Today’s broader selling action hasn’t dampened investor enthusiasm for this small-cap ASX mining share.
The All Ordinaries Index (ASX: XAO) has given back its early morning gains and is currently down 0.8%.
But Carnaby Resources Ltd (ASX: CNB) is heading the other direction, up 8.3% to 78 cents per share.
Here’s what’s driving investor interest in the ASX mining share.
What did Carnaby Resources report?
The Carnaby Resources share price is surging after the ASX mining share reported a fresh round of “exceptional drill results” from its Mount Hope Prospect at the Greater Duchess Copper Gold Project, located in Queensland.
Top composite drill results included 30 metres at 3% copper and 0.4 grams of gold per tonne from 60 metres to bottom of hole.
Another highlighted result was 35m at 1.7% Cu, 0.2g/t Au from 60 metres; including 15 metres at 2.9% Cu, 0.3g/t Au.
Commenting on the results sparking interest in the ASX mining share today, Carnaby Resources managing director Rob Watkins said:
We are only at the start of unlocking what lies beneath the ground at Mount Hope and believe that this could rapidly unfold and link up into a very large discovery with numerous IP anomalies and outcropping mineralisation about to be drilled for the first time.
Watkins also pointed to the promising results shown by the miner’s portable X-ray fluorescent (pXRF) testing at one particular hole.
“We are eagerly awaiting the laboratory assay results from MHRC029 in particular, from which the pXRF results indicate an intersection of at least 65m @ 2.1% copper,” he said. Adding that “analysis of past samples has shown actual assay grades can exceed pXRF readings by up to 30%”.
How has this small-cap ASX mining share been performing?
Though Carnaby Resources has lost a fair bit of ground in 2022, the ASX mining share remains up 143% over the past 12 months. That compares to a full-year loss of 12% posted by the All Ordinaries.
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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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.
As far as jobs go, mine is pretty great. It’s flexible enough to work around my other commitments, and I get to help others learn important money management skills. But even so, I look forward to that day, decades from now, when I can leave the workforce and devote more of my attention to my hobbies.
I’m OK taking my time to get there because I want to make sure that when I do retire, I can afford to live comfortably. That mindset leaves me unwilling to take the following three risks with my money.
1. Making risky investments
Investing in penny stocks or meme stocks carries a small chance of becoming a multimillionaire quickly, but the odds of losing money are much greater. They’re extremely volatile, and buying and selling at the right times to turn a profit are more a matter of luck than skill. Technically, all investments carry some risk of loss, but when you invest in strong, established companies, there’s a greater chance your portfolio will do well over time.Â
I prefer to spread my money between many stocks to reduce my risk of loss. An index fund is a great way to do this. It gives you instant ownership in hundreds of companies in several industries. And it’s usually pretty affordable too. Most index funds only charge you a few cents to a few dollars per year to own them.
2. Keeping all my money in stocks
Stocks are considered riskier than some other investments, like bonds. But they also offer greater growth potential over the long term. Since I’m fairly young, I’m happy to accept this additional risk in the hope it will lead to larger returns down the road. But I also recognize the risk of keeping all my money in stocks, especially as I age.
As your nest egg grows, it’s wise to move some of your money out of stocks and into bonds over time to protect what you have. This can help reduce your risk of significant losses on the eve of retirement. But you don’t want to make this move too quickly or you could hamper your savings’ growth.
A good rule of thumb is to keep 110 minus your age in stocks. So for a 40-year-old, that’d be 70% in stocks and 30% in bonds. And you keep adjusting your asset allocation a little at a time, until you reach 60% in stocks and 40% in bonds at 50 years old.
3. Underestimating my retirement needs
While many expect they’ll need as much as $3 million to retire comfortably, others think they’ll need $250,000 or less. I prefer to err on the side of the former group because I don’t want to make the mistake of underestimating my expenses. If I drain my retirement savings too early, I may have to come out of retirement or give up some of the things I enjoy in order to pay my bills.
One simple strategy you can use to estimate your retirement costs is to save 25 times your annual expenses. This is supposed to help your money last at least 30 years. But your results may vary. You could also try using a retirement calculator and your own estimates of your annual retirement expenses to determine how much you should save.
It’s OK to change your retirement plan over time if your lifestyle or financial situation changes. But don’t let this uncertainty stop you from developing a savings strategy right now. Having a plan can help you stay accountable, and it can bring you some peace of mind as well.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
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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The Santos Ltd (ASX: STO) share price has slipped into the red in early afternoon trade after kicking goals this morning.
Santos shares reached $7.13 apiece in morning trade, up 2.6% on yesterday’s closing price of $6.95. The Santos share price is currently 0.43% lower at $6.92 a share.
The S&P/ASX 200 Index (ASX: XJO) is also down 0.83% after spending most of the morning in the green. It’s on the verge of sinking beneath its June lows, dragged down by material stocks heading lower after early gains amid a downturn in Wall Street futures.
Yet energy stocks are broadly outperforming today, with the S&P/ASX 200 Energy Index (ASX: XEJ) up 0.96% at the time of writing.
What’s boosting the energy sector?
The energy sector is likely getting some tailwinds from an uptick in oil prices. On Monday, Brent crude oil was trading for US$84.06 per barrel. That same barrel is trading for US$85.98 today, up 2.3%.
Meanwhile, gas prices are also on the rise, with Bloomberg reporting that benchmark European gas prices spiked by as much as 12% yesterday.
Gas prices leapt on news of massive damage to the Nord Stream gas pipeline in Europe. The pipeline, operational since 2011, pumps gas directly from Russia to Germany, where much of it is then sent to other parts of the continent.
But it looks like that gas won’t be flowing again for a long time, putting further upward pressure on energy prices. In turn, this may also support the Santos share price in the medium term.
Two explosions were reported in the Baltic Sea in an act that Western officials believe is deliberate sabotage on the part of Vladimir Putin’s regime.
According to James Huckstepp, head of EMEA gas analytics at S&P Global Commodity Insights (courtesy of Bloomberg), “Prices are also trading higher on speculation that this was sabotage, although what that would mean remains highly speculative.”
On the sabotage front, Denmark’s prime minister Mette Frederiksen said, “It’s hard to imagine that these are coincidences. We can’t rule out sabotage.”
Patrick Graichen, deputy to Germany’s economy minister, added:
We have seen that it is part of the Russian war strategy to play actively with the gas market. Just as Nord Stream 1 was shut off under murky circumstances, Putin is good for anything.
While our beat here at The Motley Fool is markets and smart investing, we sincerely hope Russia’s conflict with Ukraine comes to a rapid end.
Santos share price snapshot
The Santos share price is up 11% in 2022. That compares to a year-to-date loss of 14.8% posted by the ASX 200.
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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S&P/ASX 200 Index (ASX: XJO) energy shares are outperforming on Wednesday amid news major pipelines supplying gas to Europe have suffered unexplained leaks.
Some European leaders are said to have accused Russia of orchestrating two explosions on the Nord Stream pipelines amid continuing concerns of an energy shortage on the continent.
European gas prices jumped as much as 20% on Tuesday (Wednesday AEST) amid news of the leak, The Wall Street Journalreports.
Back home, the S&P/ASX 200 Energy Index (ASX: XEJ) is leaping 1.01% at the time of writing. Meanwhile, the ASX 200 has slipped 0.76%.
Here’s how some of the market’s favourite energy stocks are performing right now:
The Woodside Energy Group Ltd (ASX: WDS) share price is up 1.43% at $31.11
That of Santos Ltd (ASX: STO) has slipped in the red, trading 0.58% lower at $6.91
Finally, stock in Beach Energy Ltd (ASX: BPT) has lifted 1.37% to $1.48
Let’s take a closer look at what might be going on with ASX 200 energy shares on Wednesday.
Is this boosting ASX 200 energy shares?
ASX 200 energy shares are outperforming on Wednesday. Their strong performance comes amid reports Nord Stream 1 and 2 may have been damaged in an act of sabotage.
Poland prime minister Mateusz Morawiecki was one official seemingly pointing the finger at Russia. Morawiecki was quoted by ABC News as saying “we see clearly that it’s an act of sabotage, related to the next step of escalation of the situation in Ukraine”.
An unnamed Ukrainian official was said to have labelled the leaks a sabotage. Meanwhile, neither Danish prime minister Mette Frederiksen or Kremlin spokesperson Dmitry Peskov reportedly ruled out sabotage as a possibility.
Nord Stream AG, a consortium of five companies operating 1,224-kilometre gas pipelines through the Baltic Sea, said in a release:
Currently, it is not possible to estimate a timeframe for restoring the gas transport infrastructure. The causes of the incident will be clarified as a result of the investigation.
Whatever the cause of the leaks, they will likely see demand for gas soar in Europe. That’s likely to bolster prices, in turn.
Of course, higher energy commodity prices are generally good news for ASX 200 energy shares.
The sector is also likely benefiting from rising oil prices today. The Brent crude oil price lifted 2.6% overnight to US$86.27 a barrel. Meanwhile, the US Nymex crude oil price gained 2.3% to US$78.50 a barrel.
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 Xero Limited (ASX: XRO) share price is falling on Wednesday.
In afternoon trade, the cloud accounting platform provider’s shares are down 2% to $77.99.
This follows broad market weakness and particularly heavy selling in the tech sector today. The latter sees the S&P/ASX All Technology Index trading 1.3% lower this afternoon.
Is the Xero share price good value?
According to a note out of Citi, its analysts believe the Xero share price could be great value at the current level.
The note from Tuesday reveals that the broker has retained its buy rating and $106.80 price target.
This price target implies significant potential upside of 37% for investors over the next 12 months.
What did the broker say?
Citi has been looking at the UK market and has a few concerns over rival Sage’s small business plans.
However, the broker believes the market is large enough for Xero to continue growing at a strong rate despite this. As a result, it continues to remain bullish on the company’s long term outlook.
Its analysts explained:
From Xero’s perspective, the two key takeaways from Sage’s Small Business focused investor/analyst event were that: i) Sage is stepping up investment in the accountant channel both from a product as well as go-to-market perspective; and ii) Sage is also increasingly focusing on the sole trader/self-employed segment of the market ahead of the next phase of MTD. We do see a resurgent Sage as a threat to Xero’s UK growth and could result in Xero having to increase investment in the UK, however we see the addressable market as large and continue to forecast strong growth for Xero in the region.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 coal price closed at US$437.65 overnight. It hit a record of US$460 earlier this month, according to Trading Economics data. The value of the commodity has more than doubled over the past 12 months.
What’s this going to do to ASX coal share prices?
In short, really good things!
According to the article, Macquarie has raised its performance expectations for four ASX coal shares. They are Whitehaven, New Hope, BHP Group Ltd (ASX: BHP) and Coronado Global Resources Inc (ASX: CRN).
The broker has raised its forecasts for the 12-month share price targets and earnings per share (EPS) over the next three years.
Next, New Hope. Macquarie predicts the New Hope share price will reach $7 by this time next year. It has raised its EPS by 34% for FY23, 163% for FY24, and more than 400% for FY25 (nope, that’s not a typo).
Let’s start with Whitehaven. Macquarie has increased its share price target on Whitehaven by 20% to $12. It has raised its EPS forecast by 28% in FY23 and by 100% to 200% for FY24 to FY27.
For the biggest mining company on the planet, Macquarie tips a 16% increase in the BHP share price, which is currently $37.78. Its price target is $44 per share. That’s a 5% increase on previous forecasts. Macquarie’s EPS forecasts for BHP have shifted by 4% to 6% for FY23 to FY26.
Of course, BHP isn’t a coal pure play like the other ASX shares here. But the commodity is a large part of the BHP business and represents 24% of its revenue, according to the company’s FY22 full-year results.
Finally, Macquarie expects the Coronado Global Resources share price to lift to $3.60. This is a 3% increase on previous forecasts. Today, the Coronado Global share price is up 6.6% to $1.62. The broker has upgraded its EPS forecasts by 3% to 6% over CY23 to CY27.
How’s 2022 been for ASX coal shares?
ASX coal shares have skyrocketed in 2022 due to a supply/demand imbalance caused by the war in Ukraine.
Whitehaven shares are up an astounding 226% in the year to date. New Hope shares are up 163%.
Yancoal shares are up 109% and the Coronado Global share price has increased by 26%.
Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited and Macquarie Group 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 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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The BHP Group Ltd (ASX: BHP) share price is edging higher on Wednesday.
In early afternoon trade, the mining giant’s shares are up 0.5% to $37.35.
This compares favourably to the performance of the ASX 200 index, which is down 0.5% this afternoon.
Why is the BHP share price outperforming?
The catalyst for the rise in the BHP share price on Wednesday appears to have been a bullish broker note out of Macquarie.
According to the note, the broker has retained its outperform rating and lifted its price target on the company’s shares to $44.00.
This implies a potential return of almost 18% for investors over the next 12 months before dividends.
And if you include the fully franked 7% dividend yield that the broker is expecting in FY 2023, the total return on offer with BHP’s shares lifts to approximately 25%.
The note reveals that Macquarie has been looking at thermal coal prices and expects them to remain higher for longer due to supply constraints. This has led to the broker upgrading its earnings estimates for BHP by around 5% per annum through to FY 2026.
What else is happening?
In other news, BHP has revealed that it has given notice to the holders of some hybrid notes that it will exercise its contractual option to redeem and cancel them. These notes, with a value of 600 million pounds, were due to expire in 2077.
The company made the move in accordance with its group strategy and strong liquidity position.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
According to Statista, global payment card fraud is a $32 billion problem and is expected to be a $38.5 billion problem by 2027. Riskified Ltd.(NYSE: RSKD) is a small company aiming to solve this big problem. And it may just be cheap enough to have limited downside from here, giving today’s investor a relatively low-risk way to invest in this space.
Keep in mind that all investments are fraught with risks, and Riskified is no exception. We’ll look at what’s holding this company back. But it could be worth taking a speculative position.
Meet Riskified (and its risks)
E-commerce companies obviously don’t like fraud and actively try to avoid it. They’ll decline transactions that look suspicious. If their hunches are correct, they’ll avoid losing money when transactions are disputed and chargebacks result. However, if they’re incorrect, they miss out on legitimate revenue. Riskified aims to solve both of these problems for e-commerce companies.
Riskified believes its artificial intelligence (AI) software is better at identifying fraud than e-commerce companies. Companies that use Riskified enjoy higher revenue by having more transactions approved. And if the software makes a mistake, Riskified pays for it, not the e-commerce company — it’s an undeniable value proposition.
Maybe its value proposition is why Riskified has an impressive 99% customer retention rate. Or maybe it’s simply because the company’s customer base is small and just one customer — presumably Wayfair — accounted for a whopping 16% of Riskified’s revenue in 2021. It’s easier to have a high percentage retention rate when your business is concentrated toward just a few customers.
Riskified’s small customer base makes it a risky investment. While its retention rate is impressive now, losing just one account could result in outsized damage.
The other big risk for Riskified is that its AI software doesn’t appear to be making meaningful improvements, which is the crux of a bullish investment thesis to begin with. When it approves fraudulent transactions, the company refunds its customers. And this cash outflow reduces its gross profit calculations. Other things affect its gross margin as well. However, investors can get a general idea of the effectiveness of Riskified’s AI by watching how its gross margin improves or deteriorates.Â
Here’s a look at Riskified’s gross margin over the past six quarters.
Quarter
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Q2 2022
Gross margin
56%
60%
46%
53%
52%
51%
Data source: Riskified’s press releases. Chart by author.
Riskified’s management blames its gross margin underperformance on diversification. It’s picked up new customers in new categories, and its AI software needs to be trained for the particularities in each. Long term, this is a really good thing if true.
However, the point remains that Riskified stock is a risky investment. It’s hard to quantify the quality of its software. And if it’s not quality, the company likely won’t grow and it will lose customers in time, which we’ve already noted would be a big deal.
A risk-adjusted entry point?
As of this writing, Riskified has a market capitalization of $670 million — squarely in small-cap territory. However, the company has a stellar balance sheet of $488 million in cash, cash equivalents, and short-term deposits and has no debt. Adjusting for this gives Riskified an enterprise value (the value of the business itself) of under $200 million, which is really small.
For perspective, Riskified expects to generate between $255 million and $258 million in revenue in 2022. Therefore, its enterprise value is actually below its sales, which is pretty cheap.
The other thing to consider is that Riskified isn’t profitable, but its cash burn is modest. Through the first half of 2022, the company has just negative $19.3 million in cash from operating activities, giving it a really long runway considering its large cash position.
The market isn’t asking investors to pay up for Riskified stock. The company is cheaply valued, is close to profitability, and has a rock-solid balance sheet. Riskified stock is down close to 90% from its all-time high, but these factors mitigate further downside from here.
It could be a buy
The points made early in the article clearly demonstrate that Riskified is a speculative investment, not a sure thing. However, the price could be right to take a small position and add it to a larger portfolio.
If Riskified lives up to its potential, a little stake now will be sufficient for investors. With a market cap of just $670 million, it has ample room to expand in the $32 billion (and growing) payment-fraud space. And the company has additional revenue-growth opportunities not discussed here.
From where it trades today, Riskified can be a multi-bagger investment. But it still has a lot to prove.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Jon Quast has positions in Riskified Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Riskified 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.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
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It also recorded its maiden revenue after acquiring renewable energy plant, Natür³Lich Insheim. The plant brought in around $4.5 million of revenue since its December acquisition.
What else happened in FY22?
Financial year 2022 was a busy one for the lithium hopeful.
The company has been strategically expanding its granted licence area to cover 1,465.38 square kilometres.
It also produced its first battery-quality lithium hydroxide monohydrate from piloting operations. The plant sample exceeded battery grade specifications required from offtake customers at more than 56.5% lithium hydroxide monohydrate with very low impurities.
The company has also signed lithium offtake agreements with Volkswagen, Renault, Stellantis, LG Energy, and Umicore. Its planned lithium production is now fully booked for the first five years of operation.
It believes such partnerships will see it take a key role in Europe’s transition to electric vehicles.
Finally, the company faced a challenging period on the market when it was hit with a short-seller attack. The Vulcan Energy share price tumbled amid the release of a scathing report by activist short-seller J Capital.
What did management say?
Vulcan Energy chair Gavin Rezos commented on the company’s activities and outlook:
Vulcan anticipates the use of geothermal renewable energy on a mass scale will play an important part in achieving Europe and Germany’s energy security and independence.
In the Upper Rhine Valley Brine Field, the extraction of both renewable heat and lithium from the same geothermal resource will put Vulcan in the front seat of the transition to renewable energy and e-mobility in Europe.
We are confident that we have the right team to deliver for our shareholders, assisting Europe in its much-needed transition away from Russian gas supplies as soon as possible, whilst maintaining a strong sustainability focus.
What’s next?
The company expects to deliver the Net Zero Lithium Project’s definitive prefeasibility study in the first quarter of 2023.
It’s also working to construct and commission its Sorption-Demo Plant. Cold commissioning of the plant is expected to begin later this year. Meanwhile, its lithium hydroxide production demo plant is progressing concurrently and is on track to start commissioning late in the first quarter of 2023.
Finally, Vulcan is progressing a systematic exploration program over its project area in the Upper Rhine Valley Brine Field.
Looking to its sustainability targets, the company plans to expand its taskforce for climate-related financial disclosures, pilot test the taskforce for nature-related financial disclosures, and publish its first communication on progress as part of its United Nations Global Compact membership.
Vulcan Energy share price snapshot
Sadly, the Vulcan Energy share price has been struggling lately.
It has dumped 30% since the start of 2022. It’s also trading 42% lower than it was this time last year.
For comparison, the ASX 300 has fallen 15% year to date and 11% over the last 12 months.
Motley Fool contributor Brooke Cooper has positions in Vulcan Energy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Volkswagen AG. 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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