Question 1: With the US moving out of summer time, Wall Street is now closing at 8.00am (Sydney/Melbourne time), which is after the regular radio report I listen to each morning. What is the easiest way to keep track of the US markets?
Answer: I really like the CNBC app (CNBC is the business channel of the NBC Network),
which can be downloaded for free from the Apple/Google Play stores. There is also a website (www.cnbc.com), but personally, I find the app is easier to use.
On the app, you can see real-time market data, set up watchlists, get news, watch CNBC videos etc
Question 2: With regard to rare earths miner and processor Australian Strategic Materials (ASM), I was wondering if you would recommend participating in its share purchase plan (SPP) at $1.73 per share? The share price was as high as $13.00 last year but is now down to $1.74. The Directors are planning to subscribe an additional $4m in the institutional offer. I own shares at a much higher price and am stuck. Should I invest more?
Answer: ASM has certainly had a rough ride. A one- way fall!
I suppose it highlights, yet again, that markets overdo things – both on the upside and downside. Rare earths and critical metals have just the same use case as they did 12 months’ ago, but in the case of a budding producer like ASM, it has fallen from over $13.00 to under $2.00.
No major broker covers the stock…….and there is scant public information…..so it is one for the “true believers”. I would take comfort from the fact that the Chairman and major shareholder is fronting up for another $4m. That the share purchase plan closing date has been extended is possibly a negative (they say it is due to processing time, but it could also be that they aren’t getting knocked over in the rush).
Invest because you think the Company has a solid path to profitability. If you are unsure or don’t readily have the cash, then probably best to pass. There is no way I can judge.
Question 3: Was the Qantas trading update that great? Why all the fuss?
Answer: I think the main reason for the “fuss” is that it came just 43 days after the last trading update. As a result, the shares rallied by 5.3% to close at $6.18.
Profit for the first half is now guided to a range of $1.35bn to $1.45bn, up $150m on the last estimate. Net debt has plummeted, plus Qantas alluded to a further capital return/buyback to be announced in February next year.
Qantas is rolling in cash because there is such strong demand for tickets and most people pay upfront. The airline business is booming!
Question 4: Do the broker analysts prefer Woolworths or Coles?
Answer: According to FN Arena, the major broker analysts are marginally more positive on Coles (COL). On target price, they have 1% upside (consensus target $17.34, last ASX price $17.16). There are 3 ‘buy’ recommendations, 3 ‘neutral’ recommendations and 1 ‘sell’ recommendation.
For Woolworths (WOW), they have 4.2% downside (consensus target $33.59, last price $35.05). There is 1 ‘buy’ recommendation, 4 ‘neutral’ recommendations and 2 ‘sell’ recommendations.
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