Local markets end +0.13% higher in quasi-comeback
Consumer Staples soar on bumper Coles news, but offset by everyone else
Small Caps led by Audeara on the back of a massive manufacturing sale.
The indignation of Coles has led Consumer Staples to a 2.3% gain on Tuesday, the supermarket literally dragging the benchmark’s corpse into the green light of day.
Everyone over here at Stockhead likes a comeback story. This was not that kind of comeback.
At 4.15pm on Tuesday February 26, the S&P/ASX200 closed up 10 points or 0.13% higher to 7,663.
ASX200 (XJO) and the Consumer Staples (XIJ) index
Via Google
After a dull lead from the states and iron ore losses across the planet, the ASX found itself behind the eight ball this morning and peppered with corporate earnings of all stripes throughout a wobbly old Tuesday.
While the benchmark did end higher, there’s a fair bit of angst on the trading floor because as the monthly shadow of new inflation data for January looms large on Wednesday.
This month Tony Sycamore from IG markets says the monthly CPI indicator is expected to increase to 3.5% YoY, largely due to base effects.
“Nonetheless, the trend of softer inflation and a cooling labour market will likely enable the RBA to remove its tightening bias in the coming months before cutting rates by 25 rate cuts in August and delivering a second 25 bp cut in November.”
Today the standout run for Consumer Staples came on the back of a defiant session for Coles Group (ASX:COL) which delivered better-than-expected results and an up yours to critics of the supermarket giant which has been accused of price gouging.
Coles enjoyed its best session since all the money it made during the pandemic.
The success dragged the entire sector higher, with Endeavour Group (ASX:EDV) not far behind.
Top ASX Consumer Staples (XIJ) stocks on Tuesday
Coles surged after its underlying EBITDA increased 4.1% to $1,900mn and opened up a fully franked interim dividend of 36 cents per share.
The market’s reaction to Coles throws what happened last week at Woolies into starker relief – WOW’s share price fell 8.9% after missing expectations and CEO Brad Banducci stormed off into his shock retirement.
Elsewhere, Adbri (ASX:ABC) says the $2.1bn, $3.20 a pop takeover offer from Ireland-based CRH is a go-go. The plan is that with the support of major shareholder (42.7%) Barro Group, CRH would acquire all of the shares Barro doesn’t.
Full year underlying EBITDA at Adbri was up 31% to $311m, after a 13.1% revenue lift to $1.92bn.
Statutory NPAT fell 9.5% to $92.9m, after last year’s property profits land sales at Moorebank and Rosehill. The company says price increases and strong demand delivered the decent underlying result.
The company has kept dividend payments on hold to reduce debt and to pay for upgrades to its Western Australian cement facility at Kwinana.
Tech stocks slumped after the Nasdaq fell overnight. The major drags included Block Inc (ASX:SQ2) (-5.3%) and BrainChip Holdings (ASX:BRN) which has had some kind of aneurism, down -21.5%).
Energy was the other winner after oil prices regained some upward momentum last night.
ASX Sectors on Tuesday
Via MarketIndex
These ASX300 companies dropped earnings today…
Abacus Group (ASX:ABG)
Adbri (ASX:ABC)
Altium (ASX:ALU)
Alumina (ASX:AWC)
Appen (ASX:APX)
Articore Group Ltd. (ASX:ATG)
Austin Engineering (ASX:ANG)
City Chic Collective (ASX:CCX)
Coles Group (ASX:COL)
Woodside Energy Group (ASX:WDS)
Helia Group (ASX:HLI)
Johns Lyng Group (ASX:JLG)
Reece (ASX:REH)
US Markets…
On Monday night in New York the S&P500 ended 0.4% lower with most sectors negative.
Consumer Discretionary and Energy the outperformers. Comms services and Utilities struggled the most.
US Small caps reversed higher, with the Russell 2000 rising 0.6%.
One problem was the lift in US Treasury yields.
The 10-year Treasury note rose 2 basis points to 4.28% while the 30-year also inched up 2 basis points to 4.4%. The 5-year yield popped 3 basis points to 4.31% while the 2-year rose 4 basis points to 4.73%.
Next door, the Dow Jones Industrial Average snapped a 3-day winning streak as it fell 62 points, or nearly 0.2%.
Salesforce (CRM) probably stood out the most as it gained 2.6%.
Berkshire Hathaway lost almost 1.9% following its ho-hum earnings report over the weekend. Hey. It’s still trading near all-time highs. And those highs really are high.
But some names a re looking heavily pumped and Berkshire fits the bill. Analysts have said recent price action suggests the stock is peaking, at least in the short term.
Chief Executive and Friend of the Show, Warren Buffett took time in his annual letter to shareholders to explain how difficult it is for the firm to find good takeover candidates in an era of plentiful capital.
“Size did us in, though increased competition for purchases was also a factor,” he said.
In the past, Berkshire was able to make transformative deals such as purchasing insurance giant Geico and BNSF Railway. Buffett also said Berkshire has “no possibility of eye-popping performance.”
Nevertheless, Berkshire Hathaway earnings rose 28% on an operating basis vs. a year earlier to $8.48 billion,
The so-called Magnificent 7 stocks had a mixed start to the week, with Tesla (TSLA) doing the best as it rallied almost 4%. That said, it was Chinese competitor Li Auto (LI) which ended near 19% higher as the EV stock delivered a punchy Q4 with earnings per ADS at 60 cents, which was a handy 1,400% increase on the 4 cents per ADS of a year earlier.
Revenue soared 130% to $5.88 billion. It was also well clear of Wall Street which expected earnings per ADS of 44 cents on revenue of $5.5 billion.
Nvidia (NVDA) also ended in positive territory, rising 0.4%.
Google-daddy Alphabet (GOOGL) struggled most as it fell 4.4% in above-average volume. Shares fell amid criticism of its “Gemini” artificial intelligence system which GOOGL had to pull the plug amid a media backlash over inaccurate racial depictions of historical figures.
Apple (APPL) fell 0.8%, Microsoft (MSFT) shed 0.7%. Meta Platforms (META) and e-commerce giant Amazon.com (AMZN) flirted with positive territory but Meta fell 0.5% while Amazon dipped 0.2%.
This means Amazon was back where it began – despite the fireworks of joining the Dow Jones Industrial Average, which it did on Monday.
Here’s where US Futures are pointed..
Via Fox News
ASX SMALL CAP LEADERS
Today’s best performing small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap BP8 Bph Global Ltd 0.002 100% 274,588 $1,954,116 AUA Audeara 0.065 97% 1,969,631 $4,772,055 EXL Elixinol Wellness 0.009 50% 6,028,632 $3,797,230 MTB Mount Burgess Mining 0.003 50% 2,000,000 $2,089,627 HIQ Hitiq Limited 0.026 30% 94,000 $7,036,899 OEQ Orion Equities 0.22 29% 14,603 $2,660,369 5EA 5Eadvanced 0.225 29% 1,895,487 $54,804,972 NAG Nagambie Resources 0.029 26% 545,061 $18,322,621 AMD Arrow Minerals 0.005 25% 35,480,683 $26,735,060 IVX Invion Ltd 0.005 25% 956,423 $25,698,129 TMK TMK Energy Limited 0.005 25% 8,346,247 $24,490,317 SRK Strike Resources 0.049 23% 494,482 $11,350,000 ARN Aldoro Resources 0.105 22% 253,677 $11,577,642 EQS Equitystorygroupltd 0.036 20% 275,000 $1,278,444 BIO Biome Australia Ltd 0.36 20% 2,432,625 $63,603,194 INP Incentiapay Ltd 0.006 20% 1,043,578 $6,219,650 SIT Site Group Int Ltd 0.003 20% 914,000 $6,506,226 YAR Yari Minerals Ltd 0.006 20% 83,160 $2,411,789 REH Reece Limited 28.72 19% 846,371 $15,561,758,920 TRI Trivarx Ltd 0.038 19% 3,609,112 $10,824,918 LEL Lithenergy 0.54 19% 247,429 $46,869,550 AJL AJ Lucas Group 0.013 18% 560,912 $15,133,026 AME Alto Metals Limited 0.027 17% 236,000 $16,595,033 AMX Aerometrex Limited 0.31 17% 232,831 $25,172,519 TBN Tamboran 0.2275 17% 3,074,588 $401,756,004
Up circa 90% is the Aussie “global hearing health leader specialising in innovative listening solutions for people with hearing challenges”, – (that’ll be you Mr Audeara (ASX:AUA)) has made a groundbreaking, milestone-making maiden sale – to mass manufacture AUA audio tech for Avedis Zildjian.
The maiden third party purchase order of $2.1m is also the largest single order Audeara has received since inception.
AUA co-founder and CTO Alex Afflick says the purchase is “expected to have a significant positive impact on the Company’s cashflow and its push toward breakeven and profitability.”
First announced early last year, the project AUA says, is nearing mass production, ahead of a commercial launch anticipated in H1 FY25.
OD6 Metals (ASX:OD6) says it’s just pumped about the quality of the metallurgical recoveries from samples tested at the Australian Nuclear Science Organisation (ANSTO), including – apparently – up to 90% of Magnet Rare Earth Elements (MagREE) in multiple Prospect areas, across 60 new samples.
Lots and lots happening out of these samples from Splinter Rock with OD6 claiming that recoveries for all MagREO are inclusive of Nd, Pr, Dy, Tb similar.
This is the key to overall project economics for any clay hosted rare earth project.
MD Brett Hazelden says the metrics align closely with the essential value drivers we believe are crucial for the economic viability of clay-hosted rare earth projects.
“The outstanding results from our metallurgical leaching studies continue to affirm the Splinter Rock project as Australia’s premier clay-hosted rare earth deposit. With consistent recoveries averaging over 60% across multiple prospects, and notably high recoveries observed for each of the fifteen rare earth elements, our confidence in the project’s potential remains high.”
Meanwhile, battery metals stocks have been crunched lately, but one brave US-based ASX battery metals player is taking care of Tuesday with a startlingly comprehensive update on progress at the 5E Boron Americas Complex in California.
Word is: it remains on track to kickstart commercial operations at the new boron and lithium mine in California in the second quarter of this year.
5E Advanced Materials (ASX:5EA) is planning to open what will be only the second major boric acid operation in America. The other is a non-core asset owned and operated by Rio Tinto (ASX:RIO) which has been in business since 1927.
5E Advanced Materials (ASX:5EA) CEO Susan Brennan says the company remains on track to start commercial ops in CY Q2 2024, with all mining operations and related activities on track as it moves closer to initial boron and lithium production.
Just how big a deal is it, Ms Brennan?
“I cannot emphasize enough the importance 5E will represent in the US in the coming months as a new and secure producer of critical materials needed for clean energy economies.”
That’s how much.
And new sources of the ‘supermaterial’ — used alongside rare earths metals in permanent magnets, fire retardants, ceramics, fertiliser, detergent and more — are essential given the concentrated nature of the market.
5EA began mining at its Boron Americas Complex at Fort Cady last month, where it plans to produce 2000tpa of boric acid and 100tpa of lithium carbonate from a starter plant in 2024 before ramping up in a US$389m expansion to 90,000tpa and 1100tpa in 2026.
Finally, OD6 Metals (ASX:OD6) says it’s just pumped about the quality of the metallurgical recoveries from samples tested at the Australian Nuclear Science Organisation (ANSTO), including – apparently – up to 90% of Magnet Rare Earth Elements (MagREE) in multiple Prospect areas, across 60 new samples.
Lots and lots happening out of these samples from Splinter Rock with OD6 claiming that recoveries for all MagREO are inclusive of Nd, Pr, Dy, Tb similar.
This is the key to overall project economics for any clay hosted rare earth project.
MD Brett Hazelden says the metrics align closely with the essential value drivers we believe are crucial for the economic viability of clay-hosted rare earth projects.
“The outstanding results from our metallurgical leaching studies continue to affirm the Splinter Rock project as Australia’s premier clay-hosted rare earth deposit. With consistent recoveries averaging over 60% across multiple prospects, and notably high recoveries observed for each of the fifteen rare earth elements, our confidence in the project’s potential remains high.”
Finally, a shout out to Elixinol Wellness (ASX:EXL), which is up about 88%. It could be the Germans. or it could be that this is just a stunner of a prospects…
Via ASX
ASX SMALL CAP LAGGARDS
Today’s best performing small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap DGL DGL Group Limited 0.61 -41% 11,372,619 $293,711,155 BRN Brainchip Ltd 0.325 -34% 53,089,583 $884,849,196 ACE Acusensus Limited 0.76 -33% 2,841,047 $144,095,972 ICL Iceni Gold 0.018 -33% 1,771,022 $6,657,148 AVW Avira Resources Ltd 0.001 -33% 1,285,000 $3,200,685 PPG Pro-Pac Packaging 0.2 -30% 10,000 $51,780,998 ATG Articore Group Ltd 0.57 -29% 3,511,312 $226,226,630 DCX Discovex Res Ltd 0.0015 -25% 1,500,322 $6,605,136 ASH Ashley Services Grp 0.26 -25% 1,473,816 $49,671,687 ASP Aspermont Limited 0.007 -22% 104,503 $22,100,712 T3D 333D Limited 0.007 -22% 5,393 $1,075,004 BUX Buxton Resources Ltd 0.105 -22% 327,285 $23,388,330 MPK Many Peaks Minerals 0.094 -22% 29,000 $4,370,476 ENV Enova Mining Limited 0.04 -22% 85,018,301 $32,687,396 MEG Megado Minerals Ltd 0.011 -21% 729,287 $3,562,378 CCZ Castillo Copper Ltd 0.004 -20% 1,270 $6,497,527 NRZ Neurizer Ltd 0.004 -20% 27,071,129 $7,319,554 SI6 SI6 Metals Limited 0.004 -20% 781,561 $9,969,297 TRJ Trajan Group Holding 1.055 -19% 3,148,872 $197,880,911 BIT Biotron Limited 0.069 -19% 8,166,017 $76,693,418 OXT Orexploretechnologie 0.022 -19% 464,545 $5,276,222 NOX Noxopharm Limited 0.06 -18% 142,840 $21,333,370 ARR American Rare Earths 0.24 -17% 8,493,296 $130,042,757 ME1 Melodiol Glb Health 0.0075 -17% 12,528,338 $2,536,828 RNT Rent.Com.Au Limited 0.025 -17% 337,322 $18,889,487
ICYMI – PM Edition
Headline-making Aussie Biopharma Dimerix (ASX:DXB) has reported the successful gathering of data from the initial 72 patients enrolled in its ACTION3 Phase III trial for DMX-200 for kidney disease focal segmental glomerulosclerosis (FSGS).
CEO and MD Dr Nina Webster says incoming interim analysis is scheduled for review by the independent Data Safety Monitoring Committee (IDMC) in March 2024.
“We are now only a matter of days away from our Part 1 analysis outcome and, on the presumption of success, are continuing to prepare for Part 2 of the Phase III study.
“Success in Part 1 would signal that DMX-200 is performing better than placebo in reducing proteinuria, an important marker of kidney disease progression, in a larger cohort of patients than our prior Phase II study and validates our strategy and our prioritisation of this potentially valuable program.”
Battery Age Minerals (ASX:BM8) has secured 100 years of historical mining data to help fast track targeted extensions of known mineralisation and develop an exploration plan for its Bleiberg zinc-germanium project in Austria.
Desktop studies have recorded >172 tonnes of germanium production at only a portion of the Bleiberg mine which was ranked as the 6th largest in the world during its final years in production before being closed in 1993.
Since then, germanium and gallium have both become essential elements in the manufacture of semiconductors and China’s recent export restrictions on the materials have placed a strategic importance on developing assets such as Bleiberg.
Calima Energy (ASX:CE1) has completed the sale of Blackspur Oil Corp to Astara Energy for the gorgeously shaped figure of $81.6 million. Already in the bank, the company says.
Calima chairman Glenn Whiddon says CE1 plans to distribute some $80 million from the Blackspur Sale to Calima shareholders in the most tax effective form.
CE1 is in talks with the ATO on how best to do this which will take up to 3 months.
Post distribution, Calima will have ~A$5-6 million cash and a 100% interest in the Paradise Field in British Columbia which generates approximately A$350,000 in free cash flow annually.
TRADING HALTS
coming soon.
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