It was a good morning for the Australian stock market.
The S&P/ASX200 is up today at the time of writing, gaining 55.10 points or 0.76% to 7,311.80.
Over the last five days, the index has gained 1.76% and is currently 4.21% from its 52-week high.
The top-performing stocks on the S&P/ASX200 are Chalice Mining Ltd (ASX:CHN, OTCQB:CGMLF) up 4.97% continuing its form from yesterday and Magellan Financial Group Ltd (ASX:MFG) up 4.3%.
News of interest
Tesla held its annual meeting this morning, which is usually good news for resource sectors.
Founder Elon Musk has once again put nickel front and centre, while pointing out that there was no shortage of lithium supply. It all bodes well for a ramp-up of electric vehicles in the near future.
“Lithium is extremely plentiful. It’s one of the most plentiful things on earth, it’s not rare at all,” he said.
“There’s lithium everywhere, so that’s not an issue. Also, lithium is maybe only one or two per cent of the [battery] cell.
“So the actual thing that matters is the cathode. Our long-range vehicles use a nickel-based cathode, some people think it’s a cobalt-based cathode, no, cobalt is used in phones and laptops, we use nickel because it’s higher energy density for our long-range vehicles.
“But for standard range vehicles and for stationary storage, I think all of that will move to iron-based cathodes.
“Iron is also extremely plentiful, nickel is not rare, but there’s 10 to 100 times more iron than there’s nickel ... I think the vast majority of batteries in the future will be iron-based, so I do not see any shortages.”
Bring on the lithium and nickel players.
Stocks to watch
As we’ll do each month, we caught up with eToro analyst Josh Gilbert to see what’s on his radar.
Gilbert gave his four stocks to watch for October 2021.
1. Chevron Corp (NYSE:CVX)
Active in more than 180 countries and one of the biggest oil companies in the world, Chevron Corp’s shares have been booming in recent months, having climbed 22% year-to-date.
Chevron Corp is coming off the back of a solid Q2 earnings report, which saw it beat expectations on the top and bottom line. The company’s revenues jumped by 179% year-over-year, as it announced it would resume its share buybacks in Q3, with annual purchases estimated between US$2 billion to US$3 billion.
On top of this, Chevron Corp has had an excellent dividend track record, increasing its dividend in Q2, with the stock now yielding 5.19%.
With the most robust financial base of all the major oil companies and the continued rise in Brent Crude and WTI Crude prices, Chevron Corp’s Q3 earnings are expected to be quite hefty. With OPEC+ sticking to its planned 400,000 barrel per day increase for November, oil prices have reached a 7-year high and will keep supply tight heading into Q4.
The company is also investing heavily in lower-carbon energy businesses in order to improve its renewable sector, which is no doubt a win for many investors.
Visa’s shares have underperformed so far in 2021 compared to the S&P 500 benchmark, but as the trend towards a cashless society continues, Visa is set to benefit. Recent deals with Suncorp Bank as well as partnerships with Paypal and Affirm, cement its position as the go-to provider for financial services.
Payments volume has increased from 2020, with a 34% year-over-year increase in its FQ3 earnings. The company’s recent report has also illustrated that its cross-border travel spending has improved and is expected to accelerate as vaccination rates rise and more borders open.
Visa has recently made a significant stride in the crypto industry with the announcement of its plans to launch a Universal Payments Channel that will support global transfers of digital currencies and connect to different blockchains. Not only is this anticipated to bolster the company’s stock moving forward, but it provides Visa with a seat at the crypto table.
3. Volkswagen Group (XETRA:VOW) (ETR:VOW3)
While Volkswagen Group’s shares may have climbed by 27% year-to-date, it has recently pulled back around 21% over the last six months, creating an exciting opportunity for investors.
Volkswagen Group continues to raise its profit margin targets and the company’s brand Porsche has seen its 911 model being named the most profitable vehicle in 2021 and on track to sell a record 40,000 vehicles by the end of this year.
Looking to potentially IPO its Porsche brand in 2022, which is worth an estimated US$80 billion, the Volkswagen Group is anticipated to benefit handsomely as it supports its free-cash outlook.
On the electric vehicle (EV) front, Volkswagen Group’s strong EV sales have recently surpassed that of leading EV manufacturer Tesla in Europe over the first half of 2021. If this continues, it’s anticipated that the company will be set to over-take Tesla’s global EV sales by 2023.
4. Amazon.com, Inc (NASDAQ:AMZN)
Amazon has experienced a rocky 2021 so far, with shares down 2% year-to-date. This has opened up a significant opportunity for investors to snap up Amazon stocks, as it trades down 15%.
Regardless, Amazon continues to dominate in sectors such as e-commerce and cloud services, with the biggest portion of market share amongst its competitors. The company has also started to invest heavily in sectors it doesn’t typically lead such as streaming, with the recent acquisition of MGM studios. This, in turn, will drive more Prime subscriptions and act as a catalyst for further growth.
Amazon’s subsidiary Amazon Web Services (AWS) is also expected to ramp up over the next few years and reach US$100 billion in sales by 2023, as a direct result of businesses and corporations' seismic shift to cloud applications.
Ultimately, the fundamentals for Amazon are solid and despite this near-term slowdown in sales, we can expect growth rates to remain strong and accelerating in Q4 and beyond.
On the small cap front
Kin Mining NL is up 4% after revealing new assay results of up to 2.9 g/t in recent aircore (AC) drilling at Iron King prospect, a potential satellite project to the flagship Cardinia Gold Project (CGP) in Western Australia.
Other small cap gainers of note
- 9SP +8.33%
- AIS +7.81%
- AQI +4.76%
- AQX +10.53%
- ALK +2.22%
- AME +4.40%
- ARR +4.41%
- ADN +3.33%
- AZY +2.0%
- ARE +16.67%
- AKM +5.0%
- AGC +4.17%
- APC +3.30%
- BDC +2.0%
- BGL +2.34%
- BSX +4.26%
- BRK +8.33%
- BUR +6.82%
- BRU +3.13%
- CE1 +3.33%
- CPN +2.13%
- CNQ +5.51%
- DNK +4.88%
- EPM +2.22%
- ELT +10.42%
- EMD +2.38%
- FEL +2.56%
- FEX +2.27%
- G1A +2.63%
- GAL +2.0%
- GPR +2.42%
- GEV +7.32%
- GBR +3.03%
- HHR +7.69%
- HFR +4.44%
- INF +4.55%
- KIN +4.0%
- KWR +3.85%
- LCD +2.08%
- LEG +4.35%
- LIT +4.55%
- MEI +6.0%
- NXM +13.16%
- NTU +2.27%
- OBM +5.67%
- OCC +2.0%
- PNX +7.69%
- PAM +3.61%
- PNR +2.44%
- PEN +7.14%
- PLL +2.04%
- POS +6.45%
- QML +9.86%
- QPM +5.32%
- RPM +7.81%
- RVR +3.03%
- RTR +12.36%
- SNS +4.0%
- SRI +3.70%
- SHP +11.11%
- SOR +11.11%
- STK +7.94%
- TMR +3.03%
- TIE +3.80%
- VAL +7.14%
- VAN +3.23%
- VMS +2.08%
- WRM +3.70%