The Australian share market hit a four month high on Tuesday but slid lower towards the end of the week, with the S&P/ASX 200 (ASX:XJO) ending the week down 0.2%. The market was buoyed early in the week on news around a potential COVID-19 vaccine, but economic data put a dampener on exuberance later in the week. The government announced the extension of its stimulus payments which gave the market continued support, but ongoing increases in COVID-19 cases in Victoria is giving rise to caution.
The information technology sector finished the week marginally higher with the S&P/ASX All Technology Index (ASX: XTX) up just under 2%. The energy sector also performed well, however industrials and healthcare were down. A number of blue chip shares dropped last week, including CSL Limited (ASX: CSL), which fell 2.3%. But Afterpay Ltd (ASX: APT) was up 3.6% and Newcrest Mining Limited (ASX: NCM) was up 5.6%. So now let’s take a look at last week’s biggest ASX 200 share price gainers.
Resolute Mining Limited (ASX: RSG)
The Resolute Mining share price gained 17.2% last week to finish the week at $1.36. The gold miner released its June quarterly report and the gold price was also on the rise, closing the week at $2680 per ounce. Resolute poured 107,183 ounces of gold in the June quarter at an all-in sustaining cost (AISC) of US$1,033 per ounce.
The miner sold 110,660 ounces of gold during the quarter at an average price of US$1,446 per ounce. Resolute Mining had US$88 million cash and bullion at 30 June 2020 and net debt of US$220 million. The company has provided FY20 guidance of 430,000 ounces of gold at an AISC of US$980 per ounce.
AP Eagers Ltd (ASX: APE)
The AP Eagers share price rose 16.8% last week to close the week at $7.23. AP Eagers is Australia’s oldest listed automotive group. The company represents a diversified portfolio of brands including 19 of the top 20 selling car brands in Australia and 9 of the top 10 selling luxury car brands. The company operates dealerships, many of which are on land it owns, with the balance leased.
AP Eagers own $332 million of prime real estate in high profile, main road locations across Brisbane, Sydney, Melbourne, Adelaide, and Perth. It sold off an ancillary refrigeration business in June for $75 million, allowing it to focus on its core automotive retailing business. The company has engaged with its landlords in an effort to share the economic burden of Covid-19 and taken action to reduce its cost base. There was no news out of the automotive group last week to prompt the price rise, however the extension in the government’s stimulus program and resulting uplift to the economic outlook no doubt contributed.
Orocobre Limited (ASX: ORE)
The Orocobre share price lifted 13.2% last week to finish the week at $3.17. Lithium prices are at record lows this year but are expected to rally in coming years as demand for electric vehicles increases. Orocobre shares have been rallying since the start of the month, having been slow to recover from the March market correction. Orocobre shares actually hit their low for the year of $1.84 in May, but have since recovered 72%.
Sales in the June quarter were impacted by coronavirus restrictions which hindered the ability of the company to complete sales. Total sales volume for the June quarter was approximately 1,600 tonnes of lithium carbonate at US$4,015 per tonne FOB. While most logistical issues have now been addressed, demand has yet to return to normal as customers delay shipments due to lower production and excess inventory.
Electric vehicle manufacturers are taking a cautious approach to production given the uncertain economic impacts of COVID-19. Nonetheless, the pandemic has accelerated investment in some jurisdictions which will have medium to long-term benefits with many European countries implementing programs to support the manufacture and use of electric vehicles.
Silver Lake Resources Limited (ASX: SLR)
The Silver Lake Resources share price gained 11.6% last week to close the week at $2.59. Another beneficiary of the rising gold price, Silver Lake Resources also revealed record quarterly gold production last week. During the June quarter, Silver Lake Resources produced 71,291 ounces of gold and 494 tonnes of copper. It sold 64,593 ounces of gold and 416 tonnes of copper.
Annual group sales were a record 255,533 ounces of gold and 2,175 tonnes of copper, exceeding upgraded sales guidance. The miner reported it held cash and bullion of $269 million at the end of the quarter, an increase of $42 million or 19%, plus no debt. Silver Lake Resources has provided sales guidance for FY21 of 240,000 to 250,000 ounces of gold and 1,100 tonnes of copper.
QBE Insurance Group Ltd (ASX: QBE)
The QBE share price rose 11% last week to close the week at $10.40. The share price rose throughout the week after QBE released a better than expected update on the impact of COVID-19 and its 1H20 result. Covid-19 is expected to have a $335 million underwriting impact over the half. This includes ~$150 million of net incurred claims, ~$115 million of additional risk margin, and ~$50 million of premium concessions.
While the landscape remains uncertain, QBE expects total Covid-19 related costs to be around $600 million pre-tax. QBE expects to report a 1H20 net statutory loss after tax of $750 million, reflecting the impact of Covid-19, bushfires, and investment market volatility. CEO Pat Regan said, “despite the impact of Covid-19, I am encouraged by the strong underlying trends evident in the result. Our greatly strengthened capital base positions us well to capitalise on accelerating pricing momentum and emerging organic growth opportunities.”
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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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