They note in their report published on 29 October that the S&P/ASX200 Resource Index (ASX: XJR) is down 17%, the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 12%, and the S&P/ASX 300 Resources Index (ASX: XKR) is down 19%.

And the broker has a theory as to why.

Shaw & Partners said:

In our view, the reasons for the sell-off are due to rising energy costs, higher inflation, rising bond yields and wobbles in the AI trade. However, the sell-off has been indiscriminate, and commodity prices are holding up (particularly copper) so stocks with positive catalysts before the end of year could quickly recover ground.

Disconnect between share prices and commodities

On the resources front, Shaw & Partners noted that resource stocks had gone backwards over the past two months, despite commodities except for iron ore being either flat or up.

They said it was an "unusual sell off" given the relative strength in commodity markets.

The broker added:

Copper is close to its record high, Newcastle coal is up roughly 40% this year and the term uranium price is at a record high. The sell off has been driven by rising yields and risk-off sentiment, not a commodity bust. It is going to be crucial to watch the copper market in coming weeks. If copper holds onto its gains, then we should expect resource equities to bounce.

Shaw & Partners surmised that copper stocks had been sold off along with AI stocks, as they were seen as a key supplier to data centre builders.

They said:

When the AI infrastructure trade wobbled, that momentum money left the resource sector too.

On the small-cap resources front, Shaw & Partners said these stocks were sold down because they were sensitive to funding risks and could struggle to raise capital, and with no cash flow, were sensitive to interest rate increases.

The broker said small caps were often sold off in a "risk off" market, and the retail squeeze from cost-of-living pressures was impacting many consumer-focused companies.

But Shaw & Partners argued that the sell-off may now be over, and it could be time to buy.

Firstly, we are now probably towards the end of the rate rise cycle. The RBA is hiking into rising unemployment, which historically signals peak rates are near. When yields roll over, the longest-duration assets rebound hardest, and that means small cap stocks. Secondly, the sell-off has disconnected equities from commodity prices – copper in particular remains strong, but gold is holding above US$4,000/oz despite rising yields, coal prices are heading higher, uranium is strengthening, and most base metals remain up ytd. Despite higher costs, the cash generation in the resource sector is strong, and if equity markets don't value assets, then it is likely that corporates will.

Shaw & Partners' 10 stock ideas

Benz Mining Corp (ASX: BNZ) – the company is "unusually" advanced on permitting and is expected to publish a maiden resource early next year.

COG Financial Services Ltd (ASX: COG) – COG is trading below its peers, while Shaw is predicting double-digit net profit growth for the next three years.

Elementos Ltd (ASX: ELT) – tight global tin supply supports the fundamentals of this company, which is expecting its final environmental approval for mining early next year.

Gentrack Group Ltd (ASX: GTK) – slower than expected contract wins have pushed the share price down, but Shaw says the fundamentals of the business are sound.

ikeGPS Group Ltd (ASX: IKE) – the company has three new products on track for launch this year, while Shaw sees potential for recurring revenue to exceed expectations.

IPD Group Ltd (ASX: IPG) – Shaw said the company is exposed to multiple tailwinds, including electrification, electric vehicle infrastructure, and data centres.

Metro Mining Ltd (ASX: MMI) – shares were heavily sold off after the company missed guidance, but Shaw said the company remains cash flow positive with a good balance sheet.

Paladin Energy Ltd (ASX: PDN) – Paladin is down 17% year-to-date despite a rising uranium price, progress at Patterson Lake South, strong performance from Langer Heinrich and a highly positive outlook for the uranium sector.

Sky Metals Ltd (ASX: SKY) – Shaw argues the market is underestimating the value of the company's Tallebung tin project in New South Wales.

Waratah Minerals Ltd (ASX: WTM) – this company is expected to publish a maiden gold resource early next year, and ongoing drilling could provide further upside.

The post 10 ASX small caps that could "bounce" by the end of the year: Shaw & Partners appeared first on The Motley Fool Australia.

But after the company's most recent production report, Shaw and Partners is bullish on Metro Mining's prospects and has reiterated its price target, which we'll get to shortly.

First, let's look at what Metro Mining reported recently.

Record results and a stronger second half expected

The company last week said it had shipped a record 1.8 million tonnes of bauxite for the June quarter, up 7% on the same period last year.

The company said this was an "excellent result" given the impact of a tropical cyclone during the quarter and the recommissioning of its offshore floating terminal.

Metro Mining said it had $24 million in cash at the end of the quarter and US$31.5 million in secured debt.

On pricing, the company said:

Market conditions were soft in February/March when agreeing Q2 prices resulting in a 14% reduction in … pricing. With the market firming on the back of higher freight costs from Guinea, price rises of approx. 9% have already been negotiated for Q3.

Metro Mining Chief Executive Officer Simon Wensley said regarding the quarter:

Achievement of record Q2 output was pleasing given the post cyclone recovery and the absence of our primary transhipper, Ikamba for its 5 year dry dock service, for a portion of the quarter. In June, we demonstrated proof of concept of our new integrated planning and operating system and aligned management structure, thanks to focussed efforts from Metro and contractor teams. I expect our focus on production reliability, grade control and planning to coincide with excellent mining and shipping conditions to deliver over 5 million tonnes in the second half of 2026. As most of our freight is fixed, this will deliver lower operating costs straight to the bottom line in likely strengthening market conditions, as Guinea producers seek to cover freight and diesel cost rises.

Metro Mining said the war in the Middle East had been affecting the aluminium supply chain, with the effects continuing to play out.

The company said aluminium was already in short supply coming into 2026, "and the curtailment of Middle East smelters exacerbated the supply risks with London Metals Exchange prices peaking close to US$3800 /T during the quarter''.

This ASX mining stock is looking cheap

Shaw and Partners said in its research note on the company that Metro's cash on hand was well above their $11 million estimate, and the only negative from the quarterly was higher-than-expected costs.

The broker has a price target of $3 per share for Metro Mining, compared with the current price of $1.39.

Shaw and Partners added that the company is expected to start a previously announced share buyback during the current quarter.

The post Shaw and Partners tips this ASX mining stock to more than double in value appeared first on The Motley Fool Australia.

What did Metro Mining report?

• Record Q2 bauxite shipments of 1.8 million WMT, a 7% increase from Q2 2025
• June shipped volumes hit 779,000 WMT – a monthly record
• Site EBITDA for the quarter was $4.4/WMT, impacted by costs and softer pricing
• Closing cash and equivalents of $23.8 million; secured debt reduced by US$5 million to US$31.5 million
• Q2 average CIF pricing was $63.2/WMT, down 14% from the final quarter of 2025
• 2026 shipment guidance maintained at 6.6 to 7.1 million WMT

What else do investors need to know?

Metro delivered strong operational performance in the face of significant challenges, including Tropical Cyclone Narelle and the temporary dry-docking of the Ikamba offshore terminal. The introduction of a new integrated planning and operating system improved productivity and reliability, leading to record volumes and efficient grade control. This allowed trial cargos to be agreed with two new customers.

The company completed a port stockpile extension, increasing storage by 170,000 WMT, and made substantial progress in vegetation clearing and overburden removal, positioning the mine well for the remainder of the year. While market conditions were soft early in the quarter with lower realised prices, Metro has already negotiated a 9% price uplift for Q3 2026 shipments, offsetting some prior headwinds.

Metro's cost base was impacted by higher diesel prices and accelerated stripping, but these measures were taken to support expected higher production in the second half. Most of Metro's ocean freight costs are fixed, providing a buffer against recent volatility in freight markets.

What did Metro Mining management say?

CEO & Managing Director Simon Wensley said:

Achievement of record Q2 output was pleasing given the post cyclone recovery and the absence of our primary transhipper, Ikamba for its 5 year dry dock service, for a portion of the quarter. In June, we demonstrated proof of concept of our new integrated planning and operating system and aligned management structure, thanks to focussed efforts from Metro and contractor teams. I expect our focus on production reliability, grade control and planning to coincide with excellent mining and shipping conditions to deliver over 5 million tonnes in the second half of 2026. As most of our freight is fixed, this will deliver lower operating costs straight to the bottom line in likely strengthening market conditions, as Guinea producers seek to cover freight and diesel cost rises.

What's next for Metro Mining?

Metro Mining is aiming for strong production in the second half of 2026, expecting to take advantage of both higher production capacity and a 9% price uplift for Q3. The company also plans to commence its previously announced on-market share buy-back in the third quarter, delayed earlier due to market volatility.

Metro is well positioned operationally and financially, with continued focus on grade control, cost management, and expanding customer relationships. Further stability in freight and commodity markets could support improved profitability as shipment volumes increase over the remainder of the year.

Metro Mining share price snapshot

Over the past 12 months, Metro Mining shares have declined 5%, trailing the All Ordinaries Index (ASX: XAO), which has risen 3% over the same period.

View Original Announcement

The post Metro Mining posts record Q2 bauxite shipments and positive outlook appeared first on The Motley Fool Australia.

I've had a look through the broker notes published this week and selected three companies that they believe could deliver serious share price gains.

Let's see who they like.

ResMed Inc (ASX: RMD)

Macquarie this week issued a new research note on ResMed after the company told shareholders it was going to sell its MatrixCare business for $490 million, with the funds to be used, in part, for an accelerated buyback program.

The company said the sale fit with its 2030 strategy, "by focusing on high-growth, scalable opportunities in sleep health, breathing health and connected home-based healthcare''.

Chair Mick Farrell said regarding the sale:

Today's announcement is about our disciplined approach to portfolio management and our commitment to driving long-term growth. By focusing on areas where we see the greatest opportunity for sleep health innovation and impact, we are strengthening our ability to deliver life-changing health technologies, improve patient outcomes, and create value for our stakeholders.

Macquarie said the sale "offloads a structurally challenged business, improving the group's growth profile''.

The broker has a 12-month price target of $46.60 on ResMed shares, which would represent a 53.7% gain if achieved.

Bhagwan Marine Ltd (ASX: BWN)

This marine services company hosted brokers at an investor day recently, showing them around two of its divisions on the Brisbane River, Bhagwan Marine Services, and Riverside Industrial Sands.

Analysts from Shaw and Partners attended and said the business looks to be in good shape.

They said:

BWN operates Australia's largest and most diverse marine fleet, employing more than 1,000 personnel nationwide. BWN's Queensland Marine Solutions business is … strategically located on the Brisbane River and generates revenue from both contract and spot work. Core activity provides a solid EBITDA base, with fleet utilisation currently around 75%. Higher-margin contract work can lift EBITDA margins to approximately 30%. The business is positioned to benefit from demand associated with the Brisbane Olympics, and management has recently secured several new contracts. Longer term, growth is supported by population expansion and Queensland's substantial infrastructure pipeline.

Shaw and Partners said competition was relatively limited, with only 3 to 4 meaningful participants in the market.

The broker has a price target of 60 cents on Bhagwan shares, which would represent a 90.5% gain if achieved.

Metro Mining Ltd (ASX: MMI)

Shaw and Partners said this bauxite miner remains on track to hit its full-year guidance of 6.6 to 7.1 million tonnes of bauxite for the year.

The analysts said bauxite prices had firmed from lows earlier this year, and the market remained well supported by strong demand growth from China.

They said:

Metro Mining's Bauxite Hills project is well placed to supply the growing Chinese market due to the proximity to markets. As a low value product, freight costs make up almost half the cost of delivering bauxite to China.

Shaw and Partners has a $3 target price on Metro Mining shares, which would be an 89.8% gain if achieved.

The company also pays a 5.8% dividend yield.

The post 3 ASX shares which could deliver 53% to 90% gains appeared first on The Motley Fool Australia.

The results have confirmed the ASX small cap miner's status as undervalued in the eyes of the team at Shaw and Partners, which reiterated a bullish price target for the shares.

More on that later. First, let's have a look at the results.

Record performance

Metro Mining said in a statement to the ASX last week that it had shipped a record 6.2 million tonnes of bauxite, which was a 9% increase year-on-year.

The company's net profit came in at $142.3 million, up from a loss of $22 million the pervious year, and the company had $57.5 million in cash and $58.9 million in senior debt at the end of the year.

The company's guidance for this year's production was set at 6.6-7.1 million tonnes of bauxite, with Metro's confidence allowing it to start a share buyback.

As the company said:

Due to confidence in the company's financial position, operational performance and long-term outlook the board believes that the current share price does not reflect the underlying value of the company's assets and prospects. As part of its ongoing capital management strategy, Metro is pleased to announce its intention to undertake an on-market share buy-back of up to 5% of shares on issue.

ASX small-cap shares looking cheap

The Shaw and Partners team had a look at the full year result and said it was "strong", with underlying EBITDA up 95% to $73 million and net debt close to zero.

They added:

The result was delivered despite a weaker bauxite price in 2H25, delivery of bauxite into low price legacy contracts, and a number of operational issues which have now been addressed.

 They also believed the production guidance could be conservative.

Metro has released production guidance for CY26 of 6.6-7.1Mt (Shawf 6.8Mt). In CY25 the flow sheet proved itself capable of delivering in excess of 7Mt, and so we view the guidance as realistic but conservative. CY25 was impact by an unseasonal tropical low in April which caused the Skardon River channel to silt up, and restrict the amount of bauxite which could be loaded on barges. The operation also suffered from an unplanned barge loader outage in October and weather disruptions in late December.

Shaw and Partners has a price target of 15 cents on Metro Mining shares, compared with 7 cents currently.

Metro Mining was valued at $433.9 million at the close of trade on Friday.

The post This ASX small-cap miner could more than double: Broker appeared first on The Motley Fool Australia.

Namely bauxite, which is used to produce aluminium. Aluminium is in strong demand for its critical role in the global electrification push.

According to CM Group, "The global traded bauxite market has entered a period of significant transformation, driven by the emergence of 'merchant' refineries importing bauxite into China."

The industry analysis company added:

More recently, we've observed the early signs of structural grade depletion of China's domestic bauxite reserves which, combined with strong alumina growth, create a significant opportunity for bauxite miners the world over.

Citing data from CM Group, The Australian Financial Review reported that the bauxite price reached a new record of US$112 per tonne last week, up 59% year to date. That certainly won't go unnoticed by ASX mining shares, with iron ore trading for around US$105 per tonne.

Atop the strong demand from China, global bauxite prices have been buoyed by supply disruptions out of Guinea, which followed Indonesia's export ban last year. The blockage of a Brazilian bauxite shipping lane by an errant cargo vessel in November has only added to the supply crunch.

Which ASX mining shares have exposure to bauxite?

Among the ASX mining shares exploring for and digging up bauxite, we find:

• Metro Mining Ltd (ASX: MMI), whose flagship project is the Bauxite Hills Mine in Queensland.
• South32 Ltd (ASX: S32), which is headquartered in Perth and has operations in ten countries mining bauxite, silver and copper, among other metals.
• Rio Tinto Ltd (ASX: RIO), which has bauxite mines in the Northern Territory and Queensland.
• Canyon Resources Ltd (ASX: CAY), which owns the Minim Martap Bauxite project in Cameroon.

So, how have these ASX mining shares been performing?

Well, since the opening bell on 2 January:

• Metro Mining shares are up 185%
• South32 shares are up 1%
• Rio Tinto shares are down 12%
• Canyon Resources shares are up 143%

Having a look at the performance, you can see that the smaller miners focused more solely on bauxite have been having a much stronger run in 2024 than the more diversified mining stocks.

What are the market experts saying?

Commenting on the soaring bauxite price helping boost ASX mining shares with significant exposure, Vivek Dhar, a commodity analyst at Commonwealth Bank of Australia (ASX: CBA) said (quoted by The AFR), "It's impossible to predict when the bauxite rally might peak. This market was already a tinderbox before the Brazilian shipment got stuck."

Alan Clark, managing director of CM Group, added:

If you rewind five years and told people bauxite prices would overtake iron ore in price, they'd have laughed you out of the room. This highlights the contrasting trajectories of two critical global industries: aluminium and steel. Right now, one is soaring while the other is facing headwinds.

Now, Australian bauxite is lower in grade compared to the metal mined in Guinea. It's also cheaper. According to CM Group, Aussie bauxite is trading at all-time highs of US$88 per tonne, up 75% from its 2024 lows.

Doug Ritchie, chair of ASX mining share Metro Mining, said that the lower-priced Australian bauxite is gaining traction in China.

According to Ritchie:

We've expanded our customer base from one to three in China. Selling bauxite is a long-term process. It requires aligning refinery capabilities with the material's properties, which takes sustained dialogue and trust-building.

The post The under-the-radar metal trading at record prices (and 4 ASX mining shares exposed to it) appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are pushing higher:

Arafura Rare Earths Ltd (ASX: ARU)

The Arafura Rare Earths share price is up 6.5% to 19.2 cents. This has been driven by news that the rare earths developer has secured funding from the German government. It revealed that the government has issued conditional approval for up to US$115 million (AU$173 million) in Untied Loan Guarantees from Euler Hermes. The funds would support debt financing for Arafura's rare earths Nolans Project and will secure neodymium and praseodymium (NdPr) supplies for German-based companies.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is up 6% to $9.09. Investors have been buying this fund manager's shares following the release of its monthly update. In June, Magellan revealed that net flows were flat. This comprised net retail outflows of $0.2 billion and net institutional inflows of $0.2 billion. It also revealed that it will be entitled to estimated performance fees of approximately $19 million for the year ended 30 June 2024.

Metro Mining Ltd (ASX: MMI)

The Metro Mining share price is up 6% to 5.4 cents. This follows the release of a trading update from the bauxite producer. Management advised that it has established a new second quarter shipment record of 1.42 million wet metric tonnes. This is up 12% year on year. This is despite the quarter being classed as the "commissioning quarter" for the new 7 million wet metric tonnes per annum expansion project.

Santos Ltd (ASX: STO)

The Santos share price is up 5% to $8.04. This has been driven by reports that the energy producer could be a takeover target again. According to Bloomberg, both Saudi Aramco and the Abu Dhabi National Oil Co are considering takeover bids for Santos. Bloomberg notes that these energy companies were looking to increase their international gas exposure. The media outlet's sources also suggested that "other potential buyers" could be interested in acquiring the ASX 200 energy giant. However, at present, there has been no comment from Santos, Abu Dhabi National Oil Co, nor Saudi Aramco. Last year, Woodside Energy Group Ltd (ASX: WDS) failed in its attempt to acquire its rival.

The post Why Arafura Rare Earths, Magellan, Metro Mining, and Santos shares are racing higher appeared first on The Motley Fool Australia.

Short-term gains are broadly going backwards today, with the S&P/ASX 200 Index (ASX: XJO) down 2.7% in early afternoon trading.

Tech share prices are among the hardest hit. The S&P ASX All Technology Index (ASX: XTX), which tracks 50 of Australia's leading and emerging technology shares, is down 4.4% intraday trading.

ASX shares are broadly following the lead of US share markets, which all lost ground yesterday (overnight Aussie time).

The S&P 500 Index fell 3.5% while the tech-heavy Nasdaq Composite Index lost 5.0%.

All the fabled FAANG shares lost ground, with behemoth Apple Inc. (NASDAQ: AAPL) leading the way down. Apple's share price fell 8.0% by the closing bell. A bit of back of the napkin maths tells me that works out to more than a US$160 billion (A$216 billion) daily loss.

Some of today's share price losers… and winners

Here in Australia, online retailer Kogan.com Ltd's (ASX: KGN) share price is among the biggest fallers today, down 11.2% at time of writing.

Buy now, pay later (BNPL) giant, Afterpay Ltd (ASX: APT)'s share price dropped more than 7% at the open, but has regained some of those losses and is currently down 4.6%.

Of course, as the old saying goes, it's a market of shares, not a share market. And while the overall indexes are falling, there are some big winners on the ASX today too.

Like the Metro Mining Ltd (ASX: MMI) share price, up 5.3%. Or Ainsworth Game Technology Limited (ASX: AGI), which is up 4.0%.

There are always opportunities, if you know where to look for them.

Why you should keep these short-term share price falls in perspective

After detailing some of the daily moves for you, I'll now recommend you largely ignore it.

You see, the rapid share price gains enjoyed by many companies over the past months, particular technology shares, was never going to continue apace. At some point retracements are inevitable. And at some point the rate of growth will slow.

Let's take the ASX All Tech index as an example.

From 23 March through to yesterday's close, the index of 50 leading ASX tech shares had gained 110%. That blistering recent growth doesn't mean these shares don't have further growth ahead of them. I believe many of them do. But they won't keep doubling in price every 5–6 months.

And that's okay. At least, if you have a long-term investment horizon, rather than looking to double your money in short order. That way you can ride out the share price dips and let the power of time and compounding grow your wealth.

Kogan's share price, for example, is still up 157% in 2020. And Afterpay's share price is up 159% this year. As for the Nasdaq, it's still 27% higher than it was on 2 January.

Now there may well be some more short-term falls to come. But long-term, the well managed companies with solid balance sheets and good growth outlooks should continue to deliver patient investors healthy share price gains.

What the experts are saying about the share price retracement

If you're feeling anxious watching the share prices of some of your favourite companies head lower today, don't be. In fact, turn off your finance screens and tune into something else.

The current retracement was broadly expected. And as Alec Young, chief investment officer at Tactical Alpha says, healthy even for the broader market (as quoted by the Australian Financial Review):

Frankly, the deeper the pullback in tech, the healthier it is for the overall market. The market was overbought, there were too many people chasing the tech names. It's all healthy. The valuations have been stretched.

Randy Frederick, the vice-president of trading and derivatives for Charles Schwab in Austin Texas, agrees:

Some of the stocks have gotten a little pricey, and what the actual cause is to spark this selloff is difficult to say. The leading sector for quite a long time has been the Nasdaq, which is very heavily weighted in technology stocks so people just saw this as an opportunity to take the profits off the table.

There's nothing wrong with taking profits off the table if your investment horizon is months and not years. But unless you need the money for other purposes, history shows that staying invested in quality shares is among the best ways to growth your wealth over time.

The post Every bull run has pullbacks. Why today's share price falls are 'healthy' appeared first on The Motley Fool Australia.