Its fortunes changed when news emerged late last week that Russia had invaded Ukraine. The market’s response led to a 6.3% drop in the price on Thursday.

However, with the stock currently changing hands at around 148p — a slither of the 400p price we saw pre-pandemic — is now a good time for me to be adding IAG shares to my portfolio? Let’s take a look.

The reopening of borders

A major boost for IAG will be the recent reopening of borders around the world. As more and more countries have eased the restrictions placed on international passengers, this should allow the firm to see an increase in passengers over the coming months. Further, some countries have lifted restrictions altogether, for instance, Sweden and Spain. And the benefits they reap from doing so may entice other countries to follow suit. According to the International Air Transport Association, around 3.4bn people will fly in 2022 – nearly double that of 2020. As such, this makes me believe buying IAG shares at the current price could be a steal.

Further, and as my colleague Andrew Woods stated, IAG may benefit more than competitors when it comes to the increased travel we should begin to see. This is because, unlike EasyJet and Wizz Air that focus on short-haul flights, IAG also operates transatlantic routes – estimated to be worth $1bn annually to the firm.

IAG also released its full-year results last week. And the numbers were encouraging. While revenues were up 8.3%, its post-tax loss had declined by 57.7%. When considering buying the shares, these numbers do sway me.

The risks

There are risks, however. The most obvious threat to IAG remains the pandemic. While it seems that the worst of it is over, there’s still potential for it to cause disruption in the future. Any sign of this would most definitely mean a drop in the price of IAG shares. With this said, Boris Johnson recently announced that the legal requirement to self-isolate due to a positive case has ended, showing further how the UK is taking strides to move away from the pandemic. This will provide a boost for the business.

My verdict

So, while a threat linked to the pandemic remains, I’m optimistic about what the future holds for IAG. The firm will see big benefits from the increase in passenger volume this year, and trading for well below half of the pre-pandemic levels I think IAG could be a solid buy. Its full-year results also provide me with confidence. As such, I would be willing to add IAG shares to my portfolio today.

The post Should I be adding IAG shares to my portfolio? appeared first on The Twelfth Magpie.

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

ASOS share price: a warning…

Let’s start with a bit of context. In terms of trading, ASOS has been one of the few real beneficiaries from multiple UK lockdowns. With no stores to browse, it was predictable that young consumers would gravitate towards the company’s website for their fashion fix. 

For a while, sales were buoyant as people stocked up on less formal gear to make it through working from home. The ASOS share price did very well too. It rose from a low of 1,060p in April 2020 to just under 6,000p a year later. That’s an incredible gain of over 450%!

The problem is that momentum such as this can’t last forever. When news of slowing sales came last week, it was equally inevitable that some investors would be unhappy.

Another thing that may have exacerbated the fall in the ASOS share price was its relatively small ‘free float’. This is the percentage of a company’s stock that’s available to trade on the stock exchange. For ASOS, this sits at a little less than 70%, according to Stockopedia. Most companies of its size have free floats nearer 100%. In practice, this can make moves up or down more violent.

…or an opportunity?

There’s another way of looking at this. Will any of the setbacks mentioned in last week’s update still be relevant in, say, five years? I’d be surprised. 

Yes, Covid-19 is proving a stubborn beast to beat. However, two-thirds of adults have now received both jabs in the UK. While an increase in infections is very likely as all restrictions are removed, Boris Johnson appears committed to his belief that there’s no turning back now. Supply chain pressures should also be transitory.  

On top of this, ASOS’s growth strategy should have borne fruit by then. Let’s not forget that the firm recently acquired brands such as Topshop and Miss Selfridge. These should complement organic growth and help increase the company’s share of its target market here and abroad.

Great opportunity

Having tumbled last week, shares in ASOS now trade at 26 times forecast earnings. That’s still nowhere near the sort of multiple that would get value investors salivating. However, it’s a much lower valuation than ASOS has previously traded at. Moreover, investors shouldn’t compare an online giant with, say, a struggling airline or energy provider.

Sure, things could be tricky for a while. The mooted online sales tax would be another headwind for the company. Even so, this is very much a ‘known’ risk and one management has no doubt factored into its planning. 

So, while suggesting that the ASOS share price crash now makes it the bargain of the year may be taking things too far, I do think Thursday’s reaction was overdone. I therefore consider this a great opportunity for me to build a position in a company that’ll likely be worth far more than £4bn in a few years. 

The time to buy stock in a quality growth story is when the momentum jockeys have temporarily jumped off. I think that time has arrived here.

The post The ASOS share price crash: is this now the bargain of 2021? appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended ASOS. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Tesla CEO Elon Musk has made his views on the hydrogen fuel cell technology quite clear. He once called it a “staggeringly dumb” idea when compared to storing power in an efficient battery. But given he runs an electric car company, it’s fair to say he is biased.

Hydrogen technology is gaining significant popularity in several European nations – including France, Germany, Spain, Portugal, Holland, and soon the UK. Prime Minister Boris Johnson recently announced plans for a Green Industrial Revolution and one of its critical points is the use of hydrogen to power industries, transport, and homes.

The UK, along with other European nations, is slowly transitioning to a net-zero emissions economy. I’ve previously discussed what this means for the energy sector. But another crucial evolving industry is the automobile sector.

Today the two most viable solutions to eliminating vehicle emissions are to change the power source to either electric or hydrogen.

An opportunity to beat Tesla?

NASA have been using hydrogen to power its rockets since the 1950s. It is the most abundant element in the galaxy. However, a significant problem with hydrogen technology has been sourcing the fuel.

Originally, hydrogen was extracted from hydrocarbons — commonly referred to as fossil fuels. This is not exactly an environmentally friendly way of acquiring the material.

Luckily ITM Power (LSE:ITM) found a much better solution. Using patented technology, it uses a process called electrolysis to convert water into hydrogen and oxygen. The process produces zero greenhouse gas emissions.

Three projects – three hydrogen opportunities

Today ITM Power has three major projects underway.

The REFHYNE project is the leader in the effort to supply clean refinery hydrogen across Europe. Partnering with Royal Dutch Shell, and the European Commission’s Fuel Cells and Hydrogen Joint Undertaking (FCH JU), ITM will install and operate the world’s largest hydrogen electrolyser in Wesseling, Germany.

Its second project, HyDeploy, is experimenting with the viability of blending up to 20% hydrogen into the normal gas supply. The research is being funded by Ofgem, with the University of Keele testing the new solution. If successful, households could see a dramatic drop in energy bills with no changes to their consumption or domestic appliances.

The third project is by far the largest. H2Mobility is an effort to install and operate hydrogen refuelling stations across Europe. Supported by the British and European governments, 21 companies – including Honda, Hyundai, and Nissan – are collaborating to complete the project with ITM providing the fuel.

The bottom line

Combined, these projects, along with new supportive legislation, are making a hydrogen-based energy solution increasingly viable, not just for vehicles but households as well.

Like Tesla in the electric vehicle market, ITM Power has the technology and expertise to lead in the hydrogen market. However, the stock valuation today is borderline insane.

The market has priced the company at £1.6bn. While it may be worth that in the future, today it remains unprofitable and has little more than £3m in revenue.

I am keeping a close eye on the company, but for now, I’m not buying shares.

The post Forget Tesla! I’m looking at this hydrogen stock appeared first on The Twelfth Magpie.

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Zaven Boyrazian does not own shares in ITM Power. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.