Day: September 14, 2021

The AMP (ASX:AMP) share price hit an all-time low of $1 today

a person wearing a sad faced bag on his head stands with hands to head in front of a red arrow plunging into the ground, denoting a falling share price.

The AMP Ltd (ASX: AMP) share price continues swimming in a sea of red on Wednesday.

At the time of writing, shares in the financial services giant are trading at an all-time low of $1 per share. That’s a 2.44% drop from the market open.

What’s the deal with AMP’s share price lately?

The AMP share price has been on an extended run south ever since the Australian Securities and Investment Commission (ASIC) commenced criminal proceedings against the company.

Serious allegations and findings of misconduct were already brought against AMP from the Royal Commission into Banking and Financial Services. One of those findings was that AMP was charging fees on its life insurance and advisory services to accounts of deceased customers.

The investigations into such reprehensible conduct have been drawn out over a 3 year period after AMP admitted to the wrongdoings.

Keep in mind the AMP share price has come off a high of $5.43 back in March 2018, the time of the Royal Commission.

Even though ASIC dropped one of its cases against AMP in July, there is no doubt the Royal Commission’s findings still plague the AMP share price to this day.

For instance, the company reported a fairly robust first half result last month, which resulted in a slight recovery in its share price.

In its report, the company recognised a 57% increase in net profit after tax (NPAT) from the year prior and grew its assets under management (AUM) by 8%.

However, zooming out, the downward pattern has continued from this point and its earnings result had little to no impact on the longer-term trend of the AMP share price.

What else is weighing down AMP shares?

It could also be that a failed deal with Ares Management Corp earlier in the year has left a sour taste in the mouth of investors – particularly since it was the second failed deal with Ares.

Adding more pressure is AMP’s demerger plans to split and form two separate entities, AMP Limited and AMP Private markets.

The company expects the split to finalise some time in FY22 but this appears to be weighing in on the AMP share price today.

Finally, it’s important to remember the market prices shares on the basis of a blend of past earnings history and future earnings expectations.

AMP expects its FY21 earnings to be weaker than FY20 due to lower investment return and performance income – especially given the decision to withhold the interim dividend last month. At the same time, its past earnings results over the last 3 years haven’t been much to write home about either.

So taking all of this into consideration, it starts to make sense how the market is pricing AMP shares. It’s reflecting a combination of controversy, failed deal flow, lower earnings expectations and the lack of visibility in AMP’s growth vision.

AMP share price snapshot

The AMP share price has been a major disappointment on the ASX this year, posting a loss of 36% since January 1.

Over the last month alone, AMP shares have slipped a further 13% into the red. This extends the loss over the last 12 months to 33%.

These results have lagged the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% over the past year.

The post The AMP (ASX:AMP) share price hit an all-time low of $1 today appeared first on The Motley Fool Australia.

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The Transurban (ASX:TCL) share price is up only 1% this year. Is it a buy?

older couple driving in a convertible in the country

The Transurban Group (ASX: TCL) share price has been underperforming so far this year.

Since the start of the year, the toll road operator’s shares have risen just 1%.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) is up almost 11% over the same period.

Is the Transurban share price in the buy zone?

One leading broker that sees value in the Transurban share price at the current level is Ord Minnett.

According to a recent note, the broker has retained its buy rating but trimmed its price target on the company’s shares to $15.50.

Based on the current Transurban share price of $13.85, this implies potential upside of 12% over the next 12 months.

And with Ord Minnett pencilling in a dividend of 36.5 cents per share in FY 2022, this potential return stretches to approximately 14.5%.

Why is the broker bullish?

While the broker has revised its free cash estimates lower to reflect the impact of lockdowns on traffic volumes, it remains positive on the future. This is due partly to its belief that traffic will rebound quickly once restrictions ease.

In addition to this, the broker believes the Transurban share price is not reflective of the value of its assets. Particularly given how long life infrastructure assets are in demand with investors. It points to the sale of stakes in some of its US assets as evidence of this demand.

Ord Minnett commented: “We believe the market value of Transurban’s assets remains well ahead of the implied value.”

“We believe this supports the underlying thesis on Transurban and is more important than the short-term impact lockdowns are having on traffic and free cash flow,” it added.

Overall, the broker believes this makes the weakness in the Transurban share price this year a buying opportunity for investors.

The post The Transurban (ASX:TCL) share price is up only 1% this year. Is it a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Why the Square share price jumped and fell off today

Woman paying using Square.

What happened 

Shares of fintech stock Square (NYSE: SQ) were up as much as 2.7% in trading on Tuesday after the company announced a big integration between the Square App and Cash App. Shares are down 0.2% with a few minutes left in trading, although that was largely driven by the market overall falling from breakeven at the start of trading to just under 1% lower near the end of trading. 

So what

The announcement was that Square sellers will now be able to accept Cash App Pay both online and at their terminals. This opens up a new payment option for businesses and allows customers to access funds in their Cash App account. 

While adding a payment method may be a small move, it’s the underlying fees where Square will see the biggest impact. A majority of the approximate 2.9% fee that it charges sellers to perform credit or debit card transactions is paid to banks and credit card companies like Visa and Mastercard. Since the Cash App to Square integration doesn’t use those networks it’s Square that will keep the entire fee. 

Now what

The end goal for Square has long been a likely integration between the consumer Cash App and the business-focused Square App. This announcement does just that and it could be the start of Square’s disruption of the long engrained credit card companies. I’m very bullish on this announcement and Square’s ecosystem in general, and think the small bounce today should have been much bigger, even if investors could have seen the move coming a mile away. 

The post Why the Square share price jumped and fell off today appeared first on The Motley Fool Australia.

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Travis Hoium owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Square. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Is the current Treasury Wine (ASX:TWE) share price a bargain?

a group of people clink wine glasses in an outdoor, late afternoon setting.

The Treasury Wine Estates Ltd (ASX: TWE) share price certainly has returned to form in 2021.

Since the start of the year, the wine company’s shares have rallied an impressive 28% higher.

Can the Treasury Wine share price keep rising?

Despite this strong rise, one top broker believes the Treasury Wine share price can still go even higher.

According to a recent note out of Morgans, its analysts have retained their add rating and increased their price target on the company’s shares to $14.01.

Based on the current Treasury Wine share price of $12.25, this means potential upside of 14% over the next 12 months.

What did the broker say?

Morgans was pleased with the company’s performance in FY 2021 and appears positive on the future.

It notes that the company is targeting sustainable revenue growth and significant wider margins.

And while Morgans acknowledges that there are risks to the reallocation of its wine from China, it isn’t overly fazed. Especially given the impressive performance of its US business, which is bouncing back from the pandemic much quicker than it was expecting.

It commented: “TWE has the China reallocation risk and it will take 2-3 years to recover these earnings in new markets. However, outside of China, its key markets, particularly the US, are recovering faster than expected from COVID.”

In addition to this, the broker highlights the company’s restructuring and believes the Treasury Wine share price is undervalued based on a sum of the parts (SOTP) valuation.

Morgans explained: “The new business units centred around the brands, are now fully in place and we are excited to see what they can earn with TWE effectively creating the benefits of a demerger without the extra costs. It also demonstrates that the SOTP is worth materially more than the whole.”

“It shines a light on Penfolds and its best-in-class margins and may ultimately lead to corporate activity in some form in the future. We rate this management team highly,” it concluded.

The post Is the current Treasury Wine (ASX:TWE) share price a bargain? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Treasury Wine right now?

Before you consider Treasury Wine, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Treasury Wine wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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