Day: December 4, 2021

Could this be a fly in the appointment for Woolworths’ (ASX:WOW) push into healthcare?

two people in business attire rise above the graphic image of a cityscape as if to join hands.

Woolworths Group Ltd (ASX: WOW) wants to buy the Australian Pharmaceutical Industries Ltd (ASX: API) business. But there could be some roadblocks for that deal.

Woolworths has come in with a bid of $1.75 per API share, which is a 12.9% premium compared to the price that was agreed with Wesfarmers Ltd (ASX: WES).

The supermarket business said it was willing to explore potential alternative control transaction structure options, such as a takeover bid with a minimum acceptance condition of 50.1%. Woolworths noted that the board of API has determined the proposal is, or is reasonably likely to be, a superior proposal.

The CEO of Woolworths, Brad Banducci, said:

There is a compelling strategic rationale to support Woolworths Group’s acquisition of API. Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem.

If successful, we will continue to support API’s community pharmacy partners to deliver better experiences for both customers and pharmacists. We will also work to strengthen API’s wholesale and distribution business to ensure that all Australians continue to have timely, cost-effective access to a full range of PBS and other medicine, via their community pharmacy, regardless of where they live.

Woolworths also said it expects to achieve material shared benefits and synergies from the combination if it went ahead.

What’s the problem with the takeover?

As reported by my colleague Brooke Cooper, the Pharmacy Guild of Australia is not enthusiastic about the deal. The Pharmacy Guild said:

Why is a company with interests in the alcohol, tobacco, gambling, and nightclub industries wanting to move into healthcare?

How does it hope to convince Australians that it is serious about their health and welfare?

How will it ensure the successful community pharmacy model, which is custodian of the PBS (Pharmaceutical Benefits Scheme), is protected and maintained?

Analysts agree that it could be harder for Woolworths to get its offer across the line compared to Wesfarmers.

The Australian Financial Review reported that UBS analyst Shaun Cousins could face a lot of scrutiny because of the overlap between pharmacy sales and the and the health and beauty products that are sold by Woolworths. Whilst Mr Cousins thinks the deal could be approved by the ACCC, it could take time. He said that the Pharmacy Guild concerns looks greater for Woolworths than Wesfarmers.

Craig Woolford, a MST Marquee analyst, was also quoted by the newspaper, who said that a Woolworths deal is “likely to make the influential Pharmacy Guild nervous.”

Jefferies analyst Michael Simotas said that Wesfarmers could come back with a higher bid and that the ACCC could also have concerns as well. The AFR reported he said synergies should be bigger for Woolworths, but Wesfarmers had a better track record of executing in non-food retail categories.

Time will tell whether Wesfarmers comes back with an improved bid and which retail giant is ultimately successful at expanding into the pharmacy space.

The post Could this be a fly in the appointment for Woolworths’ (ASX:WOW) push into healthcare? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Woolworths right now?

Before you consider Woolworths, 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 Woolworths 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

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Motley Fool contributor Tristan Harrison 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 Wesfarmers 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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What happened to the AGL (ASX:AGL) share price in November?

Young boy with glasses in a suit sits at a chair and reads a newspaper.

The AGL Energy Limited (ASX: AGL) share price continued its downward trend in November, falling to a decade low of $5.10 last month. Investors dumped the energy company’s shares despite no price-sensitive announcements from AGL.

For the month of November, the company’s share price backtracked 5.6%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) also ended November in the red, shedding around 1% over the same time frame.

At market close on Friday, AGL shares managed to claw back some of their losses, finishing up 1.46% to $5.55.

What’s the latest with AGL?

It’s been a relatively quiet couple of months for the company with its last market-sensitive news being its full-year results in August.

However, a catalyst dragging down the AGL share price might be tough conditions for the national electricity market along with unstable electricity prices.

The company previously noted that a sharp decline in wholesale prices for electricity and renewable energy certificates affected its financial performance. AGL regarded the 2021 financial year as one of the most difficult energy markets on record.

In addition, the increased demand to decarbonise its operations has impacted Australia’s largest carbon emitter. Nonetheless, management plans to turn around its fortunes for AGL to become a more agile business towards renewable energy.

At its annual general meeting (AGM) in September, AGL recognised the disappointing result and aimed to change its fortunes around.

As such, management has focused on reducing operating costs by $150 million by the end of FY22. Also, the sale of non-core assets for $400 million by the end of FY22 is expected to provide ample firepower to the company’s balance sheet. The AGL share price climbed amid the news.

More than half of shareholders voted in favour of AGL setting emission targets ahead of its demerger. This is in accordance with the Paris Agreement which sets out a global framework to limit climate change.

The soon-to-close Liddell coal-fired power station could be a sign of greener pastures. AGL plans to transform the site with a hydro and solar energy facility after Liddell’s shutdown in 2023.

The company is aiming to split into two separate businesses by June 2022. They are bulk power generator AGL Australia, and a carbon-neutral energy retailer, Accel Energy.

About the AGL share price

In 2021, the AGL share price has continued to plummet in value, losing more than 50% for investors. When looking at the last 12 months, its shares are down almost 60%.

Based on valuation metrics, AGL presides a market capitalisation of approximately $3.65 billion, with approximately 658.38 million shares outstanding.

The post What happened to the AGL (ASX:AGL) share price in November? appeared first on The Motley Fool Australia.

Should you invest $1,000 in AGL right now?

Before you consider AGL, 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 AGL 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

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Motley Fool contributor Aaron Teboneras 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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These were the best performing ASX 200 shares last week

A wide-eyed happy woman with long brown hair and wearing a pink top holds her hands up in delight after hearing positive news about her ASX shares

The S&P/ASX 200 Index (ASX: XJO) was out of form again last week and recorded its fourth consecutive weekly decline. The benchmark index fell 0.5% to end the period at 7,241.2 points.

Fortunately, that couldn’t stop some ASX 200 shares from storming higher last week. Here’s why these were the best performing shares on the index over the period:

Worley Ltd (ASX: WOR)

The Worley share price was the best performer on the ASX 200 last week with a gain of 10%. This follows the release of its investor day presentation in the middle of the week. One broker that was pleased with what it heard at the event was Morgan Stanley. In response, the broker upgraded the engineering company’s shares to an overweight rating with an improved price target of $12.00. Morgan Stanley expects Worley to benefit from the clean energy transition.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price wasn’t far behind with a gain of 9.4%. This appears to have been driven by the rare earth producer’s annual general meeting update. At the meeting, management spoke positively about demand for rare earths. It notes that its volume forecast for NdPr demand has increased to an average 10% annual growth rate from 7.5% previously.

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price was on form and climbed 7.9% over the five days. The quick service restaurant operator’s shares stormed higher after investors responded positively to its half year results. Collins Foods reported a 9.5% increase in revenue to a record of $534.2 million and a 31.6% jump in underlying net profit after tax to $28.9 million. A strong performance from the KFC Europe business helped drive its growth.

BHP Group Ltd (ASX: BHP)

The BHP share price was a positive performer and rose 5.9% last week. This follows a positive week for the resources sector and news that the mining giant plans to proceed with its unification. This will see BHP make its ASX listing the primary listing. The Big Australian’s Board believes unification is in the best interests of shareholders. It will result in a corporate structure that is simpler and more efficient, reduces duplication and streamlines BHP’s governance and internal processes.

The post These were the best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

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Motley Fool contributor James Mickleboro owns shares of Collins Foods Limited. 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 recommended Collins Foods 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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10 ASX shares to buy in 2022

a happy investor with a wide smile points to a graph that shows an upward trending share price

With the end of the year fast approaching, now could be a good time to look at your portfolio and see if there is room for any new additions for 2022.

To help you along your way, I have picked out 10 ASX shares that are highly rated and could offer strong returns next year. They are as follows:

Adore Beauty Group Limited (ASX: ABY)

Adore Beauty is a leading online retailer in the Australian beauty and personal care (BPC) market. It currently has almost 1 million active customers and generated revenue of $63.8 million from them during the first quarter. This is still only a small slice of the $11.2 billion BPC market. UBS is a fan of the company and currently has a buy rating and $6.00 price target on its shares.

Breville Group Ltd (ASX: BRG)

Breville is a leading appliance manufacturer responsible for a number of popular brands. These include Sage and the eponymous Breville brand. Thanks to its global expansion, burgeoning product pipeline, and favourable consumer trends, it has been tipped to grow strongly over the long term by the team at Macquarie. As a result, the broker has put an outperform rating and $34.37 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Hipages is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies. At the last count, there were over 31,000 tradies using the platform, underpinning strong revenue growth. Goldman Sachs expects this strong growth to continue as it grows into its huge market. The broker currently has a buy rating and $4.95 price target on its shares.

Life360 Inc (ASX: 360)

Life360 operates in the digital consumer subscription services market, with a focus on products and services for digitally native families. Its eponymous app currently has over 30 million active users across the globe. Bell Potter is very bullish on Life360’s future and sees a lot of value in its shares at the current level. The broker has a buy rating and $14.75 price target on them.

Lovisa Holdings Limited (ASX: LOV)

Lovisa is a fast-fashion jewellery retailer with a growing store network. It recently appointed Victor Herrero as its new CEO. Mr Herrero was previously the Head of Asia Pacific and Managing Director Greater China for Inditex (Zara, Pull & Bear and Massimo Dutti), the CEO of Guess, and the CEO of Clarks. Macquarie notes that Mr Herrero has experience in China and India, which will be a key focus for Lovisa. It sees scope for the company to open as many as 1,400 stores in these markets alone. Macquarie has an outperform rating and $25.00 price target on its shares.

Megaport Ltd (ASX: MP1)

Megaport is a technology company that offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. It has networking equipment in hundreds of data centres around the world, creating a software layer that provides an easy way for users to create and manage network connections. Macquarie is a fan of the company. It recently put an outperform rating and $24.00 price target on its shares.

NEXTDC Ltd (ASX: NXT)

NEXTDC is a leading data centre operator with a collection of world class centres across key locations throughout Australia. Combined with its potential expansion into Asia, NEXTDC appears well-placed to benefit from the structural shift to the cloud. Citi is a fan and currently has a buy rating and $15.40 price target on NEXTDC’s shares.

Orocobre Limited (ASX: ORE)

Orocobre is a top five global lithium mining company with a collection of high-quality assets including Olaroz, Mt Cattlin, and the Sal de Vida brine project. Unlike many lithium explorers and developers, Orocobre is already benefiting from the sky high lithium prices being underpinned by the clean energy transition and the rapid adoption of electric vehicles. This bodes well for its growth in the coming years. Macquarie is bullish and has an outperform rating and $12.00 price target on its shares.

PointsBet Holdings Ltd (ASX: PBH)

PointsBet is a sports betting operator and iGaming provider. It offers innovative sports and racing betting products and services via a scalable cloud-based platform in the ANZ and US markets. While 2021 hasn’t been a good year for its shares, Goldman Sachs believes 2022 will be better. It notes “the significant upside opportunity ahead in what will likely be a transformational CY22 year as it expands its North American footprint as well as ongoing M&A attractiveness to peers.” Goldman has a buy rating and $12.79 price target on its shares.

South32 Ltd (ASX: S32)

South32 is a diversified mining and metals company producing bauxite, alumina, aluminium, copper (soon), energy and metallurgical coal, manganese, nickel, silver, lead, and zinc. Thanks largely to its exposure to a number of in-demand commodities such as aluminium, Goldman Sachs has a conviction buy rating and $4.40 price target on its shares. The broker is also expecting double digit dividend yields for a number of years.

The post 10 ASX shares to buy in 2022 appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Motley Fool contributor James Mickleboro owns shares of Life360, Inc., NEXTDC Limited, and Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hipages Group Holdings Ltd., Life360, Inc., MEGAPORT FPO, and Pointsbet Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Hipages Group Holdings Ltd., Lovisa Holdings Ltd, MEGAPORT FPO, and Pointsbet Holdings Ltd. 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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