Day: February 23, 2022

Here’s why CSL (ASX:CSL) could be an ASX 200 share to buy now

A young bearded man wearing a white t-shirt with a yellow backdrop holds up his arms to his chest and points to the camera in celebration of ASX shares rising today

A young bearded man wearing a white t-shirt with a yellow backdrop holds up his arms to his chest and points to the camera in celebration of ASX shares rising todayA young bearded man wearing a white t-shirt with a yellow backdrop holds up his arms to his chest and points to the camera in celebration of ASX shares rising today

Among the 200 shares listed on the benchmark ASX 200 index are some of the highest quality companies that Australia has to offer. One of those is CSL Limited (ASX: CSL).

Why CSL shares?

CSL is widely regarded to be one of the highest quality shares on the ASX 200. It is a biotherapeutics company that develops, manufactures, and sells a range of life-saving plasma therapies and vaccines. It is also in the process of acquiring Vifor Pharma for ~$17 billion.

The addition of Vifor is expected to expand CSL’s leadership across an attractive portfolio focused on renal disease and iron deficiency, complementing its existing therapeutic focus areas including Haematology, Thrombosis, Cardiovascular, and Transplant.

But it doesn’t end there. Each year CSL invests in the region of 10% to 11% of its sales back into research and development (R&D) activities. In fact, earlier this month when the company released its half year results, it revealed an R&D spend of US$486 million for the six months. Pleasingly, CSL looks set to soon bear the fruit from its R&D labour. Management advised that a promising cluster of R&D programs are nearing completion.

Is the CSL share price good value?

The team at Morgans see a lot of value in the CSL share price. In response to its half year results, last week the broker put an add rating and $327.60 price target on its shares.

Based on the current CSL share price of $268.89, this implies potential upside of 22% for investors over the next 12 months.

It commented: “CSL – 1H above expectations; the “tide is beginning to turn” 1H results were better than expected, albeit in line with management’s assumptions, with net profit down 5% in cc on 4% revenue growth.”

“While near term challenges remain, the ongoing recovery in plasma collections, coupled with management’s confidence, paints a favourable earnings picture,” it concludes.

The post Here’s why CSL (ASX:CSL) could be an ASX 200 share to buy now appeared first on The Motley Fool Australia.

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

Before you consider CSL, 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 CSL wasn’t one of them.

The online investing service he’s run for over 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 January 13th 2022

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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. owns and has recommended CSL Ltd. 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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2 small cap ASX shares getting analysts excited

Three excited business people cheer around a laptop in the office

Three excited business people cheer around a laptop in the officeThree excited business people cheer around a laptop in the office

If you have a penchant for investing in small cap shares, then you might want to look at the two listed below.

Here’s why these are highly rated by analysts right now:

MoneyMe Ltd (ASX: MME)

The first small cap ASX share to watch is MoneyMe. It is a fintech that uses technology and artificial intelligence to deliver highly automated credit products and customer experiences.

The company notes that it originates through a diversified mix of credit products and distribution channels to create significant scale and long-term customer advantages. This will soon include the SocietyOne business, which the company is acquiring for $132 million.

Morgans is positive on the company and believes it has strong long term growth potential.

The broker commented: “In our view, MME continues to deliver strong organic book growth and believe its new, innovative product suite, targeting niche under-serviced markets has the potential to further drive top-line growth. Add maintained.”

Morgans has an add rating and $2.50 price target on the company’s shares.

Nitro Software Ltd (ASX: NTO)

Another small cap ASX share to look at is Nitro Software. It is a global document productivity software company aiming to drive digital transformation in organisations across multiple industries globally.

Nitro’s core solution, the Nitro Productivity Suite, provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.

Goldman Sachs is positive on Nitro and believes the market is underestimating its growth potential as a challenger in a US$34 billion total addressable market across PDF, e-signing and workflows.

It commented: “Nitro is down ~50% since November with the market currently pricing in long-term growth and margin assumptions that understate Nitro’s potential, in our view. We are positive on Nitro’s structural growth opportunity, reflected in our DCF scenario analysis implying an attractive asymmetric risk/reward skew.”

Goldman Sachs has a buy rating and $2.95 price target on its shares.

The post 2 small cap ASX shares getting analysts excited 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 over ten 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 January 12th 2022

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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 recommended Nitro Software 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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Costa (ASX:CGC) share price tumbles 8%, giving back all of Tuesday’s gains. What’s going on?

A man sits on a couch with his arms out feeling exasperated while looking at the Costa share price going down on his laptop todayA man sits on a couch with his arms out feeling exasperated while looking at the Costa share price going down on his laptop todayA man sits on a couch with his arms out feeling exasperated while looking at the Costa share price going down on his laptop today

Shares in Costa Group Holdings Ltd (ASX: CGC) traced lower today without any market-sensitive news in correlation.

The group released its full-year results for the 12 months ending 31 December 2021 yesterday. This saw the Costa share price spike by 26 cents to a four-month high of $3.26. That was an impressive 8.6% gain.

Alas, today Costa gave all of those gains back. The share price finished the day at $2.98 — a loss of exactly 8.6% on a trading volume more than double Costa’s four-week average.

Why did ASX investors sell down Costa today?

After a fairly robust set of results yesterday, questions remain as to why ASX investors sold the stock down on Wednesday.

Revenue came in 5% higher at $1.22 billion and EBITDA increased by more than 10% over the course of the year. This carried through to a 5 cents per share dividend fully franked for shareholders at tax time.

However, net profit after tax (NPAT) was weak — slipping 31% compared to 2020 — as cost increases and supply chain headwinds plagued the company’s earnings.

As such, reported earnings per share (EPS) was 22% lower and missed the consensus estimate of analysts by a considerable amount.

It also missed the consensus on revenue by about 30 basis points. Analysts had been banking on Costa recognising $1.225 billion at the top in 2021.

Plus, even though the company grew its earnings throughout the year, it appears that market pundits were expecting far more. As such, analysts have downgraded their earnings estimates across the board on average for FY22 and FY23. Their downgrades extend from revenue all the way down to EPS and free cash flow at the bottom lines.

What does a future earnings downgrade mean for Costa?

These downgrades by analysts are important because as Peter Lynch alludes to in his book, One Up On Wall Street, the market prices stocks on a combination of past earnings and future earnings expectations. Hence, downward revisions of future earnings could impact the market’s view of Costa moving forward.

The downward revisions certainly aren’t good news for the Costa share price, which has been tracking below the S&P/ASX 200 Index (ASX: XJO) since May last year.

The ‘crocodile jaws’ pattern, as it is colloquially known, shows no signs of narrowing — as seen on the chart below.

TradingView Chart

Costa share price snapshot

In the past 12 months, the Costa share price has fallen by 32% and is down 4% this year to date.

Things are looking a bit more positive in the past month though with the shares trading in the green, up 1.36% during this time.

The post Costa (ASX:CGC) share price tumbles 8%, giving back all of Tuesday’s gains. What’s going on? appeared first on The Motley Fool Australia.

These 5 Cheap Shares Could Be Set For Huge Gains (FREE REPORT)

We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can find out the names of these stocks in the FREE stock report.

*Extreme Opportunities returns as of February 15th 2021

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Motley Fool contributor Zach Bristow 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 recommended COSTA GRP FPO. 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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Woolworths (ASX:WOW) faces fresh probe as wage scandal balloons to $500m

a supermarket employee holds an upside down banana in front of his mouth and his thumbs down as if showing his disapproval of something.a supermarket employee holds an upside down banana in front of his mouth and his thumbs down as if showing his disapproval of something.a supermarket employee holds an upside down banana in front of his mouth and his thumbs down as if showing his disapproval of something.

Woolworths Group Ltd (ASX: WOW) is facing a fresh investigation from the Fair Work Ombudsman after the company admitted it underpaid employees.

Woolworths shares closed the session at $35.68 today, a 1.36% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.62% today.

Let’s take a look at what the company revealed today.

Woolworths in focus

Woolworths has discovered $144 million worth of staff underpayments as part of a payroll review. The supermarket giant revealed the discrepancy in its half-year results today.

The Fair Work Ombudsman (FWO) will launch an investigation into the underpayments, The Australian reported today. This is on top of the legal action the ombudsman launched against the company in June 2021.

In its half-yearly results presentation on Wednesday, CEO Brad Banducci apologised for the findings. He said:

We are disappointed to have identified further inadvertent underpayments and unreservedly apologise to our affected team members.

We will continue to fix issues when we identify them and introduce the right controls to prevent them from happening again.

This latest discovery takes the total underpayments to employees to at least $571 million, after a separate review uncovered underpayments of $427 million.

The payroll investigation is ongoing with 85% of Woolworths staff reviewed to date. The company hopes to complete the process by the end of 2022.

As covered by the Motley Fool earlier, Woolworths reported a 6.5% drop in net profit in its half-year results today. However, group sales were up 8% on H1 FY21.

The company’s performance was impacted by the COVID-19 pandemic. Despite strong sales growth, Woolworths reported COVID cost the company $239 million.

Woolworths declared a fully-franked interim dividend of 39 cents per share, down 26.4% on the prior corresponding period.

Woolworths share price snapshot

The Woolworths share price has risen 3% in the past year but is down 6% year to date. In the past week, it has gained 4%.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.

Woolworths has a market capitalisation of about $43 billion based on its current share price.

The post Woolworths (ASX:WOW) faces fresh probe as wage scandal balloons to $500m 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 over 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 January 13th 2022

More reading

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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