Day: March 9, 2022

3 blue chip ASX 200 shares analysts are tipping as buys

Three people in a corporate office pour over a tablet, ready to invest.

Three people in a corporate office pour over a tablet, ready to invest.Three people in a corporate office pour over a tablet, ready to invest.

Investors that are looking for some new shares to buy might want to look at the blue chips listed below.

These three blue chip ASX 200 shares have been tipped to climb notably higher from where they trade today. Here’s what you have to know about them:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share that could be in the buy zone is Goodman. It is a global integrated commercial and industrial property company with a world class property portfolio. These properties have exposure to key growth markets such as ecommerce and logistics and are in high demand from tenants such as Amazon and DHL. Thanks to this strong demand and its huge development pipeline, Goodman has been tipped to continue its strong growth long into the future. Citi is one of many brokers that is positive on its future. Its analysts currently have a buy rating and $29.50 price target on its shares.

Wesfarmers Ltd (ASX: WES)

Another blue chip ASX 200 share to consider is Wesfarmers. It is the conglomerate behind brands such as Bunnings, Kmart, and Officeworks. In addition, the company owns a collection of industrial businesses and is in the process of acquiring Priceline pharmacy chain operator Australian Pharmaceutical Industries Ltd (ASX: API). While trading conditions are on the tough side in FY 2022, analysts at Morgans believe it is worth sticking with the company due to its positive long term outlook. The broker currently has an add rating and $58.50 price target on Wesfarmers’ shares.

Westpac Banking Corp (ASX: WBC)

A final blue chip ASX 200 share that could be in the buy zone is Westpac. This banking giant’s shares have fallen heavily over the last six months amid concerns over its margins and the viability of its cost cutting plans. The team at Morgans aren’t concerned by either. The broker believes the challenges facing Westpac are not unsurmountable. As a result, it feels the recent share price weakness is a buying opportunity for investors and has put an add rating and $29.50 price target on its shares.

The post 3 blue chip ASX 200 shares analysts are tipping as buys 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.

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Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 this still the dawning of the age of ASX commodity shares?

businessman takes off with rockets under feetbusinessman takes off with rockets under feetbusinessman takes off with rockets under feet

As conflict in Europe takes another unsuspecting turn, the outlook for commodities continues to shine – much to the dismay of consumers in the end-market.

Talks of a ban on Russian oil exports are being taken very seriously amongst market pundits, such that Brent Crude futures nudged past US$130 barrel this week, their highest in more than a decade.

Ukrainian wheat, which is sold on the black sea supply route, has also faltered amid the tension, sending global wheat prices skyrocketing to US$11.40 per bushel after hitting US$12.52/bushel yesterday in response to the disruption.

Nickel futures soared “to infinity” yesterday according to one trader such that the London Metals Exchange (LME) suspended trading of the metal to prevent an all-out disaster. Russia is the world’s largest nickel producer.

Gold, the traditional safe-haven asset in times of inflation, spiking interest rates, and geopolitical tension, has also surged to its all-time high and now trades at US$2,055 per troy ounce.

In fact, the Bloomberg Commodities Index (BCOM), a proxy for the performance of a global basket of commodities used by investors worldwide, is at its highest level in over 10 years as well.

It has slowly risen from the depths of 2020, when COVID-19 first reared its ugly head onto the scene. Lockdowns resulted in massive supply shock in both raw materials and commodities, compounded by huge backlogs in supply chains around the world. People had the money, but ‘drivers’ simply couldn’t deliver the goods, due to the lockdowns.

The latest conflict only adds a petrol can to the fire and has sent the global commodity sector into a blaze such that the BCOM has shot up vertically north in February/March.

TradingView Chart

Is this the time of ASX commodity shares?

By all accounts, a surge in commodities like gold, nickel, wheat – any product for that matter – is usually a net positive for the producers and miners.

However, miners, explorers, refiners and every player along the value chain realises the impulse effect from a massive jump in the price of base commodities. It’s not always a gain though – costs to increase for some unfortunate companies.

Where ASX commodity players realise the biggest benefit is to revenue, operating cash flow and free cash flow.

Each of these stem from gross profit and net profit respectively. The surge in commodity prices helps miners and producers at the margin, by feeding more cash down through the income statement for operations and then after everything has been paid.

If fundamentals are anything to go by, then it’s a good chance investors might look favourably on these metrics, particularly as free cash flow, margins and revenue growth are key metrics analysts use to value shares.

Not only that – but bigger profits and free cash flow means the prospect for bigger dividends, something we’ve seen abundantly clear on the ASX these past 2 years.

However, it’s the market’s opinion that matters most. Even as nickel surged to unfathomed heights of US$100,000 per tonne yesterday night, shares in BHP Group Ltd (ASX: BHP) – one of the world’s largest nickel players – finished in the red today.

Not only that but nickel pig iron specialist Nickel Mines Ltd (AX: NIC) saw its equity value evaporate by over 20% before entering into a trading pause early in the session. It fell 5% by the close of trade today as well.

You see, it’s not all that clear at face value. Sure, higher commodity prices mean better revenues for those involved, generally speaking.

But there is a whole other side to that equation, one that involves costs being passed down the line, as BHP recently alluded to.

The mining giant had recently warned of the “spillover effect” from this surge in commodities to things like inflation and global growth.

Moreover, Nickel Mines share price tanked today amid concerns of its ties to Chinese nickel giant Tsingshan and its affiliate Shanghai Decent.

Tsingshan and the affiliate were recently caught out holding an enormous short position on nickel futures which has obviously backfired spectacularly in the last few days. There are reports that coverage of this short position is what may have helped propel nickel so high.

Even though Nickel Mines reassured its deal covenants remain well intact, the market was still weary and offloaded shares with authority today.

What else to consider?

But let’s not also forget that this commodities rally, has – according to strategists – been driven in part by a set of extenuating circumstances that most certainly aren’t the ‘norm’.

The combination of COVID-19 and unprecedented monetary and fiscal policy already staged the perfect storm for the sector to stage a rally. Whereas Russia’s invasion of Ukraine and the US Federal Reserve fighting inflation are the two ‘sparks’ for 2022, according to Bloomberg commodity strategist Mike McGlone.

So much so that McGlone even postulates that crude oil could even trade places with bitcoin as the preferred risk asset of choice for investors going forward.

“When the history of 2022 is written, crude oil at the top of our performance scorecard to Feb. 28 appears at elevated risk of trading places with Bitcoin at the bottom”, he said in a recent note.

However, it could be agricultural commodity producers that benefit the most in 2022 according to McGlone, if the current trends keep at pace.

“If prices sustain near end-of-February levels, it should be a boon for energy and agriculture producers”, the strategist said.

As the tension continues to garner steam in Europe, it remains to be seen what direction the global commodities basket will head next.

Nonetheless, as a group, ASX commodity shares are outstripping the broader market. Each of the Betashares Australian Resources Sector ETF (ASX: QRE) and the VanEck Australian Resources ETF (ASX: MVR) that track Aussie commodity players are soaring in the past month and have broken away from Australian large caps in the S&P/ASX 200 index (ASX: XJO).

As with any market situation, it appears to be a case of investors separating those companies deemed to produce the highest forward return potential based on a combination of fundamental and market factors.

TradingView Chart

The post Is this still the dawning of the age of ASX commodity shares? 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 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 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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Four ASX nickel shares are in the green today. Here’s why

Boral share price ASX investor wearing a hard hat looking excitedly at a mobile phone representing rising iron ore priceBoral share price ASX investor wearing a hard hat looking excitedly at a mobile phone representing rising iron ore priceBoral share price ASX investor wearing a hard hat looking excitedly at a mobile phone representing rising iron ore price

It was a good trading day for ASX nickel shares today, with most finishing ahead off the back of surging nickel prices in global markets.

Four ASX nickel shares that finished in the green include Mincor Resources NL (ASX: MCR), Panoramic Resources Ltd (ASX: PAN)IGO Ltd (ASX: IGO) and Western Areas Ltd (ASX: WSA).

Let’s take a closer look at their performance today.

Nickel buying frenzy shoots price to record highs

ASX nickel shares jumped today after nickel prices continued to explode in international markets overnight.

By the close of trade on Wednesday, Mincor shares had climbed 2.93%, Panoramic shares were up 3.23%, the IGO share price jumped 2.19% and Western Areas finished 1.73% higher.

Nickel prices hit record highs above US$100,000 a tonne overnight. The metal surged 400% compared to Friday’s close, according to a report on NAB trade.

In response to these unprecedented prices, the London Metal Exchange suspended nickel trading until at least Friday.

Nickel prices have rocketed 104.49% in a month and 200.57% in a year, trading economics data reveals.

In a report from Thomson Reuters cited by NAB, ING analysts said Nickel is clearly trading in crisis mode.

Fundamentals, though supportive of stronger prices, do not justify this frenzy. The market has long faced structural issues.

Nickel is a crucial component in electric batteries. In a company presentation reported to the market yesterday, Mincor noted electric vehicle sales could hit 20 million by 2025 and more than 70 million by 2040. The company added:

High nickel content batteries are the key to longer range, more efficient electric vehicles.

One ASX nickel share that wasn’t so lucky today was Nickel Mines Ltd (ASX: NIC). As my Foolish colleagues reported, the company’s share price plummeted today, sinking 23% before recovering to finish 4.75% in the red at market close.

ASX nickel share recap

Despite some experts calling it out today as a market frenzy, it’s been a big 12 months for ASX nickel shares. Mincor shares have rocketed 115% in the past year, Panoramic is up a whopping 146%, the IGO share price has seen gains of 108% and Western Areas shares surged 50% in this period.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned around 4.16% in the past year.

The post Four ASX nickel shares are in the green today. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in right now?

Before you consider , 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 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.

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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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3 ASX tech shares at 52-week lows despite tech rally

The S&P/ASX 200 Index (ASX: XJO) managed to climb higher on Wednesday thanks in part to a strong showing by ASX tech shares. Yet, there were still a handful of tech companies that tumbled to new 52-week lows.

At times, it can be telling when certain ASX shares underperform on days of broad strength. Such situations usually indicate investors are paying attention to more prevalent issues at the company level than the positivity demonstrated at a sector-wide level.

Having said this, let’s take a look at three ASX tech shares that reached new lows today.

These ASX tech shares are not catching a break

Siteminder Ltd (ASX: SDR)

While the global hotel e-commerce platform technically reached a new 52-week low today, the company has only been listed since 8 November 2021.

Following its initial share price pop on debut, this ASX tech share has failed to impress shareholders. In February, the Siteminder share price suffered a blow after reporting a net loss of $87 million for the December ending half year.

However, today’s negative move occurred without any substantial information. The company is slated to enter the S&P/ASX 300 Index (ASX: XKO) on 22 March. Shares in Siteminder finished the day at $4.52, down 5.8% from their previous close.

Damstra Holdings Ltd (ASX: DTC)

Another ASX tech share hitting a new 52-week low today was the workplace management solutions company, Damstra Holdings.

Investors have gone cold on Damstra after a guidance downgrade in November last year. Since then, the picture hasn’t gotten prettier, as the company reported a net loss of $56 million compared to $5.49 million in the previous corresponding period.

In a similar fashion, Damstra did not release any announcements today. However, the company is expected to be removed from the All Ordinaries Index (ASX: XAO) this month. Shares in Damstra finished the day at 20 cents, up 2.6% — rebounding from their new 18 cent low.

Dug Technology Ltd (ASX: DUG)

Lastly, Dug Technology is the third and final ASX tech share that cemented a new 52-week low on Wednesday.

Unfortunately for shareholders, it has been a slow and steady grind lower for the high-performance computing company over the past 12 months. Today, Dug Technology announced the appointment of a new CEO after its previous chief executive resigned yesterday.

Shares in Dug Technology finished the day at 55 cents, down 1% from their previous close.

The post 3 ASX tech shares at 52-week lows despite tech rally 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

More reading

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Damstra Holdings Ltd and SiteMinder Limited. The Motley Fool Australia owns and has recommended Damstra 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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