Day: March 14, 2022

Why is the Rio (ASX:RIO) share price down 12% in a week?

The Rio Tinto Ltd (ASX: RIO) share price has slumped in the past week after trading ex-dividend.

Rio shares have lost 12% between Monday 7 March and today’s close. The company’s share price finished the day 0.52% down, at $111.12.

Let’s take a look at what’s impacted the Rio share price during the past week.

Why did the Rio share price fall?

A major reason for the share price fall was the company trading ex-dividend last week. The company will be offering a fully-franked final dividend of US$10.40 per share on 21 April.

Trading ex-dividend tends to make a company’s share price fall in proportion to the dividend paid out, as my Foolish colleague Aaron noted last week. Any shareholders who bought Rio Tinto shares on or after ex-dividend day are not eligible for the latest dividend.

Iron ore prices may have also impacted the Rio share price in the past week. The global iron ore price slipped 4% from $US159 per tonne on 7 March to the latest reported price of $152.50, Trading Economics data reveals.

In other news, Rio also revealed it was cutting all ties with Russia on Thursday. This sparked questions about the company’s Queensland Alumina Limited refinery. Russian company Rusal holds 20% of this business. There is speculation Rio may need to buy out Rusal’s share of the venture.

Also last week, Rio was hailed as one of the top three dividend payers in the world for 2021. The only ASX share to top Rio in the list of global dividend payers was BHP Group Ltd (ASX: BHP). Fortescue Metals Group Limited (ASX: FMG) came in at number 10.

Rio share price snapshot

The Rio share price has shed nearly 5% in the past year. It’s fallen 9% in the past month alone although it is up 11% year to date.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 5.7% over the past 12 months.

Rio has a market capitalisation of about $41 billion based on its current share price.

The post Why is the Rio (ASX:RIO) share price down 12% in a week? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto right now?

Before you consider Rio Tinto , 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 Rio Tinto 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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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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Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022

A disappointed female investor sits in front of her laptop and puts her hand to her forehead and closes her eyes in disappointment over share price falls

A disappointed female investor sits in front of her laptop and puts her hand to her forehead and closes her eyes in disappointment over share price fallsA disappointed female investor sits in front of her laptop and puts her hand to her forehead and closes her eyes in disappointment over share price falls

We all know that 2022 hasn’t been the kindest year to ASX shares thus far. Even after today’s robust gains on the market, the S&P/ASX 200 Index (ASX: XJO) remains down 5.8% year to date. However, that’s nothing compared to the Xero Limited (ASX: XRO) share price.

Xero shares have certainly not been a market beater in 2022. In fact, while the ASX 200 has lost 5.8% this year, the Xero share price has plunged by a rather astounding 35.99% over 2022 so far. It’s also down 17.24% over the past 12 months.

Xero share price cops a beating

Now, investors may have gotten used to Xero giving back astronomical returns. After all, this is a company that, despite its recent woes, remains up more than 425% over the past 5 years. So what’s changed for Xero?

Well, unfortunately, it’s not exactly clear. We haven’t gotten much news out of the company in 2022. Xero hasn’t even reported any earnings this year.

But what we do know is that Xero is a pre-profit growth share that, prior to this year, had enjoyed some astounding gains. And this company is not the only one of those that has copped a belting this year. 2022 has seen tech shares of all stripes suffer immense losses.

Take Zip Co Ltd (ASX: Z1P). It’s down a far-nastier 64.1% year to date. Before Afterpay was swallowed by Block Inc (ASX: SQ2), it had also had a rough trot. And Block shares have been under the weather as well, losing more than 20% since their ASX debut.

In fact, the entire S&P/ASX All Technology Index (ASX: XTX) remains down more than 23% year to date.

So it’s possible that Xero has just been caught up in a general market distaste for growth and tech companies that has been one of the defining themes of ASX investing so far this year.

But now that Xero is down by a notable 36% or so in 2022, and down an even more significant 40% from the all-time highs we saw late last year, many investors might be wondering if it could be time to buy Xero shares.

Could it be time to buy?

Well, there are more than a few brokers who think it could be. Goldman SachsCiti and Morgan Stanley have all rated Xero as a buy in the past month. As have analysts at Sage Capital and even here at The Motley Fool (be sure to check out why Fool analyst Ryan Newman likes Xero).

So there are a lot of fans of this cloud-based accounting software provider at the moment.

At the current Xero share price, this ASX 200 tech share has a market capitalisation of $13.95 billion.

The post Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022 appeared first on The Motley Fool Australia.

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

Before you consider Xero, 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 Xero 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 Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. and Xero. 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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Telstra (ASX:TLS) share price climbs amid rumours the telco plans to take on US giants

Man holding phone in front of stocks graphicMan holding phone in front of stocks graphicMan holding phone in front of stocks graphic

The Telstra share price finished in the green today amid speculation it plans to buy a major stake in Fetch TV.

The company’s shares gained 1.56% today and were trading at $3.90 at the market close. In comparison, the  S&P/ASX 200 Index (ASX: XJO) closed 1.2% higher.

Let’s take a look at what might have impacted investor sentiment in the telco today.

Potential new deal

Speculation is mounting Telstra plans to buy a 51% stake in Fetch TV, an independent Australian pay-TV provider offering streaming services via the internet.

According to a report in the Sydney Morning Herald, the telco plans to build a combined platform that can “compete against international companies such as Apple and Google”.

Telstra also holds a 35% stake in pay-TV provider, Foxtel. Fetch TV has coverage in at least 670,000 homes.

Sources told the publication that Telstra and Fetch TV were in advanced talks about a possible deal that could be finalised as soon as the end of March.

Flood assistance

In other news, Telstra has offered $250,000 for communities impacted by the floods in Queensland and New South Wales.

Telstra CEO Andy Penn said in a statement on Friday:

As part of our overall support for flood-affected communities, the Local Flood Grants will provide either cash or technology to the value of up to $10,000 to eligible local organisations.

Our local Telstra teams have been on the ground working around the clock to get communities back online as quickly as possible.

Furthermore, analysts have recently recommended Telstra as a potential dividend share to buy.

As my My Foolish colleague James reported, Morgans predicts a fully franked dividend of 16 cents per share in FY 2022 and FY 2023. The broker has a $4.56 price target on Telstra shares.

Telstra share price ASX recap

The Telstra share price is up 27% over the past 12 months, but shares in the telco have dropped 3% in the past month and are down 6.7% year to date.

For perspective, the benchmark ASX 200 has returned nearly 5% over the past year.

Telstra has a market capitalisation of almost $46 billion based on its current share price.

The post Telstra (ASX:TLS) share price climbs amid rumours the telco plans to take on US giants appeared first on The Motley Fool Australia.

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

Before you consider Telstra , 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 Telstra 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 owns and has recommended Telstra Corporation 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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Why is the Novonix (ASX:NVX) share price down 44% YTD?

a man with a moustache sits at his computer with his hands over his eyes making a gap between his fingers so he can peek through to his computer screen.a man with a moustache sits at his computer with his hands over his eyes making a gap between his fingers so he can peek through to his computer screen.a man with a moustache sits at his computer with his hands over his eyes making a gap between his fingers so he can peek through to his computer screen.

The Novonix Ltd (ASX: NVX) share price finished in the red on Monday, closing at $5.12, down 0.19% on the day.

It’s been a difficult year for Novonix shareholders who have seen their holdings lose more than 44% in value since trading recommenced in 2022.

While the company has struggled, the S&P/ASX All Technology Index (ASX: XTX) has also faltered more than 22% this year so far. However, Novonix is still trailing well behind the broad tech sector over that time.

What’s up with Novonix shares?

The market has punished the battery materials and technology company in recent months with Novonix shares continuing their rapid descent from a high of $10.68 in early January.

At the same time, the broad tech sector has taken a downturn as well. In fact, Novonix tends to track the index quite closely, as shown below.

TradingView Chart

Not only that, but rising yields on long-dated bonds has resulted in a correction to high-beta and high-growth equities in 2022.

The relationship between bond yields and stock valuations is inversely related, so the rise in yields has compressed ASX tech share valuations this year to date (as shown below).

TradingView Chart

Hence, with a downturn in the wider sector, this appears to have spilled over into downward pressure on Novonix as well.

Today, the company’s shares traded at near six-month lows on volumes less than 50% of the four-week trading average.

Investors have been piling out of the company since it reported a much larger expenditure base for the first half. Brokers took notice of the blowout too and made note of the company’s capital management.

Last month, Morgans said that Novonix had spent almost $9 million more than the broker’s estimates on operations and that headcount has doubled in its battery testing services division.

As a result of its market forecasts and the likelihood of operating costs increasing again next year, the broker lowered its valuation to $4.88 per share but kept a hold rating on the stock.

Novonix share price snapshot

In the last 12 months, the Novonix share price has shot up around 85% and is leading the benchmark over that time.

However, in the last month alone it has collapsed 22% and is flat over the last five days of trading.

The company has a market capitalisation of $2.4 billion.

The post Why is the Novonix (ASX:NVX) share price down 44% YTD? appeared first on The Motley Fool Australia.

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

Before you consider Novonix, 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 Novonix 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

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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