Day: March 28, 2022

Broker names 2 ASX 200 shares to buy with almost 20% upside

Man drawing an upward line on a bar graph symbolising a rising share price.

Man drawing an upward line on a bar graph symbolising a rising share price.

If you’re looking to add some ASX 200 shares to your portfolio, then it could be worth checking out the two listed below.

Both have been rated as buys by the team at Morgans and tipped to climb materially higher from current levels. Here’s what you need to know:

QBE Insurance Group Ltd (ASX: QBE)

The first ASX 200 share to look at is QBE. Morgans believes the insurance giant’s shares are trading at a very attractive level, particularly given its improving outlook.

The broker currently has an add rating and $13.50 price target on the company’s shares.

Morgans explained: “With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~12x FY22F PE.”

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX 200 share that could be in the buy zone right now according to Morgans is Treasury Wine. The broker likes the wine giant due to the quality of its Penfolds business, favourable tailwinds, and its highly regarded management team.

Its analysts have an add rating and $13.93 price target on the company’s shares.

The broker commented: “TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The company recently reported an impressive 1H22 result despite facing a number of material headwinds. The foundations are now in place for TWE to deliver strong double digit growth from the 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.”

The post Broker names 2 ASX 200 shares to buy with almost 20% upside 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 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 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.

from The Motley Fool Australia https://ift.tt/FQaLuey

Buying ASX shares to cash in on the EV and battery metals craze? Read this

Group of children dressed in green hold up a globe relating to climate change.Group of children dressed in green hold up a globe relating to climate change.

Early adopters of the electric vehicle (EV) and lithium-ion (li-ion) battery trend a few years ago are likely to have seen their holdings lunge forward exponentially in that time.

Just about every player along the li-ion value chain has seen lithium shares explode over the past 12 to 24 months. All while the battery metal itself has soared more than 265% in the last year.

For instance, miners like Pilbara Minerals Ltd (ASX: PLS), Mineral Resources Limited (ASX: MIN) and Allkem Ltd (ASX: AKE) are up 211%, 34% and 138% in that time respectively.

Meanwhile, battery materials and technology company Novonix Ltd (ASX: NVX) has soared over 120% in the last year. Novonix shares now trade at $5.29 apiece. However, that’s after touching a closing high of $12.15 back in December 2021.

TradingView Chart

All of the talk around EVs and batteries includes the presumption that it is a ‘cleaner’ source of energy.

However, is that really the case? Are EVs and batteries really ’emissions free’, as the term goes?

Not everyone agrees with that statement. A quick check of the facts suggests our electrical and/or renewable alternatives for energy mightn’t be as ‘green’ as they appear on face value.

Are batteries ‘zero-emissions power sources’?

Not all those familiar with the subject totally agree that li-ion battery production is the key to a zero-emissions future.

However, the recent surge in oil and gas prices has sent shockwaves through global energy markets. A fact that “should only spur the renewables evolution as it becomes evident that Europe cannot rely on Russian supply,” according to the Australian Financial Review.

Brent crude has soared to near-record highs in the last few weeks. Brent now trades at US$117 per barrel on last check. Whilst United Kingdom gas futures thrust more than 1,300% higher in the 12 months to 7 March. They have now spiked 520% in the past year.

Not to mention, the price of lithium has set a series of consistently new all-time highs over the last year. Lithium now trades at 497,500 Chinese yuan (AU$103,700) per tonne. Trading of nickel futures, another battery metal, was suspended on the London Metal Exchange two weeks ago as traders went into meltdown from tensions in Ukraine.

TradingView Chart

All of these factors are certainly relevant for the cost of li-ion batteries to the end market. However, what about the makeup of these batteries? What are the other costs involved?

Experts weigh in

Says Michael Vail, principal of Tre Ponte Corporate:

To manufacture each EV auto battery, you must process 25,000 pounds [11.3 tonnes] of brine for the lithium, 30,000 pounds [13.6 tonnes] of ore for the cobalt, 5,000 pounds [2.27 tonnes] of ore for the nickel, and 25,000 pounds [11.3 tonnes] of ore for copper.

All told, you dig up 500,000 pounds [226.8 tonnes] of the earth’s crust for one battery.

A typical EV battery weighs one thousand pounds [450kg], about the size of a travel trunk. It contains twenty-five pounds [11.3kgs] of lithium, sixty pounds [27kgs] of nickel, 44 pounds [20kgs] of manganese, 30 pounds [13.6kgs] cobalt, 200 [90kgs] pounds of copper, and 400 [180kgs] pounds of aluminum, steel, and plastic. Inside are over 6,000 individual lithium-ion cells.

Vail is actually referencing notes from a thought-provoking essay from author Bruce Haedrich. Titled “How much do you know about batteries?”, the piece questions the validity of renewable energy’s greenness.

Where do green batteries get their energy?

One other point the author highlights is that batteries don’t actually make electricity. They store electricity that is produced somewhere else.

At the moment, the primary means of energy production on a global scale (Australia included) is by coal, uranium, natural gas or diesel-fuelled generators.

Since a good portion of global energy produced is from fossil fuels, this could mean that a good portion of the EVs on the road are also “indirectly powered by fossil fuels” he postulates.

“Einstein’s formula, E=MC2, tells us it takes the same amount of energy to move a five-thousand-pound gasoline-driven automobile a mile as it does an electric one,” Haedrich writes.

The only question again is what produces the power? To reiterate, it does not come from the battery; the battery is only the storage device, like a gas tank in a car.

Not-so-clean clean energy

In his essay Haedrich also extends critique to both solar and windpower. He encourages readers to think more deeply about the embedded and operational costs involved with each.

“Windmills are the ultimate in embedded costs and environmental destruction,” he writes.

Each weighs 1,688 tonnes (the equivalent of 23 houses) and contains 1,300 tonnes of concrete, 295 tonnes of steel, 48 tonnes of iron, 24 tonnes of fibreglass, and the hard to extract rare earths neodymium, praseodymium, and dysprosium. Each blade weighs 81,000 pounds and will last 15 to 20 years, at which time it must be replaced. We cannot recycle used blades. Sadly, both solar arrays and windmills kill birds, bats, sea life, and migratory insects.

According to the United States Geological Survey, “depending on make and model, wind turbines are predominantly made of steel (66%–79% of total turbine mass); fiberglass, resin or plastic (11%–16%); iron or cast iron (5%–17%); copper (1%); and aluminium (0%–2%).”

There are also extra carbon-costs associated with the transportation and processing of each of these metals and/or chemicals as well.

Contrasting this to output, statistics shared in the Statistical Review of World Energy 69th Edition show that wind power supplied over 5% of electricity generation globally in 2020. Having said that, it accounted for around 2% of global consumption.

Renewable energy floating in the breeze

This year, renewable energy indices are struggling. There’s been an approximate 7% decrease in the Wind Energy Index since the beginning of 2022. In the same time, there has been a 6% drop in the Solar Energy Index, per Trading Economics data.

Both indices have collapsed around 14% and 15% in the past 12 months, respectively.

TradingView Chart

More than meets the eye

There is a generally-held consensus that climate change is happening. What’s more, humanity has a role in ensuring that we look after the planet as best as we can.

A debate has emerged surrounding the best way to go about this. Renewable energy is often at the forefront of the argument.

Most of the debate centres around direct costs, mileage/wattage and the indirect costs associated with mining and producing these products.

Alas, the push into renewable energy in the first place, and inclusion of the latest technologies has started to take effect, per the IVL Swedish Environmental Research Institute.

The report, published in 2019, showed that carbon emissions from battery manufacturing range from 61kg to 106kg per kilowatt hour.

Converting that into kilograms of carbon dioxide (CO2) per hour equals a range of 14.2kg to 24kg CO2/hour, at roughly 24 to 40 cents per minute.

Contrast that to CO2 emissions from driving petrol and diesel engines at around 2.4kg per litre on average, with diesel cars emitting around 20% less than petrol.

The Household, Income and Labour Dynamics in Australia (HILDA) survey 2019 showed that Australians are travelling 54 minutes per day on average, meaning the average car trip could surmount to 129.6kgs of CO2 emitted into the atmosphere, or $2.16kg/minute.

In America, the figure totals to an emission of 4.6 metric tonnes of CO2 per year for a typical passenger vehicle, according to the United States Environmental Protection Agency.

Using renewable energy to make renewable energy

The analysis highlights that many vendors are using 100% renewable energy in the production of their batteries, and recycling waste products, further reducing emissions.

There is also increasingly available data that shows electric vehicles are cheaper to run on average than internal combustion engines. What’s more, purchase costs are reducing substantially.

Noteworthy is that electric vehicle pioneer Tesla Inc (NASDAQ: TSLA) opened its first European gigafactory in Germany last week, with the hope of driving new car costs down further.

The point is that everything comes with a cost. Even with the push into renewable energies, it appears we aren’t there yet in regard to completely offsetting emissions.

In other words, there is more than meets the eye when it comes to renewable energy.

Whilst the transition is ongoing, there are still plenty of kinks to be ironed out. As that occurs, there should be plenty of opportunities for Australian investors to join the race.

The post Buying ASX shares to cash in on the EV and battery metals craze? Read this 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 Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Tesla. 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.

from The Motley Fool Australia https://ift.tt/vT0ha4q

Why the CSL (ASX:CSL) share price will ‘find its mojo again’: expert

A happy doctor in a white coat dancing due to his excitement over the EBOS acquisitionA happy doctor in a white coat dancing due to his excitement over the EBOS acquisition

The CSL Limited (ASX: CSL) share price could return to its glory days if experts are on the mark.

The biopharmaceutical company’s share price finished the day at $261.86, a 1.11% fall. On 21 February 2020, the company’s shares were trading at $336.40.

Let’s take a look at what analysts think could happen to the CSL share price.

Positive broker coverage

CSL will “find its mojo again”, expert FNArena founder Rudi Filapek-Vandyck has predicted. In fact, Filapek-Vandyck has recently bought more CSL shares himself, as my Foolish colleague Tony reported. He said:

The business model was disrupted because of COVID… If I look forward to the next two to three years, I see an environment where CSL will again come to the fore.

If we’re getting an environment where earnings forecasts are falling and companies are issuing profit warnings,… you want to go to the reliability and the safety of CSL

Citi analysts have also recently kept a buy rating on the CSL share price and a $335 price target. That’s 28% more than the current share price. As my Foolish colleague James reported, Citi expects plasma collection improvements to have the most significant impact on the company’s shares.

Morgans is also positive on the company. The broker has put an add rating and $327.60 price target on CSL shares. This broker also cited plasma collections, saying:

Promisingly, plasma collections continue to improve, although remain slightly below pre-pandemic levels, and while industry wide issues remain (eg Omicron; staffing; increase costs), the worst appears behind us.

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

CSL was also recently listed as an ASX “hall of famer” share by QVG Capital. CSL reported revenue growth of 4% in its half-year results in February and a net profit after tax (NPAT) of $1.76 billion.

CSL share price snapshot

The CSL share price has shed nearly 10% year to date, while it is down just over 2% in the past year.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has gained nearly 9% in the past 12 months.

CSL has a market capitalisation of more than $126 billion based on its current share price.

The post Why the CSL (ASX:CSL) share price will ‘find its mojo again’: expert 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

More reading

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.

from The Motley Fool Australia https://ift.tt/kITqzWH

Analysts name 2 exciting small cap ASX shares to buy with huge upside

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 today

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 small caps are highly rated by analysts right now:

Bluebet Holdings Ltd (ASX: BBT)

The first small cap ASX share to look at is sports betting company, Bluebet.

It’s fair to say that 2022 has not been kind to the Bluebet share price. A selloff of sports betting shares globally has led to its shares losing almost 50% of their value since the turn of the year.

While this is disappointing, the team at Morgans remains positive and appears to see this a buying opportunity for long term focused investors. It currently has an add rating and $1.60 price target on its shares.

It commented: “BBT has materially de-rated (FY22 EV/Revenue of 1.6x) in recent months as online sports betting (OSB) peers have come under significant valuation pressure. We remain confident that BBT will retain a disciplined approach in its dual track growth strategy and think this differentiated model will support a re-rating as a track record is established.”

Nitro Software Ltd (ASX: NTO)

Another small cap ASX share to look at is Nitro Software. It is a global document productivity software company behind the Nitro Productivity Suite. Nitro’s core solution provides integrated PDF productivity and eSignature tools to customers through a horizontal, software as a service and desktop-based software suite.

As with Bluebet, its shares have fallen heavily in recent months and have lost 45% of their value in 2022.

Goldman Sachs sees this as a buying opportunity. It 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 $2.60 price target on its shares.

The post Analysts name 2 exciting small cap ASX shares to buy with huge upside 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 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 BlueBet Holdings Ltd and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/UY8GRP0