Day: 23 May 2022

Exchange traded funds (ETFs) can be a great way for investors to diversify a portfolio. This is because they give investors access to a large group of shares through just a single investment.

But which ETFs should you look at? Listed below are two ETFs that have fallen heavily in 2022 and are now trading close to 52-week lows. This could make them top options for long term focused investors. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for ASX investors to look at is the BetaShares Asia Technology Tigers ETF. This popular ETF gives investors easy exposure to many of the Asian region’s most exciting growth shares. At present, the ETF is home to ~50 tech companies that are leading Asia’s technological revolution.

The BetaShares Asia Technology Tigers ETF unit price is down 25% since the start of the year. This has been driven by weakness in the tech sector and regulatory concerns in China.

Among the ETF’s holdings are giants such as Alibaba, Baidu, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent.

In respect to Baidu, it is the search engine giant regarded as the Google of China. It is also an artificial intelligence leader and is aiming to be an autonomous vehicle powerhouse.

Whereas Tencent is the tech giant responsible for the WeChat super app which is used by approximately a billion people. This app also has a virtual duopoly with Alibaba’s Ant Group in the mobile payments industry in the country.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another beaten down ETF for ASX investors to look at is the BetaShares Global Cybersecurity ETF. This ETF gives investors exposure to the leading companies in the growing global cybersecurity sector.

The BetaShares Global Cybersecurity ETF unit price is down almost 20% since the start of the year. Once again, this has been driven by weakness in the tech sector amid rising rates and inflation.

While this is disappointing, it could be a buying opportunity given the increasing demand for cybersecurity services as more infrastructure shifts to the cloud and cyber attacks increase.

Among the companies you’ll be owning with the ETF are Accenture, Cisco, Cloudflare, Crowdstrike, Okta, and Splunk.

CrowdStrike provides the popular Falcon platform. This platform delivers incident response and forensic analysis services that are designed to help businesses understand whether a breach has occurred.

Where Okta is a leading provider of workforce identity solutions. It provides cloud software that helps companies manage and secure user authentication into applications.

The post 2 beaten down ETFs for investors to buy now appeared first on The Motley Fool Australia.

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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 BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Investors who prioritize dividends and intentionally build a portfolio of dividend-paying stocks typically see massive rewards in the long run, often receiving thousands in monthly retirement income. Profiting from some stocks relies solely on increases in their stock price, but dividends essentially reward investors for holding onto shares. If you want to become a better dividend investor, here are three things you should do. 

1. Focus on companies that increase dividends

What largely makes you successful as an investor is seeing the potential in companies and capitalizing accordingly. You should make decisions primarily with the future in mind, not focusing solely on the past or current metrics. A company’s current dividend yield is important, but what dividend investors should strongly consider is its ability to increase its yearly dividend. Companies may pay the same dividend, but if one is increasing its dividend by 10% annually, it’s more attractive.

Certain companies that have increased their annual dividend payouts for at least 25 consecutive years become part of S&P Dow Indices’ Dividend Aristocrats list, while companies that have increased their payouts for at least 50 consecutive years are Dividend Kings. As a dividend investor, if you focus on either, you can be more confident in your investment. Any company that has managed to become a Dividend Aristocrat or King has shown it can withstand broader economic down periods and recessions and still have the proper cash flow to reward shareholders.

History shows that market down periods are inevitable; you might as well invest in companies that have the financial means to make it through such times.

2. Focus on dividend payouts, not yield

It’s common for investors to look at a company’s dividend yield before making investment decisions, but that can sometimes be misleading. Think about this: Dividend yield is based on the annual dividend payout relative to the company’s stock price. If a company pays out $5 annually in dividends and the stock price is $100, the yield is 5% — which is very lucrative on the surface level.

However, if the stock price drops to $50 for whatever reason, the dividend yield becomes 10%. By all means, a 10% dividend payout is seen as good, but when you consider the sharp price drop that led to that yield, you understand why that alone isn’t a good metric. It would be best if you considered what caused that sharp price drop.

Instead of a strict focus on dividend yield, examine a company’s dividend payout to get more insight into its financial health. The payout ratio is how much of a company’s earnings it’s paying out in dividends. A payout ratio above 100% — meaning the company is paying out more than it’s making — is a major red flag because it’s unsustainable in the long run. It helps to be skeptical of companies that have a dividend payout of more than 50%.

3. Watch out for dividend traps

Dividend traps often occur when something is too good to be true. Let’s take younger, smaller companies, for example. Dividends are paid from a company’s earnings, so any money paid out in dividends is money that’s not being reinvested back into the company. For smaller companies, growth is often high on the priority list, and if management is giving too much of its profit to shareholders instead of reinvesting it back into the company, that could be a cause for concern.

There are some exceptions — like real estate investment trusts (REITs) and master limited partnerships (MLPs) — which have high dividend yields built into their structure. But generally speaking, if the dividend yield seems to be questionably high, you likely want to take a deeper look at why.

The same goes for debt. A company’s debt-to-equity ratio — found by dividing its total debt by shareholder equity — lets you know how much of its daily operations are financed through debt. As a rule of thumb, the higher the debt-to-equity ratio, the more risk a company is taking. You want to be cautious of companies with a lot of debt that pay out dividends. Financially healthy companies should be able to pay out dividends from their profits. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 3 ways to become a better dividend investor appeared first on The Motley Fool Australia.

More reading

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• This fundie has beaten the ASX 200 every year for the past 2 decades. Here’s how
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• Why has the CSL share price lagged the ASX 200 over the past week?
• 3 ASX microcap shares going gangbusters on Monday

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 Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Nasdaq Composite fell 9% in the first quarter, as many investors weighed concerns about the strength of the economy. Even so, a wave of Form 13-Fs recently filed with the US Securities and Exchange Commission suggests that some asset managers remain bullish on growth stocks.

In the first quarter, billionaire Chase Coleman of Tiger Global Management added over a million shares of CrowdStrike Holdings (NASDAQ: CRWD) to his hedge fund, making it the third-largest position in the portfolio. Likewise, billionaire James Simons of Renaissance Technologies doubled down on Tesla (NASDAQ: TSLA), and the stock now ranks as the second-largest holding in his hedge fund.

Clearly, these professional money managers see something they like in both companies. But let’s take a closer look before you add them to your own portfolio. Here’s what you should know.

1. CrowdStrike Holdings

CrowdStrike is the gold standard in endpoint and cloud workload security. Its cloud-native architecture is the foundation of that success, as it allows the company to crowdsource tremendous amounts of data from the devices on its network. In fact, its Falcon platform captures trillions of security signals each week, and it leans on artificial intelligence (AI) to surface insights and prevent cyberattacks.

That forms a powerful network effect. Each new data point makes CrowdStrike’s AI models a little better at identifying malicious activity, meaning each new customer creates incremental value for all existing customers and vice versa. To add, CrowdStrike has further differentiated itself with a broad suite of software beyond endpoint and cloud workload security, including solutions for identity protection, threat intelligence, and managed services.

Financially, CrowdStrike is firing on all cylinders. Its customer base jumped 65% to 16,325 in the past year, and the average customer spent 24% more, evidencing the successful execution of its land-and-expand growth strategy. In turn, revenue climbed 66% to $1.4 billion and free cash flow jumped 51% to $442 million.

Looking ahead, CrowdStrike is well-positioned to maintain that momentum. The company puts its market opportunity at $67 billion by 2024, and its capacity for innovation should keep it on the cutting edge of cybersecurity. For example, CrowdStrike recently debuted the industry’s first fully managed identity threat protection service. That means organizations that lack the time or talent to handle their own security can outsource it to CrowdStrike. And adding identity protection to that service is especially significant because 80% of cyberattacks start with compromised credentials.

In summary, CrowdStrike has a strong presence in a critical industry, and its market opportunity should only get bigger as digital transformation creates more attack surfaces for hackers. With that in mind, Coleman’s decision to add shares to his hedge fund makes a lot of sense. More importantly, with the stock price down 50% from its high, now is a great time to buy a few shares for your own portfolio.

2. Tesla

In the first quarter, Tesla once again ranked as the leading electric vehicle (EV) brand, capturing a 15.5% market share. The company also continued to take share in total car sales across its three core geographies: China, Europe, and the US. But the real story was Tesla’s operating margin.

In the first quarter, revenue rose 81% to $18.8 billion, but GAAP earnings surged 633% to $2.68 per diluted share. What drove that accelerated growth on the bottom line? Tesla posted an industry-leading operating margin of 19.2%, fueled by increased production, pricing power, and initiatives like single-piece casting. That figure is likely to drop in the near term as production scales at the new factories in Berlin and Texas, but that uptick in capacity should make Tesla even more efficient in the long run.

Even more exciting, CEO Elon Musk announced plans for an EV robotaxi. The company aims to reach volume production by 2024, which puts Tesla one step closer to realizing its goal of launching an autonomous ride-hailing platform. On that note, Musk believes the company’s full self-driving software will be safer than a human driver by the end of the year, paving the way for software to become the most important source of profitability for Tesla’s car business.

Asset manager Ark Invest has a similar outlook. In a recent report, the firm says autonomous ride-hailing platforms could generate $2 trillion in profits by 2030, while boosting global economic output by $26 trillion. On that note, Tesla has more real-world driving data than any rival, which arguably makes it a frontrunner in the race to build a fully autonomous car.

If you think self-driving cars sound like science fiction, what about intelligent machines? Musk believes Tesla’s autonomous humanoid robot (known as Optimus) will ultimately be worth more than the car business. The company could have a prototype as early as this year, and full-scale production could start next year.

The biggest argument against Tesla is valuation. It’s currently worth more than the next seven automakers combined, and the stock trades for 12.8 times sales. But if Tesla executes on its vision of robotaxis and autonomous robots, that multiple may look cheap in hindsight. Renaissance Technologies clearly believes in the company, but should you add the stock to your own portfolio? That depends on your risk tolerance. If you can handle volatility and you believe in Tesla’s vision, I think it’s worth buying a few shares. For what it’s worth, I own the stock and I have no plans to sell. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nasdaq sell-off: 2 growth stocks billionaires were buying in Q1 appeared first on The Motley Fool Australia.

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Trevor Jennewine has positions in CrowdStrike Holdings, Inc. and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CrowdStrike Holdings, Inc. and Tesla. The Motley Fool Australia has recommended CrowdStrike Holdings, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The rise in the popularity of index exchange-traded funds (ETFs) on the ASX over the past decade or two has no doubt been supported by the idea of ‘if you can’t beat it, join it’. The ‘it’ in this case is the market. Specifically the S&P/ASX 200 Index (ASX: XJO).

‘Beating the market’ is the goal of every ASX investor. After all, if an investor can’t beat the market, then they are mathematically better off investing every cent they have in an index fund. So to hear one ASX fund manager has beaten the market every year for two decades is definitely worth a closer look.

As revealed in the Australian Financial Review (AFR), Jamie Nicol is co-founder of the Brisbane-based DNR Capital. This ASX fundie has managed to steer DNR Capital’s flagship High Conviction Australian Equities fund to an annual return of 12.9% per annum since its inception in 2002. That’s a market outperformance of an average 9.3% per annum that the fund’s ASX 200 Accumulation Index benchmark has achieved over the same period.

Meet ‘Mr 13%’ ASX fundie Jamie Nicol

This outperformance has held over many periods of market turmoil. These include the global financial crisis, the pandemic crash, and the gyrations we have seen over 2022 so far.

Nicol reckons this can be explained by “an eye for quality stocks, smart recruitment and decades of hard work”:

Remember, we started at the end of the dotcom crash, some people ended up with portfolios full of junk, it’s got similarities today… When we set up 20 years ago we were keen to go where ideas were, which would provide us with opportunities at different points in the cycle. Quality stocks at attractive prices is what we thought worked. Once this was defined, we then concentrated our portfolios in a limited number of high-quality businesses, but sought to buy them when there was a mispricing opportunity.

But Nichols also says that his firm still looks at finding value in companies that are suffering from “inefficiencies” in the market. These can be a mispricing of a growth opportunity. Or else buying a company that has been oversold over temporary concerns.

At the moment, DNR is “overweight in the mining sector”. But Nicol is also looking at Aristocrat Leisure Limited (ASX: ALL) and Domino’s Pizza Enterprises Ltd (ASX: DMP) as possible candidates for the ‘oversold’ label.

Nicol also cites patience as a necessary virtue for market outperformance. He says, “opportunities to be contrarian and buy out-of-favour businesses remain a fruitful exercise, you perhaps need more patience for the opportunities to be realised”.

The post This fundie has beaten the ASX 200 every year for the past 2 decades. Here’s how appeared first on The Motley Fool Australia.

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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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Today, the S&P/ASX 200 Index (ASX: XJO) eked out a slight gain on the first day of trade under a new government. At the end of the session, the benchmark index finished 0.05% higher at 7,148.9 points.

Sectors were divided on which direction to head today as investors made sense of financial results, commodity prices, and election outcomes. The biggest winner on Monday was the materials sector amid stronger iron ore prices. Meanwhile, utilities slipped into the red as the market gauged the implications of new energy policies.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Elders Ltd (ASX: ELD) was the biggest gainer today. Shares in the diversified agricultural company strengthened 8.91% after reporting strong first-half results and upgrading its FY2022 earnings guidance. Find out more about Elders here.

The next best performing ASX share across the market today was GQG Partners Inc (ASX: GQG). The global boutique asset management company rallied 8.07% despite there not being any announcements on the ASX. Uncover the latest GQG Partners details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Elders Ltd (ASX: ELD)	$14.92	8.91%
GQG Partners Inc (ASX: GQG)	$1.54	8.07%
Summerset Group Holdings Ltd (ASX: SNZ)	$10.06	6.57%
HUB24 Ltd (ASX: HUB)	$24.91	4.05%
Treasury Wine Estates Ltd (ASX: TWE)	$11.88	4.03%
APM Human Services International Ltd (ASX: APM)	$3.41	3.65%
The a2 Milk Company Ltd (ASX: A2M)	$4.43	3.51%
James Hardie Industries Plc (ASX: JHX)	$38.25	3.41%
Carsales.com Ltd (ASX: CAR)	$19.96	2.99%
Magellan Financial Group Ltd (ASX: MFG)	$15.21	2.98%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• Why have ASX 200 shares popped then dropped on Monday?
• 3 ASX All Ordinaries shares starting the week with new 52-week highs
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• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Why the IGO share price is rallying on Monday

Motley Fool contributor Mitchell Lawler has positions in Elders Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has recommended A2 Milk, Elders Limited, Treasury Wine Estates Limited, and carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Ltd (ASX: CSL) share price has edged 1.48% lower since this time last week.

While the global biotech hasn’t released any market sensitive news in that time, investors have been offloading the company’s shares.

CSL shares closed a further 0.73% down on Monday at $273.15 each.

What’s weighing down CSL shares lately?

A couple of factors are playing against CSL shares for the moment as the COVID-19 pandemic begins to subside.

First and foremost, the S&P/ASX 200 Health Care index (ASX: XHJ) has reversed its gains over the past week, down 0.3%. The index closed another 0.16% lower today.

Investors appear to have focused their efforts on better performing ASX sectors such as the S&P/ASX 300 Metals & Mining (ASX: XMM) index. This consists of the top 300 ASX companies that are involved with gold, steel, and precious metals.

For context, the Metals & Mining sector has soared 5.96% from this time last Monday.

And it’s no surprise that commodity prices have skyrocketed, given the war in Ukraine and inflationary movements.

Market psychology can be a powerful force when crowd behaviour chases market rallies or selloffs during downturns.

Another factor that has led CSL shares to fall is the delay to complete the acquisition of Vifor Pharma.

Originally, the deal was due to be wrapped up by June 2022. However, receiving regulatory approvals is taking a little longer.

As such, CSL now expects the takeover to be finalised within the next few months.

CSL share price snapshot

Uncharacteristically, it has been a turbulent year for CSL shareholders, recording a loss of 4% over the last 12 months.

Year to date has not fared any better with the company’s shares down 6%.

Based on valuation grounds, CSL commands a market capitalisation of roughly $131.5 billion.

The post Why has the CSL share price lagged the ASX 200 over the past week? appeared first on The Motley Fool Australia.

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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 positions in 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) closed slightly in the green after a wobbly old day. But three ASX microcap shares soared higher.

The benchmark index closed Monday up 0.05% to 7,148.9 points. Three ASX shares that bucked this trend were Ragusa Minerals Ltd (ASX: RAS), Discovery Alaska (ASX: DAF) and Creso Pharma Ltd (ASX: CPH).

Let’s take a look at why these three ASX microcap shares stormed higher on the market today.

Creso Pharma

Creso Pharma shares jumped 9.62% today to 5.7 cents However, in morning trade, the company’s share price soared 17% to 6.1 cents. Investors bought the company’s shares on the back of a new agreement. Creso is a cannabis and psychedelics company with operations in Switzerland, Canada, Colombia, Israel and Australia. The company has signed a non-binding, non-exclusive heads of agreement (HoA) with Dr Pickles Pty Ltd. Dr Pickles is a tattoo post-care products company with a database of 20,000 online consumers. The agreement provides Creso with the potential to enter the Australian body care market. Creso will look into commercialising Dr Pickles products in North American markets. Creso has a market capitalisation of $67.4 million.

Ragusa Minerals

The Ragusa Minerals share price soared 25% today to 10 cents. The company’s share price rocketed on news it has secured new tenements prospective for lithium. Ragusa signed a tenement farm-in agreement with May Drilling Pty Ltd, providing the exclusive right to earn a 90% interest in five tenements. The tenements can be found in the “highly prospective” Litchfield Pegmatite Belt in the Northern Territory. Commenting on the news, chairperson Jerko Zuvela said:

Ragusa is in a strong position to rapidly accelerate the development of our project at a time of record lithium prices and within a proven high-quality lithium district.

Ragusa has a market capitalisation of $10.23 million based on today’s closing price.

The ASX microcap share you wish you knew about this morning, Discovery Alaska

Discovery Alaska shares surged 27.69% today to 8.3 cents. However, in earlier trade, this ASX lithium share jumped 62% to 10.5 cents. The company is exploring lithium at the 100% owned Chulitna Project in Alaska, United States. In today’s news, the company confirmed lithium mineralisation at 12 historical drill holes. Using a SciAps Z-901 LIBS handheld analyser, the company showed lithium across broad zones. Laboratory analysis will now follow with the aim of establishing a JORC lithium resource. Discovery Alaska has soared 167% in the year to date. The company has a market capitalisation of $14.5 million.

The post 3 ASX microcap shares going gangbusters on Monday appeared first on The Motley Fool Australia.

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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 Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Some investors who missed out on buying Apple (NASDAQ: AAPL) stock in 2010 may be kicking themselves. For the lucky bunch who invested $1,000 in Apple stock twelve years ago, their investment would be worth $18,400 today. That’s an impressive return on investment over any time frame.

But can Apple replicate its past success in the future? Let’s look more closely at the probable causes for Apple’s previous performance and consider if investors who buy Apple stock today can expect similarly impressive returns. 

The iPhone is vital to Apple’s success 

Apple’s dominant performance over the last decade could not have been achieved without the overwhelming success of the iPhone. One estimate from 2019 suggests that Apple sold at least 1.4 billion iPhones over the previous 10 years. In its most recent two quarters, iPhone net sales totaled a staggering $122 billion, up from $114 billion at the same time last year.

The iPhone is the center of Apple’s ecosystem that keeps customers returning for newer versions of similar products. Indeed, in the two quarters mentioned above, iPhone sales totaled 55% of Apple’s $221 billion overall sales.

AAPL Revenue (Quarterly) data by YCharts

The popularity of the Apple Watch, AirPods, Apple Music, and more would not be possible without the massive base of consumers who own an iPhone. Nevertheless, Apple has created several products that have endured numerous iterations. That demonstrated ability to develop innovative products fueled Apple’s stock price performance.

Investors are confident that Apple will sell billions worth of its existing products and that it is likely to create new products that can reach similar if not more tremendous success. Otherwise, Apple’s market capitalization would not be north of $2 trillion. 

Even with its impressive market share, the sale of products tends to be cyclical and riskier than the sale of software services. With services, consumers pay for services through recurring subscription fees, which reduces the company’s risk and provides a steady stream of revenue. Over the years, Apple has built out its services segment to become a meaningful part of its business.

As of its second quarter ending March 26, Apple boasted 825 million subscribers to Apple Music, iCloud, and Apple TV+, up by more than 165 million in the last year. The segment totaled 20% of Apple’s overall sales in the quarter that ended in March.

Another benefit of a booming services segment is that these units often produce higher margins. Apple’s services segment boasts a 72.6% gross margin, which is significantly higher than the product segment’s gross profit margin of 36.4%. As seen in the chart below, the higher gross margin of the services business has lifted Apple’s overall gross margin.

Investors have likened the growth of the services segment because of its lucrative 72.6% gross margin and its recurring nature. That’s significantly higher than its product segment gross profit margin of 36.4%. The higher gross margin of the services business has lifted Apple’s overall gross margin.

AAPL Gross Profit Margin (Quarterly) data by YCharts

Can Apple replicate its success from the previous decade? 

While Apple’s stock price may not replicate the magnitude of success, it is likely to maintain its position as one of the most dominant tech companies worldwide. Folks are spending an increasing amount of time on their electronic devices, and Apple has earned the trust of billions of people already. That could mean that if or when Apple launches a new product, it will garner a more significant part of the population who will at least try it out.

For instance, reports suggest that Apple has secretly worked on a self-driving electric car. If that product gets widespread customer adoption among existing Apple fans, it could deliver massive shareholder gains. Of course, it’s nearly impossible to predict what Apple’s precise returns will be over the next decade, but the company sure looks to be a safe bet for making today’s investors wealthier over time. In recent weeks, Apple’s stock has been caught up in the broader market sell-off, but that allows long-term investors to scoop up shares at a lower price. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post If you’d invested $1,000 in Apple in 2010, this is how much you would have today appeared first on The Motley Fool Australia.

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Parkev Tatevosian has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Australian Labor Party has claimed victory in the federal election, ousting the incumbent Coalition government. This means there could be some big changes ahead for a range of industries, with ASX energy shares front and centre.

While both parties were broadly aligned on a 2050 net-zero emissions target, Labor’s policies put more of an emphasis on renewables as its method for addressing emissions.

The changing of the guard comes at a time when oil prices are at eight-year highs of US$110 per barrel. Simultaneously, calls for climate action and emission reductions are more topical than ever. In recent months a raft of extreme weather events has impacted Australia.

So, what could the landscape for ASX energy shares look like under Labor?

Pushing more renewables

The energy sector could be in for a shakeup as Labor takes the reins of the Australian economy. As a result, investors are sizing up what it means for the energy industry.

When it comes to politics, usually not all the cards are on the table to see. However, Labor’s Powering Australia policy gives people some insights into what we could expect over the next three years of government.

According to the plan, Labor plans to reduce emissions by 43% by 2030 to remain on track for net zero by 2050. To do this, the government will invest $20 billion in upgrading the electricity grid to make it better equipped for interfacing with an increase in renewable electricity.

Furthermore, the newly sitting government will fund a large deployment of batteries and solar banks across the nation. Labor’s policy outlines $300 million worth of investment for 400 community battery installations and 85 solar banks.

While some have spouted an opinion that Labor could explore other avenues of intervention in the energy market — including taxes — these claims are unsubstantiated.

On another note, Mike Cannon-Brookes was quick to quip that the Labor win could weaken any prospects of the demerger planned by AGL Energy Limited (ASX: AGL).

Where ASX energy shares could get caught out

At face value, it appears that fossil fuel extractors on the ASX may not receive much of a lashing after all. But, a high number of elected Greens and Teal independents in this election could pose more of a risk to ASX energy shares.

Unlike the Coalition and Labor, the crossbench have greater expectations of what is needed to reduce emissions. Data collated by Climate Analytics shows that it is the two more climate progressive parties holding policies that are consistent with 1.5 degrees celsius warming by 2030.

ANALYSIS: If the rest of the world took the same level of #climate action as Australia's political parties, the LNP would bring us 3-4˚C of warming, Labor 2˚C, Teal Independents 1.5˚C (upper band) & the Greens comfortably within 1.5˚C. https://t.co/PxySTyBd4x #AusVotes #Auspol pic.twitter.com/5qvNT0O7dC

— Climate Analytics (@CA_Latest) May 5, 2022

https://platform.twitter.com/widgets.js

If Labor fails to form a majority, the crossbenchers will have the leverage to drive more dramatic climate policy. Even if Labor forms a majority, a greater presence of independents and Greens this time around increases the chances of stiffer crackdowns on polluters.

Ultimately, it is the oil and gas giants that could lose out from such a situation. ASX energy shares such as Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) would be at risk.

The post What might a Labor government mean for ASX energy shares? appeared first on The Motley Fool Australia.

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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. 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 Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price struggled to keep up with the broader market on Monday despite no word having been released by the company.

At market close, the Wesfarmers share price finished at $46.18, 1.22% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) gained 0.05% on Monday.

Let’s take a closer look at what might have been weighing on the conglomerate’s shares today.

What went wrong for the Wesfarmers share price today?

Wesfarmers shares underperformed this afternoon despite getting off to a strong start this morning.

After reaching a high of $47.25 in mid-morning trade – a 1% gain – the Wesfarmers share price tumbled into the red around midday.

That was a similar performance to the broader market. It also dropped this afternoon amid concerns rising COVID-19 cases in China could extend lockdowns, as reported by the Australian Financial Review.

Wesfarmers’ home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – also slid lower for most of today. It closed 0.11% lower.

The Wesfarmers share price was the index’s second-worst performer. The InvoCare Limited (ASX: IVC) share price was its biggest weight, falling 2.4% today.

Wefarmers shares have had a rough start to 2022. They’ve tumbled around 22% year to date. For comparison, the ASX 200 has fallen around 4% in that time.

The company’s stock is also 15% lower than it was this time last year while the index has gained 1.7%.

The post Why did the Wesfarmers share price trail the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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