Day: July 19, 2022

3 blue chip ASX 200 shares experts say are buys

growth ASX shares, small caps

growth ASX shares, small caps

The ASX 200 index is home to a good number of blue chip shares. But which of these shares would make good additions to a portfolio this week?

Three blue chip shares that are highly rated are listed below. Here’s what experts are saying about them:

CSL Limited (ASX: CSL)

The first blue chip share to look at is CSL. It is a leading biotherapeutics company which owns the CSL Behring and Seqirus businesses. Combined, these two businesses have a portfolio of life-saving and lucrative therapies and vaccines which are generating billions of dollars in sales each year. But management isn’t resting on its laurels. Each year the company invests in the region of 10% to 11% of its sales back into research and development activities every year. This means it is on course to invest ~US$1 billion into these activities this year. This ensures that CSL has a pipeline of potentially lucrative products to support its long term growth.

Analysts at Citi are big fans of the company. The broker currently has a buy rating and $330.00 price target on its shares.

REA Group Limited (ASX: REA)

Another ASX 200 blue share to look at is REA Group. It is the dominant player in real estate listings in the Australian market. In fact, in the first half of FY 2022, during one month the company saw 13.2 million people visit its local site. This is the equivalent of 65% of Australia’s adult population. Furthermore, on average, there were 3.3x more visits than the nearest competitor each month. Thanks to this leadership position, new revenue streams, acquisitions, price increases, and its international operations, the company has been tipped to continue its solid growth in the coming years.

Goldman Sachs remains very positive on REA Group. Its analysts currently have a buy rating and $164.00 price target on its shares.

ResMed Inc. (ASX: RMD)

A final blue chip ASX 200 share to look at is ResMed. It is a medical device company with a focus on the growing sleep treatment market. Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a very strong rate over the last few years. Pleasingly, thanks to its significant market opportunity and the growing prevalence of sleep disorders, analysts are tipping the company to continue its growth for the foreseeable future.

Morgans is bullish and has an add rating and $37.95 price target on its shares.

The post 3 blue chip ASX 200 shares experts say are 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

See The 5 Stocks
*Returns as of July 7 2022

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended REA Group 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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Down 76% this YTD, can the Novonix share price claw back gains?

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.

Beaten-down battery technology company Novonix Ltd (ASX: NVX) extended its losses on Tuesday, closing 0.46% lower at $2.16 apiece.

This brings the company’s losses to more than 76% year to date, well ahead of sector indices and benchmarks.

For instance, the S&P/ASX 200 Index (ASX: XJO) is down 10.7% this year to date while the S&P/ASX All Technology Index (ASX: XTX) is 32% lower.

Where to next for the Novonix share price?

Novonix has given back all of its gains earned from 2021 to date. Its share price now trades back at January 2021 levels, having soared to a high of $12.16 in December last year.

Since then, shareholders have endured a one-way ticket south – at a pace much faster than the wider market.

As it stands, the Novonix share price now needs to gain 233% to return to its January 2022 levels.

To reach its all-time high, it needs to appreciate more than 460%, something that seems highly improbable in the current climate. The downtrend in the Novonix share price is shown on the chart below.

TradingView Chart

Clearly, the downside has been heavy for Novonix investors.

The company’s market capitalisation is currently valued at just over $1 billion. That’s a considerable drop from a market cap of $4.4 billion in December. This, too, on an asset base of $438 million.

Some market watchers are questioning how a $4 billion company — in December — delivered just $5 million in H1 FY22 revenue, a loss of $15 million in cash from operations (CFFO), and a net loss of $28 million.

For reference, Dicker Data Ltd (ASX: DDR) is another ASX tech company valued at around $2.1 billion. It delivered FY21 revenue of $2.5 billion, CFFO of $20 million, and an after-tax profit of $73 million.

‘Liquidity era’ closing

The ‘pandemic era’ of 2020-2021 was marked by tremendous amounts of cheap liquidity coursing throughout the veins of financial markets.

Investors were happy to pay a premium for the promise of growth and return, set to occur sometime in the future.

This resulted in an enormous upswing in speculative investing, whereby unprofitable companies were re-valued at exorbitant multiples. Record low interest rates and a ‘risk-on’ attitude helped fuel the sentiment.

But, fast forward, and the market has shied away from rewarding unprofitable companies in 2022. This is evident through the large wind-down in growth and tech stocks.

Morgans is neutral on Novonix shares, valuing them at $2.98 apiece after a roughly 40% slice to its previous valuation.

Hence, with the prospects for tech shares dwindling in FY23, it remains to be seen if Novonix can re-rate to the upside. It seems the price of lithium and graphite might not have a strong bearing on the company’s share price.

After all, Novonix touts itself as a “battery materials and technology company” and is rated in the tech sector by the Global Industry Classification Standard (GICS).

The post Down 76% this YTD, can the Novonix share price claw back gains? 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

See The 5 Stocks
*Returns as of July 7 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 Scott Phillips.

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Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape

man using laptop happy at rising share priceman using laptop happy at rising share price

AMP Ltd (ASX: AMP) has highlighted its digital advantage in a recent presentation to investors.

AMP shares fell 1.46% today to trade at $1.01. For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) finished 0.01% in the red today.

Let’s take a look at what the company’s CEO is plugging today.

What is AMP saying?

AMP CEO Alexis George has touted the company’s digital presence in an Allan Gray Live investing webinar.

Speaking to investors on Tuesday, George said AMP has a plan to “launch a digital mortgage next week”.

She said:

We will launch a digital mortgage next week. Now yes, we used to partner and that’s brave.

But we did that in less than 100 days from concept to getting the fourth customer and that is what I want our bank to be — more agile, respond to what’s going on, and be brave about putting new initiatives out there.

George highlighted the company’s digital presence, saying “we are a digital bank, you know, we don’t have branches, we are a digital bank”. She said:

Are we mignon, yeah. We’re one point something percent market share of of mortgages, but we’re digital. We have a brand we have a consumer presence. And I think they’re really important.

In recent news, Mirvac Group (ASX: MGR) has taken control of the AMP Capital Wholesale Office Fund (AWOF). Investors voted to appoint Mirvac as the trustee of the $7.7 billion office fund.

This fund is made up of 11 major assets in Sydney and Melbourne, including Collins Place, Melbourne and the Quay Quarter, Sydney.

Mirvac is expected to take over in as the investment manager and property manager of these assets in October.

AMP share price snapshot

AMP shares have lost 6% in a year, while they have jumped 3% in the past month.

For comparison, the ASX 200 Financials Index is up 28% in the past year and 29% year to date.

AMP has a market capitalisation of nearly $3.3 billion based on the current share price.

The post Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape 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

See The 5 Stocks
*Returns as of July 7 2022

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Motley Fool contributor Monica O’Shea 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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Is the NAB share price in danger from a resurgent ANZ?

A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

The National Australia Bank Ltd (ASX: NAB) share price has been rising over the past month. But could a stronger Australia and New Zealand Banking Group Ltd (ASX: ANZ) derail its progress?

Over the past month, the NAB share price has risen by more than 12%. That’s strong progress, considering the S&P/ASX 200 Index (ASX: XJO) has only gone up by 3.3% in the last month.

In recent times, investors have been impressed by the progress that NAB’s relatively new leadership team, including CEO Ross McEwan, have made in turning the bank around.

For example, the NAB FY22 half-year result included cash earnings growth of 4.1% to $3.48 billion.

The CEO said that focused investment has been “key” to delivering strong momentum across the business.

But, banks are fighting each other for market share. There are the big four banks of NAB, ANZ, Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA). And there are other players like Macquarie Group Ltd (ASX: MQG), Bank of Queensland Limited (ASX: BOQ), and Bendigo and Adelaide Bank Ltd (ASX: BEN) that want to grow.

As such, an increase in market share for ANZ could mean a decrease in market share somewhere else. For starters, an acquisition of Suncorp’s banking operations would simply merge the market share of ANZ and Suncorp. But after that, could ANZ use its bigger size to compete more strongly with NAB and others to grow its market share?

ANZ kicks things up a notch

The ANZ CEO has said that the acquisition could mean it can “compete more effectively in Queensland”.

The Australian Financial Review also reported that CEO Shayne Elliot said:

This is a big step forward, but I don’t think moving from 13% to 15% market share somehow gives us some dominant position or some pricing power that we didn’t have before.

It’s a modest uplift, and we get to be a better competitor, with the really big players in the market who are people like CBA. Just as Suncorp probably feels dwarfed by ANZ, we feel dwarfed by CBA.

It’s worth noting that ANZ will become the third largest in terms of mortgages and retail deposits if its Suncorp deal goes ahead, jumping ahead of NAB. It will also add $47 billion of home loans for ANZ.

But, even before this deal, ANZ reported that it’s getting on a level playing field with the big four in loan processing times. Home buyers value being able to get faster loans through the system. In recent times, ANZ had seen longer processing times, a factor in its losing market share to other banks.

But in the trading update for the last quarter, released on the same day as the acquisition news, ANZ said:

Adding operational capacity and processing resilience in our Australian home loan business has helped deliver consistently faster turnaround times across all channels, and we are in line with major peers for our key customer segments. Lending volumes grew $2 billion (3% annualised) in the third quarter, with particularly strong growth in June. We remain on track to grow in line with the Australian major banks before the end of the financial year and are delivering growth with an eye to maintaining margin performance and credit quality.

A combination of a stronger national presence and better processing times could help ANZ capture more new loans, and slow down growth for NAB.

Foolish takeaway

The ANZ-Suncorp deal is not approved or done yet. There are many hurdles to pass, including the Australian Competition and Consumer Commission (ACCC) ruling on competitive impacts in the sector.

But, if ANZ is successful, it could be a little harder for NAB and others to grow their loan books as much as they have done in recent history.

The post Is the NAB share price in danger from a resurgent ANZ? appeared first on The Motley Fool Australia.

Three inflation fighting stocks no ones’ talking about

Savvy Motley Fool investors may have already found three stock moves to help fight inflation.
Three ASX stocks that could be hiding right under your nose.

Learn More
*Returns as of July 1 2022

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Motley Fool contributor Tristan Harrison 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 Macquarie Group Limited and Westpac Banking Corporation. 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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