Day: 2 August 2022

While the S&P/ASX 200 Index (ASX: XJO) is heading south today, this isn’t the case for the Eagers Automotive Ltd (ASX: APE) share price.

This comes after the company announced another sizeable share purchase from one of its directors.

During mid-afternoon trade, the automotive retailer’s shares are swapping hands at $12.58, up 2.11%.

For context, the benchmark ASX 200 index is trading at 6,963.4 points, down 0.42%.

Eagers Automotive insider buying action continues

Despite the Eagers Automotive share price surging 26% in a month, the company’s non-executive director, Nick Politis is continuing to increase his holdings.

According to its release, Eagers Automotive advised that Politis has bought another 10,000 shares at a price of $12.41 apiece. This was conducted through via an on-market trade through his subsidiaries, W F M Motors and NGP Investments.

While the latest transaction equates to the value of around $124,000, Politis spent more than $1.5 million last month.

This means that Politis now has over 70.36 million Eagers Automotive shares and is its largest shareholder by some margin.

Last month, the company received the green light to acquire the rich lister’s privately-owned dealerships in the Australian Capital Territory.

The $193 million deal is expected to generate $450 million in annual revenue for Eagers Automotive.

It is worth nothing that since hitting a 52-week low of $8.65 on 17 June, shares in the company have risen by 45%.

Eagers Automotive share price recap

Although the Eagers Automotive share price has been in fine form lately, it’s down 21% over the last 12 months.

Year to date has fared slightly better, a 6% loss for the period.

Based on today’s price, Eagers Automotive presides a market capitalisation of approximately $3.17 billion.

The post This ASX 200 director bought $1.5 million worth of his company’s shares in July…and he’s still buying appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 share this billionaire has been topping up on
• Here are the top 10 ASX shares today
• Eagers Automotive share price lifts on ‘improved outlook’
• Why Eagers Automotive, Viva Energy, Woolworths, and Zip shares are rising
• ASX 200 midday update: Zip scraps Sezzle merger, Lake Resources’ short seller attack

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 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 Novonix Ltd (ASX: NVX) share price is dragging on the tech sector on Tuesday despite the company’s silence.

At the time of writing, the Novonix share price is $2.455, 4.47% lower than its previous close.

That makes it the S&P/ASX 200 Information Technology Index (ASX: XIJ)’s worst performer. The sector is currently recording a 0.72% gain while the S&P/ASX 200 Index (ASX: XJO) is lifting 0.09%.

So, what might be weighing on the ASX 200 battery technology and materials stock today? Let’s take a look.

What’s weighing on the Novonix share price?

The Novonix share price is defying its sector’s gains on Tuesday to tumble lower.

Interestingly, there’s been no word from the company to explain investors’ apparent shifting sentiment. Though, it’s worth noting today marks the second consecutive day in which the stock has plummeted.

Shares in Novonix fell 9% yesterday after posting an 11% gain over the course of last week. Thus, its latest slip may represent extended profit taking.

It’s also worth noting the company was mentioned in Phillips 66’s latest quarterly report, released after the market closed on Friday. The New York-listed company snapped up a 16% stake in Novonix in August 2021.

Sadly, that holding’s value fell by US$240 million over the three months ended June 2022 and US$398 million over the first six months of this year.

But Novonix isn’t alone in the red today. Many of its fellow battery-focused stocks are also suffering.

Lithium and boron producer Allkem Ltd (ASX: AKE) is the worst performing S&P/ASX 200 Materials Index (ASX: XMJ) share right now, recording a 4.75% tumble.

Meanwhile, lithium shares Core Lithium Ltd (ASX: CXO) and Lake Resources N.L. (ASX: LKE) are down 3.4% and 3% respectively.

The Novonix share price is now 77% lower than it was at the start of 2022. It has also fallen 14% since this time last year.

The post Why is the Novonix share price sliding on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did the Novonix share price just soar 13%?
• Why Block, Iluka, Nitro, and Novonix shares are dropping today
• Powering down: Novonix share price slumps following quarterly results
• After gaining 27% last week, the Novonix share price is struggling this week. What gives?

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 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 Santos Ltd (ASX: STO) share price is in the red today on the back of falling oil prices.

The company’s share price is down 1.83% and is currently trading at $7.245. For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) is down 0.92%.

So what’s going on with the Santos share price?

Oil prices slide

Santos shares may be falling today, but it is not the only oil and gas producer struggling. The Woodside Energy Group Ltd (ASX: WDS) share price is 0.64% lower while Beach Energy Ltd (ASX: BPT) is down 1.1%.

Brent crude oil is down 0.78% to US$99.25 a barrel, while the price of West Texas Intermediate oil is falling 0.71% to US$93.22, Bloomberg data shows.

Oil prices are dropping amid a weaker demand outlook and recession fears, Reuters reported. OANDA senior market analyst Edward Moya said (cited by Reuters):

Crude prices tumbled after a wealth of factory activity data suggested the world is headed towards a giant global economic contraction, and on expectations for more oil output following a very good earnings season for oil companies

Natural gas prices are also down 1.61% to US$8.15 MMBtu, according to Bloomberg.

Meanwhile, Morgans has named Santos as one of three shares to buy in August, my Foolish colleague James reported yesterday. This is due to its “diversified earnings base” and the resilience of its growth profile, the broker says.

Analysts have placed a $9.30 price target on the company’s share price. This is 28% more than its price at the time of writing.

In financial results released in late July, Santos reported record first-half sales revenue of US$3.8 billion.

Share price snapshot

The Santos share price has jumped almost 12% in a year and gained around 15% year to date.

For perspective, the ASX 200 energy index has soared 30% in a year and 31% year to date.

Santos has a market capitalisation of about $24 billion based on the current share price.

The post Why is the Santos share price lagging the ASX 200 on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Credit Corp, Fortescue, and Santos shares are dropping
• 5 things to watch on the ASX 200 on Tuesday
• ‘Alarming’: ASX 200 energy shares lift despite increasing government pressure over supply outlook
• Morgans name 3 of the best ASX shares to buy in August
• 5 things to watch on the ASX 200 on Monday

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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While it might feel like 2022 has been a horror year for ASX stock market investors, reality is the benchmark S&P/ASX 200 Index (ASX: XJO) is only down around 8% since the start of the year.

Rack that up to some impressive gains in commodity stocks — predominantly coal, lithium, and oil — fuelled by a heady combination of energy shortages, the ongoing war in Ukraine, and the ongoing demand for electric cars.

For coal, leading the way among the ASX 200 blue chips is the Whitehaven Coal Ltd (ASX: WHC) share price, up an impressive 130% so far in 2022 as coal prices set a new record during the June quarter.

Whitehaven sports a market cap of $6 billion and expects to report a full-year EBITDA of $3 billion. Astonishingly, it generated $1.4 billion of cash in the June quarter alone. Coupled with its net cash position of $1 billion, shareholders can look forward to a bumper franked dividend.

Trading on an FY23 forecast dividend yield of 19% and two times EBITDA, the Whitehaven Coal share price is demonstrably cheap, clearly one of the cheapest stocks trading on the ASX 200.

But is the Whitehaven Coal share price a buy?

In its June 2022 fact sheet, the top performing Lazard Select Australian Equity Fund said even with “normalised long-term coal price assumptions,” Whitehaven Coal is still looking relatively attractive.

“We believe shareholders are going to be increasingly rewarded with higher dividend payments and share buybacks in the near term,” the fund manager said.

According to ANZ Share Investing, Citi remains confident on Whitehaven shares, recently raising its 12-month share price target by 60% to $7.85. This compares favourably with the current Whitehaven Coal share price of $6.34.

On the flip side, Paradice Investment Management’s Tom Richardson is more circumspect, recently saying on Livewire he’s “worried this is as good as it gets” for Whitehaven Coal. He rates the stock as a hold.

The post Clearly this is one of the cheapest ASX 200 stocks appeared first on The Motley Fool Australia.

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More reading

• Why did the Whitehaven share price surge 28% in July?
• Here are the top 10 ASX 200 shares today
• How long can ASX coal shares keep this rally up?
• Why is Whitehaven share price climbing 5% today?
• Morgan Stanley tips 30% upside for the Whitehaven share price. Here’s why

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bruce Jackson 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 Reserve Bank of Australia (RBA) has increased the cash target rate by 0.50%. That brings Australia’s official interest rate to 1.85%.

The RBA board also increased the interest rate on Exchange Settlement balances by 0.50% to 1.75%.

With the market having broadly priced in today’s rate hike, with some investors having braced for a steeper increase, S&P/ASX 200 Index (ASX: XJO) shares jumped 0.30% higher immediately following the RBA announcement at 2:30pm AEST.

In later afternoon trading, the ASX 200 is up 0.50% since the announcement.

Four consecutive months of tightening

This marks the fourth month in a row of interest rate hikes from the central bank.

In May, the RBA raised the cash rate for the first time in a decade. The central bank boosted rates from the then all-time low of 0.10% to 0.35%. June saw another 0.50% increase as did July, leaving the rate at 1.35% as of this morning before the latest 0.50% increase.

The latest rise was brought forth to combat inflation currently sitting at 6.1% and expected to rise to around 8% by year end before beginning to decline.

What did the RBA say about the latest interest rate hike?

The RBA board reiterated the central bank’s priority of focusing on getting inflation back down into its 2% to 3% target range “over time”. It flagged the importance of “keeping the economy on an even keel” during this process.

Doing so, the bank said, will require a delicate approach.

According to RBA Governor Philip Lowe:

The path to achieve this balance is a narrow one and clouded in uncertainty, not least because of global developments. The outlook for global economic growth has been downgraded due to pressures on real incomes from higher inflation, the tightening of monetary policy in most countries, Russia’s invasion of Ukraine and the COVID containment measures in China.

As for the 6.1% headline inflation figure, the highest rate of price increases witnessed down under since the early 1990s, the RBA expects this to peak by the end of 2022.

Looking ahead, the bank expects CPI inflation of approximately 7.75% over 2022, “a little above” 4% over 2023 and around 3% over 2024.

Lowe expects the Aussie economy to keep growing strongly this year before the pace of that growth slows.

The bank is forecasting GDP to grow by 3.25% in 2022 and 1.75% in 2023 and 2024.

Tight labour markets and some uncertainty ahead

In raising interest rates, the RBA also pointed to the strength of the labour market, with June’s 3.5% unemployment rate the lowest in almost 50 years.

Looking ahead, the bank forecast unemployment of some 4% by the end of 2024. It added that wages are likely to increase “from the low rates of recent years as firms compete for staff in the tight labour market”.

The central bank said the behaviour of household spending remained “a key source of uncertainty”.

According to Lowe:

Higher inflation and higher interest rates are putting pressure on household budgets. Consumer confidence has also fallen and housing prices are declining in some markets after the large increases in recent years. Working in the other direction, people are finding jobs and obtaining more hours of work. Many households have also built up large financial buffers and the saving rate remains higher than it was before the pandemic.

What’s next for RBA interest rate moves?

ASX 200 investors and Aussie borrowers and lenders can likely expect further interest rate hikes from the RBA ahead.

Lowe said that the board “expects to take further steps in the process of normalising monetary conditions over the months ahead”.

However, he stressed the bank is not on a pre-set path.

“The size and timing of future interest rate increases will be guided by the incoming data and the board’s assessment of the outlook for inflation and the labour market,” Lowe said.

The post ASX 200 jumps higher as RBA lifts interest rates by another 0.50% appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• What’s going on with the CSL share price on Tuesday?
• 5 things to do during ASX results season
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bernd Struben 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has fought back and is edging slightly higher. At the time of writing, the benchmark index is up to 6,994.9 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price was up 7% to $4.85 before being placed into a trading halt. This follows speculation that the US Food and Drug Administration has granted the company approval to sell infant formula within the United States of America. A2 Milk is preparing an announcement that responds to the speculation.

Qualitas Ltd (ASX: QAL)

The Qualitas share price has stormed higher again and is up 14% to $2.30. Investors have been buying this alternative real estate investment manager’s shares since it secured commitments for a mandate to invest $700 million on behalf of a new fully discretionary investment vehicle of the Abu Dhabi Investment Authority. The gains may not stop there, though. This morning Goldman Sachs reiterated its buy rating and lifted its price target to $3.20.

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price is up 4% to $7.41. This morning the biopharmaceutical company announced pleasing regulatory progress for its core prostate and kidney cancer imaging programs in the Asia Pacific operating region. This includes progress in the major market of China with its strategic partner Grand Pharmaceutical Group.

Ventia Services Group Ltd (ASX: VNT)

The Ventia share price is up 5% to $2.83. This morning the essential infrastructure services provider revealed that it has been awarded a major road maintenance contract by Auckland Transport. Management notes that the five-year contract has an expected base contract value of NZ$220 million. The agreement also has a five-year extension option.

The post Why A2 Milk, Qualitas, Telix, and Ventia shares are pushing higher today appeared first on The Motley Fool Australia.

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More reading

• Here’s why the A2 Milk share price just popped then stopped
• Guess which ASX All Ordinaries share has rocketed 40% in 2 days?
• Why Core Lithium, Deterra, Panoramic, and Qualitas shares are racing higher
• Why is the Qualitas share price rocketing 23% on Monday?
• Own A2 Milk shares? Here’s what to expect from its FY22 results

Motley Fool contributor James Mickleboro has positions in TELIXPHARM DEF SET. 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 A2 Milk. 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 A2 Milk Company Ltd (ASX: A2M) share price rose more than 10% today amid news the infant formula business could soon get approval to supply the US market. Then it went into a trading halt.

The company’s shares are frozen at $4.85 apiece — that’s 6.83% above yesterday’s closing price.

There is currently an infant formula shortage in the US after a reported potential contamination at one of the nation’s largest manufacturing plants that produces formula.

Since then, several international producers have swung into action to provide as much product to the US as possible, including Bubs Australia Ltd (ASX: BUB).

However, this relies on the US Food and Drug Administration (FDA) giving product approvals through relaxed importing rules. The US government has also provided planes to transport infant formula into the country.

Good news for A2 Milk shares?

According to reporting by the Australian Financial Review, A2 Milk may get the necessary clearance “as soon as this week” for its application to sell infant formula in the country.

The newspaper reported A2 Milk CEO David Bortolussi said:

We have been informed that our application is under active review, and we hope to be able to support US parents and caregivers during this difficult period.

While A2 Milk doesn’t currently have approval to sell infant formula in the US, it does sell fresh milk into the country.

In its FY22 half-year result, A2 Milk reported that its US segment revenue decreased 5.2% to $32.4 million and earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 41.5%, resulting in a loss of $16.4 million.

However, A2 Milk isn’t alone in awaiting FDA approval to sell its formula products in the US. According to the AFR’s reporting, around 160 companies have applied for FDA approval.

With a population well north of 300 million, the US represents a large potential market for infant formula producers, which is why Bubs, A2 Milk, and many others want a piece of that opportunity.

What will this mean for the company?

For Bubs, it has led to a number of promising developments. Bubs is steadily sending a total of 1.25 million tins of infant formula to the US and has announced a number of supplier agreements with US retailers such as Target and Walmart.

The FDA is also developing a new framework to allow companies with enforcement discretion approval to have a pathway to continue supplying the market beyond November.

So, will A2 Milk manage to get a deal for at least one million tins? How many retailers will A2 Milk be able to work with? Can it fast-track the logistics by signing deals with retailers it’s already selling milk to?

Time will reveal if A2 Milk gets approval then what it’s able to do with it.

Investors seem to be betting on a good outcome.

While the A2 Milk share price has jumped higher today, it’s still 11% lower than it was at the start of 2022.

Trading halt

A2 Milk has entered into a trading halt before making another announcement. The trading halt will stay in place until 4 August 2022, or until an announcement has been made.

The post Here’s why the A2 Milk share price just popped then stopped appeared first on The Motley Fool Australia.

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More reading

• Own A2 Milk shares? Here’s what to expect from its FY22 results
• The A2 Milk share price has bubbled 10% higher in a month. What’s going on?
• Here’s why the A2 Milk share price crashed 27% lower in FY22

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 A2 Milk. 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) is currently recovering after a messy morning to record a slight gain this Tuesday. At the time of writing, the ASX 200 has gained a tentative 0.02% and is trading at around 6,995 points.

But rather than trying to figure all of that out, let’s instead dig a little deeper into these market moves and check out the shares currently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Alumina Limited (ASX: AWC)

ASX 200 alumina and aluminium producer Alumina is our first share worth checking out today. So far this Tuesday, a notable 9.94 million Alumina shares have been traded on the markets.

There has been no fresh news out of Alumina. Thus, this volume is the probable result of the movements of the company’s shares themselves.

So far today, Alumina has lost 0.65% and is now going for $1.52 a share.

Pilbara Minerals Ltd (ASX: PLS)

Next up today is ASX 200 lithium stock Pilbara Minerals. This lithium producer has had a hefty 14.52 million shares trade on the markets so far today.

This looks to be a result of the nasty share price fall the company has endured. Pilbara shares are presently trading at $2.74 each, down by 2.32% today.

Yesterday, Pilbara’s new managing director and CEO Dale Henderson took the reins of the company, which could also be influencing volumes.

Zip Co Ltd (ASX: ZIP)

And it’s ASX 200 buy now, pay later (BNPL) that is now the ASX 200’s most traded share this Tuesday. We have seen 15.46 million Zip shares bought and sold on the ASX thus far.

This looks like a consequence of the volatility we have seen with the Zip share price today. Zip is currently bucking the market with a healthy gain of 3.77% to $1.10 a share.

But Zip rose as high as $1.16 earlier this morning before settling to its current level, a rise worth more than 9% at the time.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Can ‘Operation Blue Sky’ take Zip shares up the path to profitability?
• What’s going on with the CSL share price on Tuesday?
• 5 things to do during ASX results season
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

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 positions in and has recommended ZIPCOLTD FPO. 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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It’s been a pretty poor day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At the time of writing, the ASX 200 has lost 0.2% of its value and is back down to below 6,970 points. But it’s been a lot happier for the Coles Group Ltd (ASX: COL) share price today.

Coles shares are having a corker. The ASX 200 supermarket operator has gained a healthy and comprehensively market-beating 1.8% so far today and is going for $19.19 a share at present. But earlier today, Coles shares climbed as high as $19.28.

Coles share price hits new record high

That happens to be a new 52-week high for the Coles share price. It’s also a record high for Coles shares, being the highest share price Coels has climbed to since its demerger from Wesfarmers Ltd (ASX: WES) back in late 2018.

So how has Coles come to this happy occasion on a day that has been rather grim for most ASX 200 shares?

Well, it’s seemingly got nothing to do with anything out of the company itself, seeing as Coles hasn’t released any news or announcements this week.

However, we can point to a couple of factors that could be at play here today.

Along with its arch-rival Woolworths Group Ltd (ASX: WOW), Coles is one of the largest and most dominant consumer staples shares on the ASX 200.

Consumer staples companies are those who sell food, drinks and other household essentials. These kinds of companies are often touted as ‘safer’ investments due to the provision of these life essentials.

As we covered earlier today, the legendary investor Warren Buffett is fond of these kinds of companies, possibly for these reasons. Currently, around 10% of the share portfolio of Buffett’s company Berkshire Hathaway Inc is invested in consumer staples shares like Coca-Cola, Mondelez and Kraft Heinz.

Brokers put ASX 200 consumer staples shares in vogue…

2022 has delivered a sharp rise in uncertainty for investors as concerns over inflation and higher interest rates have taken off. As such, the appeal of companies in the consumer staples sector is arguably rising because of this.

That could be why the Coles share price has risen by more than 7% year to date in 2022 thus far, while the ASX 200 has fallen by more than 8%.

But a number of expert investors have been touting the defensiveness and inflation-resistant properties that Coles shares possess too, perhaps adding to this narrative.

As we covered just yesterday, ASX broker Citi has recently come out and reaffirmed a buy rating on Coles shares. That also came with a 12-month share price target of $21.

Explaining its rating, Citi stated that “mid to high single-digit inflation, expected to persist for at least the next 6 to 12 months, will drive sales growth for supermarket majors Coles and Woolworths”.

We’ve also recently covered how fellow ASX broker Morgans has a similar view. Morgans rated Coles shares as a buy as well, with a share price target of $20.65.

So it’s possible that Coles’ new record high today has also been influenced by these positive broker opinions.

Regardless, it’s certainly been a pleasing day for Coles shareholders.

At the current Coles share price, this ASX 200 consumer staples share has a market capitalisation of $25.64 billion, with a dividend yield of 3.18%.

The post The Coles share price just smashed its all-time high. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today
• Are Coles shares an inflation-beating investment right now?
• Here’s the Coles dividend forecast through to 2024
• Analysts name 2 ASX dividend shares with good yields to buy
• Why I think Coles shares are a compelling buy today

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. 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 COLESGROUP DEF SET and 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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The DroneShield Ltd (ASX: DRO) share price is almost 6% higher today after the company announced a $2 million research grant from the federal government. 

At the time of writing, DroneShield shares are trading for 19 cents each, 5.56% higher, after reaching an intraday high of 19.5 cents this morning. 

Let’s check the latest news from the ASX technology company.

What does this mean for the DroneShield share price? 

Today’s announcement represents DroneShield’s largest government funding to date.

It’s also timely with the company reporting its artificial intelligence, electronic warfare, and adjacent technology services are “increasingly in demand” amid growing geopolitical tensions.

DroneShield touts itself as a “global leader” in providing security solutions to counter aerial drone threats to more than 120 countries. Think of bigger drones trying to pick up intelligence or even acting as attack mechanisms. 

Last year, the company won the Advanced Technologies Award at the 59th Australian Export Awards. 

The latest grant will support further research and development. 

DroneShield CEO Oleg Vornik said:

DroneShield appreciates the substantial support it receives from the Australian Government, through grants and export support for overseas sales, alongside of our current and under proposal contracts with the Australian Defence Force.

In March, DroneShield secured a $2 million order from an international government agency.

The company then formed a partnership with Nearmap Ltd (ASX: NEA) to bolster its platform software with Nearmap’s best-in-class mapping data, serving government, intelligence, homeland security, and defence markets.  

Despite a string of positive announcements in the lead-up to the 12-month peak in the DroneShield share price, its latest quarterly results for 2Q FY22 revealed the business is not yet cash flow positive. 

However, the company is continuing to grow revenue, which remains its main focus. 

The ASX defence and security solution business is quickly becoming one of the pioneers in its niche segment, so it’s worth keeping a close eye on. 

DroneShield share price snapshot

Over the past 12 months, the DroneShield share price has risen by almost 3%, peaking at 30 cents in May.

It’s also managed to outperform the S&P/ASX 200 Index (ASX: XJO), which has fallen by 7% over the past year.  

The company has a current market capitalisation of $82 million. 

The post DroneShield share price lifts 6% on record government grant appeared first on The Motley Fool Australia.

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More reading

• Why did the Droneshield share price charge 10% higher today?

Motley Fool contributor Raymond Jang 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 DroneShield Ltd. The Motley Fool Australia has recommended DroneShield Ltd. 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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