Month: October 2022

The S&P/ASX 200 Index (ASX: XJO) is once again enjoying some time in the sun as we head towards the conclusion of this Thursday’s trading session. 

At the time of writing, the ASX 200 is up by a robust 0.59% at around 6,850 points.

So now it’s time to delve a little deeper into these market moves. Let’s check out the ASX 200 shares that are presently at the peak of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara Minerals is first up this Thursday. So far today, a chunky 19.75 million Pilbara shares have been swapped on the share market. There hasn’t been any news out of Pilbara for this session.

However, we have seen a very healthy move in the Pilbara share price itself. Currently, the lithium share is enjoying a 2.51% boost to $5.11 a share. This looks to be the cause of the high volumes we are seeing.

Medibank Private Ltd (ASX: MPL)

For the second day in a row, ASX 200 health insurance provider Medibank Private makes the list. Medibank has seen a decent 28.57 million of its shares bought and sold so far this Thursday. After returning from its trading halt yesterday, Medibank had a shocker.

But investors seem to be in a forgiving mood during this session, and have sent the company back up by 1.05% to $2.90 a share. With all of the drama surrounding this company at present, these kinds of volumes are not entirely unexpected.

Core Lithium Ltd (ASX: CXO)

Finally today, we have another ASX 200 lithium stock in Core Lithium. Today has seen a whopping 51.47 million Core Lithium shares exchanged so far. This probably is a consequence of the depressing announcement the company made to investors this morning.

As we covered at the time, Core announced that its supply deal with electric vehicle manufacturer Tesla has collapsed.

The two companies reportedly failed to come to terms for the supply of lithium spodumene concentrate that both sides could agree upon. Investors haven’t reacted kindly, with Core Lithium shares down a painful 5.5% at $1.38 each. This is almost certainly the cause of the elevated trading activity we are seeing.

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

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More reading

• Is the NIB share price benefitting from Medibank’s woes?
• Why ‘long-term lithium prices are far too low’: Wilsons
• Why ANZ, Australian Clinical Labs, Core Lithium, and Kogan are sinking today
• Why is the Qantas share price so volatile today?
• Could these ASX 200 lithium shares grow into dividend juggernauts?

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 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 NIB Holdings Limited (ASX: NHF) share price benefitting from the woes of its arch-rival Medibank Private Ltd (ASX: MPL) this week?

Medibank has certainly had one of the worst weeks in its eight years or so of its public history. The company suffered a well-publicised cyber attack earlier this month which left potentially millions of customers’ healthcare data exposed.

Medibank shares went into a trading halt on this news on 13 October and again last week, only returning back to the markets yesterday.

But investors were brutal in their reception of the ASX health insurance provider. Medibank closed at $2.87 a share yesterday, a good 18.2% or so from its pre-halt levels.

The company initially fell again today, down to a new 52-week low of $2.76. However, it has recovered since then and is presently up by 0.70% at $2.89 a share.

So how is the NIB share price reacting to all of this news in its backyard?

Is the NIB share price benefitting from Medibank’s woes?

Well, if you thought NIB shares would be the main beneficiaries of its rivals’ woes, you’d be dead wrong. For one, NIB shares are deep in the red today, nursing a loss of 1.6% to $6.65 a share.

But NIB shares have been on the slide for weeks now. In fact, the company began falling dramatically in value from 13 October onwards, around the date the Medibank cyberattack became public knowledge.

However, this could be something of a coincidence. For on that date, NIB shares returned from a trading halt of their own. But this had nothing to do with cybersecurity or Medibank.

As we covered at the time, NIB shares were halted so that the company could conduct a capital raising. NIB ended up raising $135 million to facilitate its expansion plans into the national disability insurance scheme (NDIS). NIB intends to become a Plan Manager with its acquisition of Maple Plan.

So it seems that investors could have been voicing their disapproval of these plans with the share price drops we saw around then. Or else lowering the NIB share price to the $6.90 that the institutional placement took place at.

Either way, it’s certainly a raucous period in both Medibank and NIB’s histories. But we can conclude that Medibank’s share price woes of late don’t seem to be benefitting the NIB share price at all.

The post Is the NIB share price benefitting from Medibank’s woes? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Codan, Coles, Medibank, and Pilbara Minerals shares are sinking
• Medibank share price plunges 15% as cyberattack bites into outlook
• 22 high-yield ASX dividend shares Wilsons is targeting
• Medibank share price remains suspended amid worsening cyber incident

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 NIB Holdings 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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It has been a busy day for the S&P/ASX 200 Index (ASX: XJO) with plenty of updates hitting the wires.

For example, three ASX 200 shares that have released trading updates today are listed below. Here’s how they are performing in FY 2023:

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price is up 1.5% to $17.41 following the release of a trading update at the corporate travel manager’s annual general meeting.

Corporate Travel Management revealed that it had a record month in September, with total transaction value (TTV) at approximately $0.8 billion. And while its revenue recovery was only at 75% of pre-COVID levels, it has climbed higher in October. This bodes well, as consensus estimates require a ~80% revenue recovery across FY 2023.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is up slightly to $42.92. This follows a solid update from the retail giant this morning.

JB Hi-Fi advised that all its businesses have delivered double-digit sales growth during the first quarter of FY 2023. The JB Hi-Fi Australia business posted a 14.6% increase in sales, the New Zealand business delivered a 27.7% increase in sales, and The Good Guys business reported a 12.3% increase in sales.

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price is up 3% to $10.03. This morning the owner of brands including Rebel and Super Cheap Auto released a trading update ahead of its annual general meeting.

That update reveals that like for like sales were up 20% during the first 16 weeks of FY 2023. Though, it is worth highlighting that lockdowns were occurring in the prior corresponding period. As a result, management has warned investors not to extrapolate this growth. Another positive was that its gross margin remains consistent with the same period last year.

Management also warned that “[w]hile current trading remains strong, the Group expects higher mortgage rates and increased cost of living expenses will begin to impact consumer spending.”

The post 3 ASX 200 shares rising after Q1 trading updates appeared first on The Motley Fool Australia.

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More reading

• Why is the Qantas share price so volatile today?
• 5 ways to be carefree during the next ASX share market downturn
• 3 ASX 200 shares I’d pounce on when the clouds clear: expert
• Top brokers name 3 ASX shares to buy today
• Why Chalice Mining, Core Lithium, Corporate Travel Management, and NIB are rising

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 Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited and JB Hi-Fi 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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Three ASX mining shares are lifting higher along with the materials sector on Thursday.

The S&P/ASX 200 Materials Index (ASX: XMJ) is currently the second-best performing sector index with a 1.5% gain in afternoon trade. It’s second only to the S&P/ASX 200 Energy Index (ASX: XEJ), which is up 2.18%.

Meanwhile, the broader market is also seeing a rise, with the S&P/ASX 200 Index (ASX: XJO) up 0.54%.

So let’s cover which ASX mining shares are climbing along with the rest of the market.

Koba Resources Ltd (ASX: KOB)

The Koba Resources share price rocketed 136% earlier today before the shares were placed in a trading halt at the request of the company. The shares were trading hands for 26 cents apiece at the time of the freeze.

Shares lept amid the ASX mining share announcing claims at its Whitlock Lithium project covering an area of 145km2.

Earlier this morning, my Fool colleague Monica gave details about the potential of the stake, stating:

The project is located immediately on strike from the Tanco mine, which has lithium reserves of 7.3 Mt at 2.76% lithium oxide. Also nearby, are lithium resources including 10.2 Mt at 1.4% Li2O2, 3.6Mt at 1.28% Li2O3 and 1.1Mt at 1.51% Li2O4.

Trading of Koba Resources’ shares is currently under a voluntary trading halt pending an announcement from the company. Shares will go back on the market when the announcement is made, or on 31 October.

WA1 Resources Ltd (ASX: WA1)

The WA1 Resources share price is also having a cracker of a Thursday, up 21.43% to 85 cents. Earlier today, the ASX mining share, which listed on the ASX in February this year, hit a new all-time high of 99 cents before partially retreating.

Like Koba Resources, WA1 also posted a company update to the market this morning, which included its first drill results in Western Australia.

The company discovered mineralised carbonate with significant yields of niobium. It also announced that it had drilled seven holes as part of its maiden drill program.

Further assay results are due for its P1 and Luni targets in the coming weeks.

Aurelia Metals Ltd (ASX: AMI)

Aurelia Metals is another strong performer. The Aurelia share price is currently up 17% to 12 cents.

Investors could be feeling bullish on the release of the ASX mining share’s quarterly update and activities reports that both hit the market this morning.

Indeed, in its outlook, the company expects its output to reach full maximisation during the December quarter this year. At the same time, its expenses are expected to fall during the next financial year.

As for its activities, it produced 22,500 ounces of gold at an all-in-sustaining cost (AISC) of $2,643/oz. It also saw positive results from its metal production, which is falling in line with FY23 planning.

The post 3 ASX mining shares going gangbusters on Thursday appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares leaping more than 10% on quarterly updates
• Guess which ASX lithium share is soaring 136% on big news

Motley Fool contributor Matthew Farley 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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As we discussed earlier this week, there is something funny going on with Telstra Corporation Ltd (ASX: TLS) shares of late.

Telstra is one of the S&P/ASX 200 Index (ASX: XJO)’s most famous and dominant blue chip shares. It’s also a company the vast majority of Australians would be familiar with.

Since Telstra has been listed on the ASX for more than two decades now, most investors would be familiar with its ticker code ‘TLS’.

And yet, the old Telstra that we all know and (maybe) love is looking a little different this week.

For one, requesting a price quote for ‘TLS shares’ might not be very fruitful.

Instead, one will find the current Telstra share price using the code ‘TLSDA’. That doesn’t quite roll off the tongue in the same way, one could argue.

So we have TLS and TLSDA. Does this mean that Telstra now has two ticker codes?

Is it TLS or TLSDA for Telstra shares?

Well, not quite. At the moment, the TLS ticker code is dormant. But not extinct. Telstra is actually in the midst of a corporate and legal restructuring. Its name will soon change to ‘Telstra Group Limited’ rather than ‘Telstra Corporation Limited’.

This reflects that Telstra will soon be, legally anyway, a new holding company for its four now-separate underlying businesses: ServeCo, InfraCo Fixed, Amplitel and Telstra International.

According to the company, it is undertaking this revamp to “increase focus on its customer and infrastructure businesses, increase transparency of the assets in these businesses, and create greater flexibility and optionality to realise value from the Telstra Group’s fixed infrastructure assets over time”.

But when this whole operation is complete, traditionalists will be relieved to know that Telstra shares will return to their old TLS ticker code. This is expected to occur on 1 November.

Until then, remember to use TLSDA for looking up the prices on Telstra shares.

The post Are there now 2 lots of Telstra shares trading on the ASX? appeared first on The Motley Fool Australia.

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More reading

• 22 high-yield ASX dividend shares Wilsons is targeting
• Analysts say these high quality blue chip ASX 200 shares are buys
• Here’s how I allocate my ASX share portfolio and why
• Headwinds for Telstra shares are now behind them: expert
• Which ASX 200 shares could benefit from the federal budget?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 Telstra Corporation 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 S&P/ASX 200 Index (ASX: XJO) is having a solid day on Thursday and is on course to record another gain. In afternoon trade, the benchmark index is up 0.55% to 6,849.3 points.

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

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is up 5% to $5.25. This follows the release of the iron ore miner’s half year results. Investors have been buying the company’s shares despite it reporting a 34% decline in revenue to C$579.9 million and an 82% decline in profit to C$61.1 million. They may have been expecting an even softer result.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is up 7% to $8.48. Once again, this was despite the company reporting a sizeable decline in revenue. For the first quarter, Lynas posted a 44.4% quarter on quarter decline in sales revenue to $163.8 million. The company blamed some of this softness on a “catastrophic” water shortage that reduced its overall production volumes.

Newcrest Mining Ltd (ASX: NCM)

The Newcrest share price is up 3% to $17.92. This morning this gold miner released its first quarter update and revealed gold production of 527koz and copper production of 32kt. While this was down on the prior corresponding period, this was due partly to planned maintenance. In addition, the company remains on track to achieve its annual guidance.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up 5% to 26.8 cents. Investors have been buying this lithium developer’s shares following the release of an update on its 75% owned North American Lithium (NAL) operation in Quebec, Canada. That update reveals that the company has further advanced the restart of production at NAL. It is expecting production to commence during the first quarter of 2023.

The post Why Champion Iron, Lynas, Newcrest, and Sayona shares are storming higher appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 gold shares smashing the benchmark returns today?
• Lynas share price jumps despite 44% revenue fall
• Sayona Mining share price higher on lithium project update
• Newcrest share price up 5% on strong Q1 update
• Is the Lynas share price a buy ahead of tomorrow’s update?

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 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.

What happened

Tesla (NASDAQ: TSLA) stock is moving higher for the second straight day today. After jumping another 3.7% in early trading, the Tesla share price was up 1% at the market close, bringing its two-day gain to about 6%.

So what

The moves higher came after one analyst still sees more than 50% upside for Tesla stock even in the face of economic headwinds, as well as a report that the EV leader might have its sights set on the next location for another manufacturing plant.

Following Tesla’s third-quarter earnings report last week, Morgan Stanley‘s Adam Jonas lowered his price target on the stock to $330 per share from $350. Though Jonas said he wanted to “make room for unexpected headwinds” in the current economic environment, the new price target is still more than 50% higher than where Tesla stock started this week. Other news came from Reuters reporting that Tesla CEO Elon Musk may be planning on a new investment in Mexico.

Now what

Musk reportedly met with the governor of the northern Mexican state of Nuevo Leon, which borders Texas. The meeting also included other local officials and the U.S. ambassador to Mexico, Ken Salazar, according to Reuters.

Several U.S. automakers have operations and suppliers in Mexico, and it remains unclear if Musk is eyeing the area for a new production facility or some other need. Musk has said his company would eventually likely need about 12 manufacturing plants to produce the volume he eventually strives for. Tesla is currently ramping up its third and fourth facilities in Germany and Austin, Texas.

Investors want to see that growth from the company, regardless of where Musk identifies the next site or sites. The report that he may be making progress on a new investment seems to have investors buying back into the stock this week after it has declined more than 35% year to date. 

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

The post Why did Tesla stock rise today? appeared first on The Motley Fool Australia.

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More reading

• Why Tesla and other EV stocks popped today
• Here’s how I allocate my ASX share portfolio and why
• This famous investor is buying Tesla shares again. 3 reasons you should too
• Why Tesla stock tanked today
• Is the Core Lithium share price at risk following Tesla’s disappointing earnings?

Howard Smith has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in 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 Scott Phillips.

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

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It can be very overwhelming to decide which ASX exchange-traded fund (ETF) to buy.

With more than 250 ETFs listed on the ASX and counting, options are abundant. 

So, here are a handful of things I weigh up when buying an ASX ETF.

ETF strategy

First things first, it helps to narrow down my investment universe. Usually, I’ll have a particular type of ETF in mind.

For example, I might be searching for a growth-focused thematic ETF. So my options would include the likes of the BetaShares Global Cybersecurity ETF (ASX: HACK) or the VanEck Video Gaming and Esports ETF (ASX: ESPO). 

Or perhaps I’m looking for broad-based exposure to the ASX share market. In this case, the BetaShares Australia 200 ETF (ASX: A200) and Vanguard Australian Shares Index ETF (ASX: VAS) would come into play.

In any case, it’s important to understand an ETF’s strategy and what it’s designed to do.

I’ll then consider how the ETF’s strategy aligns with my investment objectives and tolerance for risk.

How it fits into my portfolio

When I’m weighing up a prospective ASX ETF, I’ll also consider how it complements or overlaps what’s already in my portfolio.

While there’s no shortage of options for ETFs on the ASX, some are designed to do similar things. 

For example, the A200 and VAS ETFs both provide exposure to ASX shares. The A200 tracks the S&P/ASX 200 Index (ASX: XJO) while VAS tracks the S&P/ASX 300 Index (ASX: XKO), so there’s notable overlap.

But it’s not just the overlap between ETFs that I’m conscious of. I’ll also look into how a prospective ETF might overlap with my individual shares.

For example, the A200 and VAS ETFs are notably weighted to the big ASX banks. If I already held shares in, say, Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) then I’d be getting even more exposure to the banks.

The ETF provider’s website is always my go-to port of call for information. They’ll have product pages for each of their ETFs, detailing a range of data including the individual holdings and weightings inside the ETF.

ETF fees

Next up we have management fees, which you’ll also find on the ETF provider’s website or the ASX directory. 

It’s very important to be mindful of fees because they can eat away at your investment returns, especially over a long period of time.

Take a $100,000 portfolio, for example, earning 7% a year for the next 25 years. If this portfolio incurred no fees, it’d grow to $540,000.

But add in annual fees of 2%, which effectively reduces annual returns to 5%, and this portfolio would stand at just $340,000. That’s $200,000 in fees or nearly 40% of the portfolio’s final value!

Just like investment returns, fees also compound. What may appear to be a trivial percentage fee can add up big time over many years.

So, when you’re weighing up a prospective ETF, it pays to consider the fees. You can see how they compare to similar ETFs from other ETF providers.

Fees for a plain, index-tracking ETF are often less than 0.2% per year. Meanwhile, fees for a thematic ETF can sit around the 0.5% mark. 

As a general rule of thumb, if I’m paying more than 0.5% I’d need to have a good reason for it. For example, perhaps the ETF provides targeted exposure to a niche market sector. Or perhaps it’s actively trying to outperform the share market.

In saying all of this, fees make up only part of the research puzzle and I wouldn’t overlook a better ETF simply because of slightly higher fees.

ETF size

Another metric worth paying attention to is the size of the ETF.

Though not nearly as important as fees, the size of an ETF tells you how much money is invested in it. And in turn, the potential likelihood of the provider closing down the ETF.

Remember, ETF providers make a dime by charging fees on the money invested in their ETFs. So, the less money invested, the less they make.

You’ll find this information on the ETF issuer’s website. It’s often shown as net assets or assets under management (AUM).

An ETF closing down isn’t the end of the world. If this were to happen, you’d likely be presented with some options, such as receiving the value of your units back in cash. But personally, it’s something I prefer to avoid.

What’s more, larger ETFs are typically more liquid. In other words, they usually have more buy and sell orders placed for them each day. This can reduce the gap between what a seller is asking and what a buyer is willing to pay, otherwise known as the ‘buy-sell spread’. 

Spreads are a hidden cost of investing and represent the price of entering and exiting a stock or ETF. The tighter the buy-sell spread, the better.

ETF performance

Last but not least we have performance. I should note that as they say, past performance is not a reliable indicator of future performance. But I think it’s an important metric nonetheless.

When I’m assessing performance, I like to look at returns over multiple years. As we know, different ETFs will do well and not so well at different times. 

When it comes to performance, it’s worth noting how a particular ETF has performed against its benchmark. This is especially important for index-tracking ETFs because it shows how well an ETF is doing what it’s designed to do.

It’s also worth investigating how an ETF is performing against its peers. There’ll likely be at least one ETF similar to the one I’m researching. And if there’s not, I can still compare performance to other options I’m weighing up.

How I research ASX ETFs

So there you have it. Five of the things I zero in on when I’m researching new ASX ETFs to add to my portfolio.

Happy hunting!

The post 5 things I look at when buying an ASX ETF appeared first on The Motley Fool Australia.

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• How are ASX cybersecurity shares faring amid all these hacks?
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Motley Fool contributor Cathryn Goh has positions in BETA CYBER ETF UNITS and BetaShares Australia 200 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF 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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The lithium price is up 188% over the past 12 months, closing last night’s session at US$76,807 per tonne.

Wilsons equity strategist Rob Crookston says the consensus among analysts right now is for long-term lithium prices to drop back to about US$36,000 per tonne. He says that’s “far too low”.

Crookston writes on Livewire: “While we do not expect lithium prices to remain elevated at these levels over the next 12 months, we believe they will be significantly higher than consensus…”

He says the energy transition “involves more energy storage and a higher uptake of electric vehicles, both of which will create a higher demand for batteries, specifically lithium-ion batteries”.

Why the long-term lithium price prediction is too low

Crookston elaborates:

With a significant increase in demand for EV’s comes a significant increase in demand for lithium-ion batteries. We expect demand for lithium to grow by 6-8x between now and 2030.

We don’t believe lithium supply can keep up with this level of demand growth. Lead times for lithium mines (from discovery to production) can take 5+ years, so there is no quick fix. If demand can grow at the market’s expected pace, this could lead to large supply deficits from 2025 onwards.

Crookston says the energy transition is a major thematic trend and ASX lithium shares are the best way for investors to capitalise on it.

He says:

We believe one of the best ways to play this thematic is through the minerals and metals that will be in high demand as we progress through this decade and beyond.

We believe the market has not fully quantified the volume of required commodities accurately in relation to the transition, and many battery mineral miners are still undervalued relative to potential growth of their underlying commodities.

When looking at the mineral mix in batteries, all roads still lead to lithium as the core base of battery technology over the next decade. We do not see an alternative to the lithium-ion battery (and hence lithium) in decarbonising the global auto fleet.

Which ASX lithium shares should you buy?

Allkem Ltd (ASX: AKE) is the Wilsons team’s preferred ASX lithium share. They cite its position as among the world’s top five producers, with operations in brine, spodumene, and hydroxide.

Crookston adds:

We prefer lithium miners, like AKE, who are currently producing lithium. We believe there is more exuberance in the non-producers, and valuations may have overshot fair value.

[Allkem has] business operations are spread across Argentina, Australia, Canada and Japan. The company has deep brine and hard rock lithium resources and a depth of experience in these fields. AKE brine production is low cost relative to the Western Australia spodumene (hard rock) mines.

We believe consolidation is likely in the pipeline for AKE, one of the biggest players in South America’s ‘Lithium Triangle’. The company could acquire smaller explorers to increase its capacity.

The current Allkem price represents value, according to Crookston. Wilsons increased its investment fund weighing in Allkem to 3% in early August.

Allkem shares are trading at $14.76 at the time of writing, up 2.8% for the day so far and up 32% in 2022.

Wilsons also likes three other ASX lithium shares. They are Pilbara Minerals Ltd (ASX: PLS), IGO Ltd (ASX: IGO), and Mineral Resources Limited (ASX: MIN).

The post Why ‘long-term lithium prices are far too low’: Wilsons appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Allkem Limited. 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 Woodside Energy Group Ltd (ASX: WDS) share price has been rising. It’s up more than 16% in a month and tracking 57.7% higher since the start of the year.

As one of the world’s largest oil and gas businesses, Woodside is benefiting from the higher prices for those resources. Today, shares in Woodside are trading a healthy 2.48% higher at $35.77.

With the company generating such good net profit after tax (NPAT) and cash flow right now, could this be a good time to consider Woodside for dividend income?

Well, first let’s look at what the company is expected to pay to shareholders.

Woodside dividend

The company’s financial year is the same as the calendar year, unlike our typical financial year which starts in July.

According to estimates on CMC Markets, Woodside is expected to pay an annual dividend of $4.03 per share in FY22. That dividend expectation is based on the projection that the company could generate $5.67 of earnings per share (EPS).

At the current Woodside share price, this means that the FY22 grossed-up dividend yield is expected to be 16.1%.

FY23 isn’t expected to be as positive as FY22, with EPS expectations of $5.07 in FY23 and an annual dividend of $3.89 per share.

That means that, in the 2023 financial year, Woodside might pay a grossed-up dividend yield of 15.5% if resource prices stay high.

Things to consider

Investing in resources is sometimes tricky. Shareholders want the commodity price to go up so the business can make more profit and pay bigger dividends.

However, a lot of resources tend to go through cycles, meaning the profit is cyclical and so is investor sentiment.

The Woodside share price is very close to its 52-week high. It’s riding high, unsurprisingly.

Woodside delivered revenue of US$5.86 billion in the third quarter of 2022, up 70% from the second quarter of 2022. This was the first full quarter after its merger with the former BHP Group Ltd (ASX: BHP) petroleum business. Woodside achieved a portfolio average realised price of US$102 per barrel of oil equivalent (up 7%).

In its quarterly update, it upgraded its full-year 2022 production guidance to 153 to 157 million barrels of oil equivalent (MMboe).

I like how the business is working on — and making progress with — major projects. They can add to its profit and scale. Combined, the Scarborough and Pluto train 2 projects in Western Australia were 21% complete at the end of the quarter and remain on track for the targeted first LNG cargo in 2026.

At the company’s Sangomar project in Senegal, the subsea installation campaign began in September and development drilling progressed, with six of the planned 23 wells now complete. This project was 70% complete at the end of the quarter, with first oil targeted for the second half of 2023.

Is the Woodside share price a buy?

Talking on Ausbiz, Carl Capolingua from ThinkMarkets believes there’s going to be a “major supply deficit” with natural gas – he said he’s bullish on the resource. He likes Woodside and thinks it’s a good longer-term pick considering that around 80% of the business is natural gas.

I agree that profit will likely remain stronger for longer, which should be good for dividend payments.

However, for me, to avoid potential disappointment with the Woodside share price, I don’t think buying when resource prices are high is the best time. It could be better to invest when sentiment is lower.

Don’t forget that just a month ago, it was trading at under $31. I’d be willing to wait for a lower price.

The post Is the Woodside share price a buy for dividends right now? appeared first on The Motley Fool Australia.

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More reading

• 22 high-yield ASX dividend shares Wilsons is targeting
• 5 things to watch on the ASX 200 on Wednesday
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• 5 things to watch on the ASX 200 on Monday
• Expert reveals why these ASX All Ords shares are drumming up a ‘growing international appetite’ right now

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 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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