Month: October 2022

The Westpac Banking Corp (ASX: WBC) share price will be in focus on Tuesday after the bank revealed a $1.3 billion hit to its half-year earnings.

The hit – born from notable items, including a loss on the sale of Westpac Life Insurance – will dint the S&P/ASX 200 Index (ASX: XJO) bank’s second-half net profit and cash earnings.

Westpac revealed the upcoming impact after the market closed on Monday. The bank’s stock ended Monday’s trade at $23.87.

Let’s take a closer look at the news that might drive the Westpac share price on Tuesday.

Westpac share price in focus on $1.3b impact

The Westpac share price could be one to watch after the bank announced its second-half results will include a significant dint.

Much of the $1.3 billion post-tax hit from notable items relates to the sale of its life insurance business.

The bank completed the sale of the business to a Dai-ichi Life Group subsidiary for $900 million in August.

That saw Westpac recognise a $1.37 billion loss, $270 million of which impacted its financial year 2021 earnings. The other $1.1 billion will be recognised in its results for the second half of financial year 2022.

Other notable items resulted from:

• The sale of Advance Asset Management and successor funds transfer of BT’s personal and corporate superannuation funds
• The sale of the bank’s motor vehicle and its vendor finance businesses
• Shrinking the bank’s corporate and branch footprint
• Higher provisions for customer refunds, associated costs, and litigation costs

Most of the notable items were previously disclosed to the market as divestments were announced.

They left a positive 12 basis points impact on the bank’s common equity tier 1 capital ratio. The completion of the life insurance sale added 17 basis points, while the other notable items had a 5 basis point impact.

The $83 billion banking giant will release its full-year results on 7 November.

The post Westpac share price on watch following $1.3b earnings hit appeared first on The Motley Fool Australia.

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More reading

• 2 much-maligned ASX shares cheap enough to buy now: experts
• 5 things to watch on the ASX 200 on Tuesday
• Guess which ASX 200 directors bought $4m worth of their company shares last week
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 gold shares have such a top run today?

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 recommended 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 Medibank Private Ltd (ASX: MPL) share price remains suspended from trade on Tuesday.

But that hasn’t stopped the embattled private health insurer from releasing another cyber-attack update to the market this morning.

Unfortunately, things continue to go from bad to worse for the company.

What’s the latest?

Incredibly, it seems that every few days the Medibank cyber-attack incident escalates further.

Originally, the company believed that it had foiled a ransomware attack and advised that there was no evidence that data was taken from its systems. However, it was soon contacted by hackers informing it that data was taken and demanding a ransom.

At that point, the company believed that only its AHM and international student businesses had been impacted by the cyber-attack.

But that no longer remains the case. This morning the company advised that the hackers have “taken data that now includes Medibank customer data, in addition to that of ahm and international student customers.”

Worryingly, once again, Medibank was unable to see that its data had been stolen and the hacker had to produce a sample file to show that this was the case.

In light of this, the company advised that it is unable to say just how much data has been taken that could ultimately be leaked to the world. It commented:

Given the complexity of what we have received, it is too soon to determine the full extent of the customer data that has been stolen. We will continue to analyse what we have received to understand the total number of customers impacted, and specifically which information has been stolen. We have taken the step of making this announcement as we believe it is important to notify our customers of this development. As we continue to investigate the scale of this cybercrime, we expect the number of affected customers to grow as this unfolds.

Premium increases on hold

Perhaps in an effort to stop customers churning to another provider, the company has decided to postpone its premium increases for Medibank and AHM customers until 16 January 2023.

In addition, Medibank’s CEO, David Koczkar, once again apologised for the incident. He said:

I unreservedly apologise to our customers who have been the victims of this serious crime. As we continue to uncover the breadth and gravity of this crime, we recognise that these developments will be distressing for our customers, our people and the community – as it is to me. This is a malicious attack that has been committed by criminals with a view of causing maximum fear and damage, especially to the most vulnerable members of our community. We continue to work closely with the agencies of the Federal Government, including the ongoing criminal investigation into this matter. We thank them for their ongoing support and assistance.

When will the Medibank share price return to trade?

As things stand, the Medibank share price is scheduled to return to trade on Wednesday.

However, given the state of things, it seems quite likely that the company will push back its return date until things are resolved.

The post Medibank share price remains suspended amid worsening cyber incident appeared first on The Motley Fool Australia.

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More reading

• Why have Medibank shares just been suspended from trading on the ASX?
• 5 big ASX announcements making news this week
• 3 ASX shares that are the top buys right now: expert
• Medibank shares remain in limbo after customer data hack confirmed
• Medibank share price halted after hackers claim to have taken customer data

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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The Treasury Wine Estates Ltd (ASX: TWE) share price could be great value at current levels.

That’s the view of analysts at Goldman Sachs, which have just upgraded the wine giant’s shares.

What is Goldman Sachs saying about the Treasury Wine share price?

According to the note, the broker has upgraded the company’s shares from neutral to a buy rating with an improved price target of $14.70.

Based on the current Treasury Wine share price of $12.64, this implies potential upside of 16% for investors over the next 12 months.

The broker is also expecting a 3% dividend yield in FY 2023, bringing the total potential return on offer to approximately 19%.

Why is Goldman bullish on this ASX 200 share?

Goldman has been looking at just how sustainable the growth of Penfolds is in Asia-ex-Mainland China.

The good news is that the broker believes its growth is sustainable with a high earnings margin. It explained:

Whilst our analysis are directional estimates only, we expect sufficient premium market demand to support a revenue range of A$380mn-A$450mn (TWE FY22 A$385mn) with a relatively high quality distribution model focused on modern trade and on-premise key accounts. This revenue range implies ~21% market share of the premium import market and ~6% total wine market across these 7 Asia Focus Markets. As a result, we now have higher confidence of sustainable revenue growth at ~42.5% EBITS margin (vs prior ~40%) for Penfolds.

The broker has also been looking at the recently acquired Frank’s Family Vineyards (FFV) business and highlights that the latest US data supports a more sizeable distribution opportunity at accretive margins. As a result, it now expects “FFV to contribute >20% of Americas sales and >40% of EBITS by 2030.”

All in all, this has led to the broker bumping its earnings forecasts higher for the coming years. Which it believes makes the Treasury Wine share price great value based on current multiples. It concludes:

With proven redirection of Penfolds China volumes as well as refocusing Treasury Americas on premium/luxury, TWE is now re-entering a growth phase with a more diverse and defensive business. We have increased our FY23-25e sales and NPAT by 1%-5% and 5%-13% and now expect the company to deliver ~16% NPAT 2022-25e CAGR. The company is trading at a 12m forward P/E of 22.6x, vs our TP implied P/E of 26.3x. Upgrade to Buy (from Neutral), A$14.7/sh TP (previous A$12.0) implying 19% TSR.

The post Why Goldman Sachs just upgraded this ASX 200 share to a buy rating appeared first on The Motley Fool Australia.

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More reading

• Up 200% since June, it’s not too late to buy these 2 ASX shares: experts
• 5 things to watch on the ASX 200 on Tuesday
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• Treasury Wine share price climbs on strong Q1 performance
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Both dividend shares are rated as buys and expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

National Storage REIT (ASX: NSR)

The first ASX dividend share to look at is National Storage. It is a leading self-storage operator with a portfolio of over 225 centres. From these centres, the company provides tailored storage solutions to over 90,000 residential and commercial customers.

The good news is that management still sees plenty of room to expand its network in the future. It notes that the self storage industry remains highly fragmented, giving it plenty of high-quality acquisition opportunities. This bodes well for National Storage’s income and distribution growth over the long term.

Ord Minnett is positive on the company and has a buy rating and $2.70 price target on its shares.

In respect to dividends, it is forecasting dividends per share of 11 cents in both FY 2023 and FY 2024. Based on the current National Storage share price of $2.39, this equates to yields of ~4.6%.

Rural Funds Group (ASX: RFF)

Another ASX dividend share for income investors to look at is this agricultural focused real estate investment trust (REIT).

Rural Funds has a high quality portfolio of assets across a range of agricultural industries. These include almond and macadamia orchards, premium vineyards, water entitlements, cropping and cattle farms.

These properties are leased to major players in the industry such as Australia’s largest meat processor, JBS Australia, wine giant Treasury Wine Estates Ltd (ASX: TWE), and leading almond producer Select Harvests Limited (ASX: SHV) on long term agreements.

Bell Potter is a fan of the company and recently upgraded its shares to a buy rating with a $2.75 price target.

As for dividends, the broker is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.441, this represents yields of 4.8% and 5.2%, respectively.

The post Experts name 2 ASX dividend shares to buy with great yields appeared first on The Motley Fool Australia.

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More reading

• Don’t miss out on these buy-rated ASX dividend shares: analysts
• Analysts name 2 ASX dividend shares to buy with great yields
• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?
• Which ASX All Ords shares could perform well in a recession?
• Want to collect BIG dividends every month? Buy these 3 ASX shares

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 positions in and has recommended RURALFUNDS STAPLED. 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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one of this edition, we’re joined by Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund.

The Motley Fool: Unlike many funds, you invest in both ASX shares that you think will gain in value as well as ASX stocks you believe will see their share prices fall. What are the advantages to that strategy?

Kristiaan Rehder: We’re a long short fund. This means we have twice the investment opportunities as a long only manager. If a long only manager comes across a company that they identify has red flags, they tend to put their pens down at that point.

For Kardinia, we can extend the research and potentially profit from that trade by going short. And that can be very powerful.

To illustrate, the short book for the month of September contributed around 350 basis points to our performance.

We’re what’s referred to as a variable beta fund, which means we can adjust our net exposure depending on how bullish or bearish we are.

MF: Has the fund every been 100% long or entirely short?

KR: We’re capped at 75% net long and we cannot exceed 25% net short. The ability to vary the net exposure is no different from how I think an investor would manage their own money. They can get more exposure to the market if they’re bullish. If they are bearish, they can go to cash. In our case we can go to cash and also short.

So, we’re not bound to be fully invested at all times, which is a characteristic that most fund managers in Australia have to abide by.

We’ve got a long track record of 16 years. One of the longest running absolute return funds in the Australian marketplace. And the strategy has been tested over that time in all market conditions.

MF: How does that strategy impact the volatility of your returns?

KR: We’ve beaten the market return over the 16 years and we’ve done that with about half the volatility of the underlying markets. The standard deviation of the fund, a common measure of volatility, is around 7%, versus the underlying market which is about 14%.

This comes to the fore during bear markets, where the strategy has a history of protecting the capital.

Back in 2020, with COVID, at the worst point the market was down 36% and we were down 4%. And during the GFC in 2008, the market was down over 40%, and we generated a positive return.

MF: Do dividends from ASX shares play a role in determining your investment decisions?

KR: They certainly do. Kardinia is very focused on dividends. Particularly fully franked dividends, because they’re obviously so valuable to underlying shareholders.

The Australian marketplace is a very high yielding market compared to other markets around the world.

To illustrate the importance of dividends to the Australian market, if you look at the S&P/ASX 300 Index (ASX: XKO), that’s returned about 2.8% per annum over the last five years. If you compare that to the ASX 300 accumulation index, which includes dividends, it’s around 6.8%. So that 4% difference per annum is all to do with dividends.

MF: Do you have any advice to readers hunting for ASX dividend shares on their own?

KR: It’s simply not enough to invest in high dividend paying companies. It’s also important to ensure that those dividends are sustainable.

Some of the things we look at to ensure the dividend is sustainable are a strong balance sheet; good cash conversion on the profit loss and cash flow statements; and sensible management.

We’re also very interested in companies we think are likely to experience a dividend cut, as these companies can often provide interesting opportunities on the short side of the business.

MF: Atop trying to ensure that the dividend yields from the ASX shares you’re investing in are sustainable, what else do you look for from an income stock?

KR: We’ve extended beyond just dividends. We’re also looking at capital management, such as buybacks and capital returns.

BHP Group Ltd (ASX: BHP) is a stock in our portfolio which we bought ahead of capital management.

BHP paid an enormous dividend in its most recent reporting season. It declared a final, fully franked dividend of about US$9 billion. And that’s done very well for us.

We still hold BHP now, and we are favourably disposed to resources generally. We think there is likely to be ongoing demand for the commodities that BHP produces.

We also think it’s likely that at some point over the next six months the Chinese economy will be stimulated. Due to the COVID restrictions that are currently in place and the slowing economy that’s being experienced, there’s a reasonable chance that stimulus will be used to support the economy. And we think BHP will be well positioned for that.

There’s another company which is of particular interest to us. It’s been out of favour for some time, and that’s AMP Ltd (ASX: AMP). Our analysis shows that there’s considerable excess capital. And we think it can surprise the market in regards to the extent of its capital returns in the near term.

**

Tune in tomorrow for part two of our interview, where Kristiaan Rehder explains the ins and outs of how to successfully short ASX shares.

(You can find out more about the Bennelong Kardinia Absolute Return Fund here.)

The post Why these 2 ASX 200 dividend shares are ‘of particular interest’: fund manager appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price surging today?
• Why is the BHP share price leaping 4% on Monday?
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• ASX dividend shares or distribution shares? Is there even a difference?
• Brokers name 3 ASX shares to buy 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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It might be hard to believe amid the turbulence, but there are some ASX shares that have risen in recent times.

One cognitive mistake many investors make is avoiding buying shares that have climbed up, thinking “It’s had its run”.

But that makes no logical sense because stocks don’t have any memory. What’s happened in the past has absolutely no bearing on where it will go in the future.

It’s classic anchoring. 

So keeping this false logic in mind, here is a pair of rising ASX shares that experts are rating as a buy:

Expansion and pricing power

Can you believe there is a software stock that has tripled in the past four months?

You better, because that’s exactly what US company Life360 Inc (ASX: 360) has achieved.

The Life360 share price was languishing at $2.41 at the close of trade on 23 June. The stock closed Monday at $7.08.

But it’s not too late to buy, according to Bell Potter investment advisor Christopher Watt.

“The company has more than 30 million active users a month and is becoming a dominant brand in the US and internationally,” Watt told The Bull.

“We believe there’s potential for Life360 to increase monthly prices for existing customers.”

The app started off as a way for families to track the whereabouts of adolescents but has now expanded functionality to features like driving safety.

Watt is not the only fan. According to CMC Markets, all five of the surveyed analysts currently rate Life360 shares as a strong buy.

Time for a nice glass of wine

While not as dramatic as Life360, Treasury Wine Estates Ltd (ASX: TWE) shares have also surged up while the rest of the market has floundered.

The stock has risen more than 18% since mid-June, all while paying out a dividend yield in excess of 2.4%.

Morgans investment advisor Jabin Hallihan reckons there’s still time to catch the upwards curve.

“This global wine company has more than 70 brands in its portfolio, including the iconic Penfolds brand,” he said.

“We believe the company is trading at a discount. Our 12-month price target is $15.71.”

Treasury Wine shares closed Monday at $12.64.

Hallihan’s team expects a boost in dividend income too.

“According to our forecasts, we expect a dividend yield of about 3% in fiscal year 2023. We have an add rating.”

The wider professional community is warm to Treasury Wines, although not unanimously.

Out of 20 analysts surveyed on CMC Markets, 11 consider the stock a buy while eight recommend holding.

The post Up 200% since June, it’s not too late to buy these 2 ASX shares: experts appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• Leading brokers name 3 ASX shares to buy today
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• Brokers say these exciting ASX growth shares are buys

Motley Fool contributor Tony Yoo has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a very positive fashion. The benchmark index rose 1.5% to 6,779.4 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to rise strongly today after a great start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 40 points or 0.6% higher. In late trade in the United States, the Dow Jones is up 1.5%, the S&P 500 is up 1.4%, and the NASDAQ is 1.1% higher.

Oil prices edge lower

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch today after a soft night for oil prices. According to Bloomberg, the WTI crude oil price is down 0.3% to US$84.76 a barrel and the Brent crude oil price has edged 0.1% lower to US$93.47 a barrel. Weak Chinese demand data weighed on prices.

Pilbara Minerals update

The Pilbara Minerals Ltd (ASX: PLS) share price will be one to watch today when the lithium giant releases its quarterly update. Sky high lithium prices are expected to have led to another very strong quarter for the company. Though, the market will be looking to see if its margins are being impacted by cost inflation.

Treasury Wine upgraded to buy

The Treasury Wine Estates Ltd (ASX: TWE) share price could be great value according to analysts at Goldman Sachs. This morning the broker has upgraded the wine giant’s shares to a buy rating with a $14.70 price target. Goldman notes that its analysts “now expect the company to deliver ~16% NPAT 2022-25e CAGR.”

Gold price flat

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a subdued day after the gold price traded flat overnight. According to CNBC, the spot gold price is fetching US$1,656.2 an ounce. A strong US dollar and rising treasury yields have lessened its appeal.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 directors bought $4m worth of their company shares last week
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 gold shares have such a top run today?
• ASX 200 bank shares have had a stellar month. Here’s why this expert is now worried
• 3 ASX mining shares going nuts on new discoveries

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When you’re young, you might look for high risk, high reward growth shares. You can do this because if things don’t go to plan, you have plenty of time to recover from your losses.

However, when you’re in retirement or approaching it, you may be better focusing on income and capital preservation.

With that in mind, listed below are two ASX 200 shares that could be good options for a retirement portfolio. Here’s what you need to know about them:

Woolworths Limited (ASX: WOW)

Another ASX 200 share to consider for your retirement portfolio is retail conglomerate Woolworths.

Woolworths could be a top option because of its strong brands, entrenched customer base, and defensive qualities. The latter was on display during the pandemic and could prove invaluable if the Australian economy falls into a recession in the next 12 months.

Goldman Sachs is a big fan of the company. This is due to its digital and omni-channel advantage, which the broker believes will drive further market share and margin gains in the coming years.

Goldman currently has a conviction buy rating and $42.70 price target on the company’s shares. In addition, it is forecasting fully franked dividend yields of ~3% in the coming years.

The post Brokers name 2 ASX 200 shares to buy for a retirement portfolio appeared first on The Motley Fool Australia.

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More reading

• 5 ways to be carefree during the next ASX share market downturn
• Brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Thursday
• Could buying Woolworths shares help ‘recession-proof’ your ASX portfolio?
• Better buy: Woolworths or Coles shares?

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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Are you wanting to add some new ASX 200 growth shares to your portfolio this week? If you are, read on.

Three ASX 200 shares that have been tipped as buys are listed below. Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX 200 growth share that has been tipped as a buy is leading appliance manufacturer, Breville. Goldman Sachs is a fan of the company and believes it is well-placed to continue its solid growth in the coming years. In fact, it is forecasting an EBITDA compound annual growth rate of 7% between FY 2023 and FY 2025. This is being driven by the “strong premium coffee in-home consumption trend and competitive advantage in premium brand and product.”

The broker currently has a buy rating and $24.70 price target on its shares.

NextDC Ltd (ASX: NXT)

Another ASX 200 growth share that could be in the buy zone is data centre operator NextDC. Morgans is very positive on the company and expects another strong result in FY 2023. This is partly due to its belief that “[s]tructural demand for cloud and colocation remains incredibly strong.” It also expects “significant new customer wins” thanks to the opening of the new M3 and S3 data centres.

Morgans has an add rating and $13.30 price target on the company’s shares.

TechnologyOne Ltd (ASX: TNE)

A final ASX 200 growth share that has been named as a buy is enterprise software provider TechnologyOne. Analysts at Bell Potter are very positive on the company thanks to its shift to a SaaS business model. The broker expects this to result in higher margin revenue and drive strong earnings growth over the coming years. It has also suggested that in FY 2022 “[b]oth SaaS and total ARR could positively surprise (guidance is SaaS ARR growth of >40%, we forecast 43%.”

Bell Potter has a buy rating and $14.25 price target on its shares.

The post Analysts say investors should buy these ASX 200 growth shares appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Friday
• Analysts say these ASX 200 shares are buys in October
• These are the 10 most shorted ASX shares
• Morgans names 2 ASX 200 shares to buy with 50%+ upside

Motley Fool contributor James Mickleboro has positions in NEXTDC 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 recommended TechnologyOne 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 Zip Co Ltd (ASX: ZIP) share price has been one to watch over the past year. But for all the wrong reasons. ASX growth shares have had a tough 2022 and a tough 12 months. But Zip has been among the highest-profile casualties of the market’s newfound scepticism of unprofitable shares.

Not even ZIp’s new status as ASX’s largest listed buy now, pay later (BNPL) share has saved it from investors’ wroth.

As it stands today, the Zip share price has lost close to 5% so far over the month of October. But that pales against the horror year Zip investors have endured. The company is down a calamitous 85% over 2022 thus far. It’s down an even more depressing 91% over the past 12 months.

As my Fool colleague Monica pointed out earlier this month, if an investor has invested $1,000 into Zip back at its February 2021 all-time high of $12.35, they would only have $51.60 left to their name.

But a few bad chapters don’t make an unreadable book. So could the worst be behind the Zip share price this October?

What’s next for the Zip share price?

The company has indeed enjoyed some more positive news of late. Last week, Zip released a well-received quarterly trading update. For the company’s first quarter, Zip announced that transaction volumes rose 15% to $2.2 billion.

Transaction numbers were up an even better 33% to 19.6 million, while revenues increased by 19% to $163.2 million. Pleasingly, customer numbers surged 50% to 12 million, with active customers up 17% to 7.4 million. The number of merchants was also on the rise, clocking a 70% increase to 94,100.

The company now expects its $140.7 million in cash and liquidity to see it through to profitability.

At the time of this update, the Zip share price spiked 13% – although it has since cooled off.

Unfortunately, brokers still haven’t been showering the company with love. As my Fool colleague Bernd reported earlier this month, brokers at Macquarie are still rating the Zip share price as underperform. Macquarie has a 12-month share price target of 60 cents on Zip. That’s below the last share price of 63 cents.

Saying that, this rating did come before Zip’s well-received quarterly update. So perhaps that will change a few minds. But we shall have to wait and see.

At the last Zip share price, this ASX BNPL share has a market capitalisation of $444.58 million.

The post How has the Zip share price been tracking in October? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Zip share price charges 13% higher on Q1 update
• Has ‘growth at all costs’ been the undoing of Zip shares and what now?
• If I’d bought $1,000 of Zip shares at their all-time high, here’s how much I’d have left
• After a horror year, what’s next for ASX BNPL shares in the new quarter?

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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