Month: October 2022

Sayona Mining Ltd (ASX: SYA) shares have become an ASX lithium staple, particularly after the company was added to the iconic S&P/ASX 200 Index (ASX: XJO) last month.

With its popularity apparently growing, prospective investors might be surprised to learn another ASX lithium share has beaten them to the punch.

Piedmont Lithium Inc (ASX: PLL) is currently Sayona Mining’s largest shareholder.

So, what drove one ASX lithium share to snap up a huge stake in its peer? Keep reading to find out.

The Sayona Mining share price closed Thursday’s session at 22 cents.

The ASX lithium share with a huge stake in Sayona Mining

There’s a simple reason behind Piedmont Lithium’s massive stake in Sayona Mining. The pair have partnered in a number of Canadian lithium projects.

Those projects include the North American Lithium (NAL) operation. The pair are working to kickstart lithium production at the operation, launching a pre-feasibility study earlier this month.  

But it was a different story back in early 2021. Then, NAL was just a twinkle in Sayona Mining’s eye as the company worked to develop several Canadian lithium projects.

That’s when the company caught US-focused lithium developer Piedmont Lithium’s attention. The pair signed a deal that would see Piedmont Lithium buy a 9.9% stake in Sayona Mining, with the option to receive another 10% through convertible notes, for up to $15.5 million.

Piedmont paid just 0.92 US cents for each Sayona Mining share it snapped up in January 2021. At that point in time, Sayona Mining shares were swapping hands for around 1 cent apiece.  

Piedmont also paid around US$5 million for a 25% stake in Sayona Québec.

Back to the present, Piedmont – which is also listed on the NASDAQ Index – holds around 1.19 billion Sayona Mining shares as of 12 October, according to the latter lithium favourite.

That represents around 14.3% of the company’s outstanding shares.

The post Guess which ASX lithium company is the biggest holder of Sayona Mining shares? appeared first on The Motley Fool Australia.

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More reading

• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• 3 ASX lithium stocks leaping higher on big news
• Piedmont Lithium share price shoots 12% higher on $226m US government grant
• If you’d bought $5,000 of Sayona Mining shares at the start of 2022, congratulations! Here’s what you’d have today
• Why are these ASX 200 lithium shares smashing it on Monday?

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 New Hope Corporation Limited (ASX: NHC) share price will be on watch today as the ASX 200 coal share prepares to take its latest dividends off the table.

On Monday, New Hope shares will be trading without entitlements to the company’s recently-declared monster dividend.

This includes a final dividend of 31 cents per share and a special dividend of 25 cents per share, both of which are fully franked.

With New Hope shares turning ex-dividend for this payment on Monday, today will be the last day to snap up these dividends, which will be paid on 8 November.

Since New Hope doesn’t have a dividend reinvestment plan (DRP), shareholders will have no choice but to receive this payment in cash.

Any New Hope shares purchased after today won’t lay claim to these latest dividends.

But to compensate investors, New Hope will likely be deep in the red on Monday as the value of these dividends leaves the share price.

These latest dividends alone represent a yield of 8.1%, so there’ll be a lot of downwards pressure on the New Hope share price to start the week.

How did New Hope perform in FY22?

New Hope operates on a slightly different financial calendar than most of the ASX. Its financial year ends on 31 July. So, New Hope handed in its full-year FY22 results last month.

It was a bumper set of results, supported by sky-high coal prices which have surged on the back of the Russia-Ukraine conflict.

These results were headlined by a 143% jump in revenue, which hit $2.6 billion, and a 1,139% increase in profit, which came in at $983 million.

Interestingly, New Hope’s production slumped by 18% in FY22, producing 7.9 million tonnes of saleable coal. The company’s operations were impacted by periods of unusually high rainfall throughout the year, along with COVID-related workforce shortages.

However, such was the strength in coal prices that New Hope delivered eye-watering financial growth. 

New Hope’s average realised prices surged from $101.36/tonne in FY21 to $281.84/tonne in FY22, an increase of 176%. Its average realised price in the fourth quarter came in at a whopping $493.52/tonne. 

This helped the ASX 200 coal miner to declare fully franked dividends of 86 cents per share in FY22, up a mammoth 681% compared to the total dividends of 11 cents declared in FY21.

Based on current prices and including special dividends, New Hope shares are spinning up a monster trailing dividend yield of 12.5%. With the benefit of franking credits, this yield cranks up to 17.8%.

What do brokers think about New Hope shares?

New Hope has been a standout performer on the ASX this year, rocketing nearly 200%. It’s kept the party going in recent months, taking out the title as the ASX 200’s best performer in September with a 28% gain. However, some brokers are wary. 

In the wake of New Hope’s FY22 results, Citi maintained its sell rating on New Hope shares and left its price target unchanged at $3. This implies a potential downside of 56% over the next 12 months. Citi’s sell rating is based on valuation grounds.

Goldman Sachs is also bearish. The broker currently has a sell rating on New Hope shares but its price target is higher than Citi’s, coming in at $4.40. This implies a potential downside of 36% over the next 12 months. Goldman’s rating is also based on valuation grounds, along with its view that New Hope’s Bengalla thermal coal mine has only modest production growth potential.

On the flip side, Morgans is fighting for the bulls. Analysts recently retained their add rating on New Hope shares and lifted their 12-month price target to $7.20, implying a potential upside of 4%. The broker’s positive view is being driven by higher-than-expected coal prices. Morgans also sees the potential Associated Water License (AWL) approval at the Acland coal mine as an underrated catalyst for the New Hope share price.

The post Hoping to dig into the monster New Hope dividend? Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• These 2 ASX 200 shares have turned a $10,000 investment into $35,000 in 2022
• 3 ASX All Ords shares smashing multi-year highs on Friday
• Up 24% in a month, is it too late to buy New Hope shares?
• Could dark clouds be gathering for ASX 200 coal shares?
• 4 ASX 200 directors who raised the stakes in their company shares in September

Motley Fool contributor Cathryn Goh 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.

Tesla (NASDAQ: TSLA) stock is down 7.2% on Thursday as of 9:52 a.m. ET, following the electric vehicle pioneer’s release of its third-quarter report yesterday.

The stock’s drop is probably largely attributable to the quarter’s revenue coming in a little lighter than Wall Street’s consensus estimate. Given the challenging market conditions in 2022, many investors are reacting more unfavorably to even relatively minor blips in quarterly earnings reports than they did when the market was in a bull mode. 

There was much to like about the report. Adjusted earnings per share (EPS) beat the analyst expectation, and revenue, operating profit, and free cash flow set quarterly records.

The following is an overview of Tesla’s third quarter centered on seven key metrics.

1. Revenue surged 56%

Quarterly revenue grew 56% year over year to $21.45 billion. This result fell short of the $21.96 billion Wall Street consensus estimate.

Revenue growth was primarily driven by increased vehicle deliveries and a higher vehicle average selling price, partially offset by the strengthening of the US dollar relative to other currencies. Tesla’s clean energy and services/other businesses also contributed to growth. 

Segment year-over-year revenue performance was as follows:

• Automotive segment revenue grew 55% to $18.7 billion.
• Energy generation and storage revenue rose 39% to $1.1 billion. Growth was driven by a 66% increase in energy storage capacity deployments to a record 2.1 gigawatt hours (GWh) and a 13% increase in solar power deployments to 94 megawatts (MW).
• Services and other revenue rose 74% to $1.6 billion. Growth was driven by used car and part sales along with a more than threefold increase in paid use of Superchargers.

2. Vehicle production and deliveries grew 54% and 42%, respectively

In Q3, Tesla produced 365,923 vehicles (about 20,000 Model S and X units and 346,000 Model 3 and Y units), up 54% from the year-ago period.

And it delivered 343,830 vehicles (about 19,000 Model S/X and 325,000 Model 3/Y), up 42% year over year.

3. Auto gross margin was 27.9%

In Q3, automotive gross margin (gross profit divided by revenue) based on generally accepted accounting principles (GAAP) was 27.9%. While this is a strong auto gross margin, it was down from 30.5% in the year-ago period. Sequentially, it was flat, as it was also 27.9% in the second quarter. 

4. Operating income rocketed 84%

In Q3, operating income grew 84% year over year to $3.7 billion. Operating margin (operating income divided by revenue) landed at 17.2%, up from 14.6% in the year-ago period. 

5. Adjusted EPS soared 69%

GAAP net income was $3.3 billion, or $0.95 per share, up 98% from the year-ago period. Adjusted for one-time items, net income came in at $3.7 billion, or $1.05 per share, up 69% year over year. This result surpassed the $1 adjusted earnings per share (EPS) that analysts had expected.

6. Operating cash flow jumped 62%

In Q3, cash generated from operations grew 62% year over year to $5.1 billion. Free cash flow skyrocketed 148% to $3.3 billion.

Tesla ended the quarter with $21.1 billion in cash, cash equivalents, and short-term investments, up by $2.2 billion from the prior quarter. 

7. Supercharger stations increased 32%

Tesla continued its solid pace of building out its network of Supercharger stations. It ended the quarter with 4,283 stations, up 32% from the year-ago period. Supercharger connectors grew 33% year over year to 38,883. 

A great quarter with a new revenue source coming soon

Tesla turned in a great quarter. The company recently began production of its all-electric Class 8 truck, the Tesla Semi, at its Gigafactory in Nevada. It plans to begin deliveries to PepsiCo in December. The beverage and food giant reportedly reserved 100 of these trucks soon after Tesla unveiled this vehicle in 2017.

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

The post Tesla stock drops on earnings release: 7 key metrics you should see appeared first on The Motley Fool Australia.

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More reading

• 3 lithium ASX shares to watch after Tesla’s results
• Why is Tesla stock falling if its business is stronger than ever?
• Tough year for leading global growth fund laid bare with brutal fall in tech stocks
• Why Tesla stock was surging at the market open today
• Tesla and Netflix will make or break the Nasdaq this week

Beth McKenna 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 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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The Westpac Banking Corp (ASX: WBC) share price may be flying this month, but it could be heading even higher.

That’s the view of analysts at Morgans, which have upgraded the banking giant’s shares this week.

What is Morgans saying about the Westpac share price?

According to the note, the broker believes that Westpac could offer the greatest value on a medium term view.

As a result, the broker has upgraded the company’s shares to an add rating with a $26.71 price target.

Based on the current Westpac share price of $23.92, this implies potential upside of almost 12% for investors over the next 12 months.

In addition, the broker is expecting a fully franked 7% dividend yield in FY 2023. If we add this into the equation, the total return stretches to approximately 19%.

Why did the broker upgrade its shares?

Morgans upgraded Westpac after revising its earnings estimates higher to reflect the positive impact of rising interest rates on its net interest margin (NIM).

The broker explained:

Compared to previous forecasts, we downgrade FY22F and upgrade FY23-24F cash EPS, as a result of assuming greater NIM expansion, higher costs, and greater ramp-up in expensing for expected credit losses, partly offset by higher shares on issue. Notable differences to consensus include higher NIM uplift and lower expected credit loss expensing, resulting in a higher dividend forecast.

Another reason to be positive is the potential for share buybacks in the future. While Morgans notes that it wouldn’t be possible right now due to capital constraints, it suspects buybacks could commence from FY 2024.

Buybacks are constrained by APRA’s CET1 capital adequacy requirements. We expect WBC to print a c.11.1% CET1 ratio at FYE-22 vs 10.75% at 3Q22. APRA’s revised framework will apply from 1 January 2023, which includes decreased risk weights applied to loans but higher minimum (equity) capital ratios. Post-implementation, WBC has indicated it will target an operating range for the CET1 capital ratio of 11-11.5%. We assume WBC undertakes c.$5bn of buybacks across FY24-25F, based on surplus capital build.

All in all, the broker feels this makes the Westpac share price great value at the current level.

The post Broker upgrade: Westpac share price tipped to keep rising appeared first on The Motley Fool Australia.

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More reading

• 5 big ASX announcements making news this week
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Westpac share price offers best value in the sector: Goldman Sachs
• Why Hub24, Sezzle, Telix, and Westpac shares are rising
• Tyro share price on watch as Westpac takeover approach confirmed

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Pilbara Minerals Ltd (ASX: PLS) share price has skyrocketed since the last day of the 2022 financial year.

Pilbara shares have soared 117% between market close on 30 June and 20 October this year.

So if I had invested in this ASX lithium explorer at the end of June, how would I be doing?

Winning investment

Let’s say I had invested $5,000 in Pilbara Minerals shares after market close on 30 June. Pilbara shares were available for $2.29 at this time.

With this investment, I would have received 2,183 shares in the company with 93 cents left over.

Now, Pilbara shares are trading at $4.97. So my investment would be worth $10,849.51.

So I would have doubled my money and would have the option of banking a $5,849.51 profit.

Now let’s take a look at Pilbara shares at their all-time high on 7 October. Pilbara shares closed at $5.42 this day. My investment would have been worth $11,831.86 at this time.

But would I want to sell my Pilbara Minerals shares? Macquarie has this week retained an outperform rating on Pilbara Minerals shares with a $5.70 price target following its latest digital auction. This implies a 14.7% upside on the current share price.

On the flip side, UBS rates the Pilbara Minerals share price as a sell, my Foolish colleague Tristan reported recently.

Red Leaf Securities CEO John Athanasiou has also recently recommended investors consider “cashing in some gains” on the Pilbara share price.

Pilbara Minerals does not currently pay dividends. However, Credit Suisse analysts are tipping the company to pay a 29 cents per share dividend in FY23. This would equate to a 5.84% dividend yield for investors.

Pilbara Minerals share price snapshot

Pilbara Minerals shares have climbed 55% in the year to date, while they have risen almost 5% in the past month.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has lost almost 10% in the year to date.

Pilbara has a market capitalisation of more than $14.8 billion based on the current share price.

The post If I’d bought $5,000 of Pilbara Minerals shares at the end of June, here’s how much I could bank right now appeared first on The Motley Fool Australia.

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More reading

• 5 big ASX announcements making news this week
• Here are the top 10 ASX 200 shares today
• Top brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is the Calix share price frozen on Wednesday? (Hint: it involves Pilbara Minerals)

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 recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The CSL Limited (ASX: CSL) share price is out of form this week.

Since the start of the week, the biotherapeutics company’s shares have fallen 3.2% to $271.64.

This is despite the company releasing an update on its new CSL Vifor business earlier this week.

Can the CSL share price bounce back?

The team at Morgans was pleased with what it saw at the company’s presentation earlier this week.

In light of this, it continues to see CSL as a share to buy and has retained its add rating with a trimmed price target of $312.20.

Based on the current CSL share price, this implies potential of 15% for investors over the next 12 months.

What did the broker say?

Morgans notes that the new CSL Vifor business has a strong position across several core therapy areas. It commented:

Vifor offers a leading portfolio across three core therapy areas (Iron deficiency; Dialysis; and Nephrology), with strong brands and a deep pipeline poised to expand the commercial opportunities and support chronic kidney disease patient across the treatment continuum (from preventing kidney damage, to chronic kidney disease treatment, to dialysis treatment to transplant).

The broker was pleased to see that management remains “extremely confident” in the long term growth potential of these therapies. It commented:

Management remains “extremely confident” in its ability to drive long-term sustainable growth by better leveraging a much more diversified product portfolio and deeper pipeline. Notably, management targets >10% revenue growth across Vifor over the medium term and reiterated profit accretion (low-to-mid teens ex-amortisation /one-off costs), including US$75m in cost synergies over the first 3 years.

In light of the above and improving plasma collections, it believes now is the time to buy. It concludes:

While plasma inventories need to be rebuilt over time, strong plasma collections, with ongoing demand across both Behring and Seqirus, coupled with Vifor’s added breadth, portends strong growth and momentum.

The post Here’s what Morgans is saying about the CSL share price appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 share could be 50% higher next year: expert
• Citi says CSL share price is great value amid large iron therapy opportunity
• 2 classic healthcare ASX shares priced to buy now: expert
• 3 ASX 200 shares that turned a $5,000 investment into $1 million
• Why is the CSL share price dropping today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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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So ASX shares and the S&P/ASX 200 Index (ASX: XJO) aren’t in a market crash. At least not yet.

If we want to get technical, a ‘market crash’ is defined by a (usually rapid) 20% or greater drop from an index’s most recent all-time high. The ASX 200 happened to peak at just over 7,600 points back in August last year.

As of yesterday’s close, the ASX 200 was at a far-lower 6,730 points. Now that is a painful 11.4% drop or so. This puts it in ‘correction’ territory. But not quite a crash. Things would have to get a lot uglier for that to happen.

And they well could. While we Aussie investors have so far dodged a 2022 crash, the Americans haven’t been so lucky. As it currently stands, the flagship US index – the S&P 500 Index (SP: .INX) – is currently a nasty 22.5% or so off its last all-time high.

So the US markets are indeed in crash territory. It’s always possible that our markets follow suit sooner or later (I’m not a harbinger of doom – it’s also equally possible that they don’t).

Most investors fear the dreaded words ‘market crash’. It is understandable to be afraid. Very Afraid.

It’s never fun seeing you’re net worth fall. It can be soul-destroying when your carefully selected investments seemingly spit in your face by plunging in value. That’s especially so if you’ve retired or plan to soon.

Look to Warren Buffett

But a market crash can be a time of great opportunity, and nothing for investors to fear.

The legendary investor Warren Buffett, chair and CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), puts it this way:

‘Price is what you pay; value is what you get’. Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.

Another great Buffett quote explaining this rationale is this:

We are going to be buyers of things over time. And if you’re going to be buyers of groceries over time, you like grocery prices to go down. If you’re going to be buying cars over time, you like car prices to go down.

We buy businesses. We buy pieces of businesses: stocks. And we’re going to be much better off if we can buy those things at an attractive price than if we can’t.

The markets, both the American and Australian, have never failed, in all their histories, to recover from a crash to attain a new all-time high. Both markets were at an all-time high just last year.

Nothing in life or investing is ever guaranteed, of course. But if I were a betting man, I wouldn’t put my money in 2022 being an exception to this rule.

Market crashes are nothing to be feared

As AMP economist Shane Oliver recently put it in a Livewire article:

Bouts of volatility are the price we pay for the higher longer-term returns from shares compared to other assets like cash and bonds… So, if we want to grow our wealth, we need exposure to growth assets like shares to make the most of the power of compound interest, but with that comes rough patches every so often…

The key is to look for opportunities pullbacks provide. It’s impossible to time the bottom, but one way to do it is to “average in” over time.

Just look at the National Australia Bank Ltd (ASX: NAB) share price. It got down to just above $13 a share during the COVID market crash of 2020. Yesterday, it closed at $31.89.

That was an opportunity well worth jumping on. The share market is littered with similar cases of quality companies getting thrown out with the bathwater of a market crash. Only to make the bravest investors far richer once the dust settled.

As you can see, a market crash is nothing to be feared for the savvy investor.

The post Buffett: Why a market crash can be an investor’s best friend appeared first on The Motley Fool Australia.

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More reading

• Yes, buy ASX shares now. Don’t wait like everyone else: expert
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• ‘Share market falls are normal’: Here’s how to make the most of them
• Is AGL really an ASX 200 ‘business with huge, huge upside for shareholders’?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank 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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Are you looking for divided shares to buy? If you are, then take a look at the two listed below that Morgans rates as buys.

Here’s what the broker is saying about these dividend shares:

Dexus Industria REIT (ASX: DXI)

Morgans is a big fan of this industrial property company and has named it as a dividend share to buy with an add rating and $3.25 price target.

The broker likes the company due to its exposure to key industrial markets, which remain robust and have a solid rental growth outlook backed by strong tenant demand. Its analysts also highlight that the company’s development pipeline provides near and medium term upside potential.

It commented:

DXI’s portfolio is valued at $1.76bn and is weighted 79% towards industrial and logistics assets. The weighted average cap rate is 5.1%; WALE 5.9 years; and occupancy 97%. DXI is trading at a discount to NTA, offers an attractive yield with solid underlying portfolio metrics and has near/medium-term growth opportunities via the development pipeline.

As for dividends, Morgans is expecting dividends per share of 16.4 cents in FY 2023 and 16.9 cents in FY 2024. Based on the current Dexus Industria share price of $2.49, this will mean yields of 6.6% and 6.8%, respectively.

Santos Ltd (ASX: STO)

Another ASX dividend share that Morgans is positive on is Santos. The broker currently has an add rating and $9.30 price target on its shares.

Morgans believes that Santos is well-placed for growth in the current environment. It explained:

The resilience of STO’s growth profile and diversified earnings base see it well placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development. PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio.

In respect to dividends, the broker is forecasting dividends per share of 22.1 cents in FY 2022 and 29.7 cents in FY 2023. Based on the latest Santos share price of $7.53, this will mean yields of 2.9% and 3.9%, respectively.

The post Broker names the ASX dividend shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Santos share price lifts following US$1 billion quarter
• 5 things to watch on the ASX 200 on Thursday
• Why is the Santos share price getting left behind the ASX 200 today?
• 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 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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There’s rarely a boring moment on the Aussie bourse, and this week has been no different. Huge announcements from many of the market’s favourite ASX shares have been making news over the last few days.  

We’ve had major news of takeovers, cyberattacks, guidance upgrades, lithium prices, and a whopping $100 million fine.

So, without further ado, these are the ASX announcements you need to know about today.

These ASX shares released major announcements this week

Westpac eyes Tyro Payments

Let’s start with the announcement from big four bank Westpac Banking Corp (ASX: WBC) and tech share Tyro Payments Ltd (ASX: TYR).

The pair revealed they’re in takeover talks on Tuesday after plenty of speculation the fintech could be an acquisition target.

As of today, there’s been no word how much might be on the table for the ASX favourite, or whether a deal will go ahead.

Star slapped with $100 million fine

Speaking of a potentially hefty sum, the Star Entertainment Group Ltd (ASX: SGR) responded to the New South Wales Independent Casino Commission (NICC)’s decision to fine the casino operator $100 million and suspend its gaming licence on Monday.

NICC chief commissioner Philip Crawford said earlier that day:

If it were not for The Star’s change in attitude and our belief that it is in the public interest to protect the thousands of jobs at risk, there might have been a different outcome.

Medibank’s unfurling cyber attack

It was a rough week for Medibank Private Ltd (ASX: MPL) shares. They’ve been in and out of the freezer as the company continually updated the market on a “cyber incident” that became an attack.

The company initially gave assurances no customer data appeared to have been taken.

However, come Thursday, it announced to the ASX it was being held to ransom by hackers. The criminals were threatening to release 200 gigabytes of its customers’ data, including certain medical information.

Origin reveals guidance

Origin Energy Ltd (ASX: ORG) shares have also been in the news after the company finally announced financial year 2023 guidance for its energy markets business.

It expects the segment to bring in between $500 million and $650 million of EBITDA this fiscal year.

The company previously withdrew its outlook due to “material developments in… energy markets”.

Pilbara Minerals’ lithium auction

The final ASX announcement to detail today came from lithium share Pilbara Minerals Ltd (ASX: PLS).

The company accepted a pre-auction offer of US$7,100 dry metric tonnes for its latest shipment of spodumene concentrate. Therefore, the shipment has a total value of more than US$35 million.

The post 5 big ASX announcements making news this week appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares that are the top buys right now: expert
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Westpac share price offers best value in the sector: Goldman Sachs
• 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 Brooke Cooper 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 Tyro Payments. The Motley Fool Australia has recommended Tyro Payments 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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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Alphinity Investment Management portfolio manager Elfreda Jonker presents three ASX shares that her fund would love to buy now.

Hottest ASX shares

The Motley Fool: What are the three best stock buys right now?

Elfreda Jonker: Yeah, so I’ll talk about three different stocks, all quite diverse to just showcase our ability to invest in a variety of different companies, be it growth, defensive or cyclical. 

The first one is Brambles Limited (ASX: BXB). It’s a supply chain logistics provider of reusable pallets, crates and containers. What we currently see is that globally there’s a pallet shortage and that a lot of the competitors are actually behaving quite rationally, particularly in the US, and this has really helped Brambles to put through material price increases and the structure of their contracts are also improving. 

So what you are seeing on the back of this shortage and the fact that they can push up their prices, you have seen Brambles actually really improving their margins despite also being exposed to a lot of input cost pressure. We also see upside from improved cycle times.

From an overall outlook… free cash flow is expected to improve. As lumber costs normalise we think a lot of these price increases will continue to roll through and we think there’s quite a bit of upside still into 2022 and 2023. We expect to see ongoing earnings upgrades for Brambles. 

It’s also trading relatively cheap on a 16-times versus five-year average of around 20 times. So we quite like the story. We think it’s exposed to some of these international trends that we can benefit from here in Australia particularly given their big exposure to the US. 

The next stock is more on the consumer side, that is Carsales.com Ltd (ASX: CAR). Carsales is a dominant online car trading platform in Australia. They’ve got significant pricing power and an excellent management team in our view. We view Carsales as quite a well-managed business. They’re dominant in their space, they really are getting strong yield improvements both on the dealer side as well as the private side currently. 

As with Brambles, they’re seeing like-for-like nice price increases coming through as well as new car volumes starting to flow through driven by the global shortages. So they are seeing a whole bunch of new products coming in, they’re benefiting from higher volumes as well as higher prices. And I think that, in return, should drive solid margin expansion and we expect that to be ahead of where the market’s currently expecting that to be.

In addition, they’ve also been boosted by their South Korean operations that’s really booming and doing very well. So that’s a key source of earnings upgrades. That’s around 15% of revenues. And also in the medium term, we are quite optimistic about that US acquisition that they’ve made, Trader Interactive. That’s a much less sophisticated business compared to the others. So we think there’s a lot of synergies that they can flow through into that business. 

For us, this is in the shorter term, we see upgrades coming through but also longer term, we see a good business model there that can continue to help grow that business.

MF: Compared to other digital companies, the Carsales share price has been reasonably resilient this year — it’s only dropped about 20%?

EJ: Yes, it’s definitely been very resilient in comparison. Firstly, as a starting point, it doesn’t have as large a valuation as some of these other higher-growth companies. It’s trading at a 25 PE currently versus the long-term average of 28. So that’s a lot more palatable in an environment where [interest] rates are rising, to be in that sort of evaluation rather than these 60-plus companies. So I think that is definitely one reason. Also… they are doing used and new products, it’s definitely I think a little bit more defensive than some of the other business models out there.

The third option is a little bit more on the defensive side — it’s Medibank Private Ltd (ASX: MPL). That’s one of the largest private health insurance companies in Australia and they’re currently benefiting from big market share gains as well as the reshaping of the claims curve. 

Obviously, they’ve been quite a big beneficiary of COVID in that a lot of people did not claim. As a result, they’ve built up a lot of reserves and a very strong balance sheet — it’s really putting them in a very good position to do a lot with that balance sheet. They have been giving back to customers and that’s created a lot of goodwill for customers, but it’s also helped them to smooth out the earnings. 

So that’s what’s creating this quite a defensive pipeline for them and a pipeline of really good strong earnings growth coming through, in combination with an ungeared balance sheet, which is always really helpful for business to help grow the non-insurance part of the business. 

For us, it’s probably one of our highest conviction positions currently in our funds. It might not be one of these great high-growth businesses with huge earnings growth, but in an environment where either the market’s not growing or seeing really small upgrades, even the smaller upgrades that you can get from companies like this that’s consistent and has got a lower risk to it, that’s, in our view, a good position to be in.

MF: The private health insurance industry can become quite political — you’re not too worried about that?

EJ: That’s always, I think, a risk in this space. At this point in time, we think they actually have very good relationships and we are not overly concerned around something that we think is waiting in the wings that could surprise us massively. 

But it is a risk that people need to bear in mind when they do invest in this space and take that into account in the valuation that they’re willing to pay for a company like this.

The post 3 ASX shares that are the top buys right now: expert appeared first on The Motley Fool Australia.

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More reading

• Medibank shares remain in limbo after customer data hack confirmed
• Medibank share price halted after hackers claim to have taken customer data
• Medibank share price halted ahead of new ‘cyber incident’ update
• 5 things to watch on the ASX 200 on Tuesday
• Why Adbri, Costa, Hawsons Iron, and Medibank shares are sinking today

Motley Fool contributor Tony Yoo 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 carsales.com Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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