Month: October 2022

Are you looking to add some growth shares to your portfolio when the market reopens next week?

If you are, the ASX growth shares listed below could be worth considering. Here’s why analysts are bullish on these shares:

Altium Limited (ASX: ALU)

The first ASX growth share that has been named as a buy is Altium. It is the printed circuit board (PCB) design software provider behind the world class Altium Designer platform. Thanks to its dominant position in an industry growing due to the explosive artificial intelligence and internet of things markets, management is very confident in its growth outlook. In fact, the company is aiming to more than double its revenue to US$500 million by 2026.

Jefferies is positive on the company and currently has a buy rating and $38.13 price target on its shares. 

Life360 Inc (ASX: 360)

A second ASX growth share that has been tipped as a buy is Life360. It is the location technology company behind the eponymous Life360 mobile app. This hugely popular freemium app had over 40 million active users at the last count. It also has a growing number of paid subscribers, who have just been hit with prices increases. While this is expected to lead to some level of churn, management revealed strong results from a recent trial of price increases. The company has also made a couple of key acquisitions that open the door to significant cross-selling opportunities.

Bell Potter was pleased with the price increase news and believes Life360 will now be profitable a year earlier than previously expected. This certainly is good news in the current environment where investors have an aversion to loss-making tech companies. Bell Potter currently has a buy rating and $9.25 price target on its shares.

The post Analysts name 2 ASX growth shares to buy next week appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• If you invested $5,000 in each of these ASX shares 10 years ago, you’d be a millionaire today
• Down 32% in 2022, this ASX All Ords share is a bargain-buy opportunity: WAM
• Why are ASX 200 tech shares getting bashed around today?
• 5 ASX shares to buy for the Christmas rally: expert
• How I’d build a portfolio by investing in top ASX shares now

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Life360, Inc. 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.

from The Motley Fool Australia https://ift.tt/VCPmT2B

The investment team at Wilson Asset Management (WAM) were touring the country in October to meet more than 150 companies to “check the pulse” of corporate Australia. It has found ASX share opportunities in sectors like tourism and mining services.

Let’s have a look at some of the companies that the fund manager has unearthed as ideas.

Mining services

WAM said that the outlook for mining services companies is “positive” with commodity prices “continuing to boost activity” coupled with borders reopening. The fund manager noted that Australia’s open borders are leading to an easing of labour constraints.

There are various businesses in this sector that the company named, of various sizes. To give context for the size of these companies, I’ll quote the market capitalisations from the ASX.

There’s Seven Group Holdings Ltd (ASX: SVW) with a market capitalisation of $6.5 billion.

SRG Global Ltd (ASX: SRG) was another pick in the mining services sector, with a market cap of around $310 million.

NRW Holdings Limited (ASX: NWH), with a market cap of $1.1 billion, was another of the fund manager’s picks from the sector.

Travel and international migration

While the investment team are noticing strong sales from the retail sector thanks to ongoing consumer spending, WAM is going with a “cautious view” because the impact of interest rate rises are yet to flow through to the industry.

However, in terms of consumer spending, the fund manager named tourism as an interesting sector to look at.

ASX travel shares are being bolstered by the reopened borders and consumer spending shifting from goods to services. It named Webjet Limited (ASX: WEB) as one of the ASX shares that is benefiting from the improvement of movement.

The fund manager also said that international migration is “finally recovering” and this is helping businesses that are involved in education and student placements, with Idp Education Ltd (ASX: IEL) also holding a place in the portfolio.

Getting insights into business performance

At the moment it’s annual general meeting (AGM) season, with many companies giving updates as they tell shareholders how FY22 went, trading updates for FY23 and expectations for future growth.

WAM said:

Strong results are not being reflected in the share prices, due to the current uncertainty with the consensus view that a weaker economy will lead to earnings downgrades in the future. This is providing the team with plenty of strong opportunities to invest in companies trading at record low valuations.

One trend is clear, the market has a preference for companies with strong balance sheets that will give them the ability to weather the storm. A select group of companies are demonstrating that strength and taking advantage of depressed share prices by announcing capital management initiatives, including buy backs.

It will be interesting to see how the WAM portfolios develop as interest rate impacts start to flow through to households and ASX share reports.

The post WAM visited 150 companies in October. Here are 5 ASX shares they are super positive on right now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX 200 dividend shares you may have overlooked: Wilsons
• Could now be a good time to buy Webjet shares?
• Why is the Qantas share price so volatile today?
• How I’d build a portfolio by investing in top ASX shares now
• Webjet share price higher on bullish Goldman Sachs note

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 positions in and has recommended Idp Education Pty Ltd. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/D97NmPB

Are you looking to make some additions to your portfolio? If exchange traded funds (ETFs) are of interest to you, then you might want to look at the three listed below.

Here’s what you need to know about them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

It has been a nightmare year for the normally reliable BetaShares NASDAQ 100 ETF. Since the start of 2022, the hugely popular ETF has lost 26% of its value. While this is disappointing, it could prove to be one of the best buying opportunities in years for patient investors. That’s because this ETF is home to 100 of the largest non-financial companies listed on the famous NASDAQ index. This means you’ll be buying household names such as Google parent Alphabet, Amazon, Apple, Meta (Facebook), Microsoft, Netflix, Nvidia, Starbucks, and Tesla.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF for smart investors to look at is the VanEck Vectors Morningstar Wide Moat ETF. This ETF aims to provide investors with a way to invest in the type of shares that Warren Buffett buys. That’s because the index it tracks has strict rules that means it only contains shares that are attractively priced and have sustainable competitive advantages or moats. The ETF changes constituents periodically, but generally it holds 50 shares at any given time. Right now, these include Alphabet (Google), Boeing, Intel, Kellogg Co, and Walt Disney.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for smart investors to consider is the Vanguard MSCI Index International Shares ETF. This popular ETF provides investors with exposure to ~1,500 of the world’s largest listed companies. This means that investors can use the fund to take part in the (eventual) long term growth potential of international economies. Among the many shares that you’ll be investing in are giants such as Amazon, Apple, JP Morgan, Nestle, and Visa.

The post Here are 3 ASX ETFs for smart investors appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 excellent ETFs for ASX investors to buy today
• Down 25%: Why is the BetaShares NASDAQ ETF having such a dire year?
• How I’d build a portfolio by investing in top ASX shares now
• Why I think every investment portfolio should include at least one ASX ETF
• 2 super ETFs for ASX investors to buy and hold

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 BETANASDAQ ETF UNITS and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/mCDYi9v

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.

At a time when inflation is running amok, it’s worth taking a lesson or two from longtime investors who’ve seen it all before.

Consider Warren Buffett’s thoughts on the matter. When inflation was rampant in 1977, he wrote, “Our acquisition preferences run toward businesses that generate cash, not those that consume it. As inflation intensifies, more and more companies find that they must spend all funds they generate internally just to maintain their existing physical volume of business.”

Not surprisingly, some of Buffett’s largest and longest-held positions are excellent dividend stocks. Dividend stocks are focused on cash generation, and that protects their businesses during these inflationary periods. They also provide generous passive income. Some of the best are Coca-Cola (NYSE: KO), Kroger (NYSE: KR), and Procter & Gamble (NYSE: PG). Let’s take a closer look at each.

One of the best dividend stocks on the market

Berkshire Hathaway has held shares of Coca-Cola for more than 30 years, and it currently owns 9.2% of the stock. The beverage giant makes up 6.8% of the total Berkshire Hathaway portfolio and is its fourth-largest holding.

Coca-Cola is a classic Buffett stock, mostly because of its focus on cash generation and its dividend, which is really a commitment to its own business. The company is a Dividend King, having raised its payout annually for the past 60 years — even through the massive sales declines at the beginning of the pandemic.

While the company innovates with new products, its well-oiled business churns out cash through its core brands, giving it enough to plow back into the business while maintaining and growing the dividend. Coca-Cola’s payout ratio is presently a bit high at 77%, but the company has tons of cash to cover its dividend, which is super-important to management.

KO Payout Ratio data by YCharts

Coke’s shares are down slightly this year. At the current price, its dividend yields 3.1%, which should please new investors.

Big supermarkets, lots of cash

Among U.S. supermarkets, Kroger comes in third in size after Walmart and Costco Wholesale (leaving out Amazon as a different kind of business). But unlike the other two, it doesn’t follow a discount model; rather, it offers a premium experience through its network of 2,800 stores.

Over the past few years, Kroger has benefited from customers spending on essentials, and it has revamped its digital channels to handle more demand. Revenue has climbed in this environment. 

It’s been in the news lately as it has proposed a merger with the next-biggest U.S. supermarket company, Albertsons Companies. The deal is facing regulatory scrutiny as it would combine the two largest non-discount grocery retailers. If it does indeed go through, the newly merged company will likely overtake Costco as the second-largest food retailer in the U.S.

Buffett first took a position in Kroger in 2019. At that time, it was just getting ready to remake itself. What he might have seen then was a foothold in stability. The company paid a dividend but stopped for several decades before resuming it again in 2006, and it’s now a growing a reliable dividend, as are all of the stocks on this list.

KO Dividend data by YCharts

Kroger stock is down just under 4% this year, and at this price, the dividend yields 2%.

A solid business with beloved brands

A theme through all of these stocks is a well-established company with well-loved products that bring in tons of cash. Procter & Gamble is no exception. The company owns popular brands, such as Tide laundry detergent and Bounty paper towels. It makes products that people across the globe use every day and frequently purchase.

Buffett first came to own its shares in 2005 through Berkshire Hathaway’s acquisition of the Gillette razor company. Procter & Gamble is another example of a company with slow but consistent growth and the ability to keep producing sales well into the future. 

Inflation has been hitting Procter & Gamble’s margins and profits, and volume was down in the company’s 2023 fiscal first quarter (ended Sept. 30).

The company has been increasing some of its prices, taking the risk that some customers will head toward discount brands. But management noted that 26 of 50 global brands maintained or increased market share in the latest quarter, which was the first to really reflect high inflation.

It expects profitability to suffer in the near term and is counting on brand power to carry it through. 

The company’s stock is down 21% this year, and its dividend yields 2.8% at this price.

KO Dividend Yield data by YCharts

Procter & Gamble is also a Dividend King, and it has one of the longest dividend-raise streaks on the market, at 66 years. It’s as reliable as you can get for steady and growing passive income.

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

The post The best Warren Buffett stocks you can buy with huge passive income potential appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Here’s how I allocate my ASX share portfolio and why

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, and Walmart Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Amazon. 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.

from The Motley Fool Australia https://ift.tt/a7HYl5Q

We’ve all heard stories of investors striking gold on the share market.

The beauty of investing in ASX shares for the long term is that your downside is capped, but your upside is unlimited. 

In other words, you can only lose as much as your initial investment. But there’s no ceiling on what that investment could become.

Of course, it isn’t easy finding multi-baggers on the ASX. But with fundamental research, temperament, and perhaps a sprinkle of luck, opportunities abound.

The road to becoming a millionaire doesn’t necessarily require a big upfront investment either. 

As you’ll see, a $5,000 investment 10 years ago in each of the ASX shares below would have turned into more than $1 million today. Let’s take a look.

Altium Limited (ASX: ALU)

Kicking things off, Altium shares have returned a whopping 3,600% over the last 10 years. So, a $5,000 investment would now be worth around $180,000 today.

In FY12, Altium booked US$61 million of sales, with subscription sales representing 44% of the total. 

Fast-forward a decade and the ASX 200 tech share has grown its top line at a compound annual growth rate (CAGR) of 14%. 

Altium delivered sales of US$221 million in FY22, with recurring revenue making up 75% of the pie as the company transitions from perpetual licenses to term-based licenses and subscriptions.

PolyNovo Ltd (ASX: PNV)

PolyNovo announced itself on the ASX stage in 2019, taking out the title of the second best-performing ASX 200 share with a yearly gain of 231%.

But PolyNovo’s history on the ASX dates back to 2008 when ASX-listed biotechnology company Calzada acquired it. The group divested its other operations and changed its name to PolyNovo in 2014.

In 2012, a $5,000 investment in what was then Calzada would have blossomed into $187,000 today, returning an eye-catching 3,730%.

Rewinding a decade, PolyNovo had just completed its first two human clinical trials for its NovoSorb BTM technology.

Today, NovoSorb BTM is sold across Australia and New Zealand, the United States, the United Kingdom, and Europe, generating global sales of $38 million in FY22.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Next up, we have investment management company Pinnacle, which has grown its share price by 3,445% over the last 10 years. This means a $5,000 investment would be worth a chunky $172,000 today.

Pinnacle has come a long way since 2012 when it operated under the banner of Wilson HTM Investment Group. At the time, it had funds under management (FUM) of $10 billion across six affiliated boutique funds. This included the likes of Hyperion and Plato, which are still around today.

As we know, the Pinnacle of today is a much more formidable force, boasting FUM of $84 billion across an affiliate network of 15 fund managers.

HUB24 Ltd (ASX: HUB)

ASX 200 fintech share HUB24 has also been a standout performer over the last decade, flaunting returns of 3,700%. In other words, a $5,000 investment 10 years ago would have grown to a handsome $185,000 today.

Back then, the HUB24 platform had funds under administration (FUA) of $190 million. And it had only just rolled out its personal superannuation product.

Fast forward to today and HUB24 is one of the fastest-growing platforms in the market, boasting FUA of $68 billion through a network of 3,639 advisers.

Objective Corporation Limited (ASX: OCL)

Objective Corp isn’t a well-known tech name but it’s been one of the best performers on the ASX over the last decade. Rocketing 2,530%, a $5,000 investment 10 years ago would have turned into $127,000 today.

In FY12, the founder-led ASX tech share generated $40 million of revenue, 23% of which was reinvested in research and development. The business would have been trading on less than 1x sales at the time.

Today, Objective commands a market capitalisation of $1.3 billion, delivering $21 million of profit in FY22 from revenue of $107 million. Suffice to say, its valuation multiples have certainly expanded. 

Dicker Data Ltd (ASX: DDR)

Last but not least, Dicker Data shares have catapulted 1,970% over the last 10 years. This means that a $5,000 investment would have shot up to almost $100,000 today.

In 2012, Dicker Data delivered record results but CEO David Dicker noted that despite the strong performance, it continued to struggle with most of the analyst community. In the company’s 2012 annual report, he commented:

I am constantly told that our dividends are too high, we do not have ‘independent’ directors and there are not enough shares with the public. Rather than discuss this in detail I will just say that our results speak loudly and that I am very comfortable with our strategies.

A decade and a return of 1,970% later, David Dicker continues to lead the business and prove sceptics wrong.

The road to becoming a millionaire

All up, $5,000 investments into each of these six ASX shares would be worth a tidy $950,000 today purely from capital growth.

Adding in dividend income, particularly from Pinnacle and Dicker Data, tips us into the million-dollar territory.

In fact, those $5,000 worth of Pinnacle shares in 2012 would have generated $8,000 in dividends this year alone. That’s more than the initial investment!

The post If you invested $5,000 in each of these ASX shares 10 years ago, you’d be a millionaire today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why are ASX 200 tech shares getting bashed around today?
• 5 ASX shares to buy for the Christmas rally: expert
• Guess which ASX All Ords share turned a $30,000 investment into $1 million
• How I’d build a portfolio by investing in top ASX shares now
• 2 ASX shares that turned $5,000 into $2.5 million (or more)

Motley Fool contributor Cathryn Goh has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Dicker Data Limited, Hub24 Ltd, Objective Corporation Limited, PINNACLE FPO, and POLYNOVO FPO. The Motley Fool Australia has positions in and has recommended Dicker Data Limited, Hub24 Ltd, and PINNACLE FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/QZ9a1wG

If you’re a fan of buy and hold investing, then you may want to read on.

That’s because Bell Potter has just released its “champion stocks” list.

The broker explained that these are the ASX shares that the broker believes would be great long term options for investors.

Furthermore, for these quality shares, the broker is “not particularly concerned about the current year’s investment arithmetic or the analyst’s twelve month buy-hold-sell rating.” It explained:

“These Champion Stocks all have a long term positive thematic, which should drive superior earnings growth and shareholder value over the coming years, notwithstanding inevitable disruptions in the economic and investment environment such as COVID-19 as well as some corporate stumbles from time to time.”

Which ASX shares does Bell Potter rate as champions?

Bell Potter has a total of nine ASX shares on its champion stocks list. They are as follows:

• Amcor PLC (ASX: AMC)
• Brambles Limited (ASX: BXB)
• Challenger Ltd (ASX: CGF)
• CSL Limited (ASX: CSL)
• Goodman Group (ASX: GMG)
• Lendlease Group (ASX: LLC)
• Netwealth Group Ltd (ASX: NWL)
• Sonic Healthcare Limited (ASX: SHL)
• Transurban Group (ASX: TCL)

Here’s what Bell Potter is saying about a couple of its picks:

The broker believes Netwealth is well-placed to benefit from structural changes in the wealth management industry. It said:

A specialist investment platform technology provider in Australia that offers investment management solutions to financial intermediaries, who provide financial advice on superannuation and other investments, and self-directed individuals who have chosen not to seek advice. In recent years, the group has been taking market share from the institutional platform providers such as the major banks and other large diversified financial companies. Looking forward, a structural shift within the wealth management sector from large vertically integrated players towards the more independent players should further boost the group’s growth outlook.

As for Transurban, the broker highlights:

Australia’s largest builder, owner and operator of urban toll road networks. The group also has toll road assets in North America. The group’s current pipeline of growth projects is $3.1 billion (TCL’s share of total project cost) and further huge development opportunities are expected over the next few decades supported by population and economic growth.

The post Bell Potter names 9 ‘champion’ ASX 200 shares to buy for the next five years appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX 200 directors who have been buying up their company shares this week
• Directors have been buying up CSL shares this month. Should you?
• Down 36% in 2022, why analysts reckon this ASX 200 share is a bargain buy right now
• 22 high-yield ASX dividend shares Wilsons is targeting
• Analysts say these high quality blue chip ASX 200 shares are buys

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Netwealth. The Motley Fool Australia has positions in and has recommended Amcor Limited and Netwealth. The Motley Fool Australia has recommended Challenger Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/c5S7hTR

National Australia Bank Ltd (ASX: NAB) shares have made a name for themselves over the past year or two as the frontrunner of the ASX banking sector.

Consider this. The NAB share price has gained a pleasing 9% over 2022 so far, and a similar amount over the past 12 months. In contrast, Commonwealth Bank of Australia (ASX: CBA) shares are up less than 1% year to date, and down 3.5% over the past 12 months.

Westpac Banking Corp (ASX: WBC) shares are doing slightly better in 2022, with a gain of 10%. But that still leaves this bank down almost 9% over the past year.

And Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are down 9% over the year to date, and have lost 11% over the past 12 months.

So that leaves NAB as a clear winner, at least over these periods.

Traditionally on the ASX, CBA has commanded the largest pricing premium over its rivals. But have these outsized gains from NAB stolen CBA’s crown?

Are NAB shares more expensive than CBA?

Well, there are a couple of ways to measure a company’s ‘expensiveness’ in its sector. A favourite method is the price-to-earnings (P/E) ratio.

At present, CBA’s P/E ratio is sitting at 18.8. NAB’s is at 15.95, with Westpac and ANZ at 17.42 and 11.44, respectively. So using that metric, NAB doesn’t even make second place.

But there is another method that can be used, which is perhaps more potent in valuing a bank specifically: the price-to-book (P/B) ratio.

This measures a company’s market capitalisation (price) against its book value. Book value is basically the value of all of a company’s assets on its balance sheet, minus its liabilities.

Book value is especially useful for a bank, given most of its assets (loans, mortgages etc.) and liabilities (deposits) are very easy to accurately account for.

So when it comes to the P/B ratio, ANZ again comes out on the bottom, with a P/B ratio of 1.1. Westpac is just ahead with a P/B of 1.2.

But NAB again is playing second fiddle to CBA. Its current ratio is 1.6, whereas CBA boasts a far more impressive 2.4.

So we can comprehensively conclude that NAB’s recent run of share price gains still puts it nowhere near the ‘most expensive’ ASX bank share. No matter which metric we use, that title remains the property of Commonwealth Bank of Australia.

The post Are NAB shares the most expensive of the big four banks? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s what’s putting CBA shares in the headlines this week
• If CBA is right, ASX 200 coal shares should keep the good times rolling
• Why CBA is much more upbeat on Rio Tinto shares than the government
• If the government has this right, the BHP share price could come under some serious pressure
• 3 ASX 200 shares to weather a bear market: fund manager

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 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.

from The Motley Fool Australia https://ift.tt/ErgeAtX

The Fortescue Metals Group Limited (ASX: FMG) share price had a day to forget on Friday.

The mining giant’s shares ended the day over 8% lower at $14.76.

This means the Fortescue share price is now down over 25% since the start of the year.

Where next for the Fortescue share price?

Unfortunately, one leading broker believes the Fortescue share price hasn’t bottomed yet.

According to a note out of Bell Potter, its analysts have downgraded the miner’s shares to a sell rating and slashed the price target on them by almost 19% to $14.09.

This price target implies potential downside of 4.5% for investors from current levels.

What did the broker say?

Like many brokers, Bell Potter has concerns over the company’s decarbonisation/Fortescue Future Industries (FFI) plans. It commented:

[T]he capital being committed to FFI is increasing significantly, as is the timeframe over which it is being committed. FMG has announced an investment in its decarbonisation strategy of US$6.2 billion through to 2030, or ~US$775m pa. The objective is the elimination of fossil fuel across its operations by 2030 and annual savings of US$818m once fully implemented. While the energy independence and savings guidance is attractive, much of the technology remains to be commercially developed and quantifying the benefits remains problematic.

The increased expenditure commitment to FFI and FMG’s decarbonisation strategy is the key driver of a 19% reduction to our NPV-based valuation, from $17.33/sh to $14.09/sh. […] We downgrade our recommendation to Sell, largely on the impact of the increased FFI investment commitment.

This sentiment is echoed by analysts at Goldman Sachs, which are even more bearish on the Fortescue share price.

Last week, the broker reiterated its sell rating with a $13.80 price target. This suggests potential downside of 6.5% from current levels. The broker said:

We continue to think FMG is at an inflection point on capital allocation, and to fund the ambitious strategy, we assume the company raises ~US$5bn of new debt, reduces the dividend payout ratio from the current ~75% in FY22 to ~50% from FY24 onwards, and increases gross gearing to 30-35% by FY26 (in-line with the company’s target of 30-40%).

The post Brokers say there’s more pain ahead for the Fortescue share price appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Brainchip, Calix, Fortescue, and ResMed shares are sinking
• Could Fortescue be on the hunt for an ASX lithium acquisition?
• The Fortescue share price has dumped over 10% since Monday. What’s going on?
• 5 big ASX announcements making news this week
• Fortescue share price lifts on record first quarter operating performance

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.

from The Motley Fool Australia https://ift.tt/hjGdvq8

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.

Last week, electric vehicle pioneer Tesla Inc (NASDAQ: TSLA) turned in a third-quarter report that was strong overall, though revenue came in a little lighter than Wall Street had expected.

Revenue grew 56% year over year to a quarterly record of $21.45 billion, driven by a 55% increase in automotive segment revenue, which came in at $18.7 billion. The Street was looking for total revenue of $21.96 billion. 

Tesla also set quarterly records for vehicle production and deliveries, which jumped 54% and 42%, respectively, year over year. It also set records for operating profit and free cash flow, among other metrics. Moreover, its adjusted earnings per share (EPS) soared 69% year over year to $1.05, beating the $1.00 analyst consensus estimate. 

Earnings releases tell only part of the story. Here are two key things management shared on Tesla’s Q3 earnings call that investors should know. 

Aiming to produce 50,000 Tesla Semi trucks in North America in 2024

From CEO Elon Musk’s remarks:

So we’ll be handing over our first production Tesla Semis to Pepsi on December 1. … We’re tentatively aiming for 50,000 units in 2024 for Tesla Semi in North America. And obviously, we’ll expand beyond North America.

The Tesla Semi is an all-electric heavy (Class 8) truck that the company unveiled in 2017. It had originally planned to begin producing this vehicle in 2019, but it pushed the date back so it could focus for some time on manufacturing Model 3 sedans, which have garnered tremendous demand from consumers.

Earlier this month, Musk tweeted that the company had begun producing the Semi and would deliver the first batch to PepsiCo Inc (NASDAQ: PEP) on December 1. He didn’t specify in that tweet or on the earnings call how many units would be in the initial delivery. The food and beverage behemoth reportedly reserved 100 Semi trucks soon after Tesla unveiled this vehicle.

On the call, Musk clarified that the Tesla Semi’s range of 500 miles was with the cargo and travelling on a level road. Yes, that invites a question about how much cargo weight it can carry and still achieve that 500-mile range.

But regardless of the exact weight, the main point holds that a fully electric heavy truck with a range in the ballpark of 500 miles should garner significant demand. That is, assuming this truck operates well overall and its price is not astronomical.

Energy storage business has the potential to grow 150% to 200% per year

From Musk’s remarks:

[To transition to sustainable energy,] you need solar [and] wind with the stationary battery pack to buffer the power so you have 24/7 power. [That’s] because the wind doesn’t blow all the time and the sun doesn’t shine all the time.

We actually see the energy storage business, stationary storage, growing more like 150% to 200% a year, much faster than cars by a lot.

For context, in the third quarter, Tesla’s energy generation and storage segment’s revenue rose 39% year over year to $1.1 billion, or about 5% of total revenue. By comparison, the core auto segment’s revenue surged 55% year over year. 

Growth in the energy generation and storage segment was driven by a 66% increase in energy storage capacity deployments to a record 2.1 gigawatt hours (GWh).

However, it’s important to note that demand for Tesla’s energy storage products has been greater than the company’s ability to produce them. The global semiconductor shortage has hurt its energy storage business more than its auto business, according to Tesla’s Q3 shareholder letter. 

On the call, Tesla CFO Zachary Kirkhorn said that the energy segment achieved its highest gross profit ever in the third quarter, driven primarily by record volumes of the Megapack and Powerwall stationary storage products. That metric was $104 million, according to my calculations. This is just 1.9% of Tesla’s total Q3 gross profit of $5.38 billion, but at least the energy segment had a gross profit. This has not always been the case. 

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

The post 2 Elon Musk quotes from Tesla’s earnings call that investors should see appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Musk finally swoops on Twitter and casts CEO out of the nest. What now?
• Why Tesla stock topped the market on Thursday
• If ASX lithium shares are soaring, why is the ACDC ETF down 9% in 2022?
• Why did Tesla stock rise today?
• Why Tesla and other EV stocks popped today

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.

from The Motley Fool Australia https://ift.tt/TYL8G3P

So far this year the S&P/ASX All Ordinaries Index (ASX: XAO) has lost 12% of its value. Rising inflation and interest rates as well as fears of a global recession have been dragging the market down all year.

But guess what these ASX shares are doing? They’re going the opposite way — and by a long shot, too.

Which ASX shares are leading the market in 2022?

According to data from S&P Capital IQ, these are the top five performing shares in 2022:

• Whitehaven Coal Ltd (ASX: WHC) shares up 277%
• New Hope Corporation Limited (ASX: NHC) shares up 183%
• Stanmore Resources Ltd (ASX: SMR) shares up 177%
• Core Lithium Ltd (ASX: CXO) shares up 134%
• Silex Systems Ltd (ASX: SLX) shares up 129%.

Why are they shooting the lights out?

You’ll note that four of these ASX shares are in the materials and resources sectors. That means their share prices have a direct relationship with commodity prices.

Commodity markets have been going gangbusters this year.

Whitehaven, New Hope, and Stanmore Resources are ASX coal mining shares. The Newcastle coal price hit an all-time high of US$440 per tonne back in March. Today it’s at US$385 per tonne — still well above historical highs.

Coal prices have been spurred higher by Russia’s invasion of Ukraine, with European and other nations now seeking alternative suppliers for the future.

Core Lithium, as you might have guessed, is an ASX lithium share. The company is a lithium explorer. The price of lithium carbonate hit a record high this month at US$77,767.49 per tonne.

Core Lithium is now reportedly only months away from first production at its Finniss Lithium Project in the Northern Territory.

Investors are bidding up the share price because they think the company has a bright future.

As my colleague Bernd writes, the Australian Industry Department forecasts lithium exports to rise by more than 180% to $13.8 billion in 2022-23. This compares to $4.9 billion in 2021-22.

What about the non-mining star performing share?

In the case of Silex, it looks like the share price has been rising on the back of exciting company developments in 2022.

Silex Systems is an ASX tech share. It’s an Australian research and development company that is creating laser uranium enrichment technology for the global enrichment industry.

The company reported strong FY22 full-year results in August, which lifted its share price by 11.75% on the day.

As my colleague Matthew wrote, Silex reported progress with its global laser enrichment commercialisation project for uranium and utilising nuclear energy.

Among this year’s highlights, Silex responded to a request from the United States Department of Energy (DoE) for information on its high-assay low-enriched uranium (HALEU) project back in February.

The post 5 ASX shares that have crushed the market this year appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here were the 3 most heavily traded ASX 200 shares on Friday
• Are non-producing ASX lithium companies now way over-priced?
• If CBA is right, ASX 200 coal shares should keep the good times rolling
• If ASX lithium shares are soaring, why is the ACDC ETF down 9% in 2022?
• If I’d spent $5,000 buying this ASX 200 coal share a year ago, here’s what I would have now

Motley Fool contributor Bronwyn Allen 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.

from The Motley Fool Australia https://ift.tt/YrS217M