Month: October 2022

The Vanguard Australian Shares Index ETF (ASX: VAS) is arguably the most popular exchange-traded fund (ETF) on the ASX.

But the BetaShares Australia 200 ETF (ASX: A200) is also popular, especially among retail investors.

The two ASX ETFs are similar in that they both track an index, providing broad-based exposure to Australian shares.

But there are some distinct differences. Let’s take a look.

Underlying benchmark

The A200 aims to track the S&P/ASX 200 Index (ASX: XJO), the most prominent index on the ASX. The ASX 200 comprises the ASX’s largest 200 companies, weighted in terms of market capitalisation.

In contrast, the VAS ETF aims to track the S&P/ASX 300 Index (ASX: XKO), which, as its name suggests, comprises the top 300 companies.

Holdings and weightings

Since these two ASX ETFs have different benchmarks, they also have different holdings and weightings.

Naturally, the VAS ETF has around 300 holdings, while the A200 ETF has 200.

But since both of these indices are weighted in terms of market capitalisation, they mirror each other more closely than I thought. 

Both ETFs share the same top 10 holdings in identical order, with very similar weightings, as shown below.

	VAS ETF weightings	A200 ETF weightings
BHP Group Ltd (ASX: BHP)	9.9%	9.8%
Commonwealth Bank of Australia (ASX: CBA)	7.8%	8.0%
CSL Limited (ASX: CSL)	6.9%	7.1%
National Australia Bank Ltd (ASX: NAB)	4.6%	4.7%
Westpac Banking Corp (ASX: WBC)	3.7%	3.7%
Australia and New Zealand Banking Group Ltd (ASX: ANZ)	3.4%	3.5%
Woodside Energy Group (ASX: WDS)	3.0%	3.1%
Macquarie Group Ltd (ASX: MQG)	2.8%	2.9%
Wesfarmers Ltd (ASX: WES)	2.5%	2.5%
Telstra Corporation Ltd (ASX: TLS)	2.3%	2.3%

Sector exposure is also very similar across these two ASX ETFs, with some minute differences. You can check it out for yourself below. 

	VAS ETF weightings	A200 ETF weightings
Financials	28.0%	28.9%
Materials	23.5%	23.1%
Healthcare	10.5%	10.6%
Consumer discretionary	6.5%	6.3%
Energy	6.3%	6.3%
Real estate	6.0%	6.2%
Industrials	6.0%	5.8%
Consumer staples	5.0%	4.9%
Communication services	3.9%	3.9%
Other	4.3%	3.8%

VAS wins on popularity

The VAS ETF had a whopping $10.8 billion invested in it at the end of September. This makes VAS the largest ETF on the ASX by a country mile.

Vanguard also offers this product in the form of a retail fund and a wholesale fund. So in total, this strategy ended the month with assets under management of $26.6 billion.

The A200 ETF is a minnow in comparison but it’s BetaShares’ largest ASX ETF, slightly edging out the BetaShares Nasdaq 100 ETF (ASX: NDQ). At the end of September, A200 had net assets of $2.4 billion.

The ASX’s monthly investment products update shows that the VAS ETF enjoyed $242 million of net inflows during September. Meanwhile, the A200 ETF brought in $72 million of net flows.

A200 takes the cake on fees

The VAS ETF incurs yearly management fees of 0.10%. So, A200 takes the cake here with annual fees of 0.07%.

Based on a $10,000 investment, this would spin up fees of $10 and $7, respectively.

As I’ve discussed previously, fees compound over time and can eat into investment returns. But given that we’re dealing with very small differences here, the effect isn’t nearly as pronounced.

To demonstrate, let’s use $50,000 portfolios earning annual returns of 7%. One invests in VAS and the other invests in A200. After 25 years, the VAS portfolio would be worth around $215,000, while the A200 portfolio would be worth roughly $230,000.

But this hypothetical example assumes both ETFs have identical returns, which certainly isn’t the case…

Which ASX ETF has performed better? 

So, last but not least, let’s take a look at how the VAS ETF has performed compared to the A200 ETF.

It would be remiss of me not to mention that past performance is not a reliable indicator of future performance. But in my mind, it’s still valuable insight.

In the last year, the VAS ETF has dropped 7.94% while A200 has fared slightly better, sliding by 7.21%.

Zooming out across the last three years, VAS has delivered an average annual return of 2.81%, again slightly lagging A200, which has achieved an average annual return of 2.92%.

Over the last five years, VAS has served up an average return of 6.83% per annum. Given that the A200 ETF was launched in 2018, it doesn’t have a five-year track record. However, its benchmark ASX 200 index has averaged a return of 7.00% per annum over the last five years.

So, the A200 ETF appears to have historically performed slightly better than the VAS ETF.

Personally, I think both of these ASX ETFs are top choices for an investment portfolio. However, given their similarities, I’d be choosing one or the other, not both.

The post Here’s how the Vanguard Australian Shares ETF (VAS) stacks up against the BetaShares Australia 200 ETF (A200) appeared first on The Motley Fool Australia.

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More reading

• 5 things I look at when buying an ASX ETF
• Is the Vanguard Australian Shares (VAS) ETF the most popular ETF to buy?
• These could be the ETFs to buy for big dividends
• The Vanguard Australian Shares ETF has doled out record dividends this year. Here’s why
• The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown

Motley Fool contributor Cathryn Goh has positions in BETANASDAQ ETF UNITS and BetaShares Australia 200 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS and CSL Ltd. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited 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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Flight Centre Travel Group Ltd (ASX: FLT) shares have lifted 14% so far this month.

The travel company’s share price has risen from $14.22 at market close on 30 September to $16.25 at the time of writing.

Let’s take a look at how a $1,000 investment in this ASX travel share would be faring now.

Taking off

If you had invested $1,000 in Flight Centre after market close on 30 September, you would be on a winner.

With a $1,000 investment, you would have walked away with 70 Flight Centre shares with $4.60 left over.

Now, these shares are fetching $16.25 per share based on the share price at the time of writing. So this investment would now be worth $1,137.50.

So in less than a month, you would have made $137.50 from a $1,000 investment.

Looking at the bigger picture, on 19 March 2020 — just as COVID-19 began to turn the world upside down — Flight Centre shares were fetching just $8.921. At this time, with $1,000, you would have gained 112 shares with 85 cents left over. This investment would now be worth $1,820.

This means, if you had held onto the shares through the turbulent times, you would still be ahead.

Flight Centre has not paid a dividend since 2019. In March 2020, Flight Centre cancelled its interim dividend amid COVID-19 border closures.

Flight Centre share price snapshot

Flight Centre shares have lost around 8% in the year to date, while they have fallen 19% in the past year.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has slid more than 8% in the year to date.

The ASX travel share has a market capitalisation of nearly $3.3 billion.

The post If you’d spent $1,000 buying Flight Centre shares at the start of October, guess how much you’d have now appeared first on The Motley Fool Australia.

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More reading

• Why is the Qantas share price so volatile today?
• Could this tailwind fuel Flight Centre’s share price into the future?
• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Are Flight Centre shares worth buying in October?

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 Flight Centre Travel 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 Nitro Software Ltd (ASX: NTO) share price is on ice on Friday as the company prepares to receive and respond to an improved takeover offer from Potentia Capital Management.

The bidder, which is also the company’s largest shareholder, plans to put forward a $1.80 per share acquisition offer. That’s 13.9% higher than its previously rejected $1.58 per share bid.  

The $1.80 per share bid values the tech company at around $440 million.

The Nitro share price last traded at $1.73. It will return to trade on the company’s response to Potentia’s intended bid or Monday’s open, whichever comes first.

The All Ordinaries Index (ASX: XAO) constituent was recently rumoured to be gearing up to announce an acquisition offer this morning.

Let’s take a closer look at Potentia’s latest move in the battle for control of the document productivity company.

Nitro share price frozen amid new takeover bid

The Nitro share price was halted this morning after the company received word of Potentia’s intention to put forward a new and improved off-market takeover bid. And this time it’s final.

The firm says its anticipated offer will only be bumped if another proposal emerges or its granted full due diligence.

Potentia has a 19.8% stake in the All Ords tech stock. It has vowed to vote its stake against any competing offers.

The $1.80 cash offer represents a 59.3% premium to Nitro’s undisturbed share price of $1.13 on 29 August. The stock last traded above $1.80 in February and boasts a 52-week high of $4.

In rejecting the firm’s previous offer, the company said the bid was “highly opportunistic … at a time of significant share market volatility and cyclical weakness in global technology company valuations.”

Potentia managing director Andrew Gray commented on the firm’s anticipated offer, saying:

This bid is a demonstration of our commitment to Nitro, its team, and to the strategy they are pursuing under the strong leadership of [co-founder and CEO] Sam Chandler and stewardship of the board.

We are specialist investors in the technology and software sector, and we have been on the same journey of building great companies which Sam and his team are currently treading. We believe we have real value to add as partners in their growth.

The firm said it intends to lodge its $1.80 per share bid for Nitro today. It expects the offer to open in around a fortnight.

The post Nitro share price halted amid improved takeover bid appeared first on The Motley Fool Australia.

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More reading

• Up 7% today, could this ASX All Ords tech share be in for more takeover bids?
• 3 ASX tech shares totally crushing the All Ords following big announcements
• Experts say these small cap ASX shares are buys

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 Nitro Software 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 Macquarie Group Ltd (ASX: MQG) share price is rocketing 3% after the S&P/ASX 200 Index (ASX: XJO) giant revealed a record interim dividend.

The financial services provider announced a $3 per share first half dividend alongside its earnings for the six months ended 30 September this morning.

The Macquarie share price is launching higher on the back of the release, gaining 2.98% to trade at $171.51.

Let’s take a closer look at the payout Macquarie investors can expect to receive in coming weeks.

All you need to know about Macquarie’s monster dividend

Invested in Macquarie shares? You’ll be glad to learn of the S&P/ASX 200 Financials Index (ASX: XFJ)’s giants latest interim dividend – 10% higher than that of the prior corresponding period (pcp).

The $3 per share dividend also represents its largest half-year offering ever.

Like that of the pcp, the upcoming interim dividend is 40% franked and represents a 50% payout ratio.

The financials favourite posted $8.6 billion of net operating income for the first half of financial year 2023.

Macquarie’s latest payout sees it trading with an approximate 3.79% trailing dividend yield. That’s considering its share price at the time of writing and its previous $3.50 final dividend.

Anyone wanting to get in on the company’s upcoming payout has a little over a week to do so.

It will trade ex-dividend on 7 November. That means investors buying the stock from then on will miss out on the offering. After that, shareholders can expect to receive their dividends from 13 December.

Macquarie will also be offering its dividend reinvestment plan (DRP) for the interim dividend. Participating shareholders will receive their payout in the form of new shares, rather than cash.

The post Everything you need to know about the super-sized Macquarie dividend appeared first on The Motley Fool Australia.

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More reading

• Why is the Macquarie share price charging 4% higher today?
• Macquarie share price on watch after first-half earnings beat
• 5 things to watch on the ASX 200 on Friday
• 22 high-yield ASX dividend shares Wilsons is targeting
• Is the Macquarie share price a buy ahead of the bank’s results on Friday?

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 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 Macquarie Group Ltd (ASX: MQG) share price is on course to end the week on a positive note.

In morning trade, the investment bank’s shares are up approximately 4% to $172.81.

Why is the Macquarie share price pushing higher?

The Macquarie share price is rising this morning after investors responded positively to the release of the company’s half year results.

For the six months ended 30 September, Macquarie reported an 11% increase in net operating income and a 13% increase in profit after tax to $2,305 million.

The latter was 6.8% ahead of the market consensus estimate of $2,157 million for the half, which helps explain the outperformance of the Macquarie share price today.

What were the drivers of the result?

Macquarie’s strong half was driven by its Banking and Financial Services (BFS), Commodities and Global Markets (CGM), and Macquarie Asset Management (MAM) businesses, which delivered double-digit growth in profit contributions.

This offset a softer performance from its Macquarie Capital business, which posted a 12% decline in its profit contribution compared to the prior corresponding period.

Also potentially giving the Macquarie share price a boost was management’s positive outlook commentary. Although, CEO Shemara Wikramanayake acknowledges the uncertain economic environment, she believes Macquarie is well-placed to prosper. Wikramanayake said:

Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; ongoing technology spend across the Group; a strong and conservative balance sheet; and a proven risk management framework and culture.

Broker response

Analysts at Goldman Sachs were impressed with the half. They commented:

MQG’s 1H23 NPAT was up +13% on pcp to A$2,305 mn and +6% above GSe and Visible Alpha consensus. The beat versus our forecasts was driven by lower expenses (-8% lower than GSe), partially offset by lower revenues (5% lower than GSe), largely on account of trading income. MQG’s surplus capital position improved to A$12.2 bn (A$10.7 bn at FY22).

However, overall, the broker isn’t expecting any major changes to consensus estimates for the full year. It explained:

Overall, we think the outlook commentary is unlikely to drive material changes to consensus expectations for FY23 (A$4.2 bn, per Visible Alpha consensus), albeit profit may need to be reallocated from the higher multiple Macquarie Asset Management (MAM) division, into the lower multiple Commodities and Global Markets (CGM) division.

The post Why is the Macquarie share price charging 4% higher today? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the super-sized Macquarie dividend
• Macquarie share price on watch after first-half earnings beat
• 5 things to watch on the ASX 200 on Friday
• 22 high-yield ASX dividend shares Wilsons is targeting
• Is the Macquarie share price a buy ahead of the bank’s results on Friday?

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 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 S&P/ASX 200 Index (ASX: XJO) could be a good place to go hunting for income ideas. ASX 200 dividend shares are known for paying higher yields, such as BHP Group Ltd (ASX: BHP) and National Australia Bank Ltd (ASX: NAB).

However, when looking at what type of companies could deliver better total returns, it could be businesses that are growing faster that may be the better picks for long-term income.

How does that work?

Writing in an article on Livewire, Rob Crookston from Wilsons gave an example by comparing APA Group (ASX: APA) and GPT Group (ASX: GPT).

A decade ago, if an investor had invested $100,000 into both of those ASX 200 dividend shares, they were each paying a yield of around 5.3%, which meant $5,300 of income.

But, while the market yields of both of these ASX shares have stayed largely consistent over that time, APA’s earnings and distribution growth mean it’d now be paying $11,200 of income (an 11.2% yield on cost), compared to $6,900 of income from GPT (a 6.9% yield on cost).

APA’s share price has grown at a similar rate, over time, as the income has grown. APA’s total returns were “significantly” better than GPT.

Crookston wrote:

Over the last decade, the average dividend yield of the ASX 200 is around 4.5%. However, it is worth considering that dividends are paid at the discretion of the company board, not the shareholders. Even profitable companies cut their dividends due to uncertainty, prioritising balance sheet strength over capital returns.

As a result, we believe it is worth focusing on companies that should generate income, regardless of the macro backdrop. These tend to be sustainable, high-quality businesses.

A high-quality, sustainable dividend stock should also grow its dividend as it is likely to have stable, growing earnings and solid fundamentals. Consequently, they are better positioned to weather potential slowdowns or exogenous shocks.

Conversely, some high-dividend yield stocks tend to be lower quality with less flexibility during tougher times. They often carry more debt and devote more cash flow to paying dividends, leading to higher share price volatility during periods of market turmoil.

Which ASX 200 dividend shares could deliver good returns?

After looking at businesses that will pay a decent yield in the next few years, could deliver good dividend growth over the next three years, are expected to deliver earnings growth, have predictable and defensive earnings, have competitive advantages and can benefit from structural tailwinds, a shortlist can be produced.

There were a number of ASX 200 dividend shares that he pointed out, but there weren’t that many that are expected to deliver annual growth of at least 10% or more.

SEEK Limited (ASX: SEK) was one of the names, which is a leading online employment marketplace business operating across Asia Pacific and Latin America. It has also been investing in creating products that can connect candidates with job opportunities and help hirers find candidates efficiently.

SEEK’s trailing grossed-up dividend yield is around 3%. Over the next three years, Wilsons said that it’s expecting a compound annual growth rate (CAGR) of 13% for the dividend.

Carsales.com Ltd (ASX: CAR), another ‘classifieds’ business, was a pick. It’s the largest online automotive, motorcycle and marine classifieds business in Australia. The company has operations across the Asia Pacific region and has interests in leading online automotive classified businesses in Brazil, South Korea, Malaysia, Indonesia, Thailand and Mexico.

Carsales has a trailing grossed-up dividend yield of 3.6%. Over the next three years, Wilsons said that it’s expecting a CAGR of 13% for the dividend as well.

Idp Education Ltd (ASX: IEL) was another ASX 200 dividend share that was picked out that could deliver strong dividend growth. It’s a company that provides both student placement services and international English language testing.

It has a trailing grossed-up dividend yield of just over 1%. But, three years from now, it could have a yield of 2.4% with an expected CAGR of 37% for the dividend over the next three years.

The post 3 ASX 200 dividend shares you may have overlooked: Wilsons appeared first on The Motley Fool Australia.

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More reading

• 5 ASX shares to buy for the Christmas rally: expert
• 5 things to watch on the ASX 200 on Friday
• This ASX 200 lithium share was Auscap’s best performer in the last quarter. Here’s why the team expects even more progress
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 directors who have been buying up their company shares this week

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 positions in and has recommended APA Group. The Motley Fool Australia has recommended SEEK Limited and 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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The BrainChip Holdings Ltd (ASX: BRN) share price is crashing down to earth with an almighty thud on Friday.

In morning trade, the semiconductor company’s shares are down a massive 13% to 74 cents.

Why is the BrainChip share price crashing?

Investors have been selling off the BrainChip share price this morning after the company released its third quarter update.

That update revealed that the ~$1.5 billion company generated revenue of just $118,000 during the three months. That’s a touch over $39,000 a month!

Unsurprisingly, this means that BrainChip is operating at a loss and recorded an operating cash outflow of $3.8 million for the quarter. This brought its year to date operating cash outflow to $11.8 million and leaves it with a cash balance of $24.6 million.

Based on its current burn rate, this gives the company six more quarters of funding.

What’s happening?

Management has blamed its abject sales performance on industry headwinds. It explained:

We are seeing the greatest amount of sales activity and engagement in the Company’s history. However, the current global technology market has created economic dynamics that have extended evaluations, decreased budgets, and delayed introduction of new technology. These conditions have created a headwind for our prospective and current customers. We anticipate these conditions to eventually calm. We remain positive on future market penetration and broad adoption of Brainchip’s technology.

Looking ahead, the company intends to focus on key sales targets and converting technical evaluations into paid licenses.

In addition, it is accelerating development of next-generation Akida IP and products to extend its supposed technological lead and market opportunity. Though, judging by its quarterly sales performance, the semiconductor market doesn’t appear to have much interest in its technology.

BrainChip has been described as a meme stock in the past. At the moment, it is living up to this tag.

The post BrainChip share price crashes 13% on disastrous Q3 update appeared first on The Motley Fool Australia.

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More reading

• Why has the BrainChip share price plunged 9% in a week?
• If I’d invested $1,000 in BrainChip shares a year ago, would I be happy right now?
• Why Bapcor, BrainChip, Evolution Mining, and Redbubble shares are sinking
• Can the BrainChip share price continue its growth run this quarter?
• Warning: BrainChip shares are being targeted by short sellers

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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It’s been a big week so far on the ASX, with some major announcements from many of the market’s biggest names.

We’ve heard of a $1.3 billion earnings hit, a big four bank’s full-year results, record iron ore shipments, strong performance from a lithium favourite, and a worsening cyberattack.

Keep reading to learn of the five ASX announcements market watchers need to know about this week.

These ASX shares released major announcements this week

Fortescue’s record first quarter

Fortescue Metals Group Limited (ASX: FMG) revealed its September quarter performance to the ASX on Thursday.

The iron ore giant shipped 47.5 million tonnes of the red mineral over the quarter – a new first-quarter record. It also reported an average revenue of US$87 per dry metric tonne and direct costs of US$17.69 per wet metric tonne.

Finally, the materials giant provided financial year 2023 guidance. It expects to ship between 187 million and 192 million tonnes of iron ore this fiscal year.

ANZ’s full-year earnings

ANZ posted its financial year 2022 earnings yesterday, detailing a 16% increase in after-tax profits and a 5% jump in cash earnings.

The bank posted a $7.1 billion profit, $6.5 billion of earnings from continuing operations, and a 74 cent per share final dividend.

Its second-half net interest margin (NIM) reached 1.68%, while its exit margin lifted to 1.8%.

Westpac’s $1.3 billion earnings hit

Speaking of bank earnings, Westpac Banking Corp (ASX: WBC) also made news with the announcement of a $1.3 billion impact on its upcoming second-half earnings.

Much of the hit was born from the sale of its life insurance business, which saw the bank recognise a $1.37 billion loss, spread across financial years 2021 and 2022.

The bank will release its full-year earnings on 7 November.

Medibank’s cyberattack worsens

Medibank Private Ltd (ASX: MPL) was the talk of the town on Wednesday after it estimated a major cyberattack will cost it between $25 million and $35 million. That’s before any potential remediation, regulatory, or litigation-related costs.

The situation worsened this week with news that all of the health insurer’s customers’ data, including certain medical data, has been accessed by a hacker. As a result, the number of impacted customers could soar.

The company also scrapped its net resident policyholder growth guidance on the back of the attack.

Pilbara Minerals’ September quarter

The final ASX announcement making news this week came from lithium share Pilbara Minerals Ltd (ASX: PLS). The company posted its quarterly update on Tuesday.

Its spodumene concentrate production lifted 16% quarter-on-quarter to 147,105 dry metric tonnes over the period. That represents an annualised production rate of 588,000 dry metric tonnes.

It shipped 138,249 dry metric tonnes for an average price of US$4,266 per tonne last quarter.

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

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More reading

• Citi downgrades Medibank share price and slashes target by 25%
• 5 things to watch on the ASX 200 on Friday
• If ASX lithium shares are soaring, why is the ACDC ETF down 9% in 2022?
• Own Westpac’s shares? Here’s what Citi is saying about the bank’s pursuit of Tyro
• Batten down the hatches as RBA may hit households with ‘supersized’ interest rate hike on Melbourne Cup day

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 second half of 2020 and most of 2021 was a great time for many ASX shares. Many share prices soared. There were several industries that got a huge bump, like technology and e-commerce. But now a lot of heat has been taken out of the market.

There are a number of winners that have turned into big losers.

I think that some of the plunges have been realistic. Higher interest rates do challenge the business models of some companies.

But, with so much damage being done to the market capitalisations of some of those former darlings, is it possible to find some great bargains?

Volatility is normal

Before getting to some specific names, I want to point out that the share market regularly goes through difficult times. Volatility is just the price of admission to this long-term wealth-building market.

It’s somewhat ironic that every past market sell-off looks like an opportunity, and all current (and future) risks look like reasons to avoid investing.

The COVID-19 crash and GFC were two periods of huge declines for investors. In hindsight, those periods were a bad time to sell and a good time to buy.

I’d guess there may be another time that the share market drops by more than 20% sometime in the next decade. Each time the market falls heavily, it’s unpredictable and seems scary, but I think of it as an opportunity to buy shares cheaply.

Where to look for investment opportunities

I certainly don’t have a crystal ball.

But, I think it’s worthwhile to consider a contrarian viewpoint.

During the COVID-19 crash, investors that went against the panic and thought the world would get through have been handsomely rewarded.

Investors that thought JB Hi-Fi Limited (ASX: JBH) could survive and thrive against Amazon entering Australia have done well.

Right now, there are a number of things that the market seems to be suggesting. Many bricks and mortar ASX retail shares have been sold off. I don’t think retail will permanently be in difficult times. Names like Wesfarmers Ltd (ASX: WES), Adairs Ltd (ASX: ADH) and Nick Scali Limited (ASX: NCK) spring to mind.

There are a number of ASX online retailers that have been hit particularly hard. Yes, some of them have individual challenges to deal with. But, I think the ones that are already leaders are worth looking at because of the long-term expectation that digital adoption of online shopping will continue.

A few names continue to invest for growth, so I think they can come out of this period in a much stronger position.

A couple of ASX share ideas

Looking specifically at COVID winners that have turned into post-pandemic losers, I think Adore Beauty Group Ltd (ASX: ABY) and Temple & Webster Group Ltd (ASX: TPW) are two names worth looking at.

In 2022, the Adore Beauty share price is down 62%, and the Temple & Webster share price is down 53%.

Adore Beauty is the leading online beauty business in Australia. While FY23 revenue growth may be volatile, I thought it was impressive that returning customers continued to climb in the first quarter of FY23, which is a good sign for repeat purchasing and for the company not needing to spend as much on marketing. Its loyalty program and mobile app are also promising.

I’m excited by the ASX share launching private label brands, while also expanding into New Zealand. It’s expecting higher profit margins over time.

The leading online homewares and furniture retailer, Temple & Webster, is doing a lot to drive future growth. I like the investment in technology like an AI interior design service, as well as augmented reality. Increased scale will also come with improved margins and efficiencies.

Both of these ASX shares have promising futures, in my opinion. I’m particularly excited by Temple & Webster with its expansion into home improvement and the company’s large overall addressable market.

The post How I’d aim to find under-the-radar ASX shares that are pandemic-era bargains appeared first on The Motley Fool Australia.

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More reading

• Which ASX All Ords shares avoided a sell-off during the last recession?
• Which ASX shares I’d buy with $5,000 right now
• Brokers name 2 ASX growth shares to buy
• Should you really be buying ASX shares in this market?
• Goldman Sachs says these small cap ASX shares are buys

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 ADAIRS FPO, Amazon, and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Amazon, and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

What happened

As the cryptocurrency market settles down from yesterday’s rally, most investors are seeing relatively flat, or slightly negative, performance in their portfolios today. That said, one standout token continues to break out: Dogecoin (CRYPTO: DOGE) has surged 14.1% over the past 24 hours, as of noon ET. 

This impressive move follows Elon Musk’s surprise arrival at Twitter (NYSE: TWTR) headquarters yesterday. Carrying a kitchen sink and subsequently prompting employees and investors to “let that sink in,” Musk appears to be taking a lighthearted approach to finalizing his deal to buy Twitter at $54.20 a share. Shares of TWTR stock are currently trading just shy of $54 per share, signaling this deal has a high likelihood of completing by Friday’s deadline.

For Dogecoin investors, questions of whether Musk would ultimately follow through on his pledge to buy Twitter at the aforementioned price of $54.20 provided a great deal of volatility to both Twitter and Dogecoin, with the latter being viewed as a beneficiary of Musk controlling Twitter.

So what

Musk’s deal to buy Twitter has been in doubt in recent months, with Musk backing down months after proposing an offer to Twitter’s board that was too good to refuse. Noting concerns around bots, spam, and fake accounts, Musk canceled his deal on July 8. This sent shares of Twitter plunging, and Dogecoin followed.

However, following some impressive legal pushback from Twitter, Musk ultimately capitulated. His reason for the acquisition, as stated in a Twitter note to advertisers, has always been to create “a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.” These goals were “important to the future of civilization,” meaning that his overpaying for Twitter may be a small price to pay to further what he believes are altruistic goals.

The exact reason why Dogecoin is rocketing higher in the fashion it is remains unclear. Yes, Elon Musk has provided Dogecoin with plenty of supportive tweets in the past. However, his explicit references to Dogecoin have died down quite a bit of late.

Now what

Perhaps holding the reins to this multibillion-dollar social media platform will allow Elon Musk to comment on his favorite subject matters in a more uninhibited fashion (as if that was a problem to begin with). For Dogecoin holders, any sort of reference or mention from Elon Musk has proven to be a catalyst that can take this token higher. Accordingly, given the speculative nature of Dogecoin, it’s clear that traders are looking to capitalize on the reality that this deal is likely to go through.

That said, we’re talking about Elon Musk here. The deal isn’t done until all the papers are signed and approval is granted. Thus, the story isn’t over yet. 

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

The post ‘Let that sink in’ — Dogecoin soars as Twitter deal seemingly set to close appeared first on The Motley Fool Australia.

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More reading

• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
• Why crypto cratered before a quick recovery today
• Is Google now joining the crypto party following its latest move?
• This is the biggest concern for crypto investors heading into the new quarter

Chris MacDonald 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 Twitter. 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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