Day: 18 November 2022

Mineral Resources Limited (ASX: MIN) has cut down any talk of selling off any of its four business units, including lithium.

Mineral Resources shares are currently trading at $80.48, a 2.98% fall. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is also down 0.09% today.

Meanwhile, some of its ASX lithium peers are also suffering today — Pilbara Minerals Ltd (ASX: PLS) shares are falling 3.57%, and the Core Lithium Ltd (ASX: CXO) share price is 2.83% in the red.

So what is going on at Mineral Resources?

What did Mineral Resources say?

Mineral Resources has four business segments — iron ore, energy (gas), lithium, and mining services. As my Foolish colleague Bronwyn noted, there had been speculation earlier this year the company could sell off its lithium business.

However, talk of this has now been shot down. The company’s managing director Chris Ellison, speaking to the Australian Financial Review after Thursday’s AGM, said:

I’ve got no plans right now to go out there and to peel off any of those four business units.

Right now we have got all the cash that we need to develop Ashburton and to develop the lithium business out.

At its AGM yesterday, Mineral Resources described itself as a “world top five lithium producer”.

The company highlighted in the next two years, it plans to double capacity at its Mt Marion hard rock lithium asset, ramp up the Kemerton hydroxide plant and “toll and convert” spodumene to hydroxide.

Looking ahead to the next three to five years, the company said it plans to “own lithium hydroxide conversion” and “target 118ktpa hydroxide production”.

In the first quarter of FY23, Mineral Resources revealed it had converted 4,703 tonnes of spodumene to lithium hydroxide in the quarter.

Mineral Resources also highlighted battery-grade lithium products are “critical to a renewable energy future” and supporting global decarbonisation.

The company said it operates 29% of the world’s hard rock lithium supply.

Mineral Resources share price snapshot

Mineral Resources shares have exploded around 100% in a year, while they have leapt more than 40% year to date.

For perspective, the ASX 200 Materials Index has climbed 13% in a year.

The company has a market capitalisation of nearly $15.3 billion based on the current share price.

The post Why are Mineral Resources shares hitting the headlines on Friday? 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 is the Mineral Resources share price beating the ASX 200 on Thursday?
• Here are the top 10 ASX 200 shares today
• Why did ASX lithium shares have a dream run on Monday?
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager
• 3 ASX 200 lithium shares smashing all-time highs on Friday

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 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/3ge4XqS

The Webjet Limited (ASX: WEB) share price is trading lower on Friday morning.

At the time of writing, the online travel agent’s shares are down 1% to $6.12.

This appears to have been driven by profit taking after a very strong gain on Friday following the release of the company’s first half results.

Should you buy the Webjet share price dip?

According to a note out of Goldman Sachs, its analysts believe investors should be snapping up shares while they can.

This morning the broker retained its conviction buy rating on the company’s shares with an improved price target of $6.90.

Based on the current Webjet share price, this implies potential upside of almost 13% for investors over the next 12 months.

What did the broker say?

Goldman was very impressed with Webjet’s performance during the first half of FY 2023, noting that its result came in ahead of estimates. It commented:

WEB’s 1H23 results reported a strong beat across both the Webbeds and Webjet OTA business, cementing our view that the business is structurally improved vs. pre-pandemic times on profitability and scale in the Bedbanks business and is well poised to capitalize on the improving online channel penetration in their B2C business.

Our near term earnings changes remain modest given that we already price in a strong recovery for WEB in FY24/25. What these results have given us greater confidence is in the group’s longer term outlook for both the Bedbanks and OTA businesses. WEB also continues to report strong cash generation.

What about the Webjet dividend?

Despite reporting a profit and a hefty cash balance, Webjet decided against declaring an interim dividend for FY 2023.

Unfortunately, Goldman expects this to remain the case for a couple more years.

We delay our dividend recovery outlook to FY25 as we note the management’s conservative view on balance sheet position amidst ongoing macro uncertainties and priority being the redemption of the convertible notes when the put option becomes active in April 2024.

Nevertheless, with the Webjet share price offering ~13% upside, the broker continues to rate the company as a strong buy.

The post Goldman Sachs tips Webjet share price to keep rising 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

• 5 of the craziest things making news on the ASX this week
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Altium, Pendal, Terracom, and Webjet shares are pushing higher
• Why did these ASX 200 shares just crack new, multi-year highs?

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 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/BXxSi9N

Happy Friday! Here’s what’s on my mind.

Will Musk crash? Or crash through?

The Twitter thing?

It’s fascinating.

Elon Musk is a polarising figure. I’m in awe of his intellect and his achievements. I’m less enamoured with some of his other personal qualities.

And I’m certainly not a fanboy of his, or his companies.

As a prolific Twitter user, I’m also a little worried about the damage he might do to the network, if his ‘crash or crash through’ strategy fails.

But still, the saga is fascinating.

Aside from his obvious brainpower, Musk’s biggest advantage, and potentially his biggest Achilles Heel, is how little he cares for the view of others.

Few other CEOs would be as blunt. Or, frankly, as heartless, as Musk appears to be.

Few others would ask employees to confirm they want to be worked like dogs, or have the company assume they’re resigning. (I’m paraphrasing. A little.)

Few would fire people on, well, Twitter.

But Musk, not caring for the opinions of the rest of us, seems to be of the view that he can attract and retain a critical mass of true believers, who will do things his way.

And he might well be right.

Whether it’s fair, reasonable, appropriate or decent are questions we can debate – but he seems not to care.

It’s his company, and he’s going to run it his way.

What’s interesting about Twitter is that the users are also the product. Unlike a car company or a rocket company, Twitter’s success or failure will depend on the extent to which people will hang around and, increasingly, pay for the privilege.

If users think there’s no better alternative, they’ll probably stay.

But if Musk’s bravado leads too many people to switch to an alternative, he may well wish he’d done things differently.

The stage is set.

History repeats itself, repeating itself

And this week’s other scandal? The FTX collapse?

Frankly, I haven’t paid as much attention as others. Soap operas are still soap operas, even if they’re financial companies. And they’re usually little more than a distraction.

I feel sorry for those who’ve been caught up in the whole thing… but I’m not surprised.

Collective delusion is powerful.

Smart, wealthy people – including managed funds – have been caught up in the collapse.

Pension funds, who should know better than to chase the latest fad, lost small fortunes.

If it sounds familiar, it should.

The power of crowds has been with us as long as investing itself.

You’ve probably heard of the ‘tulip bubble’ and the South Sea bubble. No less than Sir Isaac Newton lost most of his wealth in the latter.

And I’m sure you’ve heard of the dot.com bubble (and crash).

And a little thing called the GFC, when uber-smart people at investment banks all over the world abandoned critical thought and went all-in on collateralised debt obligations (CDOs).

Yes, a lot of normal people got swept up in the crypto craze. But so did the professionals.

Why?

Because ‘everyone else is doing it’ and, worse ‘other people are getting rich’.

At least, they were… temporarily.

It’s ever been thus. And yet people keep falling for it.

Don’t.

Oh, and I’m not saying you should stay away from a financial product just because a celebrity is endorsing it… but I’m not saying you shouldn’t…

Breaking the (block)chain

Oh, and speaking of getting carried away, I’m no database expert, but it’s hard to escape the feeling that the ASX’s now-cancelled blockchain project was not entirely unrelated.

For more than half a decade, they’ve ploughed $250 million into a project to replace the CHESS system (which records who owns what ASX shares).

And someone thought the answer needed to be the blockchain technology of the sort that underpins Bitcoin (among other things).

Why?

Well, that’s not entirely clear.

To the average onlooker, a central database, overseen, controlled and regulated by the appropriate entity would seem to be the ideal structure for a share registry.

Certainly, taking the whole thing to a technology in its relative infancy – even if that technology is intellectually super-cool – did seem kinda… ambitious.

I said so at the time, and I’m glad to see they’ve cancelled the project.

I’m sorry for ASX shareholders that the company has torched that much value in the process. And ASIC and the RBA aren’t thrilled that the ASX is going back to the drawing board.

But at least someone had the guts to say the Emperor had no clothes.

It’s a start.

Quick takes

Overblown: I’m an optimist. But the excitement with which the market reacted to slightly lower US inflation last week was just silly. Now, I do think share prices were (and are) attractive prior to that announcement, and the market was too pessimistic. But the response was one of unbridled relief and was disproportionate to the news itself. And the UK’s inflation rate of 11.1%, released this week, underscores the challenge. Stay optimistic, but remember the road ahead could still be bumpy.

Underappreciated: Let’s go back to the well on this one. Markets are usually pretty efficient, most of the time. But when there’s excess pessimism (or optimism), they tend to lose perspective. Some companies’ share prices are beaten down because the immediate future might be tough. But precious little attention is being paid to the ‘… and then…’ bit. Quite a few quality businesses with attractive long term futures are being sold at attractive prices right now, in my opinion, because investors can’t see through the short term gloom.

Fascinating: Speaking of opportunities, have you noticed the huge spike in private equity interest in smaller ASX companies? While investors (and traders) are worrying about whether share prices could fall further, these PE mobs are looking at the cash flow generation potential of those companies and figuring it’s worth paying up to buy the whole thing. Which… is an interesting disconnect, no? We’ll see who ends up being right, but PE buyers are no mugs.

Where I’ve been looking: This week, it’s a case of where I’ve been avoiding, rather than looking. Extrapolation is tempting, but it ignores the reality of a changing market. There are some businesses priced for a long term continuation of two different trends: the flight away from growth companies, towards ‘defensive’ companies, and the assumption that the world’s current struggles will continue. I think both trends are potentially hazardous to your wealth.

Quote: “I can calculate the movement of stars, but not the madness of men” – Sir Isaac Newton.

Fool on!

The post Musk, Twitter and a Crypto Crash 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 is the Washington H Soul Pattinson share price having such a lousy end to the week?
• Why is ASX mining share WA1 Resources rocketing 70% on Friday?
• Busy ‘saving’ for retirement? I’d buy ASX dividend shares instead
• Why is the OZ Minerals share price racing higher on Friday?
• 4 charts that show why Apple could outperform the markets in 2023

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/CfdU4G1

It’s looking like the S&P/ASX 200 Index (ASX: XJO) is set for a pleasant end to the trading week so far this Friday. At the time of writing, the ASX 200 has gained a robust 0.27% up to 7,154 points. But the same can’t be said for the Washington H. Soul Pattinson and Co Ltd (ASX: SOL) share price.

Soul Patts shares closed at $28.61 each yesterday afternoon. But the ASX 200 investing conglomerate opened at $28.17 this morning. It is currently going for just $27.59, a seemingly nasty drop of 3.57% from yesterday’s close.

So why are investors suddenly turning on Soul Patts shares today?

Well, the answer is that they are not. Or at least not as much as it might seem.

Soul Patts shares are past their ex-dividend date

See, today is the day that Soul Patts has traded ex-dividend for its upcoming shareholder payment.

When Soul Patts revealed its full-year results for FY 2022 back in September, the company declared a final dividend of 43 cents per share, fully franked. It also announced a one-off special dividend of 15 cents per share, also fully franked.

The final dividend is a healthy increase on last year’s equivalent payment of 36 cents per share. Along with the May interim dividend of 29 cents per share, it continues a 22-year streak of Soul Patts increasing its dividend every single year. That’s a record unmatched on the ASX 200 Index.

But with a dividend comes an ex-dividend date, and that date is today. So from now, any new investor in Soul Patts shares will not be eligible for either the final dividend or the special dividend. As such, the value of these payments has left the Soul Patts share price. As is typical with an ex-dividend date.

For all of those investors who held Soul Patts shares as of yesterday’s close, the final and special dividends are scheduled to be paid out on 12 December.

On yesterday’s closing share price, this latest final dividend gives Washington H. Soul Pattinson shares an annual dividend yield of 2.6%. That’s 3.14% if we include the value of the special dividend.

The post Why is the Washington H Soul Pattinson share price having such a lousy end to the 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(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 key things I look for when buying ASX dividend shares
• How to have your ASX 200 dividend cake and eat it too
• This ASX 200 dividend icon is trading ex-div tomorrow. Here’s what you need to know
• How I’d invest in ASX dividend shares now to make a $50k passive income in retirement
• How I’d aim to generate a growing passive income from dividend shares

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company 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/UxvmJ9A

The WA1 Resources Ltd (ASX: WA1) share price has returned from its trading halt with a bang.

In early trade, the rare earths explorer’s shares jumped as much as 70% to $3.02.

The WA1 share price has eased a touch since then but remain up 45% to $2.57.

Why is the WA1 share price rocketing higher?

Investors have been buying the company’s shares today after it announced firm commitments for a placement of new shares to institutional and sophisticated investors to raise $10 million before costs.

According to the release, the placement is being undertaken at $2.00 per new share. Unlike most placements, which are operated at a discount, WA1 has been able to raise these funds at a 13% premium to the WA1 share price prior to its halt.

Why is WA1 raising funds?

WA1 revealed that the funds will be used to advance the recent Luni and P2 Niobium-REE mineralised carbonatite discoveries in the West Arunta project in Western Australia.

WA1’s Managing Director, Paul Savich, was pleased with the placement outcome and appears very optimistic on the company’s future. He commented:

We sincerely appreciate the support from our new and existing shareholders which is enabling us to continue to execute the exploration we’re so passionate about. We will maintain our focus to maximise the chance of continuing to deliver positive results for all stakeholders.

Funds raised from the Placement will primarily be applied to a substantial drilling program at our West Arunta Project which will focus on determining the depth and lateral extent of the carbonatite intrusions intersected at Luni and P2. We are also now funded to test more priority targets in the next round of drilling.

The post Why is ASX mining share WA1 Resources rocketing 70% on Friday? 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 mining shares on ice today pending big news
• Up 1,000% in 3 weeks, what’s setting this ASX mining share off like a rocket?
• Why has the WA1 Resources share price exploded 1,200% in two weeks?
• Up 47% and down 25% in one day, what’s with this ASX mining share?
• Why was this ASX mining share placed on ice after exploding 60% 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 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/LPvy5oY

Savings accounts are often considered the be-all-end-all of retirement, but investing in ASX dividend shares could be a more shrewd move, in my opinion.

As we speak, plenty of Aussies are likely working to squirrel cash into savings accounts in a bid to fund their lives after work. However, much of that capital could be working for them instead.

Here’s why I would prioritise investments – particularly in ASX dividend shares – over adding to an already healthy savings balance.

I’d prioritise buying ASX dividend shares over saving for retirement

ASX dividend shares can provide retirees with both capital gains and passive income – an often all-important part of enjoying life after work.

Capital growth potential

Quality stocks in healthy businesses are likely to post notable gains as the years go by.

Indeed, a stock that tracked the S&P/ASX 200 Index (ASX: XJO) over the 10 years ended 2021 would have posted an annual average gain of around 6.6%. And that’s before considering any dividends.

That’s a far better return than a basic savings account – even with recent interest rate hikes. Though, it’s worth noting investments in shares bring greater risks than savings accounts.   

It’s also worth considering the power of compounding. Compounding means a 6.6% annual return would turn a $1,000 investment into $1,895 over the course of a decade without any intervention. That’s certainly nothing to scoff at!

Passive income

ASX dividend shares can also provide a retiree with passive income.

Aussie dividend-paying companies generally pay out a portion of their profits every six months or so. All without investors lifting a finger.  

Additionally, it’s likely that, as a company grows, its profits will increase too. Thus, the dividends it pays to investors might increase as the years go by.

Of course, that means ASX dividend shares can be an inflation hedge. On the other hand, cash held in a savings account is particularly susceptible to inflation.

How I’d seek out ASX dividend shares for retirement

If I were seeking out ASX dividend shares to hold through my retirement, I would focus on identifying quality companies trading at decent prices.

Quality is subjective, however. Personally, I would hunt down companies with a track record of steady performance, a strong financial position, and competitive advantages over their peers.

Therefore, my focus would likely be on dividend-paying ASX 200 blue-chip shares. They’re generally market leaders with large market capitalisations.

Blue-chip shares may not provide the large capital gains that, say, growth shares, can offer. However, they’re generally stable investments, capable of navigating the market’s ups and downs with comparative ease.

Importantly, I would aim to build a diverse portfolio. That way it would be best protected from single-sector downturns.

Though, no investment is without risk, nor can any share guarantee capital returns or passive income.

The post Busy ‘saving’ for retirement? I’d buy ASX dividend shares instead 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 is the OZ Minerals share price racing higher on Friday?
• 4 charts that show why Apple could outperform the markets in 2023
• Rio Tinto share price falls on Turquoise Hill takeover setback
• A2 Milk share price tumbles on trading update and chair exit
• Lovisa share price charges to record high on 60% sales boost

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.

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

The OZ Minerals Limited (ASX: OZL) share price is racing higher on Friday.

In morning trade, the copper miner’s shares are up 4% to $27.40.

Why is the OZ Minerals share price racing higher?

Investors have been bidding the OZ Minerals share price higher today after the company accepted a takeover offer from BHP Group Ltd (ASX: BHP).

After rejecting a $25.00 per share offer back in August, the OZ Minerals board has given the thumbs up to a non-binding $28.25 cash per share offer from the Big Australian.

This “best and final” offer represents a 49.3% premium to where OZ Mineral’s shares were trading prior to the initial proposal.

The OZ Minerals board revealed that it has granted BHP due diligence access and intends to unanimously recommend the proposal to shareholders. The latter is subject to the offer becoming binding, no superior proposal being tabled, and the independent expert’s report.

Why did OZ Minerals accept this offer?

The OZ Minerals board unanimously determined that the previous proposal significantly undervalued OZ Minerals. However, the company’s chair, Rebecca McGrath, notes that the billion dollars-plus increase in BHP’s offer has changed this. She said:

The Revised Proposal from BHP follows a period of Board-level engagement, securing a circa $1.1 billion increase to the Initial Proposal. It is the Board’s view that progressing the Revised Proposal, including providing BHP with access to due diligence, is in the best interests of OZ Minerals’ shareholders and other stakeholders. The Board will continue to update shareholders as appropriate.

Why is BHP acquiring OZ Minerals?

BHP sees OZ Minerals as a great way to increase its exposure to future facing commodities. It also believe the combination of their operations will unlock value.

The mining giant’s CEO, Mike Henry, commented:

BHP’s proposal represents a highly compelling offer for OZL shareholders, providing certainty at a time of macroeconomic uncertainty and market volatility, and increasing risks for the industry. The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development.

The post Why is the OZ Minerals share price racing higher on Friday? 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

• OZ Minerals share price on watch after accepting BHP’s $28.25 per share takeover offer
• Is a weak US dollar good for ASX 200 mining shares?
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• How to have your ASX 200 dividend cake and eat it too
• What’s going on with ASX 200 mining shares on Thursday?

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/G6IAJNS

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.

In 2020, billionaire investor Warren Buffett said Apple (NASDAQ: AAPL) is “probably the best business I know in the world.” Following this sentiment, Apple is the largest stock holding that Buffett’s company, Berkshire Hathaway, has in its portfolio.

That’s high praise from a well known and highly successful investor, but the tech giant’s stock has been declining this year. While that might worry some investors, now could actually be an opportune time to add it to your portfolio. After all, the business’s fundamentals are solid and impressive despite the adversity in the economy right now. Here are four charts that help illustrate why this is a fantastic stock for investors to buy and hold.

1. Revenue has continued to grow amid inflation

One thing that never ceases to amaze me over the years is that despite its products not being cheap or even changing all that much, consumers still are continually eager to buy Apple’s iPhones and other products. The company’s top line has generated impressive growth, even now, with inflation testing consumers’ budgets.

AAPL Revenue (Quarterly YoY Growth) data by YCharts

This resilience in the business demonstrates the brand loyalty the company enjoys and why it could continue to do well next year, even if inflation doesn’t go away. If not for the impact of foreign exchange, the company’s growth rate last quarter (for the period ending Sept. 24) would have been in the double digits.

Some analysts are worried that Apple’s sales will decline next year, especially with production issues in China impacting iPhone shipments. And while that could happen, based on Apple’s track record, I wouldn’t expect to see a huge drop in revenue. It’s still likely to do better than other tech companies.

2. Free cash flow has been rising in recent years

Investors should always focus on free cash flow. That can tell investors how safe a dividend is and how likely it is that a company can afford to buy back shares (which has a bullish impact on the stock) or pursue growth opportunities. In Apple’s case, free cash flow has been stellar.   

AAPL Free Cash Flow (Quarterly) data by YCharts

3. High profit margin gives the company flexibility

Thanks to its high-priced products, Apple also rakes in some terrific profits, with its net margin normally at 20% or better of revenue. 

AAPL Profit Margin (Quarterly) data by YCharts

Margins like these give the company the flexibility to battle inflation and absorb the impact of higher costs without necessarily passing that off to customers in the way of price increases. 

4. Its earnings multiple is at a more reasonable valuation

Since the start of the year, shares of Apple have fallen 17%, which is about in line with the S&P 500‘s performance. Investors may want to consider buying the stock on the dip because, with respect to earnings, Apple is trading right around its five-year average, which may be a deal for this top growth stock.

AAPL PE Ratio data by YCharts

Apple’s stock isn’t trading at a huge discount by any means. But at the same time, investors could be waiting a long time if they expect a strong business like Apple’s to fall much lower than where it is. A lower valuation could entice more investors to buy shares of Apple.

Apple is a safe stock to park your money in right now

A business with a strong cash position and brand loyalty, like Apple’s, makes for a no-brainer type of investment. Although its yield of 0.6% isn’t significant, between the buybacks and continued new iPhones, growth in Apple+, and the entire Apple ecosystem, there are plenty of reasons to be bullish on the company’s future. Its fundamentals are sound and with a loyal fanbase, Apple is a safe stock to buy and hold for years. 

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

The post 4 charts that show why Apple could outperform the markets in 2023 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 reasons to buy Apple stock in 2023 — and never sell
• Is it a Warren Buffett stock or not? 5 simple questions to ask yourself
• These 3 US stocks were Warren Buffett’s biggest winners over the past 5 years
• Why big US tech stocks ripped higher today
• Better big tech stock: Apple vs. Alphabet

David Jagielski 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 Apple and Berkshire Hathaway (B shares). 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 March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Berkshire Hathaway (B shares). 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/qhL6oSu

The Rio Tinto Limited (ASX: RIO) share price is edging lower on Friday morning.

At the time of writing, the mining giant’s shares are down almost 1% to $105.40.

Why is the Rio Tinto share price falling?

The Rio Tinto share price is under pressure following the release of an update on the company’s pursuit of Turquoise Hill Resources.

Rio Tinto is seeking to acquire the miner to increase its stake in the massive Oyu Tolgoi copper and gold project in Mongolia to 66%.

According to today’s release, the company has carefully considered the concerns raised by minority shareholders of Turquoise Hill Resources in relation to the dissent and dispute resolution provisions in the agreements it entered into with Pentwater Capital Management and SailingStone Capital Partners.

After taking things into consideration, Rio Tinto has agreed to terminate the agreements with Pentwater Capital Management and SailingStone Capital Partners.

Nevertheless, Rio Tinto will be pushing ahead with its proposed transaction to acquire the ~49% of Turquoise Hill shares that it does not own for C$43.00 per share in cash.

Though, it warned that there is no assurance that Pentwater Capital Management and SailingStone Capital Partners will continue to withhold their vote or whether any of them will vote for or against the arrangement.

The release also notes that all minority shareholders of Turquoise Hill will now have access to the same dissent rights and statutory process through the Yukon Courts for Rio Tinto’s proposed transaction.

Rio Tinto’s Copper chief executive, Bold Baatar, commented:

We have acknowledged feedback received from minority shareholders and returned to the proposal originally unanimously recommended by the Turquoise Hill Special Committee. We will work with the Turquoise Hill Special Committee to secure a new shareholder meeting date so that the Proposed Transaction can be voted on by minority shareholders as soon as practicable. We continue to believe that a premium of 67% for their shares and removal of financial uncertainty is an attractive proposition for minority shareholders.

The post Rio Tinto share price falls on Turquoise Hill takeover setback 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

• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• What’s going on with ASX 200 mining shares on Thursday?
• Why is Rio Tinto share price rolling downhill today?
• Why is the Rio Tinto share price having such a cracking run on Monday?
• Why are ASX 200 mining shares going nuts on Monday?

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/VqoTmXy

The A2 Milk Company Ltd (ASX: A2M) share price is having a tough end to the week.

In morning trade, the infant formula company’s shares are down 3.5% to $5.93.

Why is the A2 Milk share price falling?

Investors have been selling down the A2 Milk share price today following the release of a trading update at the company’s annual general meeting.

At the meeting, management revealed that its “underlying business performance is on track and broadly consistent with guidance.”

Though, it is facing both tailwinds and headwinds from the weaker New Zealand dollar. The company advised:

Volatility in currency has the potential to impact the shape of the reported results. The recent relative weakness of the NZD has had the effect of inflating both revenue and cost of doing business (including hedge losses). In addition, increased interest rates in Australia and New Zealand have improved the Company’s return on term deposits (interest income).

What is expected in FY 2023?

Management advised that should currencies remain at prevailing levels, full year reported revenue is likely to increase to low double-digit growth compared to its previous guidance of high single-digit growth. It also reiterated its guidance that first half growth is expected to be significantly higher than its second half growth.

As for EBITDA, management expects this to remain broadly in line with plan despite the stronger revenue. It also notes that its US infant formula expansion is not expected to have a material impact in FY 2023.

A2 Milk’s EBITDA margin is expected to be similar to the prior year compared to its previous guidance of a modest improvement.

Anything else?

In other news, this morning A2 Milk revealed that its chair, David Hearn, will be stepping down in 12 months.

The company revealed that it has spent significant time considering the best replacement for the chair. After that due consideration, it came to the unanimous conclusion that current board member Pip Greenwood has both the skills and the experience to take over from Hearn at that time.

Mr Hearn commented:

Whilst I recognise that we have had some turbulent times recently, it is an extraordinary experience to play a part in the development of this amazing business. I consider it a personal privilege to serve as your Chair and I want to take this opportunity to thank you for your support both for the Company and me personally.

Not only will Pip bring her excellent skills to the role, but importantly this plan also represents a balanced blend of Board refreshment together with continuity, which we believe is absolutely appropriate after a period of significant change at both Board and Executive Leadership Team levels within the business.

The post A2 Milk share price tumbles on trading update and chair exit 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

• 5 things to watch on the ASX 200 on Friday
• Why is the A2 Milk share price thrashing the ASX 200 on Wednesday?
• Can this help A2 Milk pick up the pieces in China?
• Here are the top 10 ASX 200 shares today
• Has the worst been and gone for A2 Milk shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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/r0hxcBf