Day: 28 November 2022

New Hope Corporation Limited (ASX: NHC) shares are charging higher today.

Again.

In early afternoon trade, the S&P/ASX 200 Index (ASX: XJO) coal stock is up 5%.

That puts New Hope shares up an eye-popping 152% since the closing bell on 31 January.

And that doesn’t include the four lots of fully franked dividends paid out this year. Even at the current share price of $5.66, New Hope still pays a trailing dividend yield of 15.2%.

ASX 200 investors who bought shares early in the year, will have realised far higher yields.

So, with those kinds of gains already in the bag, is it time to take some profits?

Is it time to cash in on New Hope shares?

The answer to that question depends on who you ask.

John Athanasiou, the founder of Red Leaf Securities, is in the take some profit camp.

According to Athanasiou (courtesy of The Bull), “It’s been a bumper year for the coal sector. However, weaker coal prices recently and possibly in the future causes us concern.”

Noting the meteoric rise in New Hope shares this calendar year, Athanasiou said, “Investors may want to consider cashing in some gains and look for opportunities elsewhere.”

Sounding off for the more bullish side are the analysts over at Macquarie.

Following the coal miner’s quarterly update last week, Macquarie retained its outperform rating for New Hope shares. While the broker did reduce its price target to $6.40, that’s still 13% above the current share price.

Pointing to strong thermal coal prices, Macquarie believes New Hope will continue to be a strong dividend payer.

Just how profitable is this ASX 200 coal stock?

In its quarterly update last Thursday, New Hope revealed that underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) leapt 167% to reach $648 million.

That came despite wet weather and labour issues seeing production fall 10% quarter on quarter.

Investors may be concerned about that production slide, with New Hope shares down 4% since the miner released that update.

The post New Hope shares have soared 152% in 2022. Is it time to cash in? appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• What’s happening with ASX 200 coal shares this week?
• 8%+ dividend yields! 3 ASX 200 shares I’d snap up to beat inflation
• Why is the New Hope share price tumbling 8% on Thursday?
• Why Core Lithium, Invictus Energy, New Hope, and Smartgroup shares are sinking

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

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The Arafura Rare Earths Ltd (ASX: ARU) share price is having a tough start to the week.

In afternoon trade, the rare earths developer’s shares are down 9% to 41 cents.

Why is the Arafura share price dropping?

Investors have been selling down the Arafura share price today despite there being no news out of it.

However, it is worth noting that prior to today, the company’s shares were up 50% since this time last month.

This could mean that some investors are taking a bit of profit off the table. Particularly given broad weakness in the materials sector today.

This has seen the likes of Core Lithium Ltd (ASX: CXO), Leo Lithium Ltd (ASX: LLL), Liontown Resources Ltd (ASX: LTR), and Talga Group Ltd (ASX: TLG) tumble deep into the red today.

What’s going on?

This weakness may have been caused by concerns that soaring COVID cases in China could put pressure on battery materials demand in the key market.

Though, with the Arafura share price up a massive 80% since the start of the year, longer term shareholders aren’t likely to be too concerned by today’s pullback.

Those gains have been driven by excitement over the company’s Nolans project in the Northern Territory. For example, it recently signed offtake agreements with Hyundai and Kia for neodymium-praseodymium from Nolans.

The post Why is the Arafura share price crashing 9% today? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ords shares that had a cracking run on Friday
• Why Arafura, Nanosonics, NextDC, and OZ Minerals shares are rising today
• Why is the Arafura Rare Earths share price rocketing 16% on Wednesday?
• Why Arafura, Nufarm, Pilbara Minerals, and Whitehaven Coal are charging higher
• What’s going on with the Arafura share price 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.

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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.

While international stocks have been quite tumultuous this year, the story of South African investment company Naspers (OTC: NPSNY) and its associated investee, Prosus (OTC: PROSY), keeps getting better.

While investors in this conglomerate have had a difficult few years, both Naspers and Prosus have greatly outperformed both the KraneShares CSI Chinese Internet ETF (NYSEMKT: KWEB) as well as the Vanguard FTSE Emerging Markets ETF (NYSEMKT: VWO) over the past six months.

NPSNY data by YCharts

These two companies have a somewhat complex cross-holding structure, but they are essentially large part-owners in the same set of assets, with Prosus shareholders owning 57% of the portfolio, and Naspers owning about 43%.

The largest asset of the combined company is its 27.3% ownership in Chinese internet giant Tencent (OTC: TCEHY), which accounts for about 75% of the portfolio. However, Naspers/Prosus also owns a portfolio of other growth businesses, including online classifieds and food delivery companies in Europe and South America, fintech assets in India, and education technology companies in both the U.S. and internationally.

The company’s earnings report for the first half of fiscal 2023 had good news on just about every single front. Assuming the combined company can execute on its plans, its outperformance may just be getting started.

The new sale and buyback strategy is all going according to plan

Despite management’s best efforts, the discount at which Naspers/Prosus trade in relation to their assets had widened over the years, much to the frustration of its investors, Yours Truly included.

Yet Naspers/Prosus’ recent outperformance came after management announced a decisive step in June. Starting in June, management began selling little bits of its Tencent stake and simultaneously repurchasing shares of both Prosus and Naspers. Given that Prosus and Naspers stocks were trading at huge discounts the value of their Tencent stake at the time – never mind all the other assets – that move immediately added to the per-share value of the company.

Since then, management has been able to repurchase 7% of Prosus’ and 5% of Naspers’ shares outstanding, while selling a lower percentage of Tencent. So while the company’s overall stake in Tencent fell, Naspers and Prosus shareholders actually now have 1.4% more exposure to Tencent on a per-share basis than five months ago.

It also helps that Tencent has begun repurchasing its own stock in significant quantities this year as its share price has fallen. So Naspers and Prosus aren’t even losing as much exposure to Tencent as their sales would indicate.

A near-7% stock dividend is coming

The news gets even better, since Tencent recently announced it would be spinning off its 17% stake in Chinese food delivery and travel platform Meituan (OTC: MPNG.Y) to shareholders, probably because of regulatory pressure from the government. Prosus’ management estimates it will receive roughly $5.4 billion worth of Meituan shares when the spinoff happens next March.

That would increase Prosus’ asset base by 4.3%, but given that Prosus shares currently trade at a 33% discount to its estimated net asset value, the upcoming Meituan dividend will amount to a nearly 7% dividend of Meituan shares, based on where Prosus shares trade now.

The other businesses will turn profitable by mid-2024

As Prosus/Naspers is now selling down its Tencent stake, management hopes to refocus the company on its other assets. These consist of a collection of both wholly owned businesses, as well as large stakes in other publicly traded companies across online classifieds, food delivery, fintech, education tech, and e-retail.

That conglomerate setup is not unlike Warren Buffett’s Berkshire Hathaway, except for one thing — Prosus’ other big segments aren’t profitable. So, the company has had to feed these businesses, with the only cash coming from Tencent’s dividend or other asset sales. That’s different from Buffett’s Berkshire, which has profitable operating and insurance businesses that constantly kick cash back to headquarters for redeployment. 

However, given the current economic environment, Prosus management is looking to change that. For the first time, Prosus’ management gave specific projections for when consolidated operations — those being its wholly owned or majority-owned businesses — would become profitable.

The target for profitability is the first half of fiscal 2025, which is the March-September 2024 quarter.

To that end, management increased some investments in its most promising markets while pulling out of others. For instance, while Prosus just bought out the remaining 33.3% stake in Brazil’s iFood for another $1.5 billion, it also pulled out of iFood’s Colombia business. Prosus also exited its OLX auto trading platform in Peru and Ecuador.

While the non-Tencent segments collectively grew revenue an impressive 35.2% to $5.2 billion over the past six months, despite the strong dollar, their trading losses also expanded from ($522 million) to ($998 million). However, management pledged that profitability would improve from here going forward, as some one-time investments were accelerated in the last half-year.

We’ll see if management is able to hit that profitability target in time; however, given the strong revenue growth across those segments despite economic troubles abroad, it seems a decent bet that those profit targets can be hit with greater scale — especially now that management is laser-focused on profits.

What will it mean for the stock?

If management can get the non-Tencent parts of the business to become profitable, it could be a big deal. Not only will Prosus get a stream of regular profits to either repurchase stock or make new investments, instead of having to sell more Tencent, but perhaps it would cause investors to view the conglomerate as something more than just a derivative play on Tencent.

If that happens, the outsized gains of the past six months could be a sign of things to come, especially given the still-huge discount to net asset value. 

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

The post The best way to invest in emerging markets just got even better appeared first on The Motley Fool Australia.

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More reading

• The Qantas share price is flying again. Why this fundie is concerned
• Guess which ASX tech share is rocketing 36% on a huge ‘turnaround in profitability’
• Why is the Bubs share price tumbling 9% to a 52-week low on Monday?
• 3 ASX 200 shares to weather the inflation storm: fundie
• Mike Henry has sold $650k of BHP shares in the past week. What’s going on?

Billy Duberstein has positions in Berkshire Hathaway (B shares), Naspers Limited (ADR), and Prosus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares), Tencent Holdings, and Vanguard International Equity Index Funds. 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), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended 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.

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The Qantas Airways Limited (ASX: QAN) share price has been taking off lately, leaping nearly 10% over the last six months. And there have been plenty of positive releases driving the S&P/ASX 200 Index (ASX: XJO) stock higher.

The airline announced it expects to post its first half-year profit since the onset of the COVID-19 pandemic in October. It then upped its predictions once more, telling investors it tips its first-half underlying pre-tax profit to come in at between $1.35 billion and $1.45 billion last week.

Though, recent months haven’t been all smooth sailing for Qantas. The airline has fielded its fair share of criticism. Indeed, Choice recently crowned the airline as Australia’s ‘shonkiest’ brand – a critique Qantas rebuked.

All in all, the Qantas share price is currently $6.15. That’s 19% higher than it was at the start of 2022 and 25% higher than it was this time last year.

Not to mention, it peaked at $6.36 last week – marking its highest point since February 2020.

But there might be clouds on the horizon for the Qantas share price. Here’s why one fundie tips the stock as a sell.

Is the Qantas share price about to dive?

Red Leaf Securities CEO John Athanasiou has tipped Qantas shares as one to sell, as per The Bull, saying the airline could soon suffer amid cost-of-living pressures.

The fundie said Qantas has benefited from surging demand for travel after previous lockdowns despite claims of poor customer service. But that might soon come to an end. Athanasiou continued:

Our concerns are higher interest rates and rising cost of living expenses.

As interest rates rise and inflation continues to run rampant, Aussies might find themselves struggling to pay for housing, food, and other essentials. It’s likely that holidays could be among the first expense surrendered in such an environment, according to Athanasiou.

Of course, that could be bad news for Qantas’ bottom line and, in turn, its share price.

The post The Qantas share price is flying again. Why this fundie is concerned appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Own Qantas shares? Guess what the airline is being accused of now
• 3 ASX 200 shares on the coveted Goldman Sachs conviction list
• Why is the Qantas share price having such a top run this week?
• 5 of the craziest things making news on the ASX this week

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

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The TASK Group Holdings Ltd (ASX: TSK) share price is lighting up today after the ASX tech share released its interim FY23 results and upgraded guidance.

In early afternoon trade, the TASK share price has raced 35.7% higher to 38 cents.

The group formerly traded as Plexure (ASX: PX1), a mobile engagement software company behind the MyMacca’s mobile app.

But in late 2021, Plexure made a $120 million play for TASK, a transaction management platform for enterprise clients across food service companies, stadiums, and casinos.

TASK’s platform takes care of everything from point of sale and online ordering to loyalty, mobile apps, and other engagement products, all on a single technology stack. 

Its customer base includes the likes of Starbucks Australia, Guzman Y Gomez, Retail Food Group Limited (ASX: RFG), Crown Casino, and Marvel Stadium.

Last month, the merged group changed its name and ticker code to reflect the completion of its business transformation.

And today, this group has handed in its interim results for the six months ended 30 September 2022. Let’s take a look.

Up to the task

Starting with the topline, the group delivered total revenue of NZ$26.6 million. This represents a whopping 97% growth over the pre-merger period of 1H22, but it includes the contribution from TASK.

TASK generated revenue of NZ$9.6 million during the half, an increase of 50% on 2H22. 

The Plexure division achieved the remaining NZ$17 million of revenue, up 26% on 1H22, reflecting increased user numbers and customer engagement. 

Notably, the Plexure division was cashflow positive during the half, aided by a 25% reduction in staff costs on the back of the business restructuring undertaken in FY22.

Before the merger, Plexure was operating at a loss. But it’s now added a profitable TASK to the fray, helping to improve the earnings of the combined group.

In the most recent half, the group achieved positive adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) of NZ$2 million. This is a marked turnaround from the adjusted EBITDA loss of NZ$7 million in the prior period.

On the bottom line, the group posted a net loss after tax of NZ$4.6 million, a 46% improvement on the prior period. This was driven by the contribution from TASK, along with benefits from the restructuring of the Plexure division.

The group boasts a debt-free balance sheet with NZ$24.2 million of cash at its disposal.

It achieved positive operating cash flows of NZ$10.1 million during the half, a dramatic improvement from outflows of NZ$7.8 million in the prior period. 

At the same time, the group’s deferred revenue increased from NZ$9.8 million to NZ$22.1 million.

Management commentary

Commenting on the results, TASK CEO Dan Houden said:

The strong growth in revenue and turnaround in profitability we have delivered this half is testament to team’s progress in transforming the business. 

The results demonstrate the merged Group’s turnaround following a corporate restructuring of the Plexure division in FY22 and the renegotiated contracts with McDonald’s on 1 August 2022, as well as increased customer demand across both divisions.

Earnings guidance receives big boost

Pleasingly for shareholders, TASK has upgraded its FY23 guidance.

It’s now expecting total revenue of between NZ$59 million and NZ$62 million compared to prior guidance of NZ$56 million. 

Adjusted EBITDA is also expected to come in between NZ$8.5 million and NZ$9.5 million, a stellar improvement from prior guidance of NZ$3.7 million.

This has been driven by the group’s strong first-half results and management’s confidence in the impact of new terms with McDonald’s and other contracts executed throughout 1H23.

In August, Plexure entered into new agreements with its largest customer, McDonald’s.

Under the new deal, Plexure will continue to provide its platform to McDonald’s over the next five years, for net positive cash flow per annum, subject to operational performance. This compares to previous losses from the Plexure division.

TASK share price snapshot

Even after today’s meteoric rise, TASK is still a minnow in the ASX tech space, currently commanding a market capitalisation of around $135 million.

Shareholders will be hoping the TASK merger will be the impetus of a sustained turnaround after the Plexure business faced a rocky start to listed life on the ASX.

So far, it’s been delivering. The TASK share price has rocketed 81% over the last six months. But it’s still down 67% since listing on the ASX at the end of 2020.

The post Guess which ASX tech share is rocketing 36% on a huge ‘turnaround in profitability’ appeared first on The Motley Fool Australia.

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More reading

• The Qantas share price is flying again. Why this fundie is concerned
• Why is the Bubs share price tumbling 9% to a 52-week low on Monday?
• 3 ASX 200 shares to weather the inflation storm: fundie
• Mike Henry has sold $650k of BHP shares in the past week. What’s going on?
• Telstra share price ‘hasn’t fully captured the upside in value’: fundie

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

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The Bubs Australia Ltd (ASX: BUB) share price has continued its poor run and is sinking on Monday.

In afternoon trade, the junior infant formula company’s shares are down 9% to a 52-week low of 31 cents.

This means the Bubs share price is now down more than 50% over the last six months.

Why is the Bubs share price sinking?

Investors have been hitting the sell button today after Bubs releases its annual general meeting presentation ahead of the main event.

Unfortunately, that update revealed that the company’s performance has deteriorated since the end of the first quarter.

At the event, Bubs’ under-fire CEO, Kristy Carr, revealed that revenue is expected to be flat during the first half. That’s despite the company delivering a 29% increase in revenue over the prior corresponding period during the first quarter.

Why is Bubs underperforming again?

Carr blamed the shift to a manufacturer to consumer model (M2C) in China for some of this underperformance. The M2C model aims to give Bubs visibility on where each tin of infant formula is sold to the final consumer. It expects this to help understand where to invest each marketing dollar to obtain the best return in the future.

In respect to the company’s first half growth, Carr commented:

Short-term revenue growth is likely to be constrained by the transition to the new M2C model in China, and sell-through velocity of the initial high volume pipe-fill orders to new retailers in the USA. Due to this phasing, we expect 1H23 revenue to be largely consistent with prior year, with strong growth momentum to be realised in 2H23.

For the full year, management expects an improvement in the second half to lead to “healthy” full year growth. Though, this will be driven by an increased investment in resources and marketing, which is likely to put pressure on margins and ultimately its balance sheet if it continues to burn through its cash. Carr added:

Overall, we expect FY23 to deliver healthy growth in revenue and further improvements to our product margin. The business will increase its investment in resources and marketing to support the growth in demand. In 2H FY23, the business will also commence an ERP upgrade project which will bring further efficiency and automation to daily business operations.

Despite the ongoing macro challenges, and softer start to the new financial year than planned, we remain confident in achieving our long-term growth ambitions.

Given this update and the Bubs share price performance, it certainly will make the shareholder vote interesting today.

The post Why is the Bubs share price tumbling 9% to a 52-week low on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why I’d buy and hold these ASX shares until 2030
• Why is the Bubs share price down 16% this week?
• Why Brainchip, Bubs, EML, and Fortescue shares are falling today
• Why is the Bubs share price sinking today when the ASX All Ords is roaring?

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 BUBS AUST FPO. 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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Not all S&P/ASX 200 Index (ASX: XJO) shares are created equal.

That may seem an obvious statement.

But with 2022 having seen inflation rocketing to 30-year highs with the prospect of a recession ahead, the ASX 200 shares that outperformed during the COVID recovery years may not deliver that same strong performance in the year ahead.

So which blue-chip companies look best set to weather the inflation storm?

For some expert insight into that, we defer to the analysts over at Perpetual Asset Management Australia.

Three ASX 200 shares to weather the inflation storm

When looking for ASX 200 shares likely to outperform in a time of high inflation and rising interest rates, the analysts focused on companies with pricing powers that are able to better control their own destinies than their competitors.

The first ASX 200 share to make their list is automotive spare parts and accessories giant Bapcor Ltd (ASX: BAP).

“Australia’s new and used car market has experienced unprecedented demand over 2022, and we expect this growth to continue in the medium term,” Perpetual said. “The attraction of the business centres on the strength of their competitive position within the automotive aftermarket industry, the nature of that industry, as well as Bapcor’s proven strategy.”

Perpetual notes that the number of cars in Australia continues to grow consistently even as they get more technologically complex, requiring higher-end repair and maintenance parts.

According to Perpetual:

Their customers are essentially the mechanics, and the mechanics are much more focused on getting the right part quickly, than on price. Ultimately, that means Bapcor has a high degree of pricing power, an attribute that is increasingly important in the current inflationary environment.

Which brings us to the second inflationary resilient ASX 200 share.

The world’s largest pallet pooling operator

Brambles Ltd (ASX: BXB) has operations in 60 nations. Its pallets and containers are used to transport goods across the world.

Explaining why Perpetual likes this ASX 200 share in today’s inflationary environment, the analysts note: “The transport and logistics company has been able to use its considerable pricing power and clout in the market as insulation from inflationary costs, while also being disciplined in recovering costs.”

According to Perpetual:

Brambles has kept revenues strong over 2022 through its ability to pass on in full the rising costs of timber, fuel, labour and transport to customers using its pool of 360 million pallets, crates and containers…

We expect Brambles to win new customers in the US, management to extract better operating performance from the existing network and to continue to push prices to reflect the higher inflation in the business.

They noted this ASX 200 share achieved a 14% year-on-year profit growth in 2021-22 “despite having to absorb US$470 million in timber price inflation”.

The third inflation-resistant ASX 200 share

Rounding off the list of ASX 200 shares likely to outperform in a time of rising interest rates and high inflation is telecommunications and information service provider Telstra Group Ltd (ASX: TLS).

Perpetual said it’s bullish on Telstra, with its analysts “attracted to Telstra’s market-leading mobile position”.

On the inflation front, Perpetual notes that Telstra “offers an infrastructure-like exposure through the Infraco assets, in particular inflation-linked receipts from the National Broadband Network for use of Telstra’s network assets”.

The analysts said there is some risk that rising interest rates could see some valuation pressure on this ASX 200 share. However, they added that “the quality, scale and defensive revenue attributes of Telstra’s network assets make them an appealing proposition”.

The post 3 ASX 200 shares to weather the inflation storm: fundie appeared first on The Motley Fool Australia.

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More reading

• Telstra share price ‘hasn’t fully captured the upside in value’: fundie
• These 2 ASX 200 shares could be a lifeline in a recession
• Use the ASX 200 market correction to retire early. Here’s how
• Telstra is in strife again. Here’s why
• Could the stage now be set for Telstra shares to outperform?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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When a CEO of an ASX share sells stock of their own company, it is usually enough to pique the attention of investors. But when the CEO of the largest share on the S&P/ASX 200 Index A(SX: XJO) offloads more than half a million dollars worth of shares, it’s a big deal. So let’s talk about BHP Group Ltd (ASX: BHP) shares.

BHP is of course the largest publically-traded company in Australia. With its market capitalisation of almost $224 billion, BHP occupies more than 10% of the total weighting in the ASX 200 Index alone.

And BHP has been on quite the run lately. It was only back in late September that the mining giant was trading at close to $36 a share. But today, BHP is closing in on the $44 mark, having gained an impressive 21% or so over the past two months.

So that brings us to the CEO. Mike Henry has run BHP since 2020, succeeding Andrew Mackenzie at the top job.

But a recent ASX filing shows that Henry has just unloaded 15,002 BHP shares. Yep, on 22 November, Henry sold those 15,002 shares for a price of $43.32 each. That’s a grand total of $649,886.64 in proceeds.

So why is the CEO of BHP selling out such a large parcel of shares? Is this a vote of no confidence in BHP’s future?

BHP’s CEO selling off shares?

Well, it’s time for some context.

So yes, Henry did make this sale. However, on this same day, he became eligible for a massive influx of new shares and performance rights. So on this day, Henry received a grant of 325,471 rights to acquire BHP shares at a later date.

These form part of Henry’s compensation package. In addition, Henry also received 31,616 ordinary BHP shares granted from previous performance rights.

It was from these 31,616 BHP shares that Henry sold his 15,002 shares. So he still holds more shares than he did before 22 November, despite the $650k sale.

Thus, for investors worried that Henry might not have enough skin in the game, let’s set minds at ease. Even after this sale, Henry now has 677,218 BHP shares to his name. That has a value of approximately $29.6 million at today’s prices.

Henry also has an additional 761,423 rights that could convert into additional BHP shares in the future. As well as another 248,854 ‘cash and deferred plan awards’ that can also convert to stock at some point.

That’s a lot of skin.

The post Mike Henry has sold $650k of BHP shares in the past week. What’s going on? appeared first on The Motley Fool Australia.

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More reading

• Almost ready to retire? How to generate $70k per year of passive income from ASX dividend shares
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Group Ltd (ASX: TLS) share price is slightly in the green today, but could it have even more upside potential in the future?

Telstra shares are up 0.25% at the time of writing and are currently trading at $4.01 apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is falling 0.46% today.

Let’s take a look at the outlook for this ASX communication share.

What’s ahead for Telstra?

Perpetual Asset Management has named Telstra as one of three “resilient stocks” with pricing power.

Analysts are particularly positive on Telstra’s exposure to InfraCo assets. Telstra created InfraCo as a standalone business with the entity building a national fibre network for internet connectivity. Commenting on Telstra InfraCo, analysts said:

We believe the stock hasn’t fully captured the upside in value for the Infraco assets, and as such we see some downside protection.

Further, Telstra carries far less debt relative to earnings than many other infrastructure-like exposures. As such a partial (or even full) selldown of Infraco assets would see significant sums returned to shareholders through capital management.

InfraCo fixed delivered $2.4 billion of income for Telstra in the 2022 financial year. NBN recurring receipts lifted 3.3%. As Telstra highlighted in its AGM in October, InfraCo’s fixed growth is tipped to be further supported in the future by the inter-city fibre project announced in February.

Analysts at Perpetual also touted Telstra’s mobile network, amid Optus and TPG challenges. Perpetual said:

One stock held by some Perpetual funds is Telstra.

We are attracted to Telstra’s market leading mobile position. Competitors Optus and TPG are dealing data privacy and integration challenges, which ought to provide Telstra an opportunity to capitalise on their already strong subscriber momentum.

Telstra’s mobile business contributed $700 million to EBITDA growth in the 2022 financial year.

Share price snapshot

The Telstra share price has descended 1.1% in the past year. In the last month, Telstra shares have climbed just over 2%.

For perspective, the ASX 200 has lost nearly 1% in the past year.

Telstra has a market capitalisation of more than $46 billion based on the current share price.

The post Telstra share price ‘hasn’t fully captured the upside in value’: fundie appeared first on The Motley Fool Australia.

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More reading

• Rio Tinto share price dips amid ‘important agreement’
• I’d drip-feed $500 a month into cheap ASX shares in this share market rally
• 3 ASX 200 shares that announced supersized dividends in November
• 5 things to watch on the ASX 200 on Monday
• If you bought $20,000 worth of Fortescue shares this year, here’s how much dividend income you’d have

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 positions in and has recommended Telstra Corporation 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 Rio Tinto Limited (ASX: RIO) share price is in the red on Monday despite the company announcing an agreement with the Puutu Kunti Kurrama and Pinikura (PKKP) Aboriginal Corporation.

The agreement marks an effort to remedy the S&P/ASX 200 Index (ASX: XJO) iron ore giant’s relationship with the PKKP people following the destruction of two ancient rock shelters at Juukan Gorge in 2020.

Right now, the Rio Tinto share price is 1.85% lower at $103.70.

For comparison, the ASX 200 has slipped 0.49% at the time of writing. Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is underperforming, falling 1.49%.

Let’s take a closer look at Rio Tinto’s latest agreement and how the company’s share price is performing today.

Rio Tinto share price falls amid ‘important agreement’

The Rio Tinto share price is slipping despite the company shaking hands on the creation of the Juukan Gorge Legacy Foundation.

Under the agreement, the ASX 200 giant will provide financial support to the foundation, which will be led and controlled by traditional owners. The financial terms of the agreement will not be disclosed.

The foundation will work to progress major cultural and social projects. Such projects will include creating a new keeping place for storage of important cultural materials.

Today’s release from Rio Tinto reads:

In accordance with the right to self-determination, the agreement reflects the desire of the Traditional Owners to create a foundation that supports the cultural, social, educational, and economic aspirations of the group. The foundation … will also enable the delivery of broader benefits through commercial partnership opportunities.

Further discussions have centred on a new approach to co-management of Country and the ongoing rehabilitation of the rock shelters and their surrounds.

Rio Tinto CEO Jakob Stausholm commented:

We fell far short of our values as a company and breached the trust placed in us by the PKKP people by allowing the destruction of the Juukan Gorge rock shelters. As we work hard to rebuild our relationship, I would like to thank the PKKP people, their elders, and the Corporation for their guidance and leadership in forming this important agreement.

Today’s tumble included, the Rio Tinto share price is 4% higher than it was at the start of 2022. It has also gained 10% over the last 12 months.

Comparatively, the ASX 200 has fallen 5% year to date. The index is currently 0.5% higher than where it was this time last year.

The post Rio Tinto share price dips amid ‘important agreement’ appeared first on The Motley Fool Australia.

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More reading

• I’d drip-feed $500 a month into cheap ASX shares in this share market rally
• 3 ASX 200 shares that announced supersized dividends in November
• 5 things to watch on the ASX 200 on Monday
• If you bought $20,000 worth of Fortescue shares this year, here’s how much dividend income you’d have
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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