The Whitehaven Coal Ltd (ASX: WHC) share price has soared 264% year to date, but could it go any higher?

Whitehaven shares closed 1.96% lower at $9.50 today. The S&P/ASX 200 Index (ASX: XJO) also ended the day in the red, sliding 0.45% to close at 7180.8 points.

Let’s take a look at the latest outlook for coal and how it relates to the Whitehaven Coal share price.

What’s the outlook for coal?

Whitehaven is a major ASX coal producer with four mines in NSW and two development assets in Queensland.

Against the backdrop of war between Russia and Ukraine, analysts at the ANZ are tipping coal demand to remain strong as European countries restart coal-fired power plants.

ANZ senior commodity strategist Daniel Hynes and commodity strategist Soni Kumari said in a recent research report:

Coal demand is likely to be sustained for another year or two as countries prioritise energy security over climate commitment.

The strategists are also tipping China’s reliance on coal to increase as well, lifting the “price of seaborne coal”. In an ANZ commodity report, Hynes and Kumari added:

Coal market tightness has persisted as Asian demand has risen because of a return to coal for electricity generation. And China’s reliance on coal-fired power is likely to increase this winter, lifting the price of seaborne coal.

With energy security increasingly on its radar, Beijing is likely to resort to coal-fired power over winter. However, it may struggle to boost domestic supply enough to meet the country’s needs.

An increase in demand naturally bodes well for ASX coal shares.

Whitehaven achieved an average realised coal price of $581 Australian dollars in the September quarter. Commenting on the coal price in a quarterly report released in October, Whitehaven CEO Paul Flynn said:

With demand for high quality coal continuing to outstrip global supply, coal prices set another record in the September quarter and continue to be well supported.

Whitehaven Coal share price snapshot

Shares in Whitehaven Coal have soared nearly 296% in the past 12 months, as shown in the chart below.

This ASX coal share has a market capitalisation of $8.57 billion based on today’s closing price.

The post Could this give the Whitehaven Coal share price a further boost? appeared first on The Motley Fool Australia.

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More reading

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• 3 best-performing ASX 200 energy shares in November
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• Climate and energy: Analyst tips 2 ASX shares perfectly placed for global crises

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.

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The team at Morgans has been looking at the best ASX 200 index (ASX: XJO) shares to buy this month.

Among its best dividend ideas for the month of December are the two ASX 200 shares listed below. Here’s what the broker is saying about them:

Telstra Corporation Ltd (ASX: TLS)

Morgans remains very positive on this telco giant and believes it could be an ASX 200 dividend share to buy. The broker has an add rating and $4.60 price target on Telstra’s shares.

Morgans is very positive on Telstra’s outlook thanks to its successful turnaround and believes that its recent restructure could unlock value for shareholders. It explained:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] on Telstra’s legal restructure, which opens the door for value to be released. […] TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders.

As for dividends, Morgans is expecting Telstra to continue to pay fully franked 16.5 cents per share dividends in FY 2023 and FY 2024. Based on the current Telstra share price of $4.00, this equates to yields of 4.1%.

Wesfarmers Ltd (ASX: WES)

Morgans sees this conglomerate as a dividend share to buy this month and has an add rating and $55.60 price target on its shares.

This is thanks to its high quality retail portfolio and focus on value, which could be important given the cost of living crisis. The broker explained:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. We believe WES’s businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.

As for dividends, Morgans is expecting Wesfarmers to continue to pay fully franked dividends of $1.82 per share dividends in FY 2023 and $1.89 per share in FY 2024. Based on the current Wesfarmers share price of $47.75, this equates to yields of 3.8% and 4%, respectively.

The post Morgans names 2 of the best ASX 200 dividend shares to buy in December appeared first on The Motley Fool Australia.

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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 positions in and has recommended Telstra Group and Wesfarmers. 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 tough year for ASX shares and the S&P/ASX 200 Index (ASX: XJO) in 2022, to be sure. Year to date, the ASX 200 remains down by a depressing 5.39%.

Time is certainly running out if the ASX 200 wants to post a gain for this year. But that loss is nothing compared to the Wesfarmers Ltd (ASX: WES) share price.

Wesfarmers has long been an ASX 200 blue-chip share. It was also one with a reputation for stability. Until this year:

Today, Wesfarmers is going for $47.75 a share as of market close, down 0.35% for the day. At this price, Wesfarmers shares are now down by a painful 20.4% year to date in 2022. That’s a loss nearly quadruple what the ASX 200 Index has given investors.

And we are certainly a long way from the all-time record high of more than $66 a share that we saw in August of last year.

So with all of this pain now under 2022’s bridge, what’s next for Wesfarmers shares? Could these late throes of 2022 be a good time to pick up some shares at a price 20% lower than we could at the start of the year?

Let’s see what some of the ASX’s expert investors reckon.

Are Wesfarmers shares a buy today? Here’s what two brokers say

One ASX broker who thinks Wesfarmers shares are a bargain at the current price is UBS. As we covered last month, UBS gave Wesfarmers an add rating, replete with a 12-month share price target of $56. If realised, that would give investors a pleasing upside of 17% from where the shares are today.

UBS is anticipating that Wesfarmers’ core retail businesses, such as Kmart and Bunnings, are performing well in the current environment. The broker even predicts that these businesses could grow their market share from here.

But UBS isn’t the only broker eyeing off Wesfarmers right now. Morgans is also bullish on the retail and industrial conglomerate. It has a slightly lower share price target of $55.60 on the Wesfarmers share price.

Morgans notes Wesfarmers has been enjoying strong retail conditions and thinks the company is a solid long-term buy at the current level. So it’s fair to say that more than one ASX expert investor is eyeing off the Wesfarmers share price this December.

But we’ll have to see what 2023 brings for this ASX 200 blue-chip stalwart

The post Down 20% so far this year, are Wesfarmers shares now a no-brainer buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
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• Here are the 3 most heavily traded ASX 200 shares on Monday
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• One ASX 200 share I’m buying for passive income before 2022 is over

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 positions in and has recommended Wesfarmers. 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 small-cap ASX share Smartpay Holdings Ltd (ASX: SMP) is a leading idea according to a fund manager.

Smartpay allows merchants to take payments from customers with a “versatile, portable EFTPOS machine”.

Recent result

Less than a month ago, the business announced its interim result for the six months to 30 September 2022.

It revealed revenue of $35.4 million, an increase of 68% year over year. Smartpay generated $8.1 million in earnings before interest, tax, depreciation and amortisation (EBITDA), which was a rise of 119%. The company also reported net profit before tax of $2.7 million, an increase of 637%.

The company saw $5.5 million of monthly Australian acquiring revenue at September 2022.

The ASX share made positive operating cash flow of $10.1 million in the period. The operating cash flow is being used to fund the purchase of new terminals, ongoing development of software and reduce bank debt.

The company is working on its Android in-store proposition, which is a “key focus”. It is seeing momentum and an acceleration. It’s looking forward to a “strong” second half.

Fund manager thoughts on the Smartpay share price

The fund manager of EGP Capital, Tony Hansen, shared some comments about Smartpay in the fund update for November 2022. Hansen said that the Smartpay update in mid-October was “spectacular”.

The fund manager commented that “the miracle of operating leverage in a fast-growing, negative working capital business is on display in all of its glory”.

He noted that while he would prefer to see every cost line grow slower than revenue, he is happy enough that marketing doubled. Hansen pointed to the “positive outcomes every increase in marketing Smartpay has had over the past few halves has had.”

In the prior year, marketing costs increased by 74%, while revenue went up 68% in this latest period.

Hansen remains “very bullish” despite the “sharp increase” of the Smartpay share price.

One reason to like the ASX share is that the stated customer churn was just 1.1%. On the current Australian terminal fleet, that equates to only 12 terminals per month that would need to be replaced to maintain the fleet size.

Hansen suggested that the customer churn is so low that the marketing budget could be “almost completely extinguished and the business would probably hold similar revenue in perpetuity”.

ASX share cash flow machine?

Hansen thinks that the business is consistent and could make a lot of money if management wanted it to. He concluded:

It is truly an annuity business, and at the flip of a switch, could be turned into a cash flow monster should management (or an acquirer) choose to do so. We prefer that given they still speak for a low single-digit market share that they continue to grow at the fastest pace prudence enables.

Smartpay share price snapshot

Over the last month, Smartpay shares have risen by around 20%.

The post Could this under-the-radar ASX share be a ‘cash flow monster’ at the flip of a switch? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 small-cap ASX shares with over 30% upside: brokers
• Why is the Woodside share price smashing the ASX 200 on Monday?
• Why is the Origin Energy share price dumping 8% on Monday?
• Will the Flight Centre share price have a better year in 2023?

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 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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