Day: 7 January 2023

Last year was a rough one for many S&P/ASX 200 Index (ASX: XJO) shares, and those of banking giants were no exception.

While rising interest rates potentially buoyed market sentiment for banks due to the potential for higher net interest margins (NIMs), most ASX 200 banks ultimately ended the year lower than they started.

Indeed, the home sector of ASX 200 banking shares, the S&P/ASX 200 Financials Index (ASX: XFJ), fell almost 3% over the 12 months ended 31 December 2022. Simultaneously, the ASX 200 tumbled around 5%.

But it wasn’t all bad for ASX 200 bank shares. Here are three that defied the downturn to post the biggest share price gains out of their peers in 2022.

2022’s best performing ASX 200 bank shares

Taking out the gold is one many might overlook when hunting for ASX 200 bank shares.

The Challenger Ltd (ASX: CGF) share price gained 16.7% between its final close of 2021 – $6.53 – and the end of 2022, which saw it trading at $7.62.

The company operates three core businesses – an investment management division, an annuities business, and an APRA-regulated bank. However, it likely won’t be a contender for 2023’s top spot.

Challenger Bank is currently in the process of being acquired by Heartland Group Holdings Ltd (ASX: HGH).

Coming in second best is the Westpac Banking Corp (ASX: WBC) share price, having gained 9.4% over the 12 months to 31 December 2022.

After ending 2021 trading at $21.35, the Westpac share price rose to $23.35 as of the final close of 2022 – a 9.4% improvement.

Looking forward, Goldman Sachs is tipping further gains from the ASX 200 bank in the coming years.

Finally, the Suncorp Group Ltd (ASX: SUN) share price also outperformed most other ASX 200 bank operators in 2022.

The stock rose from $11.07 to $12.04 – or 8.8% – over the 12 months ended 31 December 2022.

However, like Challenger, the company’s days operating a bank appear limited.

Suncorp Bank is being lined up to be acquired by ANZ Group Holdings Ltd (ASX: ANZ) in a near-$5 billion deal announced last year.

The post The 3 ASX 200 bank shares that outperformed all others in 2022 appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These are the top 3 ASX 200 shares in the first week of 2023
• ASX 200 lithium shares lead the market higher on Friday
• ASX 200 shares to rise by up to 7% in 2023: CBA
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger and Westpac Banking. 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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One of the most famous investors in the world is Warren Buffett.

The Oracle of Omaha has earned this reputation by delivering incredible returns over multiple decades.

Between 1965 and 2021, the market value of Buffett’s Berkshire Hathaway has increased by an average of 20.1% per annum. This means that Berkshire Hathaway has returned a massive 3,641,613% over the 56 years.

To put that into context, a single investment of just 27.5 cents would have turned into $1 million.

Investing in moats

One of the key reasons for Buffett’s success could be down to his focus on buying companies with wide economic moats.

In his 2007 letter, he explained why moats are important for investments:

A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business ‘castle’ that is earning high returns.

Therefore a formidable barrier such as a company’s being the low-cost producer (GEICO, Costco) or possessing a powerful world-wide brand (Coca-Cola, Gillette, American Express) is essential for sustained success. Business history is filled with ‘roman candles’, companies whose moats proved illusory and were soon crossed.

But which ASX shares have moats?

There are a number of defensive ASX shares with moats that I think would be great long-term options for investors.

These include lottery operator Lottery Corporation Ltd (ASX: TLC), toll road company Transurban Group (ASX: TCL), realestate.com.au owner REA Group Limited (ASX: REA), and biotech giant CSL Limited (ASX: CSL).

But investors don’t necessarily need to pick individual ASX shares to buy. That’s because of the VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT).

This exchange-traded fund (ETF) has been designed to replicate Warren Buffett’s investment style. It gives investors access to a diversified portfolio of companies with sustainable competitive advantages and fair valuations.

Over the last 10 years, the index that the fund tracks has generated a return of 18.1% per annum. This would have turned a $10,000 investment into more than $50,000 today.

All in all, I believe this demonstrates why following Warren Buffett’s advice could help you grow your wealth with ASX shares over the long term.

The post I’d listen to Warren Buffett and invest in ASX shares with wide economic moats appeared first on The Motley Fool Australia.

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More reading

• Build a strong portfolio in 2023 with these ASX 200 blue chip shares: experts
• Experts name 2 quality ASX 200 dividend shares for income investors to buy
• Are these the best ASX 200 shares to buy and hold?
• Top brokers name 3 ASX shares to buy
• Here’s how I’ll be investing my money in ASX shares in 2023

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended REA Group and VanEck Morningstar Wide Moat ETF. 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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All Ordinaries Index (ASX: XAO) shares closed up 0.7% on Friday.

That helped the All Ords post a gain of 1.2% for the first week of trading in 2023.

Investors will certainly welcome this start to the new year after All Ordinaries shares dropped 7.2% in 2022. Though it may be too early to hope for a return to 2021 levels, when the index gained 13.6% over the calendar year.

While the 1.2% gains represent a solid start to 2023, these three All Ordinaries shares delivered far more in the first week.

As you’ll note below, all three of the top performers this past week suffered heavy losses in 2022. With them now leading the charge in the new year, investors look to be doing some bargain hunting.

Top 3 All Ordinaries share gainers this week

The third-best performer in the first week of trade was gold miner Alkane Resources Ltd (ASX: ALK).

Alkane has a market cap of $383 million.

Like the other top-performing All Ordinaries shares covered in this article, the Alkane share price fell heavily in 2022, down 41%.

Unlike the other two stocks, Alkane did release positive price-sensitive news this week. The Alkane share price closed up 11% on Thursday after the company upgraded its FY2023 production guidance at its Tomingley Gold Operations in New South Wales.

This helped Alkane deliver a 24% gain in the first week of trading in 2023, finishing the week at 67 cents per share.

The number two spot goes to diagnostic imaging company Cyclopharm Ltd (ASX: CYC).

Cyclopharm has a market cap of $125 million.

The All Ordinaries healthcare share tumbled 29% in 2022 but is certainly off to a better start this year. Cyclopharm closed the week up 25% at $1.46 per share.

Which bring us to the best All Ordinaries share performer in the first week of 2023, financial services company Harmoney Corp Ltd (ASX: HMY).

Harmoney has a market cap of $58.4 million.

The stock lost a painful 76% in 2022 but staged a strong rally to kick off 2023, gaining 30% in the first week of trade. Harmoney closed the week trading for 57 cents per share.

The post Can you guess the top 3 performing All Ordinaries shares in the first week of trade? appeared first on The Motley Fool Australia.

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More reading

• Why Alkane, Appen, Warrego Energy, and Zip shares are racing higher today
• Can you guess which ASX gold share is surging 15% on Thursday?

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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Last year was dramatic for the Novonix Ltd (ASX: NVX) share price, to say the least.

The battery materials and technology stock plummeted 84% over the 12 months ending 31 December 2022.

After closing 2021 at $9.19, it was swapping hands for just $1.47 by the end of last year.

For comparison, the S&P/ASX 200 Index (ASX: XJO) dumped around 5.5% in 2022.

So, what went wrong for the Novonix share price last year, and can the stock pick drag itself up by the bootstraps in 2023?

The Novonix share price dived 84% over 2022

Last year was an interesting time for Novonix. The stock entered the year trading near its all-time high after soaring nearly 650% in 2021.

Soon after the year began, it announced plans to list on the Nasdaq, which it achieved in February. Co-founder and CEO Dr Chris Burns commented at the time:

Our Nasdaq listing is a perfect way to begin 2022, and continues our momentum from the previous year … this listing furthers our long-term goal of onshoring the [electric vehicle] supply chain in North America and becoming a leader in the electrification economy.

Speaking of, the company announced a supply agreement with KORE Power, set to begin in 2024, and a US$150 million government grant to help fund its anode materials division’s expansion last year.

Of course, all that sounds positive. What could possibly have led to the Novonix share price’s 84% dive?

Well, that might have something to do with deepening losses and rising interest rates.

Could this be what went wrong?

Novonix’s financial year 2022 earnings contained both good and bad news.

The good news: its revenue jumped 61% year-on-year to come in at $8.4 million. The bad: it posted a $71.4 million loss, down from the prior year’s $18 million loss.

While its books still held a decent amount of cash, rising interest rates might have led market watchers to shy away from the unprofitable stock amid the costly debt environment.

It likely didn’t help that the company’s auditors flagged concerns about its ability to continue operating without raising cash to fund its expansion.

It’s also worth noting ASX 200 tech shares broadly suffered in 2022. The S&P/ASX 200 Information Technology Index (ASX: XIJ) tumbled 34% last year.

Will 2023 be a better year for Novonix shares?

While it’s impossible to predict what this year might bring the embattled former tech-favourite, one broker is optimistic.

Morgans has slapped Novonix shares with a speculative buy rating and a $3.11 price target, my Fool colleague James reports. That marks a potential 97% upside on its current price.

The broker said:

[Novonix] offers ASX investors an opportunity to get direct exposure to the North American battery market.

The post The Novonix share price crashed a whopping 84% in 2022. What’s next? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 tech shares are leading the market higher today
• 23 ASX shares to buy in 2023 – brokers
• Why did the Novonix share price sink to a new 52-week low today?
• Why are ASX 200 tech shares having such a stellar run on Thursday?

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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I’m a big advocate of buy and hold investing and believe it is the best way for investors to grow their wealth.

In light of this, to demonstrate how successful it can be, I occasionally like to pick out a number of popular ASX 200 shares to see how much a single $20,000 investment 10 years ago would be worth now.

This time around I have picked out the two ASX 200 shares that are listed below:

Fortescue Metals Group Limited (ASX: FMG)

The resources sector can be a difficult place to invest over long periods because of the ups and downs of mining cycles. But thanks largely to this iron ore miner’s strong operating performance and favourable commodity prices over the last three years, the Fortescue share price has charged higher and higher.

Combined with some big dividend payments, this has led to the company’s shares generating very strong returns for investors. In fact, over the last 10 years, Fortescue’s shares have provided investors with an average total return of 20.26% per annum. This would have turned a $20,000 investment in 2013 into over $125,000 now.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that provided investors with market-beating returns over the last decade is ResMed. It is a sleep treatment focused medical device company which provides industry-leading solutions for sleep apnoea and chronic obstructive pulmonary disease sufferers.

Thanks to the growing awareness of these disorders, demand has been increasing strongly for ResMed’s products over the last decade. This has led to consistently solid sales and earnings growth, which has driven its shares higher. So much so, ResMed’s shares have generated an average total return of 22.94% since 2013. This would have turned a $20,000 investment in its shares into almost $160,000 today.

The post Guess how much a $20k investment in these ASX 200 shares in 2013 is worth now appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price bulls vs bears: Which will prevail in 2023?
• My 3 top-performing ASX shares of 2022, and why I’m still buying 2 of them for 2023
• 3 defining moments for Fortescue shares in 2022
• 3 of the safest ASX dividend shares on Earth
• 2 ASX 200 shares I’m never selling

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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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Although interest rates are rising, investors can still beat the returns on savings accounts easily with ASX dividend shares.

But which shares should you buy for dividends? Two that have recently been rated as buys for investors are listed below. Here’s what you need to know about them:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share for investors to consider next week is Baby Bunting.

This baby products retailer has been named as a buy by analysts at Morgans. The broker believes that recent share price weakness has “been an overreaction.” And while recent trading conditions haven’t been easy, Morgans remains positive and feels investors should focus on the long term.

Particularly given that Baby Bunting “still has compelling opportunities to grow its share of a growing market through store rollout, entry into New Zealand, range expansion and the launch of an online marketplace.”

In respect to dividends, the broker is forecasting fully franked dividends per share of 14 cents in FY 2023 and then 16 cents in FY 2024. Based on the current Baby Bunting share price of $2.77, this will mean yields of 5% and 5.8%, respectively.

Morgans has an add rating and $3.60 price target on Baby Bunting’s shares.

Mineral Resources Ltd (ASX: MIN)

Another ASX dividend share for income investors to consider next week is Mineral Resources.

Goldman Sachs appears to believe it could be a top option for investors that are not averse to investing in the mining sector.

That’s because its analysts expect the mining and mining services company’s lithium operations to underpin strong earnings and big dividends in the coming years.

In respect to the latter, Goldman Sachs is expecting fully franked dividends of $4.37 per share in FY 2023 and $4.33 per share in FY 2024. Based on the current Mineral Resources share price of $83.54, this will mean 5.25% and 5.2% dividend yields, respectively.

Goldman currently has a buy rating and $94.00 price target on its shares.

The post 2 ASX dividend shares to buy with 5%+ yields – analysts appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 lithium shares lead the market higher on Friday
• These were the 3 best performing ASX lithium shares of 2022
• Buy these ASX dividend shares for a passive income boost: analysts
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Baby Bunting Group. The Motley Fool Australia has recommended Baby Bunting Group. 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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