Day: 30 March 2023

A large-cap S&P/ASX 200 Index (ASX: XJO) stock, after not doing much for three years, is about to rocket.

That’s the opinion of Fairmont Equities managing director Michael Gable, who said CSL Limited (ASX: CSL)’s one-year forward PE ratio of 28 is at the lower end of its 5-year range.

“With the current multiple looking undemanding in the context of forecast earnings per share growth of ~20% over FY22 to FY25 on a compound annual growth rate (CAGR) basis, we consider CSL to be an attractive investment at current levels.”

The CSL share price is still around 16% lower than its pre-COVID high reached in February 2020.

“The large consolidation from the past 3 years could be almost ending and that should lead to the stock resuming its longer-term uptrend,” Gable said on the Fairmont blog.

While the current labels remain an “attractive buy”, conviction would be even higher once the stock rockets to the next milestone.

“An upside break above $300 would be the next buy signal.”

Why is CSL an exciting long-term buy?

Gable cited some key catalysts on the horizon that could bear fruit for CSL investors.

“We consider the key catalysts for the shares to be: upside risk to gross profit margin expansion for CSL Behring over FY24 and FY25, further progress on the R&D product pipeline, and future results to validate the expected earnings growth contribution from the Vifor acquisition.”

Vifor’s numbers have already looked very positive, he added.

“Vifor’s sales performance in 1H23 surprised on the upside, with CSL re-iterating all prior guidance, including its cost synergy target of US$75 million over three years remaining on track.”

While raking in decent earnings from its mature businesses such as plasma collection, CSL is developing new products in the research lab.

“There are several potentially positive catalysts likely to emerge from the R&D product pipeline over the near term.”

The four product-in-progress milestones Gable looks forward to are:

• CSL112: currently in phase III trials, expected to launch early 2024
• Hemgenix: US launch expected in “the near term”
• Garadacimab for hereditary angioedema attacks: phase III data to be released soon
• New plasma collection nomogram trial: expected to start this quarter

CSL shares are currently popular among the professional community. According to CMC Markets, 16 out of 19 analysts are rating it as a buy.

The post This ASX 200 giant is about to wake up from a 3-year slumber. Are you ready? appeared first on The Motley Fool Australia.

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More reading

• Fundie says buy these 2 ASX 200 shares that have the planets aligned
• Does the CSL share price fall finally make it a no-brainer buy?
• Why these 3 ASX 200 shares could be leading picks for dividends and growth
• Top brokers name 3 ASX shares to buy next week
• Want to boost your portfolio with ASX blue chips? Analysts say buy these shares

Motley Fool contributor Tony Yoo 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 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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Yesterday was a top day for the Coles Group Ltd (ASX: COL) share price. Coles finished the day up 0.45% at a flat $18 a share. That leaves its year-to-date performance at a healthy 9.36% for 2023 so far.

Today is also going to be a good day for Coles shareholders, no matter what the share price does. That’s because today is payday for the Coles dividend.

Last month, Coles reported its half-year earnings for the six months to December 2022.

As we covered at the time, the ASX 200 grocery giant reported a 17.1% rise in net profit after tax (NPAT) to $643 million. This came with a 17.2% lift in earnings per share (EPS), up to 48.3 cents per share. This enabled Coles to announce an interim dividend of 36 cents per share, fully franked.

Coles’ biggest dividend ever is coming to a bank account near you

This payment is the highest dividend Coles has ever paid out in its four-and-a-bit years of ASX life. It represents a pleasing 9.09% rise over last year’s interim dividend of 33 cents per share. Not to mention an even more impressive 20% increase over the inaugural interim dividend of 30 cents per share that we saw back in 2020.

With this latest dividend, Coles is on track to continue its trend of delivering annual dividend rises. The company paid out 57.5 cents per share in 2020, 61 cents per share in 2021, and 63 cents per share in 2023.

Eligibility for new investors for this dividend closed on 2 March when Coles traded ex-dividend.

But for those lucky investors who owned Coles shares before then, today is the day the dividend will be arriving in your bank account. Or else reinvested back into additional Coles shares if you’ve opted for the company’s dividend reinvestment plan (DRP).

At the last Coles share price of $18, this divided, combined with last year’s final payment, gives Coles a trailing dividend yield of 3.67%. That grosses up to 5.24% with the company’s full franking credits.

Despite Coles’ stellar year-to-date share price performance, this ASX 200 blue chip share remains up by just 0.22% over the past 12 months:

The post The record Coles dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX dividend shares that brokers rate as buys
• For $1,000 in monthly passive income, buy 18,462 shares of this ASX 200 stock
• Why is the Coles share price smashing the ASX 200 this year?
• Is the Coles share price heading back up to $19?
• 2 blue chip ASX 200 dividend shares to buy: brokers

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 Coles 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was on form again and pushed slightly higher. The benchmark index rose 0.2% to 7,050.3 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to jump

The Australian share market is expected to have a strong session on Thursday after Wall Street charged higher. According to the latest SPI futures, the ASX 200 is expected to open the day 51 points or 0.7% higher this morning. In late trade in the United States, the Dow Jones is up 1%, the S&P 500 has risen 1.45%, and the NASDAQ is up 1.85%.

Pilbara Minerals rated neutral

Analysts at Goldman Sachs continue to sit on the fence when it comes to Pilbara Minerals Ltd (ASX: PLS) shares. Despite having a price target of $4.80, which implies over 20% upside, the broker has reiterated its neutral rating this morning. It commented: “We rate PLS a Neutral on: 1) Valuation at ~1.1x NAV (peer average ~1.1x), or pricing ~US$1,080/t, 2) Strong production growth of ~3x to FY26E, and 3) Growing cash balance supports further growth opportunities and capital management.”

Oil prices fall

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a subdued session after oil prices dropped on Wednesday night. According to Bloomberg, the WTI crude oil price is down 0.4% to US$72.90 a barrel and the Brent crude oil price is down 0.5% to US$78.27 a barrel. Traders appear undecided over how tight supply levels are.

ASX 200 shares going ex-dividend

A number of ASX 200 shares are going ex-dividend on Thursday and could trade lower. This includes popular property companies such as Arena REIT (ASX: ARF), Centuria Industrial REIT (ASX: CIP), Charter Hall Long WALE REIT (ASX: CLW), and Cromwell Property Group (ASX: CMW).

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a tough session after the gold price fell overnight. According to CNBC, the spot gold price is down 0.5% to US$1,980.7 an ounce. Demand for safe haven assets weakened as equities charged higher.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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More reading

• To pause or not to pause? Here are the predictions on next week’s RBA rate decision
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why ALS, Centaurus Metals, Pilbara Minerals, and Westgold shares are rising today
• ASX 200 turns green on softer-than-expected inflation data

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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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Chester Asset Management portfolio manager Rob Tucker decides whether three heavily discounted ASX shares are value traps or bargains.

Bargain buy or value trap?

The Motley Fool: Let’s examine three S&P/ASX 200 Index (ASX: XJO) shares that have been devastated this year, and see if you think each of these fallen stars are now a bargain to pick up or if you’d stay away.

The first one is Life360 Inc (ASX: 360), a software stock that’s plunged almost 30% since November.

Rob Tucker: Yeah, Life360 is a really interesting company. We use it in our family. I’m well aware of the business model and I think it will ultimately be successful. 

We probably have more of a value bend, so it’s probably not one for us just yet. But listening to the company on a webcast yesterday, I’ve followed very closely, if they can say what they’re going to do, which is [to] become cash flow breakeven this year, I’d look a lot closer at it. 

If I was thinking interest rates were going to be cut, and these tech companies would have another leg to their story, Life360 would certainly be one I’d be interested in. I’d really prefer to see it get to cash flow breakeven before I entertained it. I do like it. I think it’s a very strong story.

MF: You’re the first person I’ve run into who’s actually used the software. How do you find it? You obviously find it useful.

RT: Yeah, we’ve got [from] a nine-year-old to a 15-year-old — four kids. And we find it very useful just tracking them. I don’t need to ring them. I say, “My son’s at the park having a kick of footy.” You can see, “Oh, he’s at 7-Eleven.” I quite like it for that reason. 

There’s about 34 million users, with about one-and-a-half [million] paid subscribers. The Life360 story’s actually converting those users into paid subscribers. 

And they’ve got a bit of a pricing lever. 

Most of the time in the US, it’s for crash protection and some driving awareness software in terms of alerting if they’ve had a crash, they can alert the insurance company and get the ambulance sent out and things like that. A lot of people in America use it for that reason. 

If they can convince people that there’s real value-add services in all the products they have, and the number of paid subscribers keeps growing, I think it will be a genuinely strong cash flow story.

I’d like to see a little bit more, just another year or so of momentum before we entertain it.

MF: Fair enough. Next one’s Corporate Travel Management Ltd (ASX: CTD), which is down about a third since April.

RT: Corporate Travel’s not one I spent that much time on personally. I’m obviously familiar with the business model, but not that close to the management team. I’ll make a broad comment that I think corporate travel is being priced for an acceleration of travel expenditure, and that’s [why] I’m probably quite cautious over the next 12 months. 

I think we’ve had a honeymoon [period] of revenge spending on travel in the backend of 2022. Everyone wanted to get away and booked travel. 

I think we’re going into a period of economic weakness… It is cyclical, and I think we’ve had a huge uptick, and I think [travel] probably softens off a bit over the next 12 to 18 months. I think for me, Corporate Travel’s still probably on the sidelines just because of the cyclical softness we’ll see in the next 12 to 18 months in travel spend.

MF: The last one is Insignia Financial Ltd (ASX: IFL), which used to be IOOF. That’s still 62% lower than pre-COVID highs. Bargain or value trap?

RT: We think that’s a really strong leverage to rising markets. It’s unbelievably cheap. It may be a value trap, but I think you’re, with a 7.5% dividend yield, being paid to wait for an uptick in the market. 

It’s a really high fixed cost base, so if the market does participate and funds under management rises, the fall through the bottom line will accelerate earnings aggressively. I think it’s really interesting here. I’d say it’s probably one we’d look at. We don’t hold it, but it’s one that we’d look at quite closely. I’m more on the buy side.

Of those three, for me, it’d probably be IFL, 360 with a little bit more cash flow certainty, and then Corporate Travel.

The post Bargain or value trap? Fundie rates 3 ASX 200 shares going for cheap appeared first on The Motley Fool Australia.

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More reading

• Go for gold: Advisors name 2 ASX 200 shares to pounce on
• Wilson reckons these 2 ASX 200 shares look ready for a massive 2023
• Buy these ASX 200 shares for 50%+ returns: Goldman Sachs
• Goldman Sachs names 5 of the best ASX tech shares to buy now
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor Tony Yoo has positions in Corporate Travel Management, Insignia Financial, and Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has recommended Corporate Travel Management. 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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