Author: openjargon

Woolworths Group Ltd (ASX: WOW) shares have been having a tough time over the last 12 months.

During this time, the supermarket giant’s shares have lost about 18% of their value.

This means that a $10,000 investment in Woolworths would now be worth approximately $8,200.

Whereas over the same period, the ASX 200 index has risen by almost 8%. This would have turned a $10,000 investment into $10,800.

That’s a disappointing opportunity cost of $2,600 from investing in Woolworths shares.

But could the worst be over? Is now the time for investors to snap up the retailer’s shares while they are cheap?

Well, Goldman Sachs certainly thinks it is. The broker sees significant value in its shares at the current level and has named a few reasons why it thinks investors should be investing today.

3 reasons Woolworths shares could be cheap

One of the reasons that Goldman Sachs believes investors should be buying the company’s shares is its customer loyalty.

It notes that Woolworths has some of the highest consumer stickiness and loyalty among its peers. The broker expects this to drive market share gains.

Another reason it is positive is the company’s ability to pass on cost inflation. It believes this will protect Woolworths’ margins more than the market currently anticipates.

Finally, the broker highlights that Woolworths shares are trading at levels well below historical averages. Given its positive sales growth outlook, it feels this is unwarranted and has created a compelling buying opportunity. Goldman summarises:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

The broker currently has a conviction buy rating and $39.40 price target on its shares. Based on its current share price of $31.54, this implies potential upside of 25% for investors over the next 12 months.

In addition, the broker is forecasting 3.4%+ dividend yields from Woolworths shares through to at least FY 2026.

The post 3 reasons this broker thinks Woolworths shares are a cheap buy appeared first on The Motley Fool Australia.

More reading

• Safeguarding against inflation: A defensive share strategy
• ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker
• Why the Woolworths share price now offers a ‘very rare opportunity’
• 3 of the best ASX 200 shares to buy for your retirement portfolio
• Dividend deals: 2 top ASX shares that still look undervalued

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 Goldman Sachs Group. 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.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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• 4 ASX growth shares to buy to supercharge your portfolio in June
• ASX 200 energy stock rockets 8% on ‘significant’ milestone
• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

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 positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX retail shares are mixed today after the release of the latest retail sales data from the Australian Bureau of Statistics (ABS). Shortly before market close, the ASX consumer discretionary sector is the third-worst performing of the day, with heavyweights like Wesfarmers Limited (ASX: WES) and JB Hi-Fi Limited (ASX: JBH) lagging the S&P/ASX 200 Index (ASX: XJO).

Elsewhere in the sector, though, Harvey Norman Holdings Limited (ASX: HVN) is trading flat and Temple & Webster Group Ltd (ASX: TPW) is surging almost 3% on the back of share buyback news.

The April numbers revealed a small increase in retail sales for April 2024. Seasonally adjusted, retail trade rose by 0.1% month-on-month and 1.3% compared to April 2023. 

The combination of inflation and high interest rates is squeezing retail spending. Clothing, footwear, and personal accessory retailing saw a decline of 0.7% in April, and food retailing was down 0.5%. Sales of household goods, however, showed a positive trend rising by 0.7%. Department stores also experienced a modest increase of 0.1%, maintaining their positive trajectory over recent months. 

Analysts have predicted sales will remain flat throughout 2024 due to rising living costs, high household debt, and economic uncertainty. This could dampen profit expectations for ASX 200 retail shares. JB Hi-Fi advised earlier this month that sales remained resilient, but cautioned that the retail market was “challenging and competitive”. Other major retailers like Wesfarmers, which owns Kmart and Target, could also be impacted by the insipid outlook.

Online sales accelerate

Overall retail sales may be down, but the portion of sales taking place online is accelerating. Data from the latest NAB Online Retail Sales Index reveals Australians spent $57.14 billion on online retail in the 12 months to April, making up about 13.4% of the total retail trade. The performance of online retail has consistently outpaced broader retail, leading to an increase in the online share of total retail sales.

Retailers with a strong online presence and diversified product offerings have seen substantial benefits from the ongoing shift towards online shopping. Companies like JB Hi-Fi and Temple & Webster have invested heavily in their e-commerce infrastructure and have seen significant share price gains over the past few years.

The accelerated shift to online could arguably further strengthen the market position of companies that have invested in their e-commerce infrastructure and allow them to stay ahead of competitors with less developed online capabilities.

Foolish takeaway

Despite mixed trading in ASX retail shares following modest retail sales growth in April, the accelerating shift to online shopping could present a silver lining. Retailers with strong e-commerce platforms may be well-positioned to navigate the challenging economic landscape and capitalise on the growing online retail market.

The post ASX retail shares mixed amid modest April sales growth appeared first on The Motley Fool Australia.

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• ASX investors may choose supermarkets over Wesfarmers shares after ACCC inquiry: broker
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Motley Fool contributor Katherine O’Brien 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 Temple & Webster Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Harvey Norman, and Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

You might have seen TechnologyOne Ltd (ASX: TNE) shares pop up on your radar recently. This ASX 200 tech stock reported its latest earnings covering the half-year ending 31 March a week ago today. And they caused quite a stir upon their release.

As we covered last week, these earnings saw TechnologyOne report a 16% year-on-year rise in revenues to $244.8 million, as well as a 21% boost to the company’s annual recurring revenue to $423.6 million.

This all helped TechnologyOne bring in $48 million in profits after tax, a 16% increase over the prior period.

As a result, TechnologyOne was able to deliver a record interim dividend of 5.08 cents per share, partially franked at 65%. That’s a pleasing 10% hike over the 4.62 cents per share payout that shareholders enjoyed this time last year.

Since these earnings results were made public, TechnologyOne shares have exploded higher. The company was going for $16.02 a share on the day before these results came out. But today, those same shares are asking $17.93 each after hitting a new record high of $18.22 last Wednesday.

But this ASX 200 tech stock is due for a share price pullback this week. How do we know? Well, because TechnologyOne is scheduled to trade ex-dividend for this latest interim dividend this Thursday, 30 May.

Should we rush out and buy TechnologyOne shares before Thursday?

Yep, the ex-dividend date has been set for Thursday, which means that anyone who doesn’t own TechnologyOne shares as of Wednesday’s market close will not be eligible to receive said dividend. if one buys this company’s shares from Thursday onwards, they will miss out on this latest payment.

As such, we should see a drop in the price of TechnologyOne shares on Thursday morning, reflecting this inherent loss of value.

So should you get in and secure some shares of this ASX 200 tech stock before then?

Well, probably not if you are just trying to grab a freebie. Buying a company’s shares before or after they trade ex-dividends in order to secure a financial gain is usually a fool’s errand. When a company trades ex-dividend, its share price normally falls by almost exactly what that dividend is worth.

Upon TechnologyOne’s return to trade on Thursday, its share price is almost certainly just going to be 5.08 cents lower than where it otherwise would be trading.

So you can buy the more expensive shares on Wednesday and nab the rights to the dividend, or wait until the shares are a little cheaper on Thursday and miss out. In all likelihood, it will be a zero-sum game – two paths leading to the same financial endpoint.

As such, if you wish to invest in TechnologyOne as a long-term investment, it probably won’t make a lick of difference whether you buy on Wednesday or Thursday.

ASX brokers say buy

On that note, many ASX experts are telling investors to consider buying TechnologyOne shares in light of its recent results.

Last week, we covered the views of ASX broker Bell Potter. Bell Potter slapped TechnologyOne with a buy rating. That was alongside a 12-month share price target of $19.

We also took stock of what another broker in Morgans had to say. Morgans was also delighted by TechnologyOne’s results. It gave the tech stock an ‘add’ rating, as well as a share price target of $20.50.

The post Should I buy TechnologyOne shares before they trade ex-dividend on Thursday? appeared first on The Motley Fool Australia.

More reading

• 4 ASX growth shares to buy to supercharge your portfolio in June
• Here’s how the ASX 200 market sectors stacked up last week
• Brokers name 3 ASX shares to buy now
• 2 ASX 200 shares trading ex-dividend next week
• Here are the top 10 ASX 200 shares today

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 positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Around half of Australia’s top 500 listed companies are in the red today. However, none are doing it quite as tough as this ASX All Ords share.

A trading update has prompted the Peter Warren Automotive Holdings Ltd (ASX: PWR) share price to shift into reverse. A 0.2% retreat across the S&P/ASX All Ordinaries Index (ASX: XAO) is less than ideal… but how about an 11% drop? That’s the punishment being administered to shareholders of this automotive dealership operator.

Shares in this company have now set a new record low, hitting $1.85 apiece. The undesirable milestone means the Peter Warren Automotive share price has cascaded 38% since its 2021 ASX listing.

So, what’s the exact cause of this deep laceration?

Expected profits lose some horsepower

Peter Warren Automotive may not achieve the earnings mileage expected by the market in FY24.

Revenue is apparently not an issue, continuing to grow. However, underlying profit before tax is a different story. Several impactful factors have forced the company to adjust the market’s view of how the full-year results should look.

The company’s full-year FY24 underlying profit before tax is now anticipated to be between $52 million and $57 million. For context, estimates already had down Peter Warren Automotive to generate $68.8 million in before-tax earnings.

At the midpoint, the new guidance reflects a 20.8% downgrade from consensus expectations. Evidently, this is not doing any favours for this All Ords share today.

Three key contributors were referenced as causes for the reduction, as follows:

• More competition between dealerships due to increased supply from car manufacturers, weighing down on new vehicle gross margins
• Subdued demand among customers for new vehicles in light of cost-of-living pressures
• Higher interest rates producing increased interest costs compared to the prior year

Despite the knock to earnings expectations, Peter Warren noted some positive items. These include growth in the number of vehicles sold and an increase in service and parts revenue.

Finally, Peter Warren Automotive highlighted initiatives to reduce the pain of pressured margins. For example, the company is limiting its inventory levels, leaning on growth in its service, parts, and used car segments, and controlling costs.

This All Ords share is not alone

While the Peter Warren Automotive share price is copping the brunt of selling pressure today, other consumer discretionary shares are also feeling the pinch.

In afternoon trading, the consumer discretionary sector is faring the worst on the ASX, down 0.79%. It might have a little to do with April retail trade data hitting the headlines.

The Australian Bureau of Statistics showed a 0.1% month-on-month increase in retail trade last month. Unfortunately, the market expected a 0.2% strengthening after a shocking 0.4% slump in March.

Investors may have interpreted it as another tough month for ASX retailers, including for our All Ords share, Peter Warren Automotive.

The post Guess which ASX All Ords share is diving 11% to record lows today appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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.

Investors tend to consider ASX 200 bank shares as dividend payers rather than growth investments, with two exceptions — Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG).

And there’s good reason for those exceptions, too.

Which bank delivers more capital growth than dividends?

At the recent ASX Investor Day in Sydney, investment strategist Marc Jocum from exchange-traded fund (ETF) provider Global X presented the following data on ASX 200 bank shares.

Source: Global X investor presentation, ASX Investor Day, Sydney

As you can see, Macquarie shares are the only ones that delivered more capital growth than dividend income among ASX 200 bank shares over the decade to 31 March 2024.

The Macquarie share price rose 244.7% and dividend returns were 230.8%, providing a total 10-year return of 475.6%.

When selecting shares for investment, Jocum emphasised the importance of a ‘total returns approach’ that takes dividend returns into account. This is important because they offset poor growth periods.

According to his presentation:

Most of the largest Australian banks have had negative capital returns. Dividends can add as an important source of returns and help cushion drawdowns.

CBA shares delivered the second-best capital growth, but it was a sliver of Macquarie’s at just 56.1% over 10 years. However, a 150.7% dividend return contributed to a solid total 10-year return of 206.8%.

What’s happening with ASX 200 bank shares today?

Today, ASX 200 bank shares are lower amid the S&P/ASX 200 Index (ASX: XJO) losing 0.27% in value.

• The Macquarie Group Ltd (ASX: MQG) share price is down 1.11%
• Westpac Banking Corp (ASX: WBC) shares are down 0.79%
• The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is down 0.32%
• Commonwealth Bank of Australia (ASX: CBA) shares are down 0.27%
• The National Australia Bank Ltd (ASX: NAB) share price is down 0.18%
• The Bank of Queensland Ltd (ASX: BOQ) share price is down 0.17%
• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are down 0.035%

Should you buy Macquarie shares?

After Macquarie reported its FY24 full-year results earlier this month, top broker Goldman Sachs retained its neutral rating on the ASX 200 bank share and reduced its 12-month price target to $178.74.

The broker noted that Macquarie’s better-than-expected FY24 performance was driven by a lower-than-expected tax rate rather than revenue growth. But it remains optimistic on the ASX 200 bank share.

Goldman said:

Despite this, we remain optimistic on the business’s medium term outlook, given i) an improving macro backdrop (we note GS now expects the rate cutting cycle to commence in November), and ii) MQG is well positioned to benefit from the global push towards decarbonisation, further infrastructure investment, and interest rates reaching their peak levels.

Yesterday, Macquarie announced that Fitch Ratings has upgraded the long-term issuer default rating (IDR) of Macquarie Bank Limited.

The long-term ratings of Macquarie entities are now A+ for Macquarie Bank Limited (up from A) and A for Macquarie Group Limited.

The post Only 1 ASX 200 bank share delivers more capital growth than dividends. Which bank? (Clue: Not CBA) appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you looking to add some growth shares to your investment portfolio in June?

If you are, then the four highly rated ASX growth shares listed below could be worth considering.

Here’s what you need to know about them:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share that could be a buy is Aristocrat Leisure. It is one of the world’s leading gaming technology companies. It has a world class portfolio of pokie machines, a lucrative digital business, and a growing real money gaming business.

Analysts at Citi are very positive on the company. Particularly given its strong performance in the first half of FY 2024 and management’s confidence in its outlook.

Citi has a buy rating and $53.00 price target on Aristocrat Leisure’s shares.

Pro Medicus Limited (ASX: PME)

Goldman Sachs thinks Pro Medicus is a top ASX growth share to buy. It is a leading provider of radiology information systems (RIS), Picture Archiving and Communication Systems (PACS), and advanced visualisation solutions across the globe.

Goldman is very positive on the company’s outlook. It notes that it sees “PME as the clear incumbent technology leader in a growing market with a strong financial profile and significant AI upside.”

The broker has a buy rating and $136.00 price target on its shares.

ResMed Inc. (ASX: RMD)

A third ASX growth share that has been tipped as a buy is ResMed. It is a sleep treatment-focused medical device company.

ResMed has been growing at a strong rate for over a decade. But if you thought its growth was coming to an end, think again. That’s because its industry-leading products have a massive market opportunity. Management estimates that there are 1 billion people impacted by sleep apnoea worldwide, with only ~20% of these sufferers currently diagnosed.

Ord Minnett is bullish on ResMed and has an accumulate rating and $40.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

A final ASX growth share for investors to look at in June is TechnologyOne. It is Australia’s largest enterprise software company with locations across six countries. It provides a global SaaS ERP solution that transforms business and makes life simple for users.

Analysts at Morgans were impressed with the company’s half year results this month. In fact, the broker believes that the company’s profit growth is about to go up a gear. Particularly given its successful transition to a software-as-a-service business model.

Morgans currently has an add rating and $20.50 price target on its shares.

The post 4 ASX growth shares to buy to supercharge your portfolio in June appeared first on The Motley Fool Australia.

More reading

• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• 2 no-brainer ASX 200 shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week
• Brokers name 3 ASX shares to buy now
• 2 ASX 200 shares trading ex-dividend next week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Pro Medicus, ResMed, and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Pro Medicus, ResMed, and Technology One. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Pro Medicus and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The market may be edging lower today but the same cannot be said for the Strike Energy Ltd (ASX: STX).

In afternoon trade, the ASX 200 energy stock is rocketing higher and is up 8% to 22.2 cents.

Why is this ASX 200 energy stock rocketing?

Investors have been scrambling to buy the company’s shares today after it achieved a “significant financial milestone” at the Walyering gas field development.

According to the release, the Walyering gas field in the Perth Basin, which was brought online eight months ago, has now reached payback of its total development capital spend of approximately $30 million (plus operating costs, royalties and taxes incurred to date).

Strike Energy advised that total gross income received to date from the Walyering project is approximately $47 million.

Management notes that this payback profile would be one of the fastest in recent history for a greenfield Australian oil and gas project. It believes this demonstrates the inherent value of the ASX 200 energy stock’s conventional gas play in the Jurassic aged Sandstones within the Cattamarra Coal Measures.

What’s next?

Given the success of the Walyering project so far, investors will be pleased to learn that drilling activities continue on site.

The company advised that Walyering-7 (W7), which commenced drilling 18 days ago, has reached its total planned depth of 4,035 metres (measured depth). This is five days ahead of target and has set a new time/depth record for its drilling performance within the Walyering gas field.

Pleasingly, the ASX 200 energy stock revealed that the W7 well has passed through multiple sandstone reservoirs within the Cattamarra Coal Measures and has registered positive observations on both mud logs and logging while drilling tools. Management advised that it is now preparing to run a series of wireline logs and specialty tools and will evaluate those results before moving to the next stage of completion.

It adds that the W7 well has been drilled from a surface location co-located with the Walyering gas processing facility directionally to the east into a fault compartment north-east of the producing Walyering-5 structure. The company intends to provide further updates as operations and evaluation concludes at the W7 well site.

Despite today’s strong gain, the Strike Energy share price remains one of the worst performers on the ASX 200 index over the last 12 months. During this time, the ASX 200 energy stock is down approximately 53%.

The post ASX 200 energy stock rockets 8% on ‘significant’ milestone appeared first on The Motley Fool Australia.

More reading

• Why Playside Studios, Pro Medicus, Strike Energy, and Winsome shares are charging higher
• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares 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.