Author: openjargon

  • ‘House of the Dragon’: BI reporters break down Daemon and Rhaenyra’s fight and Criston’s bold move

    House of the Dragon Screenshots
    "House of the Dragon" season 2 episode 2 focuses on the fallout of Jaehaerys' death.

    • Rhaenyra lays into Daemon after learning he was inadvertently responsible for Jaehaerys' murder.
    • Meanwhile, Alicent and Criston grapple with their guilt in very different ways.
    • Criston makes a big move against Rhaenyra, and Aegon II names him his new Hand after ousting Otto.

    The brutal killing of Aegon II Targaryen's heir has left both sides in chaos.

    The "House of the Dragon" season two premiere ended with Blood and Cheese, two inept assassins hired by Daemon Targaryen to kill Aemond in retaliation for the death of Rhaenyra's son Lucerys Velaryon, beheading Jaehaerys, the oldest child of Aegon II and his sister-wife Helaena.

    Episode two picks up shortly after the shocking death, with the Greens reacting to the death (and using it for political moves) and a clueless Rhaenyra desperately trying to figure out why the kingdom believes she's responsible for the murder of a child. (Thanks, Daemon.)

    Below, Business Insider reporters Eammon Jacobs, Palmer Haasch, and Ayomikun Adekaiyero and senior entertainment editor Caralynn Matassa break down all the major moments in "House of the Dragon" season 2, episode 2.

    The aftermath of Jaehaerys' death

    Olivia Cooke, Phia Saban in "House of the Dragon" season 2 episode 2
    Alicent and Helaena attend the procession behind Jaehaerys' body.

    Palmer Haasch: There are a few really important reactions here: Alicent feels like she's being divinely punished, Helaena is utterly grief-stricken, Rhaenyra is aghast that she's being blamed, and Otto knows that this is the biggest political gift his side will probably ever see. And he's right!

    Caralynn Matassa: And Aegon — just utterly wrecked. Any intention he had to try to be a good king is entirely wiped away here in favor of vengeance.

    Palmer: I think it's interesting, because you really don't get the impression that Aegon cares too much about his children until he starts to see Jaehaerys as a viable heir. Even though he didn't want the throne himself, he too has become power-drunk and wants to continue his legacy.

    Eammon Jacobs: Phia Saban's performance during that procession scene is so haunting. She's doing so much without needing to wail lines of over-the-top predictable dialogue. It's clear that Helaena is tapping into something bigger too, just with the focus on the seeds/leaves blowing in the wind and her frantic facial expressions.

    Ayomikun Adekaiyero: The series does a great job of showing how this toxic masculinity among the men — particularly Aegon, Daemon, and Criston — escalates this conflict. Aegon doesn't really care about Jaehaerys; he is terrified at looking weak, which also isn't his fault, considering he has been raised to be this great king. Tom Glynn-Carney really has one of the best performances in this episode.

    And on the toxic masculinity point, it's interesting to see how the harm of this conflict so far is mostly affecting the women. Rhaenyra is blamed for a murder she didn't order, Alicent and Helaena are forced to perform for the royal family during their grief while the men plot and create more chaos.

    Palmer: This is also really the moment where we realize how much of a curse Helaena being a dreamer is. She can foreshadow the death of her own son, but she doesn't realize it and can't prevent it. The entire funeral procession should also satiate everyone who didn't think the death was horrifying enough — I think seeing little Jaehaerys, with his neck stitched, valorized like a martyr in the streets is infinitely worse than whatever else we could have gotten out of Blood and Cheese. Phia's performance here heightens the entire thing.

    Caralynn: Phia and Tom were both such standouts in this episode! The way the procession was staged and filmed was also gorgeous and so evocative. The closeup on little Jaehaerys' sewn-on head almost made me puke.

    Palmer: I also want to talk about the conversation between Alicent and Helaena right before the funeral procession — it's a huge insight into Alicent as a mother. For the most part, I've gotten the impression that the moments where she's protecting her children are also deep political moves, like when she demanded Lucerys' eye at Driftmark in season one. But in this moment, she is truly throwing Helaena to the wolves, and knows it. Olivia manages to elucidate this tension between protecting her daughter from scrutiny and making the savvy political choice, but obviously, we know where Alicent lands.

    Caralynn: I've never had less sympathy for Alicent than in this episode. You can see her struggling with this choice — and that's all thanks to Olivia's meticulous performance — but she makes the wrong choice at literally every opportunity here.

    Palmer: I do think that she is unfortunately pretty on the nose when she says that she's being punished by the gods.

    Ayomikun: I haven't read the books, and maybe I'm reading into the procession too much, but I feel like there was so much foreshadowing that there is worse to come. The flowers of the funeral fall down like ash, terrifying Helaena. The people of the city reach out as if they are also in pain. So far, the casualties have all been kept to the royal family but there is a great sense that this is going to go really badly for everyone, and soon.

    Eammon: That's a constant theme in the franchise, really — the smallfolk always pay for the actions of the upper class. We saw that back in season one when Rhaenys broke out of the Dragonpit and squished people watching the coronation!

    Don't ignore the smallfolk

    Kieran Bew, Ellora Torchia in House of the Drago, Season 2 - Episode 2
    We get it, Hugh Hammer is going to be important soon.

    Caralynn: Speaking of squished people, we got a lot of smallfolk scenes scattered throughout the episode. But the most effective for me was that mom who saw her dead ratcatcher son strung up. And the dog giving that small whine when he saw Cheese dead!

    Palmer: Thank god the dog is safe!

    Ayomikun: The hanging scene really highlights how much Aegon messed up more than Otto's tirade. The smallfolk don't really know the ins-and-outs of what's going on, but they know their king has just murdered the lowest of their servants, most of whom were completely innocent. They likely will trust Aegon less than Rhaenyra, who kept the conflict to just the royals.

    Palmer: To be fair, Aegon is barely still winning the PR war because everyone thinks Rhaenyra killed a child. But yeah, ultimately, I agree with you — which is funny because everyone was lauding him as a wealth redistribution icon in the last episode.

    Aegon giveth sheep….. he taketh away sheep….. he slays rat men…….

    Eammon: I do think that even in the first two episodes, the writers are trying to show the war from the smallfolk's perspective — maybe more than "Game of Thrones." We had the sheep/dragon debate last week, and now we've got the elimination of the ratcatchers.

    Palmer: I have mixed feelings about how the series handles this, because, on the one hand, I think that it's hugely important for the show to contextualize the war within the actual population of Westeros in order to convey the scope. But I also think that it's a bit halfhearted when — ratcatcher mother aside — the smallfolk we interact with the most in the show are all like, hugely important characters down the line. They're not truly the everyman.

    Caralynn: I, for one, found it hard to care about the scene with Hugh's family because it just felt so much like a set-up for his eventual More Important story.

    Eammon: That moment with Hugh's family did seem heavy-handed. And I'll be honest, hearing that the cost-of-living crisis has also hit Westeros was not the plot twist I was expecting.

    Ayomikun: Damn, not real-world inflation infiltrating my fantasy comfort show!

    Palmer: Hugh comes from a SIOSK (single income, one sick kid) family.

    Caralynn: If only they had access to a Costco for a $5 rotisserie chicken.

    Eammon: Westerostco.

    clinton liberty and abubakar salim as addam and alyn of hull, two young men in blue clothing. addam has long hair, arranged in dreadlocks and pulled back, while alyn is bad. they're looking at each other in a shipyard
    Clinton Liberty and Abubakar Salim as Addam and Alyn of Hull in "House of the Dragon."

    Palmer: We should also talk about Alyn and Addam of Hull, who, without saying too much, are also going to continue to be important. There's a very conspicuous dragon (cough, cough Seasmoke) flying in the sky above Addam during one scene that we should… probably pay attention to!

    Ayomikun: If I didn't know Addam and Hugh were so important, some of their scenes feel so forced and out of place. Like the writers are stage-whispering, "YOU SHOULD KEEP AN EYE ON THESE PEOPLE."

    Eammon: I found those two reuniting far more interesting than Aegon's predictable breakdown, I'm sorry to say. Their dynamic and that shot of the dragon was a great way of endearing them to the audience and positioning them as key characters further down the line.

    Ayomikun: The conversation between Alyn and Addam — where Addam is like, "You should try to get close to Corlys Velaryon!" and Alyn is like, "I don't want to get involved in this conflict at all" — is a good way to establish the key divides of normal folk during this conflict. There are those who want to use the situation to rise above their station and those who just want to survive another day. It will be interesting to see where both those storylines lead.

    Caralynn: Then, re: smallfolk, there's of course the prostitute Aemond is with in the brothel who goes ahead and helpfully spells out that it's really the commoners who get the shaft when royals, say, get angry and let their dragon eat their nephew.

    And speaking of poor, traumatized Aemond…

    Let's get a little love for the poor traumatized kids

    ewan mitchell as aemond targaryen in house of the dragon, wearing a black leather coat and with an eye patch strapped over his eye
    Poor Aemond.

    Palmer: I love Aemond, my beautiful, very very messed up boy. Ewan gives a great physical performance here — there's one shot where it shows him all curled up, and it's very effective to see all his limbs folded in like that. Somehow, he manages to make Aemond feel very, very small!

    Caralynn: He was literally in the fetal position at one point, wasn't he?

    Palmer: Yeah, he's baby.

    Eammon: It was refreshing seeing him in a pretty vulnerable state for once though. All of Aemond's scenes previously have revolved around conflict, angst, or anger, so having a peek behind the armor (so to speak) really helps make him feel like more of a well-fleshed-out character than just a constant ball of contempt.

    Palmer: It's also a very interesting contrast, because we haven't seen this side of Aemond since he was a child, basically. He is clearly the single most powerful war asset for the Greens, but I think it's important to remember that he is also the loser cousin who got bullied. But on top of that, he also very clearly realizes that Daemon is his true rival in the war, and I love the way that the show sets them up as counterparts.

    Caralynn: Overlooked and extremely angry second sons.

    Palmer: Who have both managed to indirectly exact the most damning murders of the war!

    Ayomikun: Aemond is never escaping the wannabe Daemon allegations.

    Palmer: Also, nice to know that he's seeking some absolution for killing Lucerys.

    Caralynn: The confessional element of his conversation with the prostitute was a nice touch. She looked a little taken aback at him suddenly confiding that he regretted the single action that arguably started the war. She's just like, "Welp. You goofed, kid, and now we're all screwed."

    Palmer: Can you imagine what it would be like to be the confidant for the most capable, messed up child of the entire royal family?

    Caralynn: High-pressure therapy situation.

    Eammon: It's like "The Sopranos," but with dragons.

    Harry Collett, Bethany Antonia in House of the Dragon season 2 episode 2
    The only reasonably well-adjusted members of this family.

    Palmer: I also really want to talk about Baela and Jace because, damn, this is the most the show has given us of either of them in a hot minute.

    Caralynn: Such a sweet scene! I love that Baela gave Jace the opportunity to talk about both his dads.

    Palmer: It's a great way to show the closeness of their relationship. Baela knows how to ask about Ser Harwin Strong without judgment, and he's clearly someone that Jace still wants to talk about. Bethany Antonia, who plays Baela, told me at the premiere that she and Harry Collett, who plays Jace, made the decision that betrothal aside, Baela and Jace do want to be together — and I think this sequence does a great job illustrating that.

    I also think it's extremely telling that Rhaenyra doesn't allow Jace to patrol near King's Landing on Vermax when he volunteers, and instead dispatches Baela to do the same thing on Moondancer. There is a difference in the children that she's willing to potentially sacrifice.

    Caralynn: YES, that was such a subtle telling moment. She's not willing to lose another son. But Daemon's daughter? Sure, fine, whatever.

    Ayomikun: Honestly, these two seem like the most emotionally and mentally well-adjusted of all the Targaryen/Velaryon/Hightower families. I'm rooting for them.

    Palmer: That's the Laena Velaryon in them, truly.

    The final straw for Daemon and Rhaenyra

    Matt Smith, Emma D'Arcy in House of the Dragon Season 2, Episode 2
    Rhaenyra's had it with Daemon.

    Eammon: The writing in this whole scene was fantastic, it weaved through their twisted, chaotic relationship with such sharpness.

    "Have you used me as a tool to grasp at your stolen inheritance?" There it is — the writers digging into what makes Daemon actually tick. Even among the violence, bloodshed, and dragons, they're committed to exploring these characters in great detail. In a way, it makes me sad that other shows (ahem "Star Wars" ahem) don't take as much time to do the same.

    It's so obvious that Daemon continues to blame everyone but himself as that sociopathic, narcissistic streak keeps slipping out.

    Palmer: It's unfortunately very funny that during the council meeting where they discuss Jaehaerys' death, Rhaenys basically immediately clocks that it's Daemon's fault.

    Caralynn: The council meeting was kind of weirdly hilarious. It seemed like everyone registered it was Daemon's fault except for, belatedly, Rhaenyra?

    Palmer: Their fight is a real watershed moment for Daemon. I think he's a character that — don't get me wrong, I love Daemon — got a little bit muddied in season one. He's bloodthirsty! He's a war hero! He's a devoted husband who wants to hang out in Pentos! Actually, he does want to be King Consort! We get a lot out of him, but it's hard to see where his head is at. I think this, and what it's setting up with him leaving, are great for us to get a bit of Daemon's interiority.

    Caralynn: Also the chemistry between Matt and Emma is absolute fire, as usual. They're both top of their games in that scene.

    Ayomikun: This conversation also sees them finally confronting an issue that we, as viewers, have all wanted to see hashed out since Daemon first started trying to romance Rhaenyra. Does he actually care for her, or is she another obstacle to what he really wants: power?

    Palmer: It's refreshing to see Rhaenyra basically hit her breaking point there. I think it's important to note that she's been using him as well, whether it was to maybe indirectly piss off Viserys, or more obviously, to strengthen her standing as heir. This is the moment where she realizes that he's more of a liability than a boon, and that the challenge of mentally sparring with him just isn't worth it anymore.

    Caralynn: I love that Rhaenyra lays every single card out on the table here. She's had enough of Daemon and his games.

    Palmer: It speaks volumes that his insult is instead that Viserys used her to get back at him, by naming her as the heir. Daemon still ultimately sees her as a pawn, rather than a player.

    Ayomikun: Also, though I do believe both Aegon and Daemon want war for the wrong reasons, they're kind of right? Both sides are unwilling to give in at this point. This doesn't end without one side dying, so why aren't they already making more proactive plans to win?

    Maybe this is partly selfish of me, trying to see some action, but I find it kind of comical that both sides basically created a civil war scenario and now are just like, "No, you start the war. No, you start it!"

    My God, Criston is an idiot… aaaand now he's the Hand

    Fabien Frankel in House of the Dragon Season 2, Episode 2
    So pretty, but so stupid.

    Caralynn: Criston might be one of the most deeply unlikeable characters in the wider "Game of Thrones" universe, which is saying something.

    Palmer: In many ways, Criston and Aegon are a perfect match. Two revenge-minded imbeciles made to plunge Westeros into chaos. Criston is so unlikeable, it's genuinely funny. Alicent at least has the decency to be completely wracked by her guilt, but Criston instead lashes out to blame Arryk for what is basically his own mistake.

    Ayomikun: Criston and Aegon are really like that "It's always two dumb people telling each other exactlyyyyy" meme. They do not have a single smart thought between them. They're all action and vengeance and justice.

    Caralynn: He has such a toxic male reaction to the guilt that he can't internalize it at all — he needs to project it outward. Good on Arryk though, for being like, "Well, where were you?" I thought Criston was going to bitch slap him at that point.

    Eammon: Hilarious that the rest of the Kingsguard nope'd out when Criston started badgering him.

    Palmer: Remember when Criston asked Rhaenyra to run away and like, trade oranges with him?

    Caralynn: The scene with Arryk was very reminiscent of right before he beat Laenor's boyfriend to death. "There's a lot of things going on in my head that I refuse to have feelings about so instead… I'mma do a violence."

    Palmer: Yeah, the man has deep-seated anger issues. But I think it's so funny, because Alicent has also been terrible for him, obviously. He was so wracked with guilt for sleeping with Rhaenyra all those years ago, and her spurning him clearly like, radicalized him. And now that he's in with Alicent, and loosely complicit in Jaehaerys' murder, he really has no path forward other than to Do This.

    Caralynn: Aegon ousting Otto as Hand in favor of Criston is such a clear "OK, we've totally lost control of this situation" moment for Otto. It's silly and a little infuriating that Alicent is still insisting Aegon can be molded. This seems… unlikely?

    Palmer: It's great to see Otto once again reaping the consequences of his actions. I love to see that man humbled (though I don't think he ever actually internalizes it).

    Ayomikun: Otto was pushing the line a bit. disagreeing with the king is one thing, shouting about him being an idiot… like he's lucky Aegon idolizes him so much.

    Fabien Frankel, Rhys Ifans, Tom Glynn-Carney in House of the Dragon Season 2, Episode 2

    Caralynn: I did love the moment where Aegon says, "Well, Viserys named me his heir" and Otto says, "Is that what you think?" and laughs.

    Palmer: It's definitely an emotional move, not an intelligent one.

    Caralynn: I wonder if that little seed of doubt now planted in Aegon's head is gonna go anywhere. Or if that head is all just violence and vibes, no thoughts.

    Palmer: His spite-fueled ego, probably.

    Caralynn: Anyway, I'm looking forward to Criston making a bunch more dumb decisions in his official capacity as the Hand now.

    Palmer: I'm sure he'll do great! No notes.

    Ayomikun: Going back to Alicent and Criston for a second, it's interesting that both episodes end with a sex scene for them, but the circumstances are flipped. In episode one, Alicent is in charge completely and is on top during the scene. In episode two, Criston is now taking charge because he has reached the same station as her. I'm sure this will eventually cause conflict between those two.

    Palmer: I do love how toxic and terrible they are for each other. Alicent beats him, and he's like, wow… that's hot.

    Caralynn: One last thing I wanted to mention here — we finally got a shout-out to Viserys and Alicent's thus far unseen youngest son, Daeron! When Otto is telling Alicent he might go to Oldtown, he says Daeron is there and could be an asset to them. Maybe that means we'll finally see him sometime soon.

    Criston's masterful gambit utterly fails — but Mysaria is so back

    fabien frankel and luke tittensor in House of the Dragon season 2 episode 2
    RIP Erryk and Arryk.

    Palmer: Criston is so hot-headed he thought it was a good idea to send one guy on a suicide mission as penance for his brother defecting. Good work, man!

    Caralynn: That Arryk v. Erryk fight scene was really well done.

    Eammon: Absolutely brutal. Once again, people lower down the ladder are paying the price for the upper class's scheming.

    Palmer: I think this is a great moment for Mysaria too, who has frankly been frustrating for me over the course of the show. It's not that I particularly dislike her character, but I feel like she's frequently deployed in irritating ways to make one-off points about the smallfolk.

    But this is actually the first time I feel like we've really seen her make a decision — one that notably does not particularly serve her. It's fascinating to see her throw her lot in with Rhaenyra, but I think that Rhaenyra is also one of the first nobles to actually treat her with grace and respect by letting her go.

    Sonoya Mizuno in in House of the Dragon season 2 episode 2
    What's Mysaria's end game here?

    Caralynn: The Mysaria of it all was really interesting. I'm so curious to see her explain her motivations for stepping in, and where this leads her now. (And how it changes her relationship with Rhaenyra.)

    Ayomikun: The fight was a truly brilliant scene, especially since we as the audience can't really tell which twin is which.

    Caralynn: I was worried that only one twin would survive and that they'd do a whole prolonged "Is it an imposter?" thing. I don't think I could have handled an entire season of waiting for that foot to drop so I'm thankful they just had them both die, honestly.

    Eammon: That would've been kinda interesting, but I've been burned with that plotline in other franchises… (Yes, "Spider-Man: The Clone Saga," I'm looking at you.)

    Palmer: I will say, I am happy that my notes are no longer filled with "Arryk? Erryk? AERRYK?"

    "House of the Dragon" season two airs Sundays at 9 p.m. ET on HBO and is streaming on Max.

    Read the original article on Business Insider
  • ASX industrial stock rallying amid $110 million acquisition with ‘valuable efficiencies’

    Two men in business attire play chess.

    Cleanaway Waste Management Ltd (ASX: CWY) shares are starting the week positively.

    At the time of writing, the ASX 200 industrials stock is up 2% to $2.75.

    Why is this ASX industrials stock rising?

    The catalyst for today’s gain has been news that Cleanaway is making a new acquisition.

    According to the release, the company has agreed to acquire the waste and recycling business and assets of Citywide Service Solutions, Citywide Waste, for a total consideration of $110 million.

    In addition, Cleanaway will concurrently enter into a 35-year lease for the waste transfer station located at 391-395 Dynon Road in West Melbourne.

    What is Citywide Waste?

    Citywide Waste provides waste management services to approximately 1,500 municipal, commercial, and industrial customers in Melbourne. This includes Melbourne City Council.

    It also operates the Dynon Road waste transfer station, Victoria’s second largest waste transfer station. It is located approximately five kilometres from the Melbourne central business district. Annually, the transfer station receives over 200,000 tonnes of waste and recycling material.

    As part of the transaction, Cleanaway has committed to redevelop the Dynon Road waste transfer station into a larger, efficient, modern post collections facility. This is expected to cost the company approximately $35 million. An additional $10 million contribution will be made from the City of Melbourne over the first four years of Cleanaway’s ownership.

    Citywide Waste generated EBITDA of $10.7 million and EBIT of $6.4 million in the twelve-month period ending February 2024.

    ‘Valuable efficiences’

    The ASX industrial stock’s CEO, Mark Schubert, believes the acquisition represents an attractive expansion opportunity. He said:

    This transaction represents an attractive opportunity to expand our Solid Waste Services business in metropolitan Melbourne. Integrating Citywide Waste into our network is expected to deliver valuable efficiencies, while facilitating growth through the broadening of our municipal and C&I collections capabilities. The re-development of Dynon Road will almost double its current operating capacity, unlocking attractive earnings growth for shareholders. It will also support future volume growth into our post collections infrastructure assets.

    Schubert also highlights that the Dynon Road acquisition aligns with its BluePrint 2030 strategy. He adds:

    Securing this site in inner-city Melbourne provides a strategic position in the densely populated Melbourne metropolitan area and aligns with our approach of using M&A to accelerate the delivery of our BluePrint 2030 strategy. We are confident that the acquisition of this unique asset will deliver attractive returns to shareholders over the life of the lease.

    The acquisition remains subject to a range of conditions precedent including ACCC regulatory approval.

    Cleanaway shares are up 8% over the last 12 months.

    The post ASX industrial stock rallying amid $110 million acquisition with ‘valuable efficiencies’ appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Cleanaway Waste Management Limited right now?

    Before you buy Cleanaway Waste Management Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Cleanaway Waste Management Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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.

  • Prediction: My 2 top ASX shares to beat the market in 2024 and beyond

    A young boy points and smiles as he eats fried chicken.

    My favourite method for outperforming the market is to pinpoint ASX shares with strong profit growth potential that the market undervalues.

    The ASX’s good technology businesses are capable of producing good profit growth, but they’re also valued with higher forward price/earnings (P/E) ratios than other sectors.

    There are companies in other sectors that are just as capable of producing pleasing profits, but these businesses aren’t valued as highly.

    Recently, I’ve invested in these two stocks because I’m optimistic about their earnings growth outlook.

    Collins Foods Ltd (ASX: CKF)

    Collins Foods is a franchisee operator of a large number of KFC restaurants in Australia and Europe.

    I think KFC is a strong brand that can deliver long-term success in Collins Foods’ operational markets.

    Collins Foods is growing by expanding its store networks and achieving same-store sales (SSS) growth.

    In the FY24 first-half result, KFC Australia reported SSS growth of 6.6%, and KFC Europe saw SSS growth of 8.8%. If SSS growth continues to be healthy, this can help drive the business’ margins higher.

    The HY24 result saw revenue rise 14.3%, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grow 16.7%, and underlying net profit after tax (NPAT) jump 28.7%. That’s a good growth rate for the ASX share and demonstrated operating leverage.

    The estimates on Commsec suggest Collins Foods’ earnings per share (EPS) could rise 44% between FY24 and FY26. The forecast would put the current Collins Foods share price at under 13x FY26’s estimated earnings – that looks very cheap to me for a growing business.

    Close The Loop Ltd (ASX: CLG)

    Close The Loop’s core offering is to collect and repurpose products with takeback programs in the US, Australia, South Africa and Europe. The ASX share’s overall premise is for there to be “zero waste to landfill” with the products it deals with.

    The company recovers a wide range of electronic products, print consumables, cosmetics, plastics, paper, and cartons. It also uses toner and post-consumer soft plastics as asphalt additives.

    According to the company, another service that it provides is sustainable packaging products with its packaging division, which enables “greater recoverability and recyclability”.

    The ASX share recently announced it was exploring IT refurbishment expansion opportunities in the US, EU and Middle East. Its print consumable takeback program has been expanded into Spain and Portugal, with HP joining the program. The company revealed a new IT refurbishment plant in Mexico will be operational by October 2024. It’s also constructing a second TonerPlas line after the awarding of $2.2 million in government funding.

    The company’s FY24 first-half result saw revenue increase by 76% year over year to $103 million, the gross profit margin increase from 32.8% to 36.2%, EBITDA grow by 139% to $22.7 million, and underlying NPAT jump by 164%.

    According to Commsec, the Close The Loop share price is valued at just 7x FY24’s estimated earnings and EPS is predicted to grow by 23% between FY24 and FY26.

    The post Prediction: My 2 top ASX shares to beat the market in 2024 and beyond appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Collins Foods Limited right now?

    Before you buy Collins Foods Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Collins Foods Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Tristan Harrison has positions in Close The Loop and Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Close The Loop. The Motley Fool Australia has recommended Close The Loop and Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • How does the Guzman Y Gomez ASX valuation compare to Domino’s?

    Confused African-American girls in casual clothing standing outdoors and comparing information on smartphones.

    As most investors would know, Guzman Y Gomez Ltd (ASX: GYG) shares are now trading on the ASX. However, some investors are questioning whether the Mexican fast-food company is expensive. Let’s see how it compares to the competition.

    There aren’t too many fast-food companies trading on the ASX, but Domino’s Pizza Enterprises Ltd (ASX: DMP) is a good business to compare GYG to.

    Both companies have comparable valuations. Guzman Y Gomez currently has a market capitalisation of $2.93 billion, and Domino’s has a market capitalisation of $3.31 billion.

    Domino’s also has a long-term target of significantly growing its global store count, just like GYG.

    However, there are other more helpful measures for comparing businesses. Let’s dig in.

    How to compare these ASX shares

    Domino’s has been a listed ASX business for close to two decades, while GYG is newly-listed.

    It may not be helpful to compare them based on how much net profit after tax (NPAT) they’re making because Guzman Y Gomez is investing heavily for growth, while Domino’s has been profitable for some time.

    Revenue may not be the most useful comparison either because their business models are somewhat different.

    Earnings before interest, tax, depreciation and amortisation (EBITDA) and earnings before interest and tax (EBIT) are not perfect profit measures, but they could help us compare these two businesses for the next two or three years until GYG starts generating sizeable NPAT.

    For now, all we can go on is the GYG prospectus information. Then, in a few months, we’ll examine GYG’s FY24 statutory result.

    Forecast Guzman Y Gomez profitability

    Guzman Y Gomez has forecast that it can generate pro forma (underlying) EBITDA of $43 million and pro forma (underlying) EBIT of $12 million in FY24. GYG predicts that statutory EBITDA will be $25.4 million in FY24.

    GYG’s FY25 statutory EBITDA and EBIT are projected to be $59.9 million and $19.7 million, respectively. Those numbers suggest that GYG could deliver good double-digit growth in FY25.

    I think FY25 is a more useful year to look at because it reflects where the company could be in 12 months from now. Even then, a year is not long in investing terms.

    At the current GYG share price and market capitalisation, it’s valued at 149x its FY25 estimated EBIT.

    The broker UBS believes Domino’s profitability can materially recover in FY25 after its inflation and post-COVID difficulties.

    UBS has forecast Domino’s can generate $244 million of EBIT in FY25 (a rise of $30 million compared to the estimate for FY24). At the current Domino’s share price, it’s valued at 13.5x FY25’s estimated EBIT.

    Clearly, Domino’s is a lot cheaper than Guzman Y Gomez based on FY25’s predicted profitability. The Domino’s share price is down close to 40% this year, so it could be a contrarian opportunity at the current value.  

    Of course, GYG’s EBIT is still at a low base. Adding $10 million, for example, of EBIT in FY26 wouldn’t be much in dollar terms, but it would represent a 50% increase in percentage terms and help normalise the Guzman Y Gomez EBIT multiple.  

    Why GYG shares could still be worth it

    GYG is still fairly early on in its growth journey. It plans to add dozens of locations every year in Australia, with expected growth in Asia and North America.

    The Mexican fast-food business can benefit from global expansion, even through global franchisee sales, because it owns the brand. However, Domino’s can only expand in certain countries.

    GYG may be able to deliver much better profit margins in the future because of its focus on drive-through locations, which can deliver good unit economics.

    While GYG is starting at an expensive short-term valuation, it may be able to significantly grow its profitability over the next five or 10 years to justify the price today.

    The post How does the Guzman Y Gomez ASX valuation compare to Domino’s? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Domino’s Pizza Enterprises Limited right now?

    Before you buy Domino’s Pizza Enterprises Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Domino’s Pizza Enterprises Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

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

  • Why did the Cettire share price just crash 42%?

    Woman in dress sitting in chair looking depressed

    The Cettire Ltd (ASX: CTT) share price is under tremendous selling pressure today.

    Shares in the All Ordinaries Index (ASX: XAO) retail stock closed on Friday trading at $2.24. In early morning trade on Monday, shares were swapping hands for just $1.29 apiece, down 42.4%.

    The Cettire share price has since recovered a small part of those losses, trading for $1.34 at the time of writing, down 40.1%.

    For some context, the All Ords is down 0.2% at this same time.

    Here’s what’s happening.

    Cettire share price plunges on profit warning

    Investors are bidding down the Cettire share price after the online luxury goods retailer updated the market on its FY 2024 expectations.

    On the plus side, Cettire noted that it had experienced “strong, broad-based revenue growth” in Q4 FY 2024.

    And management said it expected to deliver “significant” year-on-year growth in active customers, sales revenue, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) and cash.

    Indeed, sales revenue is forecast to grow 77% to 99% from FY 2023 to $735 million–$745 million. And adjusted EBITDA is expected to fall in the range of $32 million to $35 million, up 24% to 36% year on year.

    But the Cettire share price has nonetheless come under heavy pressure after the company reported that “the operating environment within global online luxury has become more challenging”.

    The All Ords retail share said softening demand trends and increased promotional activity had crimped margins and impacted its Q4 financial performance.

    Commenting on the FY 2024 growth figures, Cettire CEO Dean Mintz said:

    With FY24 nearing completion, we are expecting to report considerable growth in revenue and Adjusted EBITDA for the year. Not only does this highlight the strong traction that our platform is gaining both on the supply and demand side, but it also illustrates our efficient cost structure.

    Turning to the more challenging market conditions sending the Cettire share price tumbling today, Mintz added:

    A softening demand environment and an increase in promotional activity has been visible across our footprint, particularly in the last several weeks as the market has entered the Spring Summer 24 sale period.

    Additionally, we believe the market is currently being impacted by clearance activity as certain players exit parts of the market.

    To continue to expand our market share, Cettire has selectively participated in the promotional activity, leading to an increase in marketing costs relative to sales and a decline in delivered margin percentage.

    Offering some potential future tailwinds, Cettire launched its direct platform in China on Sunday. The company is already processing orders.

    “The company continues to grow rapidly, is profitable and cash generative,” Mintz said.

    Management will release Cettire’s full-year FY 2024 results in the second half of August.

    With today’s big intraday losses factored in, the Cettire share price is down more than 50% over 12 months.

    The post Why did the Cettire share price just crash 42%? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Cettire Limited right now?

    Before you buy Cettire Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Cettire Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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 recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • This ASX stock has gained 89% since I bought it – but it could still be a bargain

    High fashion look. glamor closeup portrait of beautiful sexy stylish Caucasian young woman model with bright makeup, with red lips, with perfect clean skin.

    One of my best ASX stock investments within the last year has been Lovisa Holdings Ltd (ASX: LOV). The Lovisa share price has gone up almost 90% since I bought it in the last quarter of the year. I think it’s a very exciting ASX growth share with a lot of potential to keep expanding.

    Investors generally consider an ASX stock by its present profit and its prospects for future profit. I am optimistic about the jewellery company’s potential for significant growth in the future.

    I think there are few non-technology S&P/ASX 200 Index (ASX: XJO) shares that have the potential to grow revenue as much as Lovisa in the next several years.

    Two things make me believe the company could deliver strong capital growth in the next five years.

    Global store rollout plans to boost ASX stock’s sales

    Over the last three years, five years or longer, Lovisa’s sales growth has largely tracked its store rollout and a bit of same-store sales growth in normal economic conditions.

    For example, in the FY24 half-year result, Lovisa’s store count rose 19.4% to 854, and total sales went up by 18.2% to $373 million (despite the current challenging economic conditions harming same-store sales growth).

    At the end of the FY24 first-half result, the ASX stock had 175 stores in Australia, a country of less than 30 million people.

    I think there is excellent scope for the business to expand significantly in numerous markets. For example, in the USA, it has 207 stores (up from 155 stores in HY23), 47 stores in the UK, one store in China, one store in Vietnam, four stores in Mexico, and so on. These countries have much bigger populations than Australia, particularly the US and China.

    In my opinion, the Lovisa store network could easily double in the next five years, and if its growth trend continues, Lovisa’s sales could double in that time too.

    Scale benefits

    When a business grows, profit margins often increase. This can enable the bottom line to grow faster than revenue. The profit can help push the Lovisa share price higher and fund larger dividends.

    While Lovisa’s costs have accelerated during this inflationary period, I think inflation can slow down relatively soon, and the ASX stock’s growing scale will enable bigger profit margins.

    Expansion into a new country comes with initial costs, but it doesn’t need to enter Mexico or Canada again; those one-off start-up costs won’t be repeated. It just needs to open more stores in those markets.

    Becoming bigger will give Lovisa more buying power and give it other economies of scale.

    The broker UBS has estimated that Lovisa can generate $709 million in revenue in FY24 and $81 million in net profit after tax (NPAT). By FY28, in four years, its revenue is expected to increase by 76% to $1.25 billion, and the net profit is projected to grow by 112% to $172 million.

    According to those UBS estimates, the Lovisa share price is valued at 21x FY28’s estimated earnings.

    The post This ASX stock has gained 89% since I bought it – but it could still be a bargain appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Lovisa Holdings Limited right now?

    Before you buy Lovisa Holdings Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lovisa Holdings Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • ResMed share price plunges 13% as weight-loss results reawaken worries

    The ResMed Inc. (ASX: RMD) share price is having a very disappointing start to the week.

    In morning trade, the sleep disorder treatment company’s shares are down 13% to $27.88.

    Why is the ResMed share price sinking?

    Investors have been rushing to the exits this morning in response to the release of sleep apnoea trial results in the United States.

    On Friday, global pharmaceutical giant Eli Lilly And Co (NYSE: LLY) released detailed results from the SURMOUNT-OSA phase 3 clinical trials. These are evaluating tirzepatide injection (10 mg or 15 mg) for the treatment of moderate-to-severe obstructive sleep apnoea (OSA) in adults with obesity, with and without positive airway pressure (PAP) therapy.

    Tirzepatide, sold under the brand names Mounjaro and Zepbound, is an antidiabetic medication used for the treatment of type 2 diabetes and for weight loss.

    According to the release, in both studies, tirzepatide achieved all primary and key secondary endpoints for both the efficacy and treatment-regimen estimands and demonstrated a mean reduction of up to 62.8% on the apnoea-hypopnea index (AHI), or about 30 fewer events restricting or blocking a person’s airflow per hour of sleep, compared to placebo.

    It also notes that in a key secondary endpoint, the efficacy estimand showed that 43% (Study 1) and 51.5% (Study 2) of participants treated with tirzepatide at the highest dose met the criteria for disease resolution.

    Management highlights that this means achieving an AHI of fewer than 5 events per hour, or an AHI of 5-14 events per hour and an Epworth Sleepiness Scale (ESS) score of ≤10. It notes that ESS is a standard questionnaire designed to assess excessive daytime sleepiness.

    ‘A complex disease’

    Commenting on the results, Dr Atul Malhotra said:

    In the trials, patients with moderate-to-severe obstructive sleep apnea and obesity treated with tirzepatide experienced about 30 fewer disruptive events every hour of sleep and nearly half achieved disease resolution.

    Senior vice president, product development, Jeff Emmick, MD, Ph.D, added:

    There are currently no pharmaceutical treatment options to address the underlying cause of OSA, a complex disease that disrupts the daily lives of 80 million people in the U.S. alone and is linked to serious health complications. The SURMOUNT-OSA results showed a significant proportion of patients with moderate-to-severe OSA and obesity treated with tirzepatide achieved disease resolution based on predetermined AHI and ESS measures, at which point PAP therapy may not be recommended.

    Based on the ResMed share price weakness today, it appears that some investors are concerned that tirzepatide could weigh on the company’s growth in the coming years by reducing its addressable market.

    Time will tell if that is the case and whether today’s selling has been yet another overreaction.

    The post ResMed share price plunges 13% as weight-loss results reawaken worries appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Resmed Inc. right now?

    Before you buy Resmed Inc. shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Resmed Inc. wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has positions in ResMed. 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.

  • The latest episode of ‘House of the Dragon’ dropped a major clue about why Addam and Alyn of Hull are going to be important characters

    clinton liberty and abubakar salim as addam and alyn of hull, two young men in blue clothing. addam has long hair, arranged in dreadlocks and pulled back, while alyn is bad. they're looking at each other in a shipyard
    Clinton Liberty and Abubakar Salim as Addam and Alyn of Hull in "House of the Dragon."

    • "House of the Dragon" has introduced Addam and Alyn of Hull, brothers affiliated with the Velaryon fleet. 
    • In "Fire and Blood," the brothers are pivotal characters.
    • Here's what happens to them in the books — and what may happen on the show.

    Warning: Spoilers ahead for "House of the Dragon" season two, episode two, and for the book "Fire and Blood."

    Another week, another new character introduction that you'd best not forget on "House of the Dragon."

    Viewers met Alyn of Hull in episode one. Corlys Velaryon approaches Alyn, who gives him a report on the status of his ship. Alyn also presents Corlys with a dagger — one that Corlys commissioned as a gift for Lucerys, his now-deceased heir. But there's one more crucial piece of information Corlys gives us: Alyn was the one who saved his life, and Corlys feels that he owes him a debt.

    In episode two, we meet Alyn's brother Addam, a shipwright from Hull working on the Velaryon fleet. Addam urges his brother to cash in on his favor from Corlys, and sail with him. Alyn reminds him that Corlys never offered.

    "Do not be foolish, Alyn. To serve with the Sea Snake is to make your fortune. Had I such a chance, I would leap at it," Addam tells Alyn.

    Alyn reminds his brother that there's a real, impending war. Addam thinks that Corlys owes Alyn (presumably for saving his life), but then cryptically adds that Corlys owes both of them.

    The writers are telegraphing pretty hard that these are characters we'll see again — here's what happens to them in "Fire and Blood."

    Major potential show spoilers ahead.

    Steve Toussaint as Corlys Velaryon in "House of the Dragon."
    Steve Toussaint as Corlys Velaryon in "House of the Dragon."

    Addam of Hull becomes a dragon rider

    In the events of "Fire and Blood," Jaecaerys Velaryon promises wealth to any man able to claim a dragon. Addam successfully claims Seasmoke, the former dragon of Laenor Velaryon, Rhaenyra's husband.

    It's likely the show will go this route too; in episode two, Addam observes a pale dragon resembling Seasmoke flying above him as he picks up a crab on the beach. Pretty strong foreshadowing!

    In the book, both Alyn and Addam are described as having silver hair and purple eyes, hallmarks of Valyrian descent. Their mother was a woman named Marilda, who gave birth to Addam when she was 16, and Alyn when she was 18. Both of her sons served on her fleet of ships.

    Marilda claimed that her sons were Laenor Velaryon's bastards. But Mushroom, who provides one of the historical accounts referenced in "Fire and Blood," posits that Corlys was their father instead. After Addam successfully bonded with Seasmoke, Corlys asked Rhaenyra to legitimize him as a Velaryon. She did so, making Addam Velaryon the heir to Driftmark.

    As a dragonrider, Addam played a crucial part in the war. He eventually helped to claim King's Landing for Rhaenyra, and defended it while Daemon sought out Aemond and Vhagar.

    Later in the war, Addam's fate is loosely tied to that of the other dragon riders, some of whom betray Rhaenyra. Eventually, he and Seasmoke die in a dragon fight.

    Alyn of Hull becomes Corlys Velaryon's heir

    After failing to locate the wild dragon Grey Ghost, Alyn unsuccessfully tried to claim another dragon called Sheepstealer. He was wounded in the process when Sheepstealer set his cloak aflame, but Addam and Seasmoke saved him.

    Later, Corlys asserted that both Alyn and Adam were Velaryons, and suitable heirs to his throne. After Rhaenyra's death, and with Corlys sequestered in King's Landing, Alyn assumed control of the Velaryon fleet.

    Eventually, Alyn became Corlys' chosen heir. After Corlys' death, he became the new Lord of the Tides, and eventually wed Baela Targaryen.

    Read the original article on Business Insider
  • ASX 200 travel share slips on latest demerger news

    A businessman slips and spills his coffee.

    S&P/ASX 200 Index (ASX: XJO) travel share Webjet Ltd (ASX: WEB) is in the red today.

    The Webjet share price closed on Friday at $8.88. In morning trade on Monday, shares are changing hands for $8.83 apiece, down 0.6%.

    For some context, the ASX 200 is down 0.2% at this same time.

    This comes after the company updated the market on its demerger plans.

    ASX 200 travel share aims to split in two

    The Webjet share price is edging lower after the ASX 200 travel share reported that it continues to progress with the potential separation of its two leading travel divisions, WebBeds and Webjet B2C, via a demerger.

    The company originally informed investors of its demerger plan on 22 May. At the time, managing director John Guscic said:

    Having carefully weighed up the arguments for and against a demerger, the board sees significant value enhancement through a potential separation of our two industry leading businesses and brands.

    Our B2C businesses will continue to deliver organic growth through the shift to online, while separation will support our WebBeds business in its relentless focus on achieving scale in all markets, in a post pandemic landscape characterised by a reduced number of smaller competitors.

    In pursuing the demerger, the board noted today it expected the process would “strengthen both businesses’ ability to respond to the continuously evolving travel industry, streamline capital allocation decisions and build long-term value for shareholders”.

    How will all this work?

    If the demerger goes through, Webjet Limited shareholders will receive one Webjet B2C share for every Webjet Limited share they own, and they’ll retain their shareholding in Webjet.

    After the demerger, the board expects Webjet Limited (Webjet B2B), will be renamed to match its global bedbanks business, WebBeds.

    Should things progress to plan, Webjet B2C will be listed on the ASX alongside Webjet B2B. The two standalone ASX-listed companies will have their own leadership positions within their respective industries.

    In line with that, the ASX 200 travel share announced the appointment of Katrina Barry as CEO of Webjet B2C. An experienced technology executive, Barry has served as non-executive director of the company since 2022. She starts in her new role today.

    Webjet B2B, comprising the WebBeds business post-demerger, will continue to be led by Roger Sharp as chair and John Guscic as managing director.

    Management expects that both Webjet B2B and Webjet B2C will maintain net cash positions, “reflecting capital structures that provide each business with adequate funding flexibility to pursue their respective growth initiatives”.

    If it gains the necessary shareholder and regulatory approvals, the company expects to complete the demerger in calendar year 2024.

    With today’s intraday moves factored in, the Webjet share price remains up 31%% in 12 months.

    The post ASX 200 travel share slips on latest demerger news appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Webjet Limited right now?

    Before you buy Webjet Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Webjet Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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.

  • Would Warren Buffett buy Telstra shares?

    A couple makes silly chip moustache faces and take a selfie on their phone.

    Owning Telstra Group Ltd (ASX: TLS) shares gives investors exposure to the leading telco in Australia. That could be the sort of investment that might appeal to Warren Buffett. But, I’d suggest he would want to analyse the business before deciding to buy.

    Warren Buffett is one of the world’s leading investors who has led Berkshire Hathaway to become one of the world’s largest businesses by buying quality companies with long-term growth potential. His investment returns have been an average of around 20% per annum over the decades.

    There are a few different things Buffett likes to look for, so I’ll look at a couple of those factors.

    Economic moat

    Telstra is seen as having the strongest telecommunications network in Australia, with wider coverage, more spectrum and a greater number of subscribers. That could be the kind of economic moat Buffett likes to see.

    The company has invested heavily in 5G to ensure that it continues to have the best network. According to Telstra’s FY24 first-half result, the company’s 5G population coverage reached around 87%, with 48% of mobile traffic on 5G.

    Telstra’s ownership of spectrum and its vast network reach give it a strong economic moat that Warren Buffett would like, in my opinion.

    In the last couple of years, we’ve seen Telstra feel confident enough in the appeal of its network and loyalty of subscribers to increase prices in line with inflation.

    I think Buffett would also like the fact that almost every household and business is paying for telecommunication services, making telecommunications a very defensive industry.

    Growth

    Warren Buffett usually likes to look at businesses that have good long-term potential.

    Telstra has a significant market share already, so I wouldn’t say it’s likely to grow its market share a lot.

    However, the company is winning a lot of new subscribers. In the HY24 result, it reported its mobile services in operation (SIO) rose 4.6% year over year, which represented an increase of 625,000. If Telstra keeps winning significant numbers of new subscribers, it can deliver good profit growth for shareholders.

    Telstra is investing in several areas, including fixed wireless broadband for households, intercity cable infrastructure, cybersecurity, and more.

    The HY24 net profit after tax (NPAT) rose by 11.5% to $1 billion, and the areas I mentioned above could help deliver profit growth in the coming years.

    Has Warren Buffett invested in US telcos?

    While we’ve never heard of Buffett investing in Telstra shares before, he has previously invested in some US telco shares.

    However, he chose to dump the AT&T shares quickly after acquiring them, and Verizon didn’t last much longer in the portfolio. But, in the last few years, Buffett has bought T-Mobile shares.

    Those previous investments do not guarantee that Buffett would choose to invest in Telstra shares today, but they do show that he could be interested in the sector.

    Are Telstra shares trading at a reasonable price?

    Warren Buffett hasn’t outlined exactly what valuation metric he likes to focus on when investing within Berkshire Hathaway’s portfolio. It’s also not clear what margin of safety he’d want either when it comes to price.

    According to the broker UBS, Telstra shares are valued at 20x FY24’s estimated earnings. Looking ahead to the 2028 financial year, Telstra shares are valued at 13.5x FY28’s estimated earnings.

    I think Warren Buffett would be intrigued by Telstra shares after their 15% fall in the past year. However, there’s a fair chance the Omaha investor would prefer an even cheaper price before considering investing.

    The post Would Warren Buffett buy Telstra shares? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Telstra Corporation Limited right now?

    Before you buy Telstra Corporation Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra Corporation Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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 positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Verizon Communications. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.