Category: Stock Market

Although they are trading well off their highs, Core Lithium Ltd (ASX: CXO) shares have still been a great place to invest over the last 12 months.

As you can see on the chart below, the lithium developer’s shares have risen 52% since this time last year.

This would have turned a $10,000 investment into $15,200.

But that was then, and this is now. What might a $10,000 investment today look like in a year?

What return could you get from Core Lithium shares

Opinion is divided on where Core Lithium shares are heading between now and this time next year.

In the bear corner you have Goldman Sachs, which thinks the company’s shares are overvalued. It has a sell rating and 95 cents price target on them. This compares to the current Core Lithium share price of $1.11.

If Goldman is on the money with its recommendation, a $10,000 investment would be worth approximately $8,500 at the end of the year. Not great!

The bull corner

In the bull corner you have Macquarie.

Its analysts recently upgraded the company’s shares to an outperform rating with a $1.30 price target. Based on its current share price, this implies potential upside of 17% for investors over the next 12 months.

This would turn a $10,000 investment into $11,700, which is much better!

Will the bulls or bears win?

It is impossible to know which broker will make the right call.

However, what may have a major say on things is the lithium price. With Goldman Sachs expecting lithium prices to start their significant decline later this year, sentiment could improve if prices stay strong.

Conversely, if they start to weaken as Goldman predicts, this could put a lot of pressure on the lithium industry and send Core Lithium shares tumbling towards the broker’s bearish price target.

Investors may want to keep a close eye on the monthly digital lithium auctions held by Pilbara Minerals Ltd (ASX: PLS). The prices it commands each month should provide investors with an idea of what is happening behind the scenes in the industry.

The post If I invest $10,000 in Core Lithium shares now, what could my return be this year? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• Down 41% since November, is the Core Lithium share price a bargain buy now?
• Here are the 10 most shorted ASX shares
• My top predictions for ASX lithium shares in 2023

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.

from The Motley Fool Australia https://ift.tt/qNUtwak

With so many uncertainties in 2023, ‘structural growth’ seems to be the hot buzz term in investing at the moment.

Inflation is still raging, higher interest rates are bearing down on businesses and consumers, and many experts reckon the global economy is about to put the brakes on very soon. 

Those barracking for ‘structural growth’ ASX shares are taking the logic that those businesses will be more resistant to short-term calamities because they have long-term trends driving their earnings.

Pengana investment specialist Tim Richardson recently named ageing population as one of his drivers of structural growth.

“Ageing populations in developed economies and Asia will support spending on healthcare, including medical insurance, care facilities, and pharmaceutical development.”

Tribeca portfolio manager Jun Bei Liu agreed that healthcare is a theme worth backing at the moment.

“In this environment, you need to find some of the structural defensive growth leaders. We like the healthcare sector,” she said at a GFSM briefing in Sydney on Tuesday.

Don’t just buy any old healthcare stock though

It’s critical not to go all-in on a particular sector though. Bottom-up analysis is crucial in 2023 for stock picking, according to Liu.

“The challenge [for healthcare] is they do have that foreign US dollar sort of exposure. As the US dollar becomes weaker, the earnings will fall.”

Liu named two particular ASX shares in health that she loves at the moment: Ramsay Health Care Ltd (ASX: RHC) and CSL Limited (ASX: CSL).

Ramsay shares plunged last year after a private equity consortium led by KKR cancelled a takeover bid.

That just gives it a mouth-watering entry point, as far as Liu is concerned.

“I always say this company is something I put my mother’s money in — and I do. 

“It’s very defensive. It’s going into an earnings upgrade cycle with double its earnings because of hospitals reopening. It’s got assets — something like $1 billion — they can spend out to improve the balance sheet.”

If private equity comes sniffing again, then that’s icing on the cake.

She nominated CSL as a safe bet in the coming period.

“I know it’s boring but it’s very defensive. It’s going to grow double digits for the next three years and [the] share price hasn’t really rallied aggressively relative to others.”

Ramsay shares have risen 5.6% this year, while CSL is up 5.7%.

Liu’s recommendations concurred with the analysts at Firetrail, who released a memo this month explaining their overweight position in healthcare.

The Firetrail team, just like Liu, loves the look of Ramsay and CSL.

“Ramsay will likely deliver above-trend growth in 2023/24 as the surgery backlog is addressed,” read the memo.

“CSL is the ultimate defensive… CSL grew earnings per share by 60% during the global financial crisis, compared to a 20% fall in EPS for the S&P/ASX 200 Index (ASX: XJO).”

The post Jun Bei Liu’s 2 ‘structural growth’ ASX shares to buy now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 of the best ASX 200 shares to buy in 2023: Bell Potter
• 3 ASX shares to buy in the hottest sector for 2023: Firetrail
• If I invest $10,000 in CSL shares now, what could my return be this year?
• Top brokers name 3 ASX shares to buy next week
• How I’d invest $40k in ASX shares and aim for $1 million

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.

from The Motley Fool Australia https://ift.tt/CXb9iH4

Coles Group Ltd (ASX: COL) shares look like a solid S&P/ASX 200 Index (ASX: XJO) share in my opinion.

The Coles business has three different divisions – supermarkets, liquor and service stations. Some of the liquor brands include Liquorland, First Choice Liquor and Vintage Cellars.

Coles shares have seen a bit of pain, down around 10% over the past six months. With the defensive nature of supermarket earnings, I think it’s a good idea to look at Coles in the economic environment.

Resilient business model

We all need to eat, lots of people like to drink alcohol and a large amount of the population need to use a petrol station regularly. When you put that all together, it seems like Coles’ earnings could hold up, even if there’s a recession. Though, the business is looking to sell its petrol business to Viva Energy Group Ltd (ASX: VEA).

According to Commsec, in the 2023 financial year, the business is expected to generate 79.6 cents of earnings per share (EPS). Then, EPS could rise to 82 cents in FY24 according to Commsec.

In FY22, the company generated 78.8 cents of EPS, so the current projections show that earnings could rise slightly, despite all of the disruption to the economy with inflation and so on.

I think the update for the first quarter of FY23 showed this potential (slight) growth for FY23 in action, with total sales revenue growth of 1.3% to $9.89 billion.

Why I think the ASX 200 share looks like an opportunity

Despite the projection that the business is going to grow earnings over the next two years, the Coles share price is lower than earlier in the year, so investors can invest at a seemingly better value.

Using the estimates on Commsec, Coles is valued at 22x FY23’s projected earnings. Woolworths Group Ltd (ASX: WOW) shares are valued at 25x FY23’s projected earnings. Coles shares look a bit cheaper than its main competitor.

I think the ASX 200 share is doing a number of good things to grow profit in the future, including lowering its costs, launching more own brand products, investing in automated distribution warehouses and being a more sustainable business.

The dividend income could also provide a good boost to the total return in 2023 and beyond. It’s expected, according to Commsec, to pay a grossed-up dividend yield of 5.4%.

While it may not generate a lot of growth, I think the business can achieve slow-and-steady progress, which could be enough to produce outperform this year.

The post I think Coles shares are a top ASX 200 buy for 2023 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Coles shares: Here are the dividend forecasts for 2023 and 2024
• Here are the top 10 ASX 200 shares today
• Are ASX 200 retail shares on sale in 2023?
• Want 17% upside plus dividend income? Broker says buy Coles shares
• How I’d invest my very first $500 in ASX shares in 2023

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/fxJQ0mW

Goldman Sachs has been busy running the rule over the insurance industry and named QBE Insurance Group Ltd (ASX: QBE) shares as its top pick.

This morning, the broker has initiated coverage on the company with a buy rating and $16.67 price target.

Based on its current share price of $13.60, this implies potential upside of over 22% for QBE shares over the next 12 months.

Goldman is also expecting a 5.3% dividend yield in FY 2023, boosting the total potential return beyond 27%.

Seven reasons to buy QBE shares

The broker has named seven reasons why it thinks investors should buy QBE shares right now.

The first couple of reasons relate to favourable industry tailwinds, which are expected to boost its near term performance. It explained:

We like QBE because: 1) It is most exposed to the strength in the commercial premium rate cycle which we think will continue, particularly in classes exposed to higher reinsurance costs and underlying claims inflation such as commercial property / motor. Comments from QBE have been clear that they are pricing ahead of loss cost inflation; 2) QBE is seeing organic volume growth on a constant currency basis ex-crop and price increases. We think the strong rate environment coupled with underlying volume growth provides flexibility for QBE to manage any trade-off between top line net earned premium (NEP) growth and margins. 3QYTD constant currency GWP growth was 16% v guidance of 10% constant currency for FY22 – which we think looks conservative.

Goldman also likes the company’s reserve strength and sees opportunities for further margin expansion thanks to stronger yields and changes in the property business. The broker commented:

3) We note that QBE continues to build reserve strength by assuming an extended inflationary environment across reserving / pricing; 4) Yields are supporting margins and could see further upside into FY23. QBE is most sensitive to a lift in global interest rates including the US; 5) We see continued opportunity for margin expansion through remediation of QBE’s property business in North America and increasing mix to Crop. Our FY23 underlying insurance margins are close to 12%, and above Visible Alpha consensus of 11.5%. This is about a 1% improvement from FY22E at 10.9% underlying on 94% COR.

Finally, the broker believes QBE shares are trading at an attractive level compared to historical levels, particularly given its strong capital position. It concludes:

6) Valuation not demanding at ~9x FY23E BBG consensus v recent historical trading range around ~12-15x. We think an ongoing build of reserve strength and catastrophe allowances through a strong premium rate environment should help QBE improve the predictability and consistency of its results supporting a valuation re-rate. 7) Strong capital position expected at FY22 – at the upper end of target range.

The post 7 reasons to buy QBE shares: Goldman Sachs appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Broker names 2 high yield ASX 200 dividend shares to buy now
• Buy QBE and this ASX 200 blue chip share: broker
• Buy Telstra and this ASX 200 dividend share: Morgans
• Morgans names 2 ASX 200 dividend shares to buy now
• ASX financial shares lifted the ASX 200 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.

from The Motley Fool Australia https://ift.tt/kszEA2O

The United States has just been through one of the coldest cold snaps in its history, with the weather so extreme that dozens of people died.

Energy systems strained under high demand, leaving 1.8 million American homes and businesses without electricity on Christmas Eve. Thousands of flights during the busy holiday season were cancelled.

“Two-thirds of the country were under extreme weather alert as the ‘bomb cyclone’ brought blizzard-like conditions and temperatures as low as minus 45 degrees celsius to some states,” read a Firetrail memo to clients.

Remarkably, out of this chaos, the team at Firetrail has picked out an ingenious stock investment idea:

This ASX company could be busy this year

Such a cold snap is a foreign concept to most Australians, who consider 15 degrees a “cold” day.

But Firetrail analysts noted that what the US has just been through puts a huge strain on infrastructure.

“A freeze event causes water in the pipes of home plumbing systems to expand, freeze and ultimately burst,” read the memo.

“The upshot is that repair and maintenance work for plumbers will spike following the catastrophic event.”

So what does this mean for ASX shares?

Firetrail reckons plumbing parts supplier Reliance Worldwide Corporation Ltd (ASX: RWC) could rake it in from all the pipes that need fixing in the US.

“Back in 2021, Reliance Worldwide saw an incremental $42 million, or 8.5%, increase in sales driven by the [previous] freeze event.”

The current forecast is for 3% revenue growth for the second half, but the Firetrail team suspects the company could beat this.

“We see upside to these expectations as the freeze event will clear any surplus inventory in the channel supporting demand into 2023,” the memo read.

“We believe the market is underestimating the portion of Reliance Worldwide’s sales that are linked to routine, nondiscretionary repair work.”

Freezing weather is becoming more routine

Unfortunately, global warming means extreme weather is becoming a more regular phenomenon.

“Events like these are becoming more frequent as illustrated by the fact that the last major freeze event in the US occurred in only 2021.”

To top it off, the Reliance share price is fairly cheap for anyone wanting to jump on the bandwagon right now.

That’s despite a 14.5% climb already this month.

“At 12x one-year forward P/E, we believe Reliance Worldwide offers investors an attractive entry point to a quality growth stock.”

The post ASX share to buy right now to cash in on a FREEZING American winter: Firetrail appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s a top ETF to buy for a passive income boost
• 3 small-cap ASX shares to rocket from this year’s mega-trends: fund manager
• 10 types of ASX companies that can grow even if the economy tanks
• 5 things to watch on the ASX 200 on Wednesday
• Guess which four ASX 200 lithium shares charged higher today

Motley Fool contributor Tony Yoo 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 Reliance Worldwide. The Motley Fool Australia has recommended Reliance Worldwide. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Gkmwz6H

Wouldn’t it be great if you could build an income portfolio filled with quality dividend shares without any effort?

Well, here is some good news for you. There are a number of exchange traded funds (ETFs) listed on the Australian share market that have been designed to help income investors.

One that could be worth considering is listed below. Here’s what you need to know about this popular ETF:

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A top ETF for income investors to look at buying this month is the Vanguard Australian Shares High Yield ETF.

This ETF provides investors with easy access to ASX listed shares that have higher than average forecast dividends. Vanguard notes:

VHY is built smarter. Unlike most high yield equity ETFs, VHY uses forward looking broker estimates to determine which securities go in the fund. This ensures VHY can look past historical information and capture the securities that are forecast to pay a higher yield.

Vanguard also has diversity in mind when building its portfolio. The fund manager restricts the proportion invested in any one industry to 40% and 10% for any one company. This ensures that income investors are holding a diverse collection of dividend shares and not just a group of coal miners.

Included in the fund are a number of income investor favourites. This includes mining behemoth BHP Group Ltd (ASX: BHP), Australia’s largest bank Commonwealth Bank of Australia (ASX: CBA), and telco giant Telstra Corporation Ltd (ASX: TLS). Australian Real Estate Investment Trusts (A-REITS) are excluded from the index.

At the time of writing, the Vanguard Australian Shares High Yield ETF was trading with an estimated forward dividend yield of 5.6%.

The post Here’s a top ETF to buy for a passive income boost appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Which of the Vanguard ASX ETFs has performed best over the past year?
• How I’d generate a $4,000 monthly passive income using only ASX ETFs
• Top ASX dividend shares to buy in January 2023
• Here are the ASX ETFs to buy for a passive income boost in 2023
• 2 excellent ETFs for ASX investors in January

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 recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/y4mIujE

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, Eley Griffiths portfolio manager Nick Guidera explains why two mining companies and one tourism business are the best bets at the moment.

Hottest ASX shares

The Motley Fool: What are the three best stock buys right now?

Nick Guidera: Monadelphous Group Ltd (ASX: MND) — we believe mining services have been in the wilderness for much of the past five years, impacted by slowing global growth, COVID, labour shortages, rampant cost inflation, and the power resting squarely with the miners. As such, we have seen consolidation amongst the players, and a number of companies go broke.

Monadelphous is considered one of the quality tier-one contractors that is regularly used by the major miners BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) to build new mines and infrastructure as well as maintain some of the existing plants. Commodity prices had a strong end to 2022, buoyed by a falling US dollar and the hope of China’s reopening demand. Higher commodity prices are incentivising the miners to embark on new capital projects to increase or replace production. Monadelphous, as one of the superior engineering firms, is well placed to benefit from a significant amount of new work in a more rational operating environment. 

Iron ore prices have rallied from their lows of sub US$80 in late 2022 to a seven-month high a few days ago of US$127/tonne. Commodity traders are expecting that China’s reopening will follow a similar path to previous stimulus and be focused on property and infrastructure, which will ultimately require demand for steel and hence more iron ore. 

While China’s reopening is expected to be choppy, and the outlook beyond [lunar] new year remains unknown, we remain constructive on the outlook for commodities and China’s end demand for iron ore into 2023. 

Higher iron ore prices will mean stronger revenues and cash flow for iron ore miners. One notable small-cap pure play is Champion Iron Ltd (ASX: CIA). A low cost operator that produces a premium product, with an expanding production profile, [it’s] well placed to benefit from higher prices.

The third pick is Tourism Holdings Ltd (ASX: THL).

‘Van life’ is back in vogue, as travel resumes and a generation of people are keen to explore new destinations. New Zealand RV [recreational vehicle] manufacturing, rental, and retail business Tourism Holdings recently completed its merger with Apollo Tourism & Leisure and the new business was listed for the first time on the ASX, while maintaining its existing listing on the NZX.  

The merger saw the two largest RV rental companies come together in Australia and New Zealand. The combined business owns and operates everything from the humble van to a six-berth driving hotel. 

It has [a] global footprint with operations in North America and Europe, and local manufacturing to produce the best product for the local market, and a retail footprint to dispose of those vehicles at the end of life. 

With any merger there are risks. However, with $27 to $31 million of recurring cash synergies by bringing the businesses together, there is also potential upside. With tourism seen for many as a non-discretionary spend nowadays, the more affordable option of a motorhome should be well placed to benefit from any consumers trading down.

The post 3 small-cap ASX shares to rocket from this year’s mega-trends: fund manager appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 6 ASX mining shares just upgraded by brokers
• Here are the top 10 ASX 200 shares today

​​DISCLAIMER: This presentation has been prepared and issued by Eley Griffiths Group Pty Limited (ABN 66 102 271 812, AFSL 224 818) (EGG) as the investment manager of the Eley Griffiths Group Small Companies Fund and Eley Griffiths Group Emerging Companies Fund (Fund). The Trust Company (RE Services) Limited ABN 45 003 278 830, AFSL 235 150 (Perpetual) is the Responsible entity and issuer of units in the Fund. It is general information only and is not intended to provide you with financial advice and has been prepared without taking into account your objectives, financial situation or needs. You should consider the product disclosure statement (PDS), prior to making any investment decisions. The PDS and target market determination (TMD) can be obtained for free by visiting our website https://www.eleygriffithsgroup.com/invest/.  If you require financial advice that takes into account your personal objectives, financial situation or needs, you should consult your licensed or authorised financial adviser. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. 

Neither EGG, nor any company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital. Neither EGG nor Perpetual give any representation or warranty as to the reliability or accuracy of the information contained in this presentation. Any opinions, forecasts,  estimates or projections reflect judgments of EGG as at the date of this document and are subject to change without notice. Rates of return cannot be guaranteed and any forecasts, estimates or projections as to future returns should not be relied on, as they are based on assumptions which may or may not ultimately be correct. Actual returns could differ significantly from any forecasts, estimates or projections provided. Past performance is not a reliable indicator of future performance.

Motley Fool contributor Tony Yoo 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.

from The Motley Fool Australia https://ift.tt/oyMghHW

While much debate rages among experts about how investments might do in 2023, there is more agreement about the outlook for the global economy.

Higher interest rates are now starting to bite both consumers and businesses. Thus most commentators now agree that economies around the world will have a slowdown, with some countries plunging into recession.

So can you make money with ASX shares this year?

Pengana investment specialist Tim Richardson said that the “short answer is yes”.

“The impact of the global economic slowdown on profitability will be highly stock-specific,” Richardson wrote on the Pengana blog.

“Earnings will depend on company sensitivity to interest rates, consumer spending, and secular growth trends. This will bring share market investors a wider dispersion of returns.”

Of course, he added that the difficulty is picking which ASX shares will thrive through the tough times.

“Such companies often have two things in common: lower sensitivity to interest rates, which are expected to remain elevated, and lower sensitivity to consumer spending, which is expected to remain subdued.”

Secular growth trends in the secret sauce 

According to Richardson, a business that’s exposed to long-term structural growth themes has the best chance of growing earnings regardless of the economic cycle.

Already the market is starting to see “lower corporate earnings”, triggered by reduced disposable incomes, higher home loan repayments, a slower housing market, and more expensive business financing.

“In this environment, many cyclical stocks whose revenues are sensitive to consumer spending are expected to underperform as they struggle to grow earnings,” said Richardson.

“However, companies whose business models are well aligned to secular growth trends which will endure throughout the interest rate and consumer spending cycles are better placed.”

Helpfully he identified 10 such long-term global shifts that investors will want to seek when buying ASX shares right now:

1. Transition to net-zero carbon emissions
2. Labour shortages driving automation
3. Ageing population
4. Retail behaviour shifting to online and home delivery
5. Global travel reopening
6. Delayed family formation
7. Rise of middle class in China and other emerging economies
8. The decoupling of China-US economies
9. Reshoring to high-cost countries
10. Trust in strong brands

Some of these trends cover a broader range of ASX shares than one might first think.

“The switch to net zero will benefit not just manufacturers of electric vehicles and solar panels but a wider range of critical components such as lithium batteries and high voltage cables,” said Richardson.

“Labour shortages will drive vehicle automation, supporting innovation not just in cars, but also in semi-trucks, agricultural vehicles, ride-sharing services, and semiconductors.”

The ageing population has implications for healthcare, insurance, aged care and the pharmaceutical industries.

Considering this, Richardson urged investors to think with a long-term horizon when picking stocks to buy now.

“Investors should now consider selectively establishing some exposure to quality global growth stocks, following the market turbulence of 2022 that leaves many at highly attractive valuations.”

The post 10 types of ASX companies that can grow even if the economy tanks appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Will Liontown Resources post a profit in 2023?
• ‘Exploration breakthrough’: What’s going on with this ASX 200 copper share today?
• ASX 200 lithium share Sayona has surged 38% in 2023. Too late to buy?

Motley Fool contributor Tony Yoo 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.

from The Motley Fool Australia https://ift.tt/Yc5OdhB

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was on form again and charged higher. The benchmark rose 0.45% to 7,490.4 points.

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

ASX 200 expected to drop

The Australian share market looks set to fall on Wednesday following a subdued night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 14 points or 0.2% lower this morning. In late trade on Wall Street, the Dow Jones is up 0.1%, the S&P 500 is down 0.1%, and the Nasdaq is 0.2% lower.

Oil prices sink

Energy producers Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch after a poor night for oil prices. According to Bloomberg, the WTI crude oil price is down 2.25% to US$79.79 a barrel and the Brent crude oil price has fallen 2.6% to US$85.94 a barrel. Global economic growth concerns weighed on prices.

Woodside Q4 update

The Woodside Energy Group Ltd (ASX: WDS) share price will also be one to watch on Wednesday. That’s because the energy giant is scheduled to release its fourth quarter and full year update this morning. According to a note out of Morgans, its analysts are expecting full year production of 146MMboe. From this it expects revenue of US$15,864 million and EBITDAX of US$11,914 million.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a decent session after the gold price rose overnight. According to CNBC, the spot gold price is up 0.4% to US$1,936.2 an ounce. Demand for safe haven assets boosted the precious metal.

Q4 inflation reading

It is a big day for the ASX 200 index on Wednesday. Later today, the Australian Bureau of Statistics will be releasing the eagerly anticipated inflation data for the fourth quarter of 2022. According to a note out of Westpac Banking Corp (ASX: WBC), its economics team expect inflation to come in at 7.4% after a 1.5% quarterly lift in consumer prices. A stronger than expected reading could spook the market and increase rate hike expectations.

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

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Will Liontown Resources post a profit in 2023?
• ‘Exploration breakthrough’: What’s going on with this ASX 200 copper share today?
• ASX 200 gold share Evolution Mining gains on increased production and falling costs

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/rvP8V0X

The S&P/ASX 200 Materials Index (ASX: XMJ) lifted 1.26% in Tuesday trading, but four ASX 200 lithium shares soared considerably higher.

Lithium explorers IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE), Mineral Resources Ltd (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS) all leapt on the market today.

Let’s take a look at what may have impacted these lithium companies today.

What’s going on

IGO shares rose 4.49% today, while Mineral Resources shares jumped 5.28%. Meanwhile, Pilbara shares gained 5.18% and Allkem shares climbed 3.45%.

Today’s lift in ASX lithium shares comes amid broker upgrades from analysts at UBS. The broker upgraded Mineral Resources and IGO to a buy and Pilbara Minerals to neutral, while it retained its buy rating on Allkem, the Australian Financial Review reported.

UBS has lifted its lithium price outlook by up to 50%, according to the publication. Commenting on lithium, UBS analyst Lachlan Shaw said:

We believe lithium markets will remain in deficit for the near and medium term before moving to structural deficit long term.

This needs a demand rationing price, for which we have seen no evidence in the past 12 months despite record-high prices that are orders of magnitude above costs

Meanwhile, Pilbara Minerals has also just received positive broker coverage from Morgans, as my Foolish colleague James reported this morning.

Morgans has maintained an add rating on Pilbara shares and lifted the price target to $5.40.

Commenting on Pilbara, analysts said:

We maintain our ADD rating given the upside that we see to our target price. The company’s growing cash balance gives it options for capital management including buybacks or a special dividend.

Share price snapshot

The IGO share price has risen 25% in the last year.

Mineral Resources shares have exploded 56% over the past 12 months.

Pilbara shares have risen 46% in the last 52 weeks.

Allkem shares have soared 39% in the past year.

The post Guess which four ASX 200 lithium shares charged higher today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• I’d buy 100 shares of this ASX lithium stock for $700 a year in passive income
• Move over bank deposits! These ASX 200 mining shares are forecasting yields of over 5%
• 5 ASX 200 shares rocketing to new 52-week highs on Tuesday

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/pRfFS8G