Category: Stock Market

S&P/ASX 200 Index (ASX: XJO) banks have long been favoured by investors looking for some handy passive income.

But with numerous banks in the United States and Europe under intense selling pressure, just how safe are the big ASX bank stocks?

And for investors hunting for reliable passive income, what’s the outlook for the ASX 200 banks’ fully franked dividend payouts?

Why are ASX 200 banks at risk?

As you’re likely aware, the ongoing global banking crisis was born in the United States with the collapse of Silicon Valley Bank and Signature Bank.

That liquidity crisis quickly spread to Europe, felling Credit Suisse. That bank is set to be taken over by UBS in a controversial deal engineered by the Swiss government. And now even Deutsche Bank has come under short-selling pressure.

With the situation still unfolding, Saxo Markets Australia market strategist Jessica Amir advises caution for investors eyeing ASX 200 bank shares.

“If we do have a banking collapse in the US in the lending part of their market, the fear and hysteria will probably hit our market too – when the US sneezes we catch a cold,” Amir said (quoted by The Australian).

“We are telling clients to be quite cautious at the moment,” she added. “Bank stocks are quite risky at the moment.”

What’s the dividend outlook for the big banks?

Shaw and Partners senior investment adviser Jed Richard pointed to the Hayne Royal Commission into the Aussie banking sector and prudent lending practices as helping put ASX 200 banks on safer ground than their international peers.

“There is talk that there is no growth in the banking sector – however, the dividend yield we believe is safe,” Richard said. “If you can ride it out for a little while and you get a good dividend yield – mission accomplished.”

Catapult Wealth portfolio manager Tim Haselum was cautious about the short-term outlook for ASX 200 banks. But he said their dividends will see them continue to have a spot in Australians’ portfolios over the longer term.

According to Haselum (quoted by The Australian):

We think bank profitability and hence the share prices will struggle in the short term, but we are not worried about liquidity or solvency in Australia. Longer-term, as long as Australians continue their love affair of property and investors continue to seek dividends, the big four banks will have a place in portfolios.

Here are the 100% franked dividend yields the big four ASX 200 banks currently trade at:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) 6.5%
• National Australia Bank Ltd (ASX: NAB) 5.6%
• Westpac Banking Corp (ASX: WBC) 5.9%
• Commonwealth Bank of Australia (ASX: CBA) 4.4%

You can see why passive income investors are likely to continue targeting these blue-chip stocks.

The post Investing in ASX 200 banks for dividends? Read this 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

• Will the turmoil among global banks trigger a stock market crash?
• Banking crisis ‘clearly not over’: ANZ
• A director is buying up CBA shares. Should you?
• Best ASX 200 bank share to buy now: ANZ vs Westpac
• ASX 200 bank shares lift despite Deutsche Bank stock tumble

SVB Financial provides credit and banking services to The Motley Fool. 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 recommended SVB Financial. The Motley Fool Australia has recommended SVB Financial and 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/nOcNmBd

If you’re looking to lift your passive income, then you may want to check out the ASX dividend shares listed below.

Goldman Sachs has tipped these ASX shares to pay their shareholders big dividends this year and next. Here’s what you need to know about them:

Harvey Norman Holdings Limited (ASX: HVN)

Goldman Sachs remains very positive on this ASX dividend share.

It likes the retail giant due to its belief that it is well-placed to fend off online competition due to its exposure to regional markets and older customer base.

Harvey Norman holds a unique position within the electronics and appliances retail industry as a result of its franchise model of operations in Australia, property portfolio and regional exposure. While we do not view HVN as the most advanced retailer on digitalization, we view HVN as a more defensive option that is under-valued in the home category.

The broker expects this to allow Harvey Norman to pay fully franked dividends per share of 36 cents in FY 2023 and then 30 cents in FY 2024. Based on the current Harvey Norman share price of $3.69, this will mean massive yields of 9.75% and 8.1%, respectively.

Goldman has a buy rating and $4.70 price target on its shares.

Rio Tinto Ltd (ASX: RIO)

Another ASX dividend share that Goldman Sachs is bullish on is mining giant Rio Tinto.

Its analysts see a lot of value in its shares and are expecting some very big yields in the coming years. Goldman commented:

We are Buy rated on RIO and add to the CL due to: (1) compelling relative valuation vs. peers (0.9xNAV vs. BHP 1.05xNAV and FMG 1.5xNAV), (2) strong FCF and Div yield with our bullish view on iron ore, aluminium and copper prices, (3) strong production growth from iron ore and copper (+8% Cu Eq terms in 2023E, +5% in 2024E), (4) the potential for FCF/t improvement in the Pilbara in 2023 with Guida-darri and over the medium to long run driven by Rhodes Ridge, and (5) World’s highest margin low emission aluminium business.

Its analysts are forecasting fully franked dividends per share of US$5.33 in FY 2023 and then US$5.98 in FY 2024. Based on current exchange rates and the latest Rio Tinto share price of $113.75, this will mean yields of 7% and 7.9%, respectively.

Goldman Sachs has a buy rating and $140.40 price target on its shares.

The post Goldman Sachs says these ASX dividend shares with 7%+ yields are buys 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

• 8 ASX All Ords shares trading ex-dividend this week
• Invested $7,000 in Rio Tinto shares 5 years ago? Here’s how much passive income you’ve earned
• Buy these ASX 200 dividend shares for a second income: analysts
• Dividend devotee: I’d buy Rio Tinto shares for $2,000 of monthly passive income
• $72m and counting: ASX 200 director’s massive share buy-up continues

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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/a7wBTpX

Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Chester Asset Management portfolio manager Rob Tucker explains how his fund has outperformed over more than six years.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Rob Tucker: My name’s Rob Tucker. Anthony Kavanagh, Luke Howard, and myself founded Chester in 2017. 

We’ve been working together for 10 years. The strategy that we’re running had 3.5 years at a previous firm, and six years at Chester, so it’s now 9.5 years old. We run a 25 to 40 stock high-conviction Australian equities fund — on average 35 stocks. 

Over that 9.5 years, we’ve beaten the market by 7% per annum every year. We’ve done 15.1% per annum and the market’s done 8.1% per annum.

We have done that by being very benchmark unaware, and breaking the market into what we call three buckets. 60% to 65% of the fund is in the predictable bucket, which is allocating to sectors such as healthcare, consumer staples, infrastructure, or telcos, where the cash flows are predictable. Then we have to own some cyclicals, energy, or commodities, but they are volatile. 

Then what we do differently is have an exposure to cash and gold.

Gold equities are the least correlated [to] every other S&P/ASX 300 (INDEXASX: XKO) sector. [Over] 5, 10, 15, or 25 years, that tends to be the case. What gold tends to do is act as a ballast or a hedge, so when the market is inherently volatile, gold and gold equities tend to hold up better. 

With that framework — predictables, cyclicals, and some defensives, as we call them, gold and cash — the fund has been run with far lower volatility than the ASX 300. 

We’re very focused on the drawdown, meaning the best way to compound returns over a 10-year timeframe is to minimise the drawdown to your fund when the market is negative. In that context, we have outperformed the market 82% of the time when the market is negative. 

That’s really what we sell: alpha generation through stock picking with lower volatility.

MF: Sounds good. You’re getting better returns than the market and with lower volatility. It’s the dream double.

RT: That’s what you pay an active manager — to generate superior returns. But yeah, absolutely I think the focus on minimising drawdowns is a key part of our framework.

Broadly, if you want to label our fund, we would call ourselves growth at a reasonable price (GARP). But very focused on the “reasonable price” aspect of that.

And we are a mid-cap buyer’s fund. We don’t hold many stocks in the top 20, because I think over a 10-year time frame, we tend to find better ideas over the small and mid-caps, as they mature. That’s a sometimes more volatile part of the market, but certainly a more capital growth aspect to the fund.

MF: Where do you think the market is heading?

RT: I always get slightly reluctant to crystal ball gaze, because it’s impossible. Because crystal ball gazing depends on what monetary policy does and what interest rates expectations do, which is a function of inflation at the moment. Those three levers — inflation, interest rate settings, and fiscal policy — are driving the economic cycle.

What I’d say is I think we’re going to be in for a pretty choppy six to 12 months. I don’t want to get too technical here, but our base case is, over the next decade, central governments basically have to come to the conclusion that they can’t fight inflation forever with higher rates. Our base case is we’ll enter a period of financial repression, which means inflation will be far higher than the 10-year bond ultimately. The reason for that is that over 170 years, US debt-to-GDP has expanded three times — through the Civil War, the First World War, and the Second World War. Every time the only way it’s adjusted, or recalibrated down to a normalised level of debt-to-GDP ratio, has been through inflation.

Right now you’ve got debt-to-GDP in America as high as it’s ever been. The only way to solve that problem is through inflation being stickier for an extended period. I would say I think we’ll enter another bull market when the [US] Fed Reserve says, “We’re not going to try and get inflation back to 2%. We’ll let it run up 3 or 4%, but we’re going to cut rates anyway because the economy’s so weak.” 

That’s the set-up for a really strong market. Now, that might be six or 12 or 18 months away, but that’ll be the next leg of the bull market I suspect.

MF: Considering you’re reluctant to gaze at crystal balls, perhaps a better way of shaping that question is: How have you got your cyclicals positioned?

RT: That’s a good question. It’s a combination of battery materials exposure — so Mineral Resources Ltd (ASX: MIN) has been a core holding of ours for about six years — and we have some energy exposure, because we still think energy’s basically underfunded. 

While the energy transition occurs, there’s going to be a period of time where the oil companies make significant cash flows. Santos Ltd (ASX: STO), as an example, that’s on four times cash flow. We still think there’s really interesting opportunities within those old economy stocks, but the cash flow thesis will really accelerate.

Particularly with Santos, it has 30% production growth over the next three years as the Alaskan field comes into production in 2026. A lot of investing right now, but the free cash generation will accelerate over the next two or three years.

The post How to beat the stock market by 7% per year: 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

• 5 things to watch on the ASX 200 on Monday
• Investing in ASX 200 lithium shares? You’ll want to read this
• Why are ASX lithium shares sinking today?
• 5 things to watch on the ASX 200 on Thursday
• What was with ASX lithium shares 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 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/0nFIDNK

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week on a positive note. The benchmark index rose 0.1% to 6,962 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise again on Tuesday following a solid start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 26 points or 0.4% higher. In late trade in the United States, the Dow Jones is up 0.8% and the S&P 500 is up 0.4%, but the NASDAQ is down 0.3%.

Oil prices jump

Energy shares Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a great day after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 5.2% to US$72.89 a barrel and the Brent crude oil price is up 4.1% to US$78.12 a barrel. Traders were buying oil amid a Kurdistan export halt and banking optimism.

Origin agrees takeover deal

The Origin Energy Ltd (ASX: ORG) share price will be on watch on Tuesday after the energy company accepted a takeover offer from a consortium comprising Brookfield Asset Management and MidOcean Energy. Origin has agreed to a revised deal of $5.78 per share and US$2.19 per share, which implies a total consideration of $8.912 per share. Elsewhere, United Malt Group Ltd (ASX: UMG) could return from a trading halt today with a takeover update of its own.

Gold price falls

It could be a poor day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price dropped overnight. According to CNBC, the spot gold price is down 1.3% to US$1,958.1 an ounce. Improving risk sentiment appears to have softened demand for the safe haven asset.

Dividend payday

A number of popular ASX 200 dividend shares will be rewarding their shareholders with their latest dividend payments on Tuesday. This includes health supplements company Blackmores Ltd (ASX: BKL), steel producer BlueScope Steel Limited (ASX: BKL), and conglomerate Wesfarmers Ltd (ASX: WES). The latter is paying a fully franked 88 cents per share interim dividend.

The post 5 things to watch on the ASX 200 on Tuesday 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
• These are the ASX gold shares I’d buy amid the banking squeeze
• Guess which ASX 200 stock is on ice following a takeover approach
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Start building a lifelong passive income with just $5 a day

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 positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Blackmores. 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/iPBO2gx

Historically, the share market has been a great place to grow your wealth.

For example, the most recent Berkshire Hathaway (NYSE: BRK.B) letter to shareholders reveals that the S&P 500 index has generated an average 9.9% total return per annum since all the way back in 1965.

Importantly, this is largely in line with the returns that ASX shares have generated over the last 30 years.

And while we cannot say whether the same will happen over the next 58 years, I would be disappointed if the returns are not similar. We’re also going to base our calculations on this potential return.

Growing your portfolio to $100,000 in six years

Starting from zero and growing your wealth to $100,000 with ASX shares in six years may seem farfetched, but the maths says otherwise.

If you were to invest $1,000 into ASX shares each month for six years and two months and earned the market return, your portfolio would have grown to be worth our target amount.

At that point, investors have the option to use the funds for a purchase or keep the money invested and let compounding work its magic.

Unless it is absolutely necessary to withdraw the funds, I would sooner put them to work in the share market with the aim of growing my wealth further.

For example, if you left this $100,000 invested in ASX shares for a further six years, didn’t make any more contributions, and earned the market return, your portfolio would grow to be worth $175,000.

And if you can keep going for a further four years, it would see you crack the $250,000 mark.

That’s going from zero to $250,000 in just 16 years. Not bad!

The key is sticking with a plan, buying high quality ASX shares with strong long term outlooks, and letting compounding do the work for you.

The post How to build a $100,000 ASX share portfolio in 6 years 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

• As stock markets dive, here’s Warren Buffett’s advice
• I’m listening to Warren Buffett and loading up on cheap ASX shares
• Forget day trading! I’d use Warren Buffett’s ‘secret sauce’ to build wealth
• Is now the time to be bold and snap up cheap ASX 200 dividend shares?
• Warren Buffett’s $35 billion warning to investors

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

from The Motley Fool Australia https://ift.tt/JVBs9eU

Do you want a passive income boost? If you do, then the ASX dividend shares listed below could be the way to do it.

Here’s why these could be passive income shares to buy now:

Transurban Group (ASX: TCL)

The first ASX share that could provide investors with a passive income boost is Transurban.

Citi believes the toll road operator could be a great option in the current environment due to its positive exposure to inflation. It commented:

With concerns around inflation being more sticky and higher for longer, we believe investors are likely to remain attracted to companies providing protection to rising inflation. We see TCL as being particularly attractive given ~70% of toll revenue is linked to inflation, downside protection to traffic even if we enter a recessionary period (given exposure to urban roads), and inorganic upside from the current and future development pipeline.

As for dividends, the broker is forecasting dividends per share of 58 cents in FY 2023 and then 60 cents in FY 2024. Based on the current Transurban share price of $14.12, this will mean yields of 4.1% and 4.25%, respectively.

Citi has a buy rating and $16.00 price target on its shares.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that has been tipped as a buy is Universal Store.

Goldman Sachs believes the growing youth fashion retailer could be a great option. This is due to the company’s exposure to younger consumers, which it expects to continue spending thanks to minimum wage increases and their lower exposure to rising interest rates. It explained:

We believe the young Australian consumer is uniquely resilient to inflationary and broader economic pressures given (1) a high proportion live at home; (2) more than two-thirds are working; (3) high and increasing minimum wage entitlements and; (4) a heavy skew towards discretionary spending.

In respect to dividends, the broker is forecasting fully franked dividends of 27 cents in FY 2023 and 34 cents in FY 2024. Based on the latest Universal Store share price of $4.95, this equates to yields of 5.45% and 6.9%, respectively.

Goldman Sachs currently has a buy rating and $8.05 price target on its shares.

The post 2 growing ASX passive income shares to buy now: brokers 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

• Huge yields! These are the best ASX passive income shares to buy now: Morgans
• Give yourself a passive income boost with these growing ASX 200 dividend shares: analysts
• Buy these 3 ASX retail shares: Morgans
• Experts name 2 high quality ASX 200 shares to buy for your retirement portfolio
• Dividends: Why analysts rate these ASX shares highly

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/inlHI0J

The global banking system is being tested this month. Could March 2023 be the start of another stock market crash?

We’ve already seen the collapse of Silicon Valley Bank (SVB), though it has reportedly been sold to First Citizens.

Credit Suisse is being taken over by UBS in what seems to be an emergency deal.

Investors have now turned their attention to the troubled German bank Deutsche Bank. The Deutsche Bank share price has dropped around 25% since 9 March 2023.

We’ve seen large declines in some of the biggest ASX bank shares recently. For example, the Commonwealth Bank of Australia (ASX: CBA) share price has fallen 13% since 14 February this year. The Westpac Banking Corp (ASX: WBC) share price is down 11% over the same time, and the ANZ Group Holdings Ltd (ASX: ANZ) share price has dropped around 13%.

How likely is a stock market crash?

In some ways, we could say that there already has been a sell-off. Since 9 March, the S&P/ASX 200 Index (ASX: XJO) has dropped 4.8%. I wouldn’t call that a crash, but it’s a decent fall in just a few weeks.

However, the rest of the global share market hasn’t declined like that. Banks are a sizeable presence in the global economy, but they have a bigger presence on the ASX than other markets. The S&P 500 Index (INDEXSP: .INX) is down less than 1% since 8 March 2023.

But, investors may remember the terrible impact the 2008 global financial crisis (GFC) had on the share market. In the northern hemisphere, banks collapsed, and there was a stock market crash across the global economy.

Another GFC or fallout from inflation?

ANZ CEO Shayne Elliott believes this period of instability is different to the GFC. The Australian Financial Review quoted him:

The GFC was fundamentally a crisis around the quality of assets and the loans that banks make, and that’s not what the risk is here. This is a different issue. This is really to do with the global war on inflation and how central banks are raising rates very quickly in order to combat that, and that has casualties.

I can almost guarantee regulators around the world are thinking of new things they need to put in place to protect depositors and the economy from change going forward. And so there will be a whole bunch of things that we need to prepare for.

He also suggests that there’s always a “casualty” in these events, though regulators and governments will try to limit the damage.

I think that governments will try to do everything they can to ensure that households and businesses aren’t hurt much, even if banks do run into trouble.

My view on ASX bank shares

In my opinion, the ASX bank shares aren’t in any real danger – I think they’re too well capitalised to collapse.

It would be problematic if there was a cascade of sizeable bank failures in the US or Europe. I’d say that would likely cause a bear market. But, I don’t think that’s the most likely outcome at this stage.

It’s only when lots of depositors yank their funds out of a bank that we’d see any more sizeable banks run into trouble, in my opinion. But, I think the COVID-19 pandemic period and recent weeks have shown that governments will probably do what’s needed to protect the safety of the whole economic system.

But, investor jitters can send share prices down rapidly, causing a temporary stock market crash.

If there were a large decline, I’d look at past crashes like the GFC and COVID-19 to give me confidence that, at some point, share prices would likely recover. I think it’s times of global economic distress that can present the best times for investors to buy shares.

The post Will the turmoil among global banks trigger a stock market crash? 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

• Banking crisis ‘clearly not over’: ANZ
• A director is buying up CBA shares. Should you?
• Best ASX 200 bank share to buy now: ANZ vs Westpac
• ASX 200 bank shares lift despite Deutsche Bank stock tumble
• How I’d aim for $250 in monthly passive income from ANZ shares

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 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/kc02Yzl

Are you wanting to buy some ASX growth shares but aren’t sure which ones to buy? Don’t worry, because analysts have recently tipped the two listed below as buys.

Here’s why these could be the growth shares to buy right now:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share to buy could be Aristocrat Leisure. It is one of the world’s leading gaming technology companies with operations covering poker machines, mobile games, and real money gaming.

Morgans is very positive on the company’s long term growth potential. It commented:

We’re optimistic about ALL’s long-term growth potential, given its superior capitalisation and strong ability to invest in the development of its land-based and digital gaming businesses. Additionally, ALL has a high cash conversion rate and ROCE, despite running a capital-light model. Additionally, ALL has ample funding for investment in online RMG, even following the recent buyback extension.

It currently has an add rating and $43.00 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share that could be a buy is Temple & Webster. It is Australia’s leading pureplay online furniture and homewares retailer. It also has a smaller online business that is trying to challenge Bunnings.

While time will tell whether its new business will succeed, Goldman Sachs doesn’t appear to believe that needs to happen to make Temple & Webster shares a successful investment. This is due to its strong position in a retail category that is in the early stages of shifting online. It recently commented:

Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.

Goldman has a buy rating and $6.50 price target on its shares.

The post Want big returns? Buy these ASX growth shares: analysts 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

• Leading brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Monday
• Brokers name 3 ASX shares to buy now
• Citi rates these 3 ASX 200 blue chip shares as buys
• Buy Pilbara Minerals and this exciting ASX growth share: analysts

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster 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/tLGMUSX

ASX gold shares could be a place to find safety and even positive returns. Certainly, there is significant volatility in share markets worldwide at the moment, but perhaps gold can be the antidote.

The global banking sector continues to see volatility, with Deutsche Bank being the latest bank to see investor uncertainty.

Gold has been a store of wealth for thousands of years and has tracked inflation over time.

For some reason, the yellow metal has managed to build a reputation of being a hedge against share market and other asset declines.

Indeed, being able to benefit from something going up when other assets go down could be a very useful strategy, if it works.

However, ASX gold mining shares can have similar sorts of risks to those of other commodities. So, I’d want to choose gold assets that seem relatively trustworthy in the face of all this uncertainty, like the two potential options below.

Evolution Mining Ltd (ASX: EVN)

Evolution Mining is an ASX gold mining share that operates five wholly-owned mines: Cowal in New South Wales, Mungari in Western Australia, Mt Rawdon and Ernest Henry in Queensland, and Red Lake in Ontario, Canada.

What investors may notice about that list is that all of the mines are located in dependable countries where there are high levels of trust in mining and taxation laws, as well as a strong belief in capitalism. In other words, I like the jurisdictions where Evolution Mining’s mines are located.

The business is expecting to significantly increase its gold production, with the company projecting a 25% increase between FY22 to FY24. In FY24, Evolution could produce 800,000 ounces of gold. In the first half of FY23, it made around US$330 million of operating mine cash flow.

It also has exposure to copper through its Ernest Henry operations.

In FY24, the ASX gold share is expected to generate earnings per share (EPS) of $2.95 and pay annual dividends of 9.5 cents per share. That means the current Evolution Mining share price is valued at under 12x FY24’s estimated earnings with a potential grossed-up dividend yield of 4.6%.

Global X Physical Gold ETF (ASX: GOLD)

If investors want to try to avoid exposure to mining risks, then I think I’d want to choose an exchange-traded fund (ETF) like this one – it’s backed by physical gold. Each physical bar is segregated, individually identified, and allocated.

The ETF comes with an annual management cost of 0.40%. The physical gold bullion is held in the vault(s) of the bank of JPMorgan Chase in London. This vault is audited twice a year, with the auditor’s reports made available for investors to inspect.

ETF’s unit price has risen nicely over the past decade, but it’s impossible to say what the value of the ETF will do in the future.

The post These are the ASX gold shares I’d buy amid the banking squeeze 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 Monday
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• ASX 200 gold shares are defying today’s sell-off. Here’s why
• 5 things to watch on the ASX 200 on Thursday

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 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/Phs8VMu

Stock in S&P/ASX 200 Index (ASX: XJO) maltster United Malt Group Ltd (ASX: UMG) has been put into the freezer today as the company prepares to react to what looks like a takeover proposal.

The share will remain frozen until it reveals the details of its apparent suitor and their bid or the market opens on Wednesday, whichever comes soonest.

The United Malt share price last traded at $3.44.

Let’s take a closer look at what’s going on with the ASX 200 consumer staples share this week.

ASX 200 share frozen amid takeover approach

The United Malt share price has been halted amid “a potential change of control transaction” involving the company.

And the suitor behind what appears to be a takeover bid? That’s broadly reported to be European peer Malteries Soufflet.

Malteries Soufflet was itself acquired by agriculture group InVivo in 2021, with global investment firm KKR buying a significant minority stake alongside Bpifrance and Crédit Agricole Group around the same time.

United Malt became the world’s fourth largest independent commercial maltster on demerging from GrainCorp Ltd (ASX: GNC) in 2020.

The demerger was intended to create shareholder value by splitting the two businesses into separate ASX 200 agribusiness companies.

However, the United Malt share price has disappointed since. The stock has fallen 16% since it listed. Though, it’s jumped 21% since hitting an all-time low of $2.81 in October 2022.

As of Friday’s close, the maltster boasts a market capitalisation of around $1 billion.

Goldman Sachs is advising the company’s suitor while Macquarie provides advice to United Malt, according to reporting by the Australian Financial Review.

United Malt tipped financial year 2023 to bring a “material increase in earnings” on posting its full-year results in November 2022.

Its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 23.2% last fiscal year to $105.9 million. Meanwhile, its revenue lifted 13.9% to $1.4 billion on the back of higher barley prices.

United Malt share price snapshot

The United Malt share price has underperformed the ASX 200 in recent months.

The stock has fallen 1.4% since the start of 2023. It is also currently 9% lower than it was this time last year.

For comparison, the ASX 200 is trading flat year to date and has dropped 6% over the last 12 months.

The post Guess which ASX 200 stock is on ice following a takeover approach 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

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended KKR. 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/4wb9W1t