Category: Stock Market

If you’re almost ready to retire, no doubt you’ve begun to think about how to go about funding your golden years. Thankfully, we’re all living longer than we used to. But this means that we have to plan for a retirement that lasts not just years but (hopefully) decades. ASX dividend shares can help in this regard.

Finding an ASX dividend share to fund your retirement can be tricky. Capital preservation is a must, as is a strong and reliable stream of dividend income, ideally replete with franking credits too. That’s where I think Coles Group Ltd (ASX: COL) shares can come in.

Coles is a retail share that needs little introduction. Chances are most of us would have shopped there recently. But here’s why I think Coles has what it takes to be a valuable part of an ASX retirement portfolio.

Firstly, this company is not looking too expensive right now. Coles was trading at $17.11 a share at the close on Friday. That gives the company a price-to-earnings (P/E) ratio of 21.74. Compared with arch-rival Woolworths Group Ltd (ASX: WOW), which is currently on a P/E of 27.88, this is looking pretty decent in my view.

I’m not saying Coles won’t trade lower from here. But I think a devastating and permanent or semi-permanent loss of capital is unlikely.

Why Coles shares are worth considering for an investor approaching retirement

But can Coles fund a steady and reliable stream of dividend income? I think the answer to that question is ‘yes’ as well. Ever since Coles listed on the ASX in its own right back in late 2018, it has been increasing its dividends.

2020 saw the company dole out 57.5 cents per share in dividends. But in 2021, Coles upped this to 61 cents per share and again this year to 63 cents per share.

We can see the non-cyclical nature of Coles’ consumer staples nature shine through here. That is certainly something that an investor looking for a steady dividend income can appreciate.

This track record lends me confidence for Coles’ future as an income payer. This view is backed up by broker Morgans. Morgans recently pencilled in more dividend hikes over 2023 and into 2024 as well. And yes, Coles’ dividends come with full franking credits too.

At the present share price, Coles offers a trailing dividend yield of 3.68%. If we factor in the full franking credits that Coles offers too, this yield grosses up to 5.23%.

So all in all, I think Coles is a perfect ASX dividend share to consider if you are nearing retirement. It may not offer breakneck returns going forward. But I think it can offer secure, stable and full-franked dividend income well into the future. What more could a retiree want?

The post Almost ready to retire? Here’s why I’d buy Coles shares for dividends appeared first on The Motley Fool Australia.

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More reading

• Use the ASX 200 market correction to retire early. Here’s how
• If you bought $15,000 worth of Woolworths shares this year, here’s how much dividend income you’d have
• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive
• How big will the Coles dividend be in 2023?
• Add these ASX 200 shares to your retirement portfolio: experts

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Share markets around the world have enjoyed a nice renaissance in recent weeks.

The S&P/ASX 200 Index (ASX: XJO), for example, has risen 6.5% over the past month.

But with rising interest rates and with winter recessions looming over both Europe and US, no investor can ignore the possibility that stocks will dive yet again.

With this anxiety, it could be worth considering buying ASX shares that have some resilience and defensive qualities.

But for long-term investors, there still needs to be some prospects for growth too.

Switzer Financial Group director Paul Rickard recently suggested the healthcare sector fits that bill.

Globally, health shares are traditionally considered defensive because they enjoy strong demand even through suboptimal economic conditions.

But ASX-listed healthcare businesses have a nice twist, according to Rickard.

“Australia’s a little bit different because we have companies that are really focused on a global marketplace — most of their revenues actually come from outside Australia,” he told Switzer TV Investing.

“So the companies that represent the major part of our healthcare sector tend to command pretty high price-earnings multiples.”

Agreeing with this sentiment, a pair of other experts named three ASX shares in the health sector that are ripe to buy right now:

Attractive share price, strong books

For Blackmore Capital chief investment officer Marcus Bogdan, Healius Ltd (ASX: HLS) is a buy after a 36% fall in the share price this year.

“The stock has de-rated. It was the darling through COVID-19 because of pathology and PCR testing but the base business suffered considerably,” he said in a Livewire video.

“Now, as PCR testing is coming down, we do see the base business improving over time.”

Healius, which runs pathology labs, imaging centres and day hospitals, is financially sound enough to power through an economic slowdown.

“It has a strong balance sheet which leads to capital returns, its price-to-book ratio is very attractive, and the PE on a normalised run rate is also attractive. So it’s a buy.”

Defence and offence all in one stock

Firetrail portfolio manager Blake Henricks likes the look of biotechnology giant CSL Limited (ASX: CSL).

“It’s large, it’s liquid, it’s healthcare. So to me, it ticks all the defensive boxes.”

While CSL made many investors wealthy over its three-decade listed life, the past couple of years has been flat.

In fact, the share price has yet to reach pre-COVID highs, rising just 1.3% over the past two years.

Henricks likes how one of its expenses reduces as the economy grinds to a halt.

“That’s the plasma collection. This is where they pay donors to give blood and they turn that into plasma,” he said.

“The higher unemployment goes, the more people want to give plasma and the costs come down. And so on that basis, it’s really attractive as a defensive.”

CSL shares might look expensive, Henricks admitted, but the valuation based on future growth looks attractive.

“2023 is already written [in]. 2024, the earnings are looking very strong in our view, and you’re seeing it in a mid to high-20s PE,” he said.

“They expense all their R&D. It’s a very well-run business.”

Ready to make amends

Ramsay Health Care Limited (ASX: RHC) shares have caused nothing but heartache for investors in recent years.

The stock price has lost 8% over the past five years, and it’s crashed around 23% since 22 April after a takeover proposal was killed off. 

But Bogdan feels like it’s due for a turnaround.

“I do think the private hospital business has really three things going for it.”

First tailwind is that there is a massive backlog of elective surgeries to work through now that pandemic restrictions are behind it.

“Secondly, the rise of chronic disease continues,” he said.

“And thirdly, it’s demographics. As we age, we need more healthcare.” 

The company also has attractive tangible assets that it could exploit in the coming years.

“They’ve got a very strong property book, which I think, at some stage, they will try to monetise. So based on that, it’s a buy.”

The post 3 ASX shares to combat the next market dip: experts appeared first on The Motley Fool Australia.

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More reading

• I’d aim for $1 million in retirement buying just 10 ASX 200 shares
• Why this could be a ‘powerful driver of sector dominance’ for CSL shares: Wilsons
• Here’s what Citi is saying about the CSL share price
• Could this ASX 200 share be in for a $1.7 billion boost?
• Why did the CSL share price just crack $300 for only the third time in 2022?

Motley Fool contributor Tony Yoo has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As readers will be aware, every day brokers slap buy, hold, and sell ratings on countless ASX shares.

However, one thing you may not know is that not all brokers stop at “buy.” Some brokers have an even higher rating to demonstrate that they are especially bullish on a share.

Goldman Sachs, for example, has a coveted conviction list for this exact purpose. And three ASX 200 shares that make the list right now are listed below.

Here’s what Goldman is saying about them:

NextDC Ltd (ASX: NXT)

Goldman currently has a conviction buy rating and $14.30 price target on this data centre operator’s shares. Based on the current NextDC share price of $9.76, this implies potential upside of 47% for investors.

Goldman notes that NextDC recently revealed that its sales pipeline has hit a record size, which bodes well for growth. It was also pleased to see that guidance has been reiterated. The broker saidL

NXT provided a tangible comment on the sales pipeline, noting that it is of a record size, and is expected to convert into material new contractual commitments into the next 6-12 months. We see this as clear positive statement, noting it is the first time NXT has been specific on the timing of material new contracts.

NXT noted continued strong growth in enterprise, network and partner pipelines driving healthy margin, with revenue growth assisted through price escalation & power pass-through. Although we had seen limited risk to NXT guidance in FY23, we still view this as a positive.

Qantas Airways Limited (ASX: QAN)

Like many in the market, Goldman Sachs was very impressed with Qantas’ trading update last week. That update saw the airline operator upgrade its first half earnings guidance just a touch over a month after issuing it.

In response, the broker reiterated its conviction buy rating with an improved price target of $8.20. Based on the current Qantas share price of $6.06, this suggests potential upside of 35%. The broker commented:

With the market capitalization 5% above pre-COVID levels and EV (based on last reported net debt) 12% below pre-COVID, we believe the stock is not appropriately pricing QAN’s improved earnings capacity. Specifically, our forecast FY23e EPS is 58% above FY19a levels with group capacity still 21% below pro-COVID levels. Even as the yields moderate (with capacity restoration) our FY24e EPS (100% of FY19 capacity) is 46% above FY19 levels.

Webjet Limited (ASX: WEB)

Another travel share that Goldman has on its conviction list is online travel booker Webjet. The broker has a conviction buy rating and $6.90 price target on its shares. Based on the latest Webjet share price of $6.19, this infers potential upside of 11.5% for investors.

Goldman believes that Webjet’s recent half year results demonstrate that it has come out of COVID as a much stronger business and is well-placed to benefit from the shift online. It said:

WEB’s 1H23 results reported a strong beat across both the Webbeds and Webjet OTA business, cementing our view that the business is structurally improved vs. pre-pandemic times on profitability and scale in the Bedbanks business and is well poised to capitalize on the improving online channel penetration in their B2C business.

The post 3 ASX 200 shares on the coveted Goldman Sachs conviction list appeared first on The Motley Fool Australia.

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More reading

• Why is the Qantas share price having such a top run this week?
• 5 of the craziest things making news on the ASX this week
• Leading broker tips Qantas share price to climb to a new record high
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

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

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We may not all agree on which ASX shares are buys and sells, but one thing I’m sure we all agree with, is that it would be a dream to become a stock market millionaire.

But how realistic is it for retail investors with limited funds to achieve this?

Well, the good news is that if you have time on your side and patience to invest over a long period, then I believe it is possible.

Having a head start

If you’re in a fortunate position to be able to start your investment journey with $100,000, then you are part way there.

According to Fidelity, the Australian share market has returned an average of 9.58% per annum over the last 30 years.

And while past performance does not guarantee future returns, I would be disappointed if the market didn’t deliver the same level of return over the next three decades.

If it does, thanks to the power of compound interest, it would take a touch over 25 years for a single $100,000 investment to turn into $1 million if you earned the market return.

Starting from scratch

Unfortunately, we don’t all have $100,000 sitting in a bank account ready to invest. Wouldn’t it be nice if we did!

So, if you’re starting from scratch, you’ll have to come up with a long term investment strategy.

This would involve investing $500 a month ($6,000 a year) into ASX shares and averaging a 10% per annum annual return. Compound interest would then turn this into $1 million after 28 years.

Building a portfolio

If you’re wanting to generate a 10% per annum return, I would do this by building a diversified portfolio filled with 10 quality ASX 200 shares that have strong business models and bright outlooks.

For me, 10 seems like a nice size for a diversified portfolio. It also forces you to think long and hard about your investments if you have to be more selective, which could help you avoid buying a dud.

But how do you choose? When looking at shares, you could ask yourself if this is an investment that Warren Buffett would make. He has a penchant for making long term investment in companies with competitive advantages or moats.

ASX 200 shares such as CSL Limited (ASX: CSL), REA Group Limited (ASX: REA), ResMed Inc (ASX: RMD), SEEK Limited (ASX: SEK), and WiseTech Global Ltd (ASX: WTC) spring to mind and could be worth investigating further.

But with time your greatest asset when investing, I would start putting my plan into action today, by hunting for just those sorts of shares!

The post I’d aim for $1 million in retirement buying just 10 ASX 200 shares appeared first on The Motley Fool Australia.

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More reading

• Why this could be a ‘powerful driver of sector dominance’ for CSL shares: Wilsons
• 5 ASX 200 shares with founders steering the ship
• Here’s what Citi is saying about the CSL share price
• Three comforting lessons for investors whose portfolio has been smashed versus the surprisingly good return of the ASX 200
• ‘Dominant player’: Expert urges buying ASX shares in 2 near-monopolies

Motley Fool contributor James Mickleboro has positions in CSL Ltd. and SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd., ResMed Inc., and WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. and WiseTech Global. The Motley Fool Australia has recommended REA Group Limited and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Another week full of news and views…

Don’t let Black Friday push you into the red

Well, it’s a month today until Christmas (sorry!).

And today’s also ‘Black Friday’ – a ‘sales event’ we’ve inherited from the Yanks that our retailers will happily use to get us to buy stuff.

It’s followed by Cyber Monday in a few days’ time. And ditto.

Now, I own some retail shares. So, you know, if you’re going to spend anyway…

I’m kidding. I actually don’t want you to spend. At least, not unless you were going to buy the thing anyway.

By all means, get something on special today that you were going to buy on Tuesday. Or save a few bob on the kids’ Christmas presents by buying them early.

But please resist the urge for that extra bit of ‘retail therapy’.

No, I’m not (just) trying to be a killjoy.

First, the RBA couldn’t be clearer – if we keep spending, they’ll keep jacking up rates.

Second, most of the dopamine-hit consumption is going to be on stuff you’ll throw out soon enough anyway.

But third, and most importantly, did you know that $200 feel-good purchase you make today could instead be $2,800 in 30 years time, if it was compounded at 9%, roughly in line with historical sharemarket returns?

You didn’t? Well now you do. And if you earn 9% on that $2,800, that’s $250 you could spend every single year thereafter!

Seriously. Stop spending. You don’t need the stuff, and ‘future you’ will thank you.

Bank CEOs’ full-court press

Tell you what, that bankers lobby seems to pack a punch, huh? Labor and the Greens had agreed on legislation that would make bank bosses personally liable – with a $1.1 million fine to boot – for their transgressions while in charge.

But at the last minute, the government pulled the bill, apparently after massive pressure from the Fat Cats Union.

Now, I’m not anti-business. Or anti-bank. I’m not even anti-bank-bosses.

But given how systemically important these companies are, and how frequently they’ve been cited in the media and in a little thing called a Royal Commission… don’t you reckon they could use a little help focussing on some of the deficiencies in their operations?

And be held accountable for their failures, just as they get multi-million dollar bonuses for their successes?

I do. I reckon you do, too. I hope this isn’t more evidence of our politicians ducking the hard issues.

Will Apple take a bite out of Manchester United?

There have been some (unsourced, as far as I can tell) reports that Apple might be interested in buying English soccer team Manchester United, which its owners have put up for sale.

Will it?

I mean, stranger things have happened, but I don’t think it’s likely.

Sports rights? Sure. Entertainment platforms? Yep.

But a single team in a multi-team league?

Again, it’s possible.

But I would suggest Apple will have jumped the shark if they were to do a deal.

Sports teams are – with a very few exceptions – terrible investments. They’re expensive trophy assets for billionaires, mostly.

They are usually not very profitable, the fans are brutal and they’re essentially run under the rules of their sporting organisations (remember when some teams tried to create a breakaway league? That ended badly, and they’re still in the same leagues with the same rules.)

Stranger things could happen than Apple buying Man U. But not much stranger.

We’ll see.

(And having written this, Murphy’s Law may well be brought into force. Apple shareholders might own a soccer team by this time next week!).

Don’t write off online retail

There have been plenty of stories recently about the ‘return to bricks and mortar’. To which, one might ask, ‘why was anything else expected’?

The idea of the ‘new normal’ is seductive, as a story, but the thing about new normals is that they rarely actually happen. Oh, sometimes, of course. Change happens, and will continue to.

But those big ‘this time it’s different’ things? It usually isn’t.

The ‘old normal’ reasserts itself (Remember the ‘inflation is dead’ new normal? Yep…)

We were always going to go back to the shops, just as we were always going to go back to the office.

Sort of.

See, when a tide has gone all the way out – when all but essential workers were shopping and working from home – what else was going to happen, except that the tide was going to start heading in again?

But that’s only part of the story.

“Tide goes back in again” isn’t a revelation.

Nor is “people go back to the shops”.

But just as the tide won’t stay in, I don’t think the question of ‘clicks versus bricks’ has been settled.

Just recently, we’ve seen businesses as diverse as JB Hi-Fi Limited (ASX: JBH), Myer Holdings Ltd (ASX: MYR) and Premier Investments Limited (ASX: PMV) record huge growth in their online sales, even as, yes, people go back to the shops.

And, though I’m loath to bring up something as politically charged as climate change, it’s a good analogy.

Yes, on a daily, weekly or monthly (and certainly, seasonally) basis, temperatures go up and down. But, overall, they continue to rise.

And I think that’s true of eCommerce, too. COVID is weather, but the trend, overall, is climate.      

Online retail will continue to grow. And grow.

Don’t get caught mistaking short-term cyclicality for longer term structural change.

Quick takes

Overblown: Other than the ‘return to the shops’ narrative I mentioned above, the other thing I’m seeing and hearing a lot is people trying to pick stocks for the ‘x’ environment. Higher inflation. Higher rates. Recession. All reasonable questions, but I have two criticisms. First, we just don’t know exactly what’s going to happen. How high? Will there be a recession? For how long? Etc etc. But second, a lot of those assumptions are already baked into share prices. That is, the market is probably making the same assumptions you are, so there’s no advantage to be had in answering the same questions in the same way! You should be looking for areas the market is getting wrong, not ways to come up with the same conclusions.

Underappreciated: Small wins. This is a theme I’ll return to, periodically, but remember that the world gets slightly better every day. Usually in imperceptible increments that go unreported. If you’re only looking at the bad news headlines you’ll miss it. The best bit? The small improvements tend to be permanent, but the bad news tends to be temporary. Not always, and it’s not guaranteed, but don’t forget that things tend to keep getting better.

Fascinating: This also isn’t new, but it’s remarkable how quickly sentiment turns on the share market. From ‘we’ll all doomed’ to ‘the best month for the Dow in history’ and now to six-month highs for the ASX. And it can turn just as quickly. I hope it reminds you that trying to ‘time the market’ is as silly as it sounds!

Where I’ve been looking: This isn’t supposed to be an ad, but my team at Motley Fool Share Advisor and I have been reviewing our scorecard, with some upgrades (and some downgrades, in all probability) to come in the next week or so. There are some great quality businesses that the market is offering us on the cheap, and you don’t always have to go for ‘novelty’. The lesson? Read on…

Quote: “The best stock to buy may be the one you already own.” – Peter Lynch

Fool on!

The post Don’t let Black Friday put you into the red! appeared first on The Motley Fool Australia.

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More reading

• Why did ASX 200 retail shares lead the market to fresh 25-week highs today?
• 3 ASX dividend shares I think have supercharged growth potential
• 3 ASX All Ordinaries shares hitting multi-year highs on Tuesday
• Why Liontown, Lovisa, Myer, and Whitehaven Coal shares are pushing higher
• 2 ASX All Ordinaries shares hitting multi-year highs on Monday

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The S&P/ASX 200 Index (ASX: XJO) took off once more today. The index closed 0.24% higher at 7,259.5 points – just a freckle off its six-month high. That marks a week-on-week gain of 1.51%.

The Aussie bourse wasn’t influenced by Wall Street on Friday. The New York market had the day off on Thursday as the United States celebrated Thanksgiving.

Interestingly, two of the ASX 200’s most popular sectors tumbled today. The S&P/ASX 200 Materials Index (ASX: XMJ) slumped 1.1% while the S&P/ASX 20 Energy Index (ASX: XEJ) fell 0.3%.

The latter’s tumble came despite relatively flat oil prices. The Brent crude oil price fell 0.3% to US$85.12 a barrel overnight while the US Nymex crude oil price posted a slight gain in after-hours trade, coming in at US$77.96 a barrel.

Fortunately, all other sectors lifted on Friday. The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) led the way, gaining 1.1%. The S&P/ASX 200 Utilities Index (ASX: XUJ) also rose 1.4%.

So, with all that in mind, which ASX 200 stock posted the highest gain to end the week? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 stock was Nanosonics Ltd (ASX: NAN). Its share price soared 11% amid a positive broker note from Ord Minnett, tipping it as a hold with a $4 price target.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Nanosonics Ltd (ASX: NAN)	$4.62	11.06%
Ramelius Resources Limited (ASX: RMS)	$0.925	6.94%
Virgin Money UK CDI (ASX: VUK)	$3.12	6.12%
Megaport Ltd (ASX: MP1)	$6.64	4.4%
Bega Cheese Ltd (ASX: BGA)	$3.49	3.56%
Smartgroup Corporation Ltd (ASX: SIQ)	$4.78	3.46%
AGL Energy Limited (ASX: AGL)	$8.12	3.31%
TechnologyOne Ltd (ASX: TNE)	$13.51	3.21%
Regis Resources Limited (ASX: RRL)	$1.965	3.15%
Harvey Norman Holdings Limited (ASX: HVN)	$4.30	3.12%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

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

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More reading

• Why did ASX 200 retail shares lead the market to fresh 25-week highs today?
• Why is the Allkem share price diving 8% today?
• Brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Nanosonics, Nick Scali, NRW, and Tyro shares are charging higher

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 Harvey Norman Holdings Ltd., MEGAPORT FPO, and Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Nanosonics Limited, and SMARTGROUP DEF SET. The Motley Fool Australia has recommended MEGAPORT FPO and TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It may have been Black Friday in the stores but it’s been a green day on the market with the benchmark S&P/ASX 200 Index (ASX: XJO) lifting to a new 25-week high.

The ASX 200 reached an intraday peak of 7,268.5 points today — up 0.37%. The last time we saw it above that level was on 31 May. It closed a little lower at 7,259.5 points, up 0.24%.

It seems appropriate that on one of the biggest shopping days of the year, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) was the top-performing sector among the ASX’s 11 sectors, up 1.15%.

Why did ASX 200 retail shares take the lead?

A range of ASX 200 retail shares did some heavy lifting for the benchmark index today. The top movers include Harvey Norman Holdings Limited (ASX: HVN) shares, up 3.2% to $4.31.

Super Retail Group Ltd (ASX: SUL), the owner of Supercheap Auto and Rebel, finished 2.06% higher at $10.91.

Shares in shoe retailer Accent Group Ltd (ASX: AX1) were up 1.81% to $1.685. JB Hi-Fi Limited (ASX: JBH) shares were up 1.8% to $44.79.

With inflation and interest rates rising all year, there’s been plenty of fear-mongering about householders needing to tighten their belts.

And sure, that threat is a worry for the economy. After all, the Australian Bureau of Statistics says household consumption is worth about 50% of Australia’s gross domestic product (GDP).

But we’re not seeing any reduction in retail spending yet. The latest ABS figures on retail trade show sales volumes have been growing for four consecutive quarters.

In fact, spending in the September quarter reached a new record level.

But that trade growth is slowing down amid rising prices due to inflation. Retail sales volumes went up by just 0.2% in September, down from 1% in both the June and March quarters.

But consider the impact of Black Friday. The Australian Retailers Association predicts consumers will spend $6.2 billion between Black Friday and Cyber Monday.

Sheesh…

No recession in sight

Harvey Norman executive chair Gerry Harvey says Australia is nowhere near a recession, according to the Australian Financial Review (AFR).

The retail king pointed out that unemployment was still very low, and it was difficult to find staff.

Harvey Norman is a quintessential ASX 200 retail share. The company held its annual general meeting (AGM) yesterday and presented a trading update for FY23.

It revealed a 6.9% global sales revenue bump year over year during the first four months of FY23.

Harvey said:

We’ll have a really strong Christmas, but next year is a great unknown.

I don’t think there’s any doubt as retailers we will be affected, it’s just as a matter of some sectors more than others.

We have 65 per cent of our stores in regional areas, and because agriculture and mining is so strong they shouldn’t be affected as much.

Retail shares ‘way too cheap’

Motley Fool Australia’s chief investment officer Scott Phillips says many high-quality retail shares are “way too cheap right now“.

A number of them are trading on single-digit price-to-earnings (P/E) ratios.

Phillips said ASX investors were too focused on current short-term risks like rising inflation.

He said: “With a long-term lens, I think we’ll look back and see retail on single digit P/Es and say, ‘Man, really?’”.

He used using JB Hi-Fi as an example. It has a P/E today of 9.2, according to the ASX website.

Harvey Norman has a P/E of 6.5, and Super Retail has a P/E of 10.2.

Perhaps this is another reason why ASX 200 retail shares lead the market today.

Perhaps value investors are looking into ASX 200 retail shares since the Reserve Bank of Australia has reduced its monthly rate rise increments.

The RBA increased rates by 0.25% this month and in October, following four consecutive months of 0.5% rises.

The market was also surprised by a lower-than-expected increase in inflation in the United States this month.

The post Why did ASX 200 retail shares lead the market to fresh 25-week highs today? appeared first on The Motley Fool Australia.

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More reading

• Why is the Allkem share price diving 8% today?
• Brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• ASX 200 company banned from selling its products. Here’s why
• 8%+ dividend yields! 3 ASX 200 shares I’d snap up to beat inflation

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group and JB Hi-Fi Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Allkem Ltd (ASX: AKE) share price has fallen precariously into the red today.

Shares in the lithium explorer are currently sliding 8.61% lower to trade at $13.17 apiece, after touching an intraday high of $14.48 near the open.

Putting weight on Allkem’s share price is the fact that materials is today’s worst-performing sector. The S&P/ASX 200 Materials Index (ASX: XMJ) is down 1.09% at the time of writing.

Adding to this is that a good number of Allkem’s ASX lithium share peers are also showing red this afternoon. Here’s a snapshot of how they’re doing as the market close draws near:

• Mineral Resources Limited (ASX: MIN) down 6.63%
• Core Lithium Ltd (ASX: CXO) down 5.65%
• Pilbara Minerals Ltd (ASX: PLS) down 7.1%

The broader market is also having a not-so-stellar session as the S&P/ASX 200 Index (ASX: XJO) is laying almost flat with a 0.19% gain for the day.

So why are lithium shares like Allkem performing poorly on Friday? Let’s investigate.

What’s going on with the Allkem share price?

Adding to the selling pressure on lithium shares like Allkem today is news that the lithium price may have hit a price ceiling, according to data from Trading Economics.

Prices for the commodity are creeping away from the recent high of CNY 600,000 per tonne on 11 November. It has since fallen 1.58% to CNY 590,500, effectively ending that lithium price rally.

The lithium commodity price has been on an enormous bull run year-to-date, gaining 113% during this period.

Supporting the price rise were subsidies for electric vehicles issued by the Chinese government, which were set to expire at the end of 2022. However, China Briefing reported in September that the government had exempted buyers of electric vehicles from paying vehicle purchase tax starting 1 January next year, lasting until 31 December.

Lithium commodity price could fall lower

These subsidies haven’t stopped analysts at Goldman Sachs from giving the lithium commodity price a bearish outlook starting in 2023, however.

My Fool colleagues in the US noted last week that the bank believes the sale of electric vehicles is set to slow down next year, which could lead to an oversupply of lithium and thus put downward pressure on the commodity’s price.

It was also noted that a cathode manufacturer in China was rumoured to have cut its production targets in anticipation of a slowdown in demand for its output.

So it appears the lithium commodity price is being hit from a couple of different angles, thus putting pressure on the share prices of lithium producers such as Allkem.

Allkem share price snapshot

The Allkem share price is up 26.8% year to date. That’s beating the ASX 200 by a substantial margin, as the index is down 2.53% over the same period.

The company’s market capitalisation is around $9.18 billion.

The post Why is the Allkem share price diving 8% today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why City Chic, Deep Yellow, Objective Corp, and Pilbara Minerals shares are falling
• What could be sending the Pilbara Minerals share price 7% lower today?
• Here’s why ASX 200 lithium shares are ending the week with a fizzle
• ASX 200 company banned from selling its products. Here’s why

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

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With a new month on the horizon, now could be a good time to consider making some additions to your portfolio.

One investment option that continues to grow in popularity is exchange traded funds (ETFs).

But given the many ETF options out there, it can be difficult to decide which ones to buy ahead of others. To narrow things down, I have picked out three fantastic ETFs that are very popular right now. They are as follows:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF for investors to look at is the BetaShares Global Cybersecurity ETF.

This ETF gives investors access to the leading companies in the global cybersecurity sector. As we have seen this year, cyberattacks are becoming more and more prevalent. As a result, it is no surprise to learn that demand for cybersecurity services is expected to rise strongly in the future.

This bodes well for companies included in the fund such as Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF option for investors to consider is the BetaShares NASDAQ 100 ETF.

This ETF gives investors exposure to the 100 largest non-financial shares on the famous NASDAQ index. These are many of the largest companies in the world and household names such as Amazon, Alphabet, Apple, Meta Platforms, Microsoft, and Tesla.

Given the positive long term outlooks of these companies, the Nasdaq 100 (and therefore this ETF) has been tipped to outperform the broader market over the long term.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A final ETF for investors to consider is the VanEck Vectors Morningstar Wide Moat ETF.

This popular ETF gives investors access to a diversified portfolio of companies with sustainable competitive advantages and fair valuations. The portfolio changes constituents periodically but usually includes approximately 50 US based stocks.

At present, its holdings include Amazon, Berkshire Hathaway, Etsy, Intel, Microsoft, and Walt Disney.

The post 3 fantastic ETFs for ASX investors to buy in December appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d invest $20,000 in ASX shares today to double my money
• 3 ASX shares to buy for the end-of-year tech comeback: expert
• 3 top ETFs for ASX investors to buy and hold for a decade
• 2 ASX growth shares I reckon are buys right now
• Why the Betashares Nasdaq 100 ETF (NDQ) is on my buy radar right now

Motley Fool contributor James Mickleboro has positions in BETANASDAQ ETF UNITS. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Harvey Norman Holdings Limited (ASX: HVN)

According to a note out of Citi, its analysts have retained their buy rating and $4.70 price target on this retail giant’s shares. This follows the release of a trading update which revealed stronger than expected like for like sales growth for the first four months of FY 2022. Overall, the broker believes the company’s shares are cheap and feels there is sufficient downside buffer built into expectations. The Harvey Norman share price is trading at $4.31 this afternoon.

New Hope Corporation Limited (ASX: NHC)

A note out of Macquarie reveals that its analysts have retained their outperform rating but trimmed their price target on this coal miner’s shares to $6.40. This follows the release of a softer than expected quarterly update earlier this week. While disappointed with the update, the broker continues to see value in the company’s shares thanks to strong thermal coal prices. It expects these strong prices to underpin a full year dividend of $1.79 per share. The New Hope share price is fetching $5.34 today.

Rio Tinto Limited (ASX: RIO)

Analysts at Goldman Sachs have retained their buy rating and lifted their price target on this mining giant’s shares to $114.70. The broker has been looking at the company’s Rhodes Ridge development and likes what it sees. Goldman believes it could be significant for the miner’s Pilbara business as it could lift system capacity, utilise spare infrastructure, and help close the FCF/t gap with BHP Group Ltd (ASX: BHP). The Rio Tinto share price is trading at $105.61 on Friday afternoon.

The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Does an investment in Fortescue shares provide the ‘healthiest’ ASX exposure to iron ore?
• What’s happening with ASX 200 coal shares this week?
• 3 reasons this fundie is still bullish on ASX mining shares
• 8%+ dividend yields! 3 ASX 200 shares I’d snap up to beat inflation
• The Rio Tinto share price is trading at a ‘compelling’ level: broker

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

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