Category: Stock Market

If you want better returns than the market average, then you need to buy ASX shares that others haven’t yet bought.

Fortunately, the team at Celeste Funds Management this week named two stocks it has in its portfolio that are absolute sleeping giants. 

Although they have not impressed with their recent returns, the Celeste analysts explained why they’re bullish about these ASX shares:

The first ASX-listed health insurer

ASX-listed health insurance providers have been in the headlines for all the wrong reasons in recent weeks.

Out of all of them, NIB Holdings Limited (ASX: NHF) was the first to float on the ASX, back in 2007.

While the stock grew exponentially in the first 10 years, the ensuing five have not been flattering. The share price has inched up only 0.15% over the last half-decade.

To rub short-term salt into the long-term wound for shareholders, the NIB share price took a 10.2% hit last month.

Celeste analysts attributed this to the company’s foray into a new business area.

“The company raised $150 million as part of [its] previously flagged expansion into NDIS plan management, with the acquisition of Maple Plan becoming the first of many,” read a Celeste memo to clients.

“Maple Plan is the seventh largest plan manager, with 7,000 participants.”

NIB is aiming to hit a target of 50,000 NDIS participants by 2025, according to the Celeste team, and will possibly achieve this through more takeovers. 

“Additionally, strong student visa and work visa grants for the quarter (up 47% and 31% respectively) bodes well for NIB’s international business, while the cybersecurity breach at competitor Medibank Private Ltd (ASX: MPL) might see NIB show above-system member growth.”

NIB shares are currently paying out a dividend yield of 3.16%.

Don’t call them Event Cinemas

EVT Ltd (ASX: EVT) is the cinema operator formerly known as Event Hospitality & Entertainment Ltd.

The Celeste team was impressed with what it heard at the company’s recent annual general meeting.

“EVT Limited announced at the AGM that 1q22 performance had been strong with group earnings of $70.6 million, exceeding the previous comparable quarter of a loss of $15.5 million and even exceeding $53.3 million earned in 1q19, a pre-COVID comparable.”

The EVT share price has risen only 6% over the past five years.

However, the arrival of the pandemic forced some serious soul-searching with cinemas sitting empty — and burning cash — for months.

“Strong cost control driven by the COVID lockdown has now enabled revenue growth to translate to significant earnings leverage.”

The AGM also revealed that a significant legal headache has now been dealt with. 

“EVT also announced they have settled their dispute with Vue over the failed 2020 takeover of the EVT German cinema assets,” read the Celeste memo.

“Vue, currently in receivership, paid $11.6 million to [expedite] bondholder assumption of ownership.”

The meeting was also when the company commenced its rebranding to EVT to “better reflect the spread of businesses”, as it also operates hotels and resorts.

The post Movies and health: Fund loves 2 ASX shares that have gone nowhere till now appeared first on The Motley Fool Australia.

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More reading

• Is the NIB share price benefitting from Medibank’s woes?
• Here are the top 10 ASX 200 shares today
• Why Chalice Mining, Core Lithium, Corporate Travel Management, and NIB are rising
• These 2 ASX 200 shares are ‘compelling growth opportunities’: fund manager
• Why is the WAM Capital share price having such a lousy start to the week?

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 recommended NIB Holdings 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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part two of this edition, we’re rejoined by Romano Sala Tenna, co-founder of Katana Asset Management.

The Motley Fool: With capital gains under pressure this year, ASX dividend shares are gaining much more investor attention. Do dividends play a role in determining your investment decisions?

Romano Sala Tenna: We’ve got 11 key criteria, which are broken up into other subset criteria. Additionally, there’s up to 154 data points we can look at for a company.

Dividends is one of them; it carries some weight.

Over the last 146 years, the ASX has averaged 10.8% per annum return. That’s made up of roughly 6% to 6.5% capital growth with dividends around 4% to 4.5%. That’s over the ultra-long term.

So, we if can find an ASX stock that has a dividend yield of 10.8% or better, that we believe is sustainable, and may even grow at 5% per annum, then that is definitely worth our attention.

There are a lot of high-yielding dividend stocks at the moment. But I would caution inexperienced investors about taking on some of the yields that we’re seeing currently. Trailing yields count for nothing. That’s the first thing. You need to look at forecast yields.

MF: Are there any ASX dividend shares you currently hold that stand out from the crowd?

RST: Coronado Global Resources Inc (ASX: CRN), which is in our portfolio for yield. They have tier-one assets, long-life mines, a good mix between Australia and the US, and a high-quality product (85% to 90% met coal).

If you look at where Whitehaven Coal Ltd (ASX: WHC) is, for example, and you look at where Coronado is, Whitehaven is producing fewer tonnes and lower grade, and it’s trading at a huge premium to Coronado. So, I think we’ll see some equalisation there at some point.

On 31 October, they announced a 13 US cent special dividend, which is 20 [Aussie] cents, which is over a 10% yield as an interim special, just off the bat.

We think Coronado could pay an average of 35% in dividends over three years. So it pays itself back in three years. But we also think over that time, as the coal price comes off, we could see the capital side of it depreciate by 40% to 50%. So in our base case, we’re going to see between 70% and 100% in dividends over the next three years and maybe a 40% to 50% capital loss. What is the end result of that?

It looks something like 30% to 40% yield, net, over that time frame, so 10% to 15% per annum net. That probably still makes sense.

But it’s not for inexperienced investors. You really do have to be watching a number of drivers. Obviously, watching the met and thermal coal prices closely. And also some more subtle drivers in terms of what we’re seeing in markets that give an indication of where prices are going.

MF: Any other ASX dividend shares you’re bullish on?

RST: South32 Ltd (ASX: S32) is another example. We always say it has tier-one assets in tier-two commodities. But some of those tier-two commodities are coming back into their own in terms of electrification and decarbonisation.

I think they’ve been one of the best companies in terms of capital management. They’ve run the longest continuous buyback in our stable, which we love to see. We don’t like to call it a buyback, we call it a buy-and-back. Management is buying and backing themselves.

Now, some of their commodity prices have come off a bit, and they do run the risk at the moment of some downgrades in the coming months. But I think through the cycle, from these prices, you’re not paying a premium as you are with some of the other resource plays.   The stock price has retraced significantly.

And Woodside Energy Group Ltd (ASX: WDS) is another example. They’re really executing well at the moment.

But people have to understand that there will be a capital loss amongst these ASX dividend shares at some point. They need to take that into the equation when working out what the real net yield will be.

MF: ASX coal shares have been making headlines for their outsized revenues amid record coal prices in 2022. There is a range of forecasts for both metallurgical and thermal coal prices heading into 2023. Do you have an in-house view of where prices are heading?

RST: Yes, the met coal price has been extraordinary. It went down below US$120 per tonne, then it briefly ran up above US$600. Now it’s back at US$320 per tonne on the spot market.

We differentiate the two coals, so met coal and thermal coal.

Met coal, we see it has to have some appreciation and thermal coal some depreciation They have to normalise. In 30 years of following markets, I’ve never seen the met coal price sustainably below the thermal coal price as we’re seeing at the moment.

We’re starting to see that normalise. We’ll see some substitution. At least 10% to 20% of the met coal can be substituted for thermal coal in the markets with the right adjustments and the right time frame.

We’ll see the thermal coal price come back, and we’ll see the met coal price appreciate. In fact, we’re seeing that already.

Secondly, you have to understand we have drawn a line in the sand. Russian gas is not coming back into the European market anytime in the next few years, if at all. The war could literally end tomorrow, but Europe is not going back to Russian energy. That ship has sailed. In the short term, thermal coal is the only way to replace those energy molecules.

I definitely see coal being stronger for longer. Is it US$350 per tonne? Probably not. Is it US$250 or US$200 per tonne for thermal, possibly. But that’s still incredible prices for thermal coal. I think we’ve got some runway on some of the thermal coal plays.

MF: Any particular dividend-paying ASX coal shares that look strong to you?

RST: For example, Yancoal Australia Ltd (ASX: YAL). It’s not without risk. But Yancoal, on our numbers, generated 25% of its market capitalisation in free cash flow last quarter. They’re not doing it just at the moment, but when they turn their attention to capital management,  it could be very substantial..

***

Tune in tomorrow for part three of our interview with Romano Sala Tenna. If you missed part one, click here.

(You can find out more about the Katana Australia Equity Fund here.)

The post Why these 4 ASX dividend shares stand out from the crowd: fund manager appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch…
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why is the Woodside share price being whittled away today?
• Here are the 3 most traded ASX 200 shares on Wednesday

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

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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.5% to 6,964 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to jump

The Australian share market looks set to end the week with a very strong gain after US inflation came in softer than expected. According to the latest SPI futures, the ASX 200 is expected to open 141 points or 2% higher this morning. In late trade in the United States, the Dow Jones is up 3.2%, the S&P 500 has risen 4.7%, and the Nasdaq has stormed 6.3% higher.

Oil prices rise

Energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a decent finish to the week after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.3% to US$86.96 a barrel and the Brent crude oil price is up 1.6% to US$94.12 a barrel. Oil prices rebounded on the inflation news.

Xero remains a buy

The Xero Limited (ASX: XRO) share price was sold off on Thursday after the company’s half year earnings fell short of expectations and its CEO quit. Goldman Sachs sees this as a buying opportunity and has reiterated its buy rating with an improved $115.00 price target. Goldman was pleased with Xero’s exit ARPU metric.

Gold price jumps

Gold miners including Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a positive end to the week after the gold price jumped overnight. According to CNBC, the spot gold price is up 2.35% to US$1,754.60 an ounce. Traders were buying gold on the belief that the US Federal Reserve would slow its interest rate hikes following the inflation reading.

Breville named as a buy

The Breville Group Ltd (ASX: BRG) share price could be in the buy zone according to Goldman Sachs. Its analysts have reiterated their buy rating with a $24.70 price target following the appliance maker’s trading update. Goldman said: “We reiterate our Buy rating for BRG as we believe the business remains defensive with >60% of sales exposed to US and APAC regions where demand remains resilient to date.”

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

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More reading

• Here are the top 10 ASX 200 shares today
• Guess which ASX ETF is up 13% so far this week?
• Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch…
• Here are the 3 most traded ASX 200 shares on Thursday
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 good news for income investors is that there are a number of exchange traded funds (ETFs) that have been set up to provide access to large groups of dividend shares through a single investment.

Two such ETFs are listed below. Here’s why they could be top options for income investors:

BetaShares S&P 500 Yield Maximiser (ASX: UMAX)

The BetaShares S&P 500 Yield Maximiser could be a top option for income investors.

This ETF give investors exposure to the 500 largest companies listed on Wall Street. And while the S&P 500 index doesn’t have the biggest average yield, this ETF’s ‘covered call’ strategy changes all of that.

That’s because using the strategy, the ETF is expected to earn quarterly income that is significantly greater than the dividend yield of the underlying share portfolio over the medium term.

Among the companies included in the fund are giants such as Apple, Exxon Mobil, Johnson & Johnson, Microsoft, and Walmart. At the time of writing, its units were providing investors with a trailing 6.6% distribution yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

The Vanguard Australian Shares High Yield ETF is another ETF that could be a good option for income investors.

There’s nothing particularly fancy about the way this ETF is run, it simply does exactly what it says on the tin. It provides investors with exposure to ASX-listed shares that have higher than average forecast dividends.

One thing the ETF does do, though, is restrict the proportion invested in any one industry to 40% and 10% for any one company. This ensures that investors are holding a diverse collection of dividend shares.

Included in the fund are the likes of BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Telstra Corporation Ltd (ASX: TLS).

The Vanguard Australian Shares High Yield ETF currently trades with an estimated forward dividend yield of 6.3%.

The post 2 ETFs for ASX investors to buy for big dividends appeared first on The Motley Fool Australia.

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More reading

• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
• How regularly does the Vanguard Australian Shares ETF (VAS) pay dividends?
• Is the Vanguard Australian Shares ETF fighting off inflation?
• Why did the Vanguard Australian Shares Index ETF perform strongly in October?
• 2 excellent ETFs for ASX investors in November

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 BetaShares S&P500 Yield Maximiser and Telstra Corporation 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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Sandfire Resources Ltd (ASX: SFR) shares soared by 5.25% on Thursday to finish the session at $4.21 apiece.

The ASX 200 copper miner reached an intraday high of $4.24 — a 6% bump on yesterday’s close — after announcing it has appointed a new CEO.

Drum roll, please…

What news lifted the Sandfire Resources share price today?

Sandfire announced this morning that Brendan Harris, a highly experienced mining executive, will become its new CEO and managing director on 3 April next year.

Harris will replace founding CEO Karl Simich, who finished up with the company on 30 September after 15 years at the helm. He remains the ASX 200 copper miner’s largest individual shareholder.

Sandfire conducted a global search to identify the best candidate to lead the copper miner from here.

Who is Brendan Harris?

Harris has extensive experience as an exploration geologist and was previously a senior executive with BHP Group Ltd (ASX: BHP) and South32 Ltd (ASX: S32).

He was South32’s first chief financial officer after the company was formed following the BHP demerger in 2015.

Most recently, he was South32’s chief human resources and commercial officer. In that job, he was responsible for global commodity marketing, procurement, and human resources.

He joined BHP in 2010 and was the company’s global head of investor relations.

Before that, he worked in investment banking and held various roles. They included an executive director at Macquarie Securities, where he led the metals and mining research team.

In a statement, Sandfire Resources said:

Mr Harris brings a broad range of leadership, commercial and technical skills to Sandfire, particularly in the management and operations of a diversified international mining business, and he has a deep understanding of the future-facing metals required to sustainably decarbonise the global economy.

His appointment positions Sandfire to execute the next phase of its growth strategy and capitalise on its emerging position as a multi-mine producer of copper, a critical metal required to support the world’s transition toward renewable energy and net-zero emissions.

Sandfire will pay Harris a fixed salary of $1.2 million, including superannuation. There are short-term and long-term incentives on top.

What’s next for the ASX 200 copper miner?

Investors are clearly relieved to have a new CEO sorted out, given the share price bump today.

The ASX 200 copper miner announced the departure of Simich on 30 September.

In a statement, Sandfire said the board and Simich agreed it was “a logical time for a leadership transition as Sandfire continues the next phase of its growth path as an international copper miner”.

The company says it has now achieved three successful quarters at its MATSA Copper Operations.

Sandfire acquired the MATSA project in September 2021 in a “transformational” acquisition costing it US$1.865 billion.

The ASX 200 copper miner is now “focusing on further optimising and enhancing the MATSA operation”.

It is also preparing to deliver its new Motheo Copper Mine in Botswana, with commissioning expected in the June quarter of 2023.

Sandfire Resources share price snapshot

Sandfire is having a great week, with its share price up 16% since Monday.

The rising copper price has likely contributed to the share price bump. Copper hit a four-month high today of $3.72 per pound.

The copper price is up 7% over the past week but down 15% year over year, according to Trading Economics data.

Shares in the ASX 200 copper miner are down 38% in the year to date.

This is an underwhelming performance against the S&P/ASX 300 Metal & Mining Index (ASX: XMM), which is down 2% over the same period.

The post This ASX 200 copper miner has just snagged an ex-BHP and South32 exec as CEO, and its shares leapt 5% appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Lycopodium, Origin, Perpetual, and Sandfire shares are charging higher
• Here are the top 10 ASX 200 shares today 
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has positions in BHP Billiton 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 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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The S&P/ASX 200 Index (ASX: XJO) broke its winning streak on Thursday. The index closed 0.5% lower at 6,964 points.

That was despite a roaring performance from the S&P/ASX 200 Utilities Index (ASX: XUJ).

The three-stock-strong sector posted a 13.5% gain today as the Origin Energy Ltd (ASX: ORG) share price rocketed on news the company’s board was likely to accept a proposed takeover bid.

Unfortunately, the sector’s gain wasn’t enough to offset losses in other major categories.

The S&P/ASX 200 Energy Index (ASX: XEJ), for instance, lost 2% as oil prices slipped once more.

The Brent crude oil price fell 2.8% to US$92.65 a barrel overnight while the US Nymex crude oil price slipped 3.5% to US$85.83 a barrel.

The S&P/ASX 200 Materials Index (ASX: XMJ) also fell 1.2% on Thursday, while the S&P/ASX 200 Information Technology Index (ASX: XIJ) slumped 1.9%.

All in all, five of the ASX 200’s 11 sectors posted gains today. But which ASX 200 share outperformed all others to take out today’s top spot? Keep reading to find out.

Top 10 ASX 200 shares countdown

It likely comes as no surprise that today’s biggest gain was posted by the Origin share price.

The energy giant’s stock launched 35% after its board revealed it would accept a proposed $9 per share bid put forward by Brookfield Asset Management and MidOcean Energy.

The consortium has been granted due diligence in hopes it will follow its proposal with a binding acquisition offer.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Origin Energy Ltd (ASX: ORG)	$7.83	34.77%
Perpetual Limited (ASX: PPT)	$33.40	14.82%
News Corp (ASX: NWS)	$25.05	8.72%
Sandfire Resources Ltd (ASX: SFR)	$4.21	5.25%
Computershare Limited (ASX: CPU)	$27.07	4.12%
Evolution Mining Ltd (ASX: EVN)	$2.43	3.4%
Core Lithium Ltd (ASX: CXO)	$1.60	2.24%
De Grey Mining Limited (ASX: DEG)	$1.245	2.05%
HUB24 Ltd (ASX: HUB)	$24.91	1.92%
A2 Milk Company Ltd (ASX: A2M)	$5.83	1.75%

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

• This ASX 200 copper miner has just snagged an ex-BHP and South32 exec as CEO, and its shares leapt 5%
• Guess which ASX ETF is up 13% so far this week?
• Here are the 3 most traded ASX 200 shares on Thursday
• Why Lycopodium, Origin, Perpetual, and Sandfire shares are charging higher
• Can ASX 200 gold share Evolution Mining really surge another 30% on top of recent gains?

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 Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has recommended A2 Milk. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Amazon (NASDAQ: AMZN) took another step down today, even though there was no company-specific news about the tech giant. Instead, a broader sell-off seems to be weighing on the stock for two reasons.

First, fears of a recession are likely growing after Meta Platforms said it was laying off 13% of its staff. And second, a rout in the cryptocurrency market continued after FTX, one of the biggest exchanges, was on the verge of collapse after Binance backed out of a rescue deal.      

Amazon stock finished the day down 4.3%, while the Nasdaq lost 2.5%.

So what

While Amazon doesn’t have direct exposure to the layoffs at the Facebook parent or the collapse in the crypto market, it arguably has more exposure to consumer and business spending than any other company. It’s the second-largest U.S. company by revenue (behind Walmart), and much of its business depends on consumer discretionary spending and businesses spending on cloud infrastructure and advertising.

The company’s fourth-quarter guidance indicated significant headwinds from the macro environment, as guidance called for revenue growth of just 2%-8% in the fourth quarter. On the earnings call, CFO Brian Olsavsky noted caution in spending in both its e-commerce division and Amazon Web Services, the cloud infrastructure unit. 

After the latest quarterly update, the company looks vulnerable to a recession.

Now what

In addition to a slowdown to in the growth of the business, Amazon’s valuation also seems like a concern to investors at this point. The stock is still expensive according to traditional metrics, and only one of its three core business segments, AWS, is consistently profitable.

Though shares are now down more than 50% from last-year’s peak, they could fall further if the overall economic outlook continues to deteriorate.              

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Amazon stock finished lower today appeared first on The Motley Fool Australia.

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More reading

• Why Amazon stock dropped last week
• Should investors buy the dip on Amazon stock?
• Amazon is proving why it’s a Buffett stock
• Is Amazon stock a buy now?
• Why Amazon is plunging today

Jeremy Bowman has positions in Amazon and Meta Platforms, Inc. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Meta Platforms, Inc., and Walmart Inc. The Motley Fool Australia has recommended Amazon and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The S&P/ASX 200 Index (ASX: XJO) has had a pretty decent week so far, bar today’s miserly performance. Since the end of last week’s trading, the ASX 200 has gained a healthy 1% or so. So it may be surprising to find out that one ASX exchange-traded fund (ETF) has risen by a whopping 13% over the same period. That ETF is none other than the VanEck Gold Miners ETF (ASX: GDX).

This ETF from provider VanEck does what it suggests on the tin: invests in a portfolio of gold mining shares.

But not just ASX gold miners. Sure, you will find Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST), and some other ASX peers. But this fund holds gold miners from all around the world. More than 50% of its weighted portfolio is actually held in Canadian miners.

A further 20% hail from the United States. As such, it is other names like Newmont Corp, Barrick Gold, and Wheaton Precious Metals that dominate the VanEck Gold Miners ETF”s portfolio.

Overall, this ETF has 49 underlying holdings within it.

So why has the VanEck Gold Miners ETF had such a cracking week?

Why has the Vaneck Gold Miners ETF soared 13% this week?

Well, for an ETF to rise like this, its underlying companies usually have to be rising in value as well. And lo and behold, we see that Newmont, the fund’s largest holding, is up by 5.7% over the week so far. Barrick Gold is up around 8%, a similar amount to Evolution Mining Ltd (ASX: EVN). This is largely thanks to the price of gold itself appreciating over this period.

Further, since most of the VanEck Gold Miners ETF’s holdings are domiciled outside Australia, the value of the fund is also influenced by currency movements. Over the past week, we have also seen the Australian dollar drop against the US dollar. This would boost the returns of this ETF even further. That’s because most of the companies are priced in non-Australian dollar terms.

So all of these factors probably explain why the VanEck Gold Miners ETF has had such a stellar run this week. But despite this, the ETF remains down by around 5.6% this year to date.

The post Guess which ASX ETF is up 13% so far this week? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most traded ASX 200 shares on Thursday
• Can ASX 200 gold share Evolution Mining really surge another 30% on top of recent gains?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining 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 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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1) Growth stocks have taken a pummeling these last 12 months, with seemingly no let-up in sight. As witnessed by the fall in the Xero Limited (ASX: XRO) share price today, a high-quality stock that was down 50% over the past 12 months (before today), can still tumble another 11%… and potentially more.

Xero reported revenue grew 31% over the past six months, but that translated into only an 11% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA). Free cash flow was just $NZ15.6 million as the company continues to reinvest to drive long-term shareholder value.

Problem is, when your market capitalisation is close to $10 billion, and in these times of higher interest rates when the market wants to see a decent level of cash generation, a few million dollars of free cash flow isn’t going to pass muster.

To some, Xero may offer value, given the lifetime value of a customer is around seven times its cost of acquisition. But it’s going to take a long time for the company to grow into its valuation, and in this market, patience is not a strong point. It will likely be many years before the Xero share price gets back to the heady days of $150.

2) If ASX growth shares are on the nose, value shares must be the way to go.

There’s no shortage of companies that look like great value, trading on single-digit earnings multiples and very attractive dividend yields.

Company	Price-to-earnings (P/E) ratio	Yield
BHP Group Ltd (ASX: BHP)	7.6	12.3%
Woodside Energy Group Ltd (ASX: WDS)	8.1	8.6%
Fortescue Metals Group Limited (ASX: FMG)	6.4	12.4%
JB Hi-Fi Limited (ASX: JBH)	10.2	7.3%
Magellan Financial Group Ltd (ASX: MFG)	6.4	18.5%
Codan Limited (ASX: CDA)	8.4	7.1%
Adairs Ltd (ASX: ADH)	9.7	8.0%

Data from S&P Capital IQ, P/E multiple based on last twelve months earnings. Dividend yield is historical, not forecast.

If only stock picking was this easy… 

Looking forward, each company has its challenges. When it comes to investing, there’s always a catch.

Commodity prices are hard to predict, and typically the time to buy mining stocks is at the bottom of the cycle, not near the top, as is the case now due to booming oil, iron ore and coal prices.

Retailers have some serious headwinds ahead as sharply higher interest rates start to put a bite on retail spending. As to what extent, we’re all just guessing at this stage.

By lengthening your time horizon, you put the odds more in your favour. 

Will JB Hi-Fi be generating higher profits in five years’ time than now? You’d imagine so, but how much higher? Only 20% higher translates into a less than 4% compound annual growth rate (CAGR). But 50% higher is a much more attractive 8.5% CAGR, with dividends on top. Any expansion in its earnings multiple would be jam on top of the cake.

Obviously, Magellan Financial Group will not be trading on a forecast dividend yield of anything like 18.5%. Its forward dividend yield could be closer to 0%. Will we look back five years from now at Magellan’s enterprise value of around $700 million versus its funds under management of $50 billion and think this is a value stock? Maybe.

3) Even legendary value investor Anton Tagliaferro is struggling to find obvious value.

Interviewed by Livewire Markets, the founder of Investors Mutual said with the recent stock market rally, it’s become more difficult to uncover the value gems.

Tagliaferro says Aurizon Holdings Ltd (ASX: AZJ) continues to impress, saying the rail haulage company has very stable revenues with long-term contracts. 

“Obviously, the coal sector’s doing very well, so its customers are doing very well, which helps when you’re negotiating prices. And Aurizon has a very good management team.”

While, on a trailing basis, not as cheap as the companies listed above, this ASX share trades on a modest 14.5 times earnings and a trailing franked dividend yield of 5.8%.

The post Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch… appeared first on The Motley Fool Australia.

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More reading

• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why Block, Lake Resources, Pendal, and Xero shares are dropping today
• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
• Own BHP shares? Here are key takeaways from the miner’s AGM
• Why is the Woodside share price being whittled away today?

Motley Fool contributor Bruce Jackson has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO and Xero. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Xero. The Motley Fool Australia has recommended Aurizon Holdings Limited 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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If you have room for some new investments, then you might want to consider the two ASX 200 shares listed below.

Both are rated highly by one of Australia’s leading brokers, Morgans.  Here’s why its analysts are bullish on these ASX 200 shares:

IDP Education Ltd (ASX: IEL)

The first ASX 200 share that Morgans is a fan of is this student placement and language testing company.

With its shares down 18% since the start of the year, the broker believes they are trading at a very attractive level for investors. Particularly given its belief that IDP will grow its earnings per share by a compound annual growth rate (CAGR) of 38.2% over the next two years. It commented:

IEL’s recovery (Australia Student Placement) and momentum (other divisions) support the strong growth expected in FY23. Structural demand, market share gains, technology-led client retention, operating leverage and acquisitions (especially IELTs distribution) can see IEL compound growth long-term. Value has emerged, however IEL’s near-term multiples see the stock susceptible to short-term volatility.

Morgans currently has IDP Education on its best ideas list for November with a $31.10 price target.

Pro Medicus Limited (ASX: PME)

Another ASX 200 share that the broker has on its best ideas list is this health imaging technology company.

The broker likes Pro Medicus due to the quality of its offering and favourable long term industry tailwinds. Like IDP, Morgans is expecting this to drive very strong earnings growth (CAGR of 23.8%) over the next two financial years. It commented:

We like the space, with high single digit organic volume growth and long-term industry tailwinds. Profitability in the business is backed up by long-term contracted revenues with some of the world’s largest hospital systems and growing pipeline of tenders which we view will provide continued growth over the medium to long term. We view the business as best-in-class as it heads into CY22 with a step-change in billable contracts following the significant volume and value of contracts signed over the last 12-18 months. The recent market weakness in high growth tech names has provided an opportunity for reasonable entry points.

Morgans has an add rating and $58.18 price target on the company’s shares.

The post Morgans names 2 fast-growing ASX 200 shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are 2 of the best ASX growth shares to buy: Morgans
• US$10 billion was just wiped from the value of Atlassian. How are ASX 200 tech shares responding?
• Leading fund manager names the 3 ASX stocks that drove its returns higher in October
• Two 5-bagger health tech ASX shares ready to rocket again: expert
• WAM visited 150 companies in October. Here are 5 ASX shares they are super positive on right now

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 Idp Education Pty Ltd and Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus 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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