Category: Stock Market

The Lynas Rare Earths Ltd (ASX: LYC) share price is up 3.95% in late morning trade.

The S&P/ASX 200 Index (ASX: XJO) rare earths miner closed yesterday trading for $8.36 a share. Shares are currently changing hands for $8.69 apiece.

Here’s what ASX 200 investors are mulling over.

What’s happening with miner’s license in Malaysia?

The Lynas share price is in the green after the miner reported its Malaysian operating licence has been renewed for a three-year period, commencing 3 March.

The renewal relates to the company’s wholly owned subsidiary, Lynas Malaysia, and was granted by the Atomic Energy Licensing Board.

Investors are bidding up the Lynas share price despite the fact that under the renewed licence, the miner will no longer be able to import and process lanthanide concentrate after 1 July.

The prohibition, which relates to concerns over radioactive waste, was applied to the licence issued in March 2020, stipulating the 1 July 2023 cut-off.

Lynas had applied to the Malaysian regulator to remove the prohibition, but seemingly without success.

Commenting on the licence renewal and lanthanide concentrate issue, Lynas CEO Amanda Lacaze said:

After 10 years of safe operation in Malaysia we are disappointed that the conditions that were applied to our 2020 operating licence remain. This is our sixth operating licence and the four licences granted prior to 2020 did not include these conditions.

Lacaze said the prohibition is “inconsistent with the conditions upon which Lynas was invited to invest in Malaysia and the recommendations of four independent scientific reviews”.

She said each of those reviews found Lynas Malaysia’s operations to be “low risk and compliant with regulations”.

Lynas’ Malaysia plant is the world’s largest single rare earths processing facility and the only scale producer of separated rare earths outside China.

The company noted that the Malaysian government provides administrative and legal avenues to review licence conditions. And it aims to make use of those.

“We will now proceed with administrative and legal appeals to ensure that Lynas is treated fairly and equitably as a Foreign Direct Investor and a significant employer and contributor to the Malaysian economy,” Lacaze said.

If Lynas is cannot amend the condition, it will have to close the cracking and leaching component of its Lynas Malaysia plant.

Other processes at the plant can continue regardless, with new feedstock sourced from Lynas’ Kalgoorlie Rare Processing Facility once that’s up and running.

Lynas share price snapshot

As you can see in the chart below, the Lynas share price has been a strong performer so far in 2023, up 12% year to date.

The post Lynas share price marching higher on licence update appeared first on The Motley Fool Australia.

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More reading

• Lynas share price sinks 8% amid license concerns
• 5 things to watch on the ASX 200 on Friday
• Why did the Lynas share price rocket 20% in January?
• Here are the top 10 ASX 200 shares today
• Why is the Arafura share price surging 12% to an 11-year high?

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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The Ansell Limited (ASX: ANN) share price is in a world of pain on Tuesday following the release of its FY23 first-half results.

In the first hour of trading, shares in the glove manufacturer are down 8.3% to $25.75. The negative move makes Ansell one of only two healthcare shares in the S&P/ASX 200 Index (ASX: XJO) in the red today.

Let’s unpack what happened in the first half for this top 100 ASX share.

Ansell share price descends amid 17% fall in sales

• Sales dived 17.2% compared to the prior corresponding period, reducing to $835.3 million
• Earnings before interest and tax (EBIT) of $91.5 million, down 17.6%
• Net profit after tax (NPAT) came in at $64.8 million, down 16.5%
• Earnings per share (EPS) weakened 16.5% to 50.6 US cents
• Operating cash flow improved to $3.5 million compared to a $22.1 million outflow
• Interim dividend of 24.24 US cents per share declared, down 17.1%

The popular glove maker recorded weaker metrics across the board for the December ending period.

It appears the woeful result stems from significantly reduced sales in the company’s Healthcare segment. In the first half, healthcare sales declined 21.9% to $467 million. Expected destocking and price reductions weighed on this area of the business.

In contrast, Ansell’s Industrial segment recorded sales growth of 6.4% year-on-year — tallying up $368.3 million in sales.

What did management say?

Managing director and CEO Neil Salmon unpacked the half-year performance which is impacting the Ansell share price, stating:

We saw destocking trends previously evident primarily in medical end markets extend more broadly into other markets with impacts on our Exam/SU products sold into industrial settings and Life Sciences. This was due to a combination of customers becoming cautious on economic conditions while growing more comfortable to reduce inventory as supply chain pressures have eased and product availability has broadly improved.

Furthermore, the executive named the strengthening US dollar as a contributor to the company’s reduced EBIT in the first half.

Turning to the positives, Salmon told shareholders the difficult conditions have not discouraged continued investment in expansion, as well as research and development. Pleasingly, Ansell’s construction of its India facility remains on track.

What’s next?

Looking forward, management is confident growth momentum will continue for its industrial unit into the second half. Although, this could be offset by a delayed moderation of destocking under the healthcare unit.

Additionally, Ansell could see pressure on surgical glove demand in the second half as improved competitor supply comes to market.

For these reasons, the management team has revised Ansell’s EPS guidance for FY23. Previously, the range was between US$1.15 to US$1.35 per share. However, the revised range is now between US$1.10 and US$1.20 per share — a 4% and an 11% reduction on the bottom and top ends respectively.

Ansell share price snapshot

Ansell shares had been holding up fairly well prior to today. Excluding today’s move, the Ansell share price was up roughly 9% over the past year compared to the 3% gain in the benchmark index.

However, after today’s disappointing move, the global glove manufacturer is barely in the green compared to a year ago.

The post Ansell share price slumps 8% as healthcare sales fail to cough up appeared first on The Motley Fool Australia.

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More reading

• Is this share the ASX 200’s best healthcare buy?
• ‘No signs of weakness’: Expert names 2 ASX shares to buy just starting their rise

Motley Fool contributor Mitchell Lawler 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 Ansell. 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 CSL Limited (ASX: CSL) share price is edging higher on Tuesday morning.

At the time of writing, the biotherapeutics giant’s shares are up 0.5% to $306.36.

Why is the CSL share price rising?

The CSL share price is rising today after the market responded relatively positively to the release of the company’s half year results.

For the six months ended 31 December, CSL reported a 19% increase in revenue to US$7,183.5 million and a 10% lift in net profit after tax before amortisation (NPATA) in constant currency to US$1,957 million.

This was driven partly by a five-month contribution from Vifor Pharma, strong growth in immunoglobulin and albumin sales, and record levels of plasma collections.

This allowed the CSL board to lift its interim dividend by 2.9% to US$1.07 per share.

Looking ahead, management has reaffirmed its guidance for FY 2023 NPATA in the range of approximately US$2.7 billion to US$2.8 billion at constant currency.

How does this compare to expectations?

Analysts at Goldman Sachs have had a quick look at the result and given their verdict.

While the broker described the result as “untidy” it acknowledges that it appears “in-line to slightly ahead.”

This appears to explain why the CSL share price is rising this morning. It commented:

Juggling various profit lines, we expect the market to focus on a combination of: 1) statutory NPAT (-8% YoY, but flat at constant currency), both seemingly in-line with consensus; and 2) NPATA (+2% YoY, but +10% at constant currency), which appears +3% ahead. CSL may be running slightly ahead of FY guidance on the NPATA adjustments but this is not clear, and we will await further colour on the call. In any case, FY23 guidance for NPATA of $2.7-2.8bn has been reiterated, which we also presume to mean that the prior NPAT guidance remains in effect.

The post CSL share price lifts on half-year earnings beat appeared first on The Motley Fool Australia.

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More reading

• CSL share price on watch amid US$1.6b profit
• 5 things to watch on the ASX 200 on Tuesday
• How I’d generate a $10,000 second income from CSL shares
• 5 ASX 200 shares I would buy if I was starting from scratch: expert
• Brokers name 3 ASX shares to buy now

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

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The James Hardie Industries plc (ASX: JHX) share price is diving after the company released its Q3 FY23 results this morning.

The James Hardie share price opened at $29.49 and fell quickly to a low of $28.975, down 8.7% on yesterday’s close.

Let’s see what the global building materials giant reported.

James Hardie share price tanks on falling sales

Here are key points for the three-month period ending 31 December 2022:

• Net sales down 4% to US$860.8 million on the prior corresponding period (pcp) of Q3 FY22
• Adjusted earnings before interest and taxes (EBIT) down 19% to US$165.4 million pcp
• Adjusted EBIT margin of 19.2%, down from 22.7% pcp
• Adjusted net income down 16% pcp to US$129.2 million

Given the housing downturns in the US and Asia-Pacific, it was a tough quarter for the company. The James Hardie share price fell by 14.4% over the three months to 31 December 2022.

However, if we look at the full fiscal year 2023, taking in the nine months to 31 December, net sales from ordinary activities are up 8% and the profit after tax attributable to shareholders is up 6%.

Additionally, the net tangible assets per share are up 35% to US$2.76.

What did management say?

James Hardie CEO Aaron Erter commented on the full fiscal year results:

Our team executed in the face of significant challenges to deliver strong financial results in fiscal year 2023.

The team’s performance is reflected in strong Price/Mix growth in all three regions, including North America Price/Mix growth of +10%, Asia Pacific Price/Mix growth of +6% and Europe Price/Mix growth of +14%.

We are managing quickly and decisively to accelerate our competitive advantages through this market downturn and we view this time as an opportunity.

What’s next?

Erter said the company had lowered costs by reducing staff and spending while continuing to “significantly invest in strategic growth initiatives”.

He said:

Most importantly we remain aggressive, and we are laser focused on driving profitable volume share gain in every region and segment we do business in.

We are being agile and adaptive in responding to significant changes in market conditions, but we are also being thoughtful and focused on where we can accelerate our competitive advantages

FY23 guidance lowered

James Hardie has lowered its adjusted net income guidance for the full-year 2023 to a range of US$600 million to US$620 million. This is down from the previous guidance of US$650 million to US$710 million.

For comparison, the company reported an adjusted net income of US$620.7 million in FY22.

The FY23 guidance was lowered due to “lower than expected second half volume results in both North America and APAC and restructuring charges incurred in the second half”, according to the company’s statement.

James Hardie share price snapshot

On 29 December, the James Hardie share price hit a new 52-week low of $25.84. It has since rebounded by 12%. The S&P/ASX 200 Index (ASX: XJO) is up 7.6% in the year to date.

The post James Hardie share price tumbles 8% as housing market downturn impacts sales appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX 300 shares are ‘significantly undervalued’: fund manager
• Brokers name 3 ASX shares to buy now
• Here are the top 10 ASX 200 shares today
• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen has positions in James Hardie Industries Plc. 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 Santos Ltd (ASX: STO) share price is in the green in early trading.

The S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $7.07 per share. Shares are currently changing hands for $7.15 apiece, up 1.13%.

That’s right about in line with the 1.31% gains posted by the S&P/ASX 200 Energy Index (ASX: XEJ) at this same time.

Here’s what ASX 200 investors are considering on Tuesday.

Why is the Santos share price lifting?

The Santos share price is lifting today despite the company announcing it anticipates an impairment of US$147 million as a result of the Spar/Halyard reserves reduction in Western Australia.

The 26 million barrels of oil equivalent (mmboe) reduction was largely due to earlier than expected water ingress at the Spar/Halyard field.

Santos also announced other impairment charges of US$181 million related to other late-life producing and exploration assets. That brings the total impairment to US$328 million (AU$470 million).

The impairment charges won’t impact the company’s underlying earnings.

On the positive side, and likely responsible for helping lift the Santos share price today, the company reported its proved plus probable (2P) reserves increased by 171 million barrels of oil equivalent (mmboe) before production to 1,745 mmboe.

The annual 2P reserves replacement ratio (RRR) was 166% and the three-year RRR was 366%.

The biggest increase in reserves came from Alaska, with 165 mmboe added following the sanction of the Pikka Phase 1 project.

Reserves were also added in Papua New Guinea, Queensland, and the Cooper Basin before production.

Commenting on those results, Santos CEO, Kevin Gallagher said, “Today’s statement is the result of Santos’ disciplined annual reserves review and accounting processes, which include external audit of approximately 97% of total 2P reserves.”

Offshore Dorado project greenlighted

In a separate announcement offering tailwinds for the Santos share price today, the company reported the National Offshore Petroleum Safety and Environmental Management Authority had accepted its the Offshore Project Proposal (OPP) for Dorado, a proposed phased liquids and gas development.

“Our focus now is to finalise the concept for an integrated liquids and gas development and obtain the remaining approvals required to support a final investment decision,” Gallagher said.

He added:

Dorado will provide a welcome boost to Australia’s energy security, while the potential subsequent gas development provides a future source of supply for Western Australia’s domestic market and LNG projects.

The best emergency reserve you can have for national liquid fuel security is oil in the ground and the infrastructure in place to produce it when you need it most.

Santos has an 80% interest in Dorado. Carnarvon Energy Ltd (ASX: CVN) holds the other 20%.

Santos share price snapshot

As you can see in the chart below, the Santos share price is trading right about where it kicked off 2023. Longer term, shares in the ASX 200 energy giant are up 41% over five years.

The post Why is the Santos share price lifting on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Even Joe Biden sees a lengthy future for ASX 200 oil stocks
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Thursday
• These are the best ASX 200 energy shares to buy now: Morgans

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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The JB Hi-Fi Limited (ASX: JBH) share price suffered a fall after releasing its FY23 half-year result yesterday, despite reporting growth.

When a business suffers a fall, it can be useful to look at that ASX share and consider whether the market is being too harsh or is thinking too short-term about the situation.

Let’s remind ourselves about what the business revealed.

Earnings recap

For the six months to 31 December 2022, the company generated total sales of $5.28 billion, which was an increase of 8.6%. JB Hi-Fi said there was continued elevated customer demand for electronics and home appliances.

The company pointed to the sales growth and gross profit margin improvement as the cause of the 14% increase in the earnings before interest and tax (EBIT) to $479.2 million.

Net profit after tax (NPAT) increased by 14.6% to $329.9 million and the interim dividend was bumped up by 20.9% to $1.97 per share.

While the six months to December 2022 demonstrated good growth, the trading update for January 2023 was less promising. Slowing growth could be a warning sign for some investors regarding JB Hi-Fi shares.

Trading update

The business reported how the first month of the second half went compared to January 2022 and January 2020.

JB Hi-Fi Australia’s total sales were up 2.5% year over year, and up 25.5% compared to January 2020.

JB Hi-Fi New Zealand’s total sales were up 20% year over year and up 43.4% compared to January 2020.

The Good Guys sales were flat (0% growth) compared to January 2022 and up 17% compared to January 2020.

The JB Hi-Fi CEO Terry Smart explained:

While we are pleased with the January trading result, with sales continuing to be well above pre Covid January 2020, we have seen sales growth start to moderate from the elevated levels seen in the first half of FY23. As we enter an uncertain period, our business is well placed with a proven ability to adapt to any changes in the retail environment and trusted value-based offerings that will continue to resonate with our customers and grow our market share.

Is the JB Hi-Fi share price a buy?

The broker Morgans certainly thinks so, with the rating improved to buy.

I think that this result once again showed that JB Hi-Fi is one of the leading retailers in Australia. Being able to grow sales in January 2023, despite many economic challenges, is an impressive achievement in my opinion.

The next 12 months could be tricky for the business and retail as a whole. I’d guess there are going to be fewer electronics and appliances bought in the next 12 months compared to the last 12 months.

However, the JB Hi-Fi share price is down around 20% since the peak in March 2022. I think this makes up for the short-term uncertainty.

I think the quality and scale of the business means it can easily ride through whatever happens next. Australia’s growing population should also be a boost for long-term earnings.

In my opinion, the JB Hi-Fi share price is a buy for the long term. Investors can receive large dividends until the retail situation improves.

The post Are JB Hi-Fi shares now at a bargain price? appeared first on The Motley Fool Australia.

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More reading

• Deadline coming: 3 ASX 200 shares to buy now before dividend payouts
• JB Hi-Fi share price slumps on half-year results
• Earnings inbound: How could JB Hi-Fi shares respond on Monday?
• I’m listening to Warren Buffett and buying ASX shares at deep discounts
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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 JB Hi-Fi. 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 Temple & Webster Group Ltd (ASX: TPW) share price is under pressure on Tuesday morning.

At the time of writing, the online furniture and homewares retailer’s shares are down 13% to $4.32.

This follows the release of Temple & Webster’s half year results, which appears to have disappointed the market.

Temple & Webster share price on major profit decline

• Revenue down 12% to $207.1 million
• EBITDA margin of 3.5%
• Net profit after tax down 46.7% to $3.9 million
• Cash balance of $102.4 million

What happened during the first half?

For the six months ended 31 December, Temple & Webster reported a 12% decline in revenue to $207.1 million. This reflects a decline in active customers to 840,000, offset partially by an increase in revenue per active customer.

In addition, management highlights that this half was going to be the toughest period for year over year comparisons due to the timings of lockdowns in FY 2022.

Positively, things improved in the second quarter. Revenue was down 18% in the first quarter, 6% in the second quarter, and marginally higher during the month of December.

In respect to earnings, Temple & Webster reported an EBITDA margin of 3.5%. This was towards the low end of its full year target range of 3% to 5%. Excluding its investment in The Build, its EBITDA margin would have been 4.7%. This reflects its focus on accelerating cost base initiatives and margin improvement programs.

How does this compare to expectations?

A note out of Goldman Sachs reveals that Temple & Webster’s revenue was in line and its earnings were notably ahead of its expectations.

The broker also remains confident that the revenue environment has stabilised and the company is well positioned to deliver strong medium term growth through increasing population penetration and growing market share of online.

Management commentary

Temple & Webster’s CEO, Mark Coulter, was pleased with the half. He said:

We’re pleased with the progress made during the half, with a return to year-on-year profit growth in Q2 as we benefited from our focus on margin optimisation and cost management, despite revenue being down year-on-year, which highlights the flexibility of the business model.

While we dialed back spend in the half, we continued investing in our digital capabilities, product range and target verticals, with our Trade and Commercial and Home Improvement businesses growing 17% and 12% respectively.

Pricing remains a key differentiator for the business, growing our gross margin through strategic pricing initiatives and better sourcing. Similarly, with 72% drop ship that carries no inventory risk and 28% private label inventory, through our supply chain model we further improved flexibility and our product range, placing us in a strong position to continue growing market share.

Outlook

Also potentially weighing on the Temple & Webster share price today was its trading update.

Management revealed that for the first five weeks of the second half, its sales were down 7% over the prior corresponding period. Though, this has once again been blamed on strong sales a year earlier due to the omicron outbreak.

The company remains positive on its outlook and revealed that it could look to accelerate its growth by putting its $100 million cash balance to work with acquisitions. Mr Coulter commented:

We remain committed to our profitable growth strategy and will continue our focus on margin optimisation and cost management to ensure we end the year within our 3-5% EBITDA range. We believe our business model, customer metrics, brand and new growth horizons position us well to navigate any trading conditions and return to a high growth business.

Furthermore, we have over $100m of cash to expand our roadmap of sales initiatives and pursue inorganic opportunities to support sustainable growth. Longer-term, ecommerce in the Australian furniture & homewares category remains highly under-penetrated, and we have a much larger addressable market to go after in our new target verticals.

The post Temple & Webster share price sinks 13% on half year results appeared first on The Motley Fool Australia.

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More reading

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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.

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The All Ordinaries (ASX: XAO), or All Ords ASX shares, I’m about to write about are ones that look very interesting to me in the current conditions.

I’m always on the lookout to buy ASX shares when it looks like it’s the right time to invest.

The market declines seen in June and October last year seemed like excellent times to invest in names that had fallen heavily such as retail and technology. There has been a rebound for a number of names involved since.

However, with what’s happening, I think these two All Ords ASX shares are looking like compelling ideas to boost my existing holdings.

Duxton Water Ltd (ASX: D2O)

Duxton Water is a business that owns water entitlements in Australia. It uses this portfolio to provide “flexible water solutions” to Australian farmers, such as long-term entitlement leases, forward allocation contracts and spot allocation supply.

La Nina has led to significant rainfall in recent times, with floods affecting several areas. However, La Nina is expected to end by the end of summer, according to Duxton. The company points to the Bureau of Meteorology forecasting a possible shift to El Nino conditions by June 2023, which usually brings drier than average conditions to the east of Australia.

This prospect of drier conditions is reportedly leading to increased demand for leases and forward contracts for Duxton.

Duxton Water can benefit from both the water lease income, as well as capital gains of the value of its water portfolio over time.

At the end of December 2022, excluding tax provisions for unrealised capital gains, it had a net asset value (NAV) of $2.22. Compare that to the Duxton Water share price, which is currently at a discount of around 25% to that NAV value.

It has also guided its final 2023 dividend and interim 2024 dividend to be a total of 7.3 cents, suggesting a future grossed-up dividend yield of 6.3%.

Rural Funds Group (ASX: RFF)

Rural Funds is also a potential ASX All Ords share investment in the agricultural space. It’s a real estate investment trust (REIT) that owns a variety of farms across Australia. Some of the categories include cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

The Rural Funds share price has fallen by 25% since the end of 2021 and it’s down 7% since 3 February 2023.

It’s understandable that the REIT has fallen. Higher interest rates are theoretically meant to hurt asset values, like farms. The higher interest rates could also mean a larger interest expense cost.

But, the REIT’s growing rental income can offset some of this pain, with some rent being linked to CPI inflation, which is currently elevated.

I like the defensive nature of high-quality REITs, with regular rental income. Rural Funds has some of the biggest agricultural names as tenants such as Australian Agricultural Company Ltd (ASX: AAC), Treasury Wine Estates Ltd (ASX: TWE), Select Harvests Ltd (ASX: SHV) and Olam.

The All Ords ASX share aims to grow its distribution to investors by 4% per annum. Aside from the natural rental growth each year, it aims to boost income by changing land to a ‘higher and better use’ (such as converting to tree nuts) and also improving the productivity of land for tenants, such as increased water access.

Based on the guided total distribution per unit of 12.2 cents in FY23, that amounts to a distribution yield of 5.1%.

The post 2 ASX All Ords shares I’m poised to pounce on appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Duxton Water and Rural Funds Group. 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 Rural Funds Group. The Motley Fool Australia has recommended Treasury Wine Estates. 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 AGL Energy Limited (ASX: AGL) share price has plummeted 13% over the last seven days, with most of that tumble attributed to the company’s $1.1 billion first half loss.  

But there might be a silver lining to the downturn. AGL directors appear to have taken advantage of the dip, bolstering their stakes in the stock. Are they onto something?

Shares in the S&P/ASX 200 Index (ASX: XJO) energy retailer last traded for $6.89.

Let’s take a closer look at the recent insider buying at AGL and what brokers are tipping for the future.

AGL insiders on a share buying spree

AGL insiders went on a buying spree yesterday, snapping up a combined 61,900 securities for a total of around $433,300.

The largest parcel was acquired by CEO and managing director Damien Nicks, who bought 27,000 shares in AGL for $189,000.

Non-executive director Christine Holman also snapped up a sizeable handful of shares, buying 13,000 shares for $91,000.

Chair Patricia McKenzie was in on the action too, forking out $49,000 for 7,000 shares in the company.

Finally, non-executive directors Vanessa Sullivan and Miles George bought 5,000 and 9,900 AGL shares respectively, paying $35,000 and around $69,370 for their individual parcels.

The approximate $7 price tag on each stock purchased by the insiders was notably higher than the $6.83 low inked by the AGL share price in recent sessions.

Though, it’s 17% lower than the stock’s January high of $8.215.

Are the directors onto something? Morgans thinks not

Broker Morgans is sceptical of AGL shares. It reiterated its hold rating and slashed its price target to $6.89 following the release of the company’s earnings, my Fool colleague James reports.

The broker noted the results represented a significant disappointment, and while it expects the future to be brighter, it warns the path ahead could be fraught, saying:

We anticipate increasing dividends as earnings begin to recover in the next 12 months however we think the market will want to see clear evidence of this before it regains confidence in the company and the sector.

The post Company directors are buying the dip on AGL shares. Should you? appeared first on The Motley Fool Australia.

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Brokers have picked out some leading S&P/ASX 200 Index (ASX: XJO) shares that they have rated as buys.

These analysts are looking at the share market every day, so they typically have expertise on the businesses they’re following and hopefully have chosen a good time to call that business a buy.

The Australian has reported on some of the latest calls.

Blackmores Ltd (ASX: BKL)

The broker Citi raised its target on the vitamins business to a buy. Citi’s price target on the business is $84. A price target is where the broker sees the Blackmores share price trading in 12 months time.

With a price target of $84, that suggests that Blackmores doesn’t have any upside from here.

The company is due to hand in its FY23 half-year result on 23 February 2023. The latest update we heard was in October 2022 when the company held its annual general meeting (AGM).

It said that it had seen a solid start to FY23, with supply chain stabilising, and service levels to customers improving to the best in the previous three years.

In Australia and New Zealand, it implemented price increases in the FY23 first quarter of between 5% to 6% to absorb cost inflation pressures. Blackmores’ total market share value growth in ANZ is in line with the category.

In the international market, the ASX 200 share confirmed it’s expecting revenue in the FY23 first half to be lower than the first half of FY22. It implemented price increases of 7% to 8% in the FY23 first quarter.

In the China region, Blackmores said it’s seeing good momentum in premium fish oil and eye care segments, with the performance of new product launches being “encouraging”. Blackmores implemented price increases across e-commerce platforms of between 6% to 8% in the FY23 first quarter.

Sims Ltd (ASX: SGM)

The broker UBS has significantly raised its price target on Sims to $16. That suggests a possible rise of close to 9% over the next year.

Sims describes itself as a global leader in metal recycling and providing “circular solutions for technology, and an emerging leader in renewable energy.” The business has operations in a number of places including the UK, Europe, North America, Africa and the Asia Pacific region.

The latest update from Sims was at its annual general meeting (AGM). It said that soft market conditions have persisted through the first quarter of FY23, driven by lower volumes, tighter margins and “resiliently high” inflation.

The ASX 200 share said that lower scrap volumes resulting from significantly reduced economic activity, combined with increased competition for available infeed, has tightened trading margins in both percentage and dollar per tonne terms.

Sims’ underlying earnings before interest and tax (EBIT) for the FY23 first half is forecast to be in the range of between $65 million to $75 million.

Johns Lyng Group Ltd (ASX: JLG)

The newspaper also reported that Citi has rated Johns Lyng as a buy, with a price target of $8.77. That suggests a possible rise of over 50% in the next 12 months.

This ASX 200 share is a building services business that provides building and restoration services across Australia and the US. The key role that it performs is that it rebuilds and restores properties and contents after damage from insured events such as impact, weather and fire events.

The Johns Lyng share price has dropped close to 40% since April 2022, giving it a lot of room to rebound.

While weather events are terrible for the communities it impacts, it gives the business more opportunity to provide its services. For example, at the AGM in November 2022, it said that Hurricane Ian in the US alone was an event that could cost more than US$60 billion.

The ASX 200 share has forecast that FY23 group revenue will be $1.03 billion with business as usual (BaU) work accounting for $930.4 million – a rise of 27.4% compared to FY22.

The earnings before interest, tax, depreciation and amortisation (EBITDA) forecast is $105.3 million, representing a growth of 26% compared to FY22. The BaU EBITDA forecast is $93 million, a 43.3% increase over FY22.

The post 3 ASX 200 shares just upgraded by brokers, one with 50% upside appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Blackmores and Johns Lyng Group. 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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