Category: Stock Market

The past year has been a gutwrenching experience for anyone holding Tesla Inc (NASDAQ: TSLA) shares.

A debilitating blow was dealt to the electric vehicle (EV) makers’ valuation in 2022. Unfortunately, a mix of demand concerns and Elon Musk’s Twitter-buying escapades contributed to a crushing 65% fall in the company’s share price.

Despite the numerous reported fiascos, buying activity of Tesla shares among Aussies was as feverish as ever during the final quarter of 2022, according to data from investment company eToro. As fate would have, shares in the EV company are up 21.6% this year already.

So, is there a case for investing in Tesla right now?

Oh no, not the price cuts…

You might have heard the news… Tesla has cut the prices of its Model 3 and Model Y by as much as 20% in the United States and Europe. This has prompted a cacophony from commentators on how this is a bleak indicator of weakening demand as competition ramps up.

While I believe that is partly true, I personally don’t believe the cuts are the apocalyptic signal that some claim it to be. Instead, the move appears more of a reaction to both government incentives and economic conditions — allow me to explain…

Prior to the price cuts, Tesla’s entry-level Model Y (long range) did not qualify for the US government’s US$7,500 clean vehicle tax credit. The new price tag of US$52,990 — a 20% reduction — makes the car eligible.

Furthermore, the reduced prices might mean that Tesla wins more sales that would have otherwise gone to cheaper alternatives such as Chinese EV maker BYD. According to Reuters, Tesla sales in China surged following the cuts.

On the economic front, there’s a good chance that inflation and jumbo interest rate hikes have suppressed demand. At the end of last year, the Federal Reserve Bank of St. Louis said it had “reasonable confidence” that the US will fall into a recession in 2023.

As a Tesla shareholder, I think the tradeoff of a reduced margin in the short term to prop up sales is a worthwhile one. A sale made at a lesser margin is better for cash flow than no sale at all.

Thankfully, Tesla has that flexibility. For the 12 months ending September 2022, the company reported a net income margin of 14.9%. For comparison, BYD operated at a margin of 2.9%.

Are Tesla shares a buy?

Never ask a barber if you need a haircut. I’m a Tesla shareholder and I’ll clearly have my biases on whether it’s time to buy shares in the EV maker. But, for what is worth, Tesla looks well positioned compared to the competition at the moment.

As far as I know, there isn’t another car manufacturer out there with the same pricing power that Tesla holds. Likewise, no other automaker has a balance sheet as healthy as the Elon-led business. Most other car companies are juiced up on debt like no tomorrow.

For those reasons — accompanied by the belief that EV adoption is a long tailwind — I personally believe Tesla shares look attractive right now.

The post Aussie investors are buying Tesla shares in droves. Should you? appeared first on The Motley Fool Australia.

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More reading

• Should I buy Tesla stock for 2023 or not?
• Tesla share price correction: A chance to get rich?
• What can ASX lithium share investors learn from Tesla discounting its cars?

Motley Fool contributor Mitchell Lawler has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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) wobbled in and out of the green on Wednesday before ultimately closing 0.1% higher at 7,393.4 points.

Providing the biggest boost was the tech sector. The S&P/ASX 200 Information Technology Index (ASX: XIJ) outperformed, lifting 1.7% on Wednesday, driven by a 4.6% gain out of Block Inc (ASX: SQ2).

Weighing heaviest on the Aussie bourse, meanwhile, was the S&P/ASX 200 Real Estate Index (ASX: XRE), falling 0.9%.

In the doldrums alongside it was the S&P/ASX 200 Energy Index (ASX: XEJ). The sector slumped 0.2% despite oil prices rising overnight.

The Brent crude oil price rose 1.7% to US$85.92 a barrel overnight while the US Nymex crude oil price gained 0.4% to US$80.18 a barrel amid better-than-expected growth data out of China.

So, with all that in mind, let’s take a look at the 10 ASX 200 shares posting the index’s biggest gains on Wednesday.

Top 10 ASX 200 shares countdown

Leading the charge today was lithium favourite Sayona Mining Ltd (ASX: SYA). Its share price roared 8.9% higher to close at 24.5 cents.

Interestingly, there was no price-sensitive news from the company today. Though, its stock did tumble 2% on Tuesday.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Sayona Mining Ltd (ASX: SYA)	$0.245	8.89%
Telix Pharmaceuticals Ltd (ASX: TLX)	$7.07	8.6%
Block Inc (ASX: SQ2)	$107.45	4.57%
Blackmores Ltd (ASX: BKL)	$87.05	4.3%
JB Hi-Fi Limited (ASX: JBH)	$47.98	3.16%
Lake Resources NL (ASX: LKE)	$0.835	3.09%
Alumina Limited (ASX: AWC)	$1.70	3.03%
New Hope Corporation Limited (ASX: NHC)	$6.56	2.98%
Core Lithium Ltd (ASX: CXO)	$1.05	2.94%
Coronado Global Resources Inc (ASX: CRN)	$2.12	2.91%

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

• Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Top brokers name 3 ASX shares to buy today
• Why is the Core Lithium share price rebounding 5% today?
• Why Ampol, Block, JB Hi-Fi, and Telix shares are racing 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 Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool Australia has recommended Blackmores and 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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Most of us have probably been taught that saving is a good thing. And it is. 

Having some cash stored away for that inevitable rainy day is a fundamental step in being financially independent. It’s important to have money set aside for when your car breaks down, there’s a medical emergency, or whatever other malady life can throw in one’s way.

The last place you want to find yourself when presented with an unexpected expense is the personal loan application desk at your local bank.

But just as importantly, it’s important to realise that savings are insurance, not a path to wealth. Whilst interest rates have shot up over the past 12 months, which at least gives investors some meaningful cash flow, cash still isn’t offering real (inflation-beating) returns. The top interest rate available for a term deposit right now is around 4.5%.

But recently, we’ve found out that Australian inflation was running at a hot 7.3% over the 12 months to 30 November. That means that the purchasing power of our cash in our 4.5% term deposit is going backwards by 3.3% in real terms.

As such, it is virtually impossible to grow one’s wealth using cash alone.

That’s why I’m turning to ASX shares.

Why invest in cheap ASX shares for retirement?

ASX shares are one of the best places to have your money if you wish to build wealth. For one, the best companies can keep ahead of inflation by increasing their prices to match the falling real value of cash.

But ASX shares can also give investors inflation-beating returns. Even an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) has delivered an average return of 8.54% per annum over the past ten years on average. That crushes the returns of cash.

The ASX share market has rallied quite convincingly over the past two months or so, which dulls the potential returns of investors just getting started with investing. But that doesn’t mean there aren’t plenty of dirt-cheap ASX shares still out there. One sector I’m currently looking at is ASX 200 retail shares.

Rising interest rates have dampened investor demand for consumer discretionary companies like retailers. But I think this has left many looking cheap.

Take JB Hi-Fi Limited (ASX: JBH). It’s currently sitting on a price-to-earnings (P/E) ratio of just 9.54, yet has a trailing, fully franked dividend yield of 6.6%.

Harvey Norman Holdings Limited (ASX: HVN) is looking even cheaper. It has a P/E ratio of just 6.64 right now, but with a fully franked dividend yield of 8.34%. I wouldn’t be surprised if these shares turn out to be market-beaters over the next few years at least.

So that’s why I’m not saving for my retirement. I’m investing for it instead.

The post Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• 5 reasons I’d consider buying the Vanguard Australian Shares Index ETF (VAS)
• Why Ampol, Block, JB Hi-Fi, and Telix shares are racing higher
• These ASX dividend shares have been tipped as buys by analysts
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool 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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If you’re wanting to pick up some ASX growth shares, then you may want to consider the two listed below.

Both of these growth shares have been tipped as buys by analysts at Goldman Sachs partly due to their massive global market opportunities.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

Life360 could be a quality ASX growth share to buy according to Goldman.

This rapidly growing location technology company is responsible for the Life360 mobile app. This freemium app is hugely popular and currently boasts almost 50 million global active users.

The company also added to its arsenal with recent acquisitions of wearables company Jiobit and items tracking company Tile, which are opening the door to cross and upselling opportunities.

Overall, Goldman estimates that “Life360 is exposed to a US$12bn global TAM with a large opportunity to expand its product suite, grow average revenue per paying circle (ARPPC), increase payer conversion, and lift penetration rates outside of the US.”

It also highlights that it believes “Life360 is approaching an inflection point as it proves the pricing power of its subscription business model and moves out of the non-profitable tech basket.” This could be supportive of a re-rating in the near future.

Goldman has a buy rating and $7.90 price target on Life360’s shares.

Xero Limited (ASX: XRO)

Another ASX growth share that Goldman Sachs believes is in the buy zone right now is Xero.

It is a fast-growing cloud-based accounting solution provider to ~3.3 million small and medium sized businesses globally.

Although this is a large number, it is still on a fraction of its overall market opportunity. This gives Xero and its highly rated and sticky platform a major runway for growth over the next decade and beyond.

Goldman Sachs believes Xero is “very well placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds.”

It estimates that “>100mn SMBs worldwide represent[s] a >NZ$76bn TAM”, which it feels makes Xero “a compelling global growth story.”

Goldman Sachs has a buy rating and $115.00 price target on Xero’s shares.

The post These ASX growth shares have massive global opportunities: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• My ASX shares fell 15% last year. Here’s what I’m doing now
• Xero earnings per share forecast to surge 180% in FY24: Morgans
• Leading brokers name 3 ASX shares to buy today
• Tech turnaround: Expert picks 2 ASX shares to buy for a 2023 revival
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Life360 and Xero. 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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Despite being the most shorted share on the Australian share market, the Flight Centre Travel Group Ltd (ASX: FLT) share price has started the year strongly.

As you can see below, with another gain under its belt today, the travel agent’s shares are now up almost 10% in 2023.

Where next for the Flight Centre share price?

Unfortunately, I’m not aware of a single broker that has a buy rating on Flight Centre shares.

However, that doesn’t necessarily mean that analysts don’t believe they can climb higher from here.

For example, Goldman Sachs has a neutral rating and $16.10 price target and Morgans has a hold rating and $18.25 price target on its shares.

Based on the current Flight Centre share price of $15.79, the latter implies potential upside of 13% for investors from here.

Morgans highlights that the company is recovering from the pandemic, but also notes that uncertainty remains. It is for that reason that the broker only has a hold rating on its shares at present. It recently explained:

FLT is targeting further bottom-line improvement during FY23 and heavily skewed to the 2H. It said that it is too early to provide specific market guidance given normal travel patterns (local v long haul, holidaymakers v VFR) are yet to resume; China is yet to reopen; airline capacity is restricted; and its revenue margins are yet to stabilise and normalise.

The broker also believes that revenue margins may be softer in the near term but expects them to improve once capacity normalises and competition increases. It said:

FLT’s revenue margin is expected to remain below pre-COVID levels in the near term because of cyclical factors (higher airfare prices), planned business mix changes (growth in lower margin channels/businesses) and the lower commissions.

While capacity is restricted and the airlines load factors are high, we think FLT has reduced bargaining power with the airlines. However over the medium term, as capacity normalises and there is increased competition, we think the airlines will rely more on FLT as one of the world’s largest travel groups and will thus reward the company for its efforts.

All in all, the future is looking brighter for Flight Centre, but it may just have a few more dark clouds to get through first.

The post The Flight Centre share price has made a flying start to 2023! Should I buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Could ASX 200 travel shares be set for a major boost in 2023?
• Should I buy Flight Centre shares for spectacular dividend growth?
• Here are the 10 most shorted ASX shares
• The Flight Centre share price nosedived 18% in 2022. Is it preparing for take-off in 2023?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel 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 Woolworths Group Ltd (ASX: WOW) share price is in the green today and the supermarket giant is Australia’s most valuable brand, according to a study.

Brand Finance Australia has ranked Woolworths first in its annual Australia 100 report for 2023.

Brand Finance is one of the world’s leading independent brand valuation consultancies. The company values the Woolworths brand at $16.2 billion in 2023, which is 18% higher than last year.

This is the fourth consecutive year that Woolworths has taken out the top place for value.

Brand Finance explains that brand value refers “to the present value of earnings specifically related to brand reputation”.

Why is Woolworths Australia’s top brand?

According to the report:

Woolworths has continued its focus on customer experience, including the roll out of curated ranges tailored to local communities, and offering more inclusive experiences to a wider range of consumers.

Woolworths also continued to manage the impacts of climate change, working to reduce emissions from its own operations through green electricity and electric vehicle trials, as well as the phasing out of some plastic use.

These factors continued to maintain the brand’s strong reputation and loyalty amongst Australian consumers …

Which other ASX shares made the top 10 brands?

Woolworths’ closest competitor, Coles Group Ltd (ASX: COL) held onto fourth place, with its brand value up 10% to $10.9 billion.

The report said: “Over the last year, Coles has continued to demonstrate flexibility and innovation, with improved scores for quality and value for money.”

Here are the top 10 ASX-listed brands by value.

Out of the 100 companies listed, 74 experienced an increase in brand value, while 21 saw a fall over the year.

The companies that saw a decline in their brand value included Optus, which is owned by Singapore Telecommunications Limited (SGX: Z74).

Optus experienced a 19% fall in brand value to $3.3 billion due to the cyberattack.

What does this mean for Woolworths shares?

Mark Crowe Managing Director, Brand Finance Australia, said quantifying brand value helped businesses attract investors, secure financing, and influence mergers and acquisitions.

Crowe said:

A strong brand can lead to improved business returns in several ways. First, a brand can help a business differentiate itself from its competitors and establish a unique identity in the market, which can lead to increased customer loyalty and retention. This, in turn, can drive higher sales and revenue.

A strong brand can command a higher price or premium for products or services, as consumers are willing to pay more for a brand they perceive as high-quality, value for money and trustworthy.

Finally, a strong brand can provide a competitive advantage and help insulate a business from economic downturns or industry disruptions.

Crowe said brand value also helped businesses understand where brand fitted into their earnings.

In FY22, Woolworths’ revenue was $60.84 billion, indicating its brand power contributed 26% to earnings.

According to the ASX, Woolworths shares have a market capitalisation of $42.28 billion.

The post Did Woolworths just become 18% more valuable? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Are Woolworths shares worth buying for dividend income or not?
• Are ASX 200 retail shares on sale in 2023?
• Buy these ASX 200 dividend shares when the market reopens: analysts
• Buy Woolworths shares for 23% upside AND dividend income: Goldman

Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, Commonwealth Bank Of Australia, and Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s turning out to be another rather lacklustre day for ASX shares and the S&P/ASX 200 Index (ASX: XJO) so far this Wednesday.

After a weak showing yesterday, the ASX 200 is back in the red zone again this session, currently down 0.02% at just over 7,384 points. That’s despite the ASX 200 being in the green for most of the morning. So let’s see where it ends up.

But rather than trying to figure all of that out, let’s instead take a gander at the shares presently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Core Lithium Ltd (ASX: CXO)

First up today is the ASX 200 lithium stock Core Lithium. This Wednesday has seen a decent 19.82 million Core shares find a new owner on the share market thus far. This is almost certainly the result of the sizeable share price jump we’ve seen with Core shares today.

The lithium producer is currently up a solid 3.63% at $1.057 a share after climbing as high as $1.08 earlier this afternoon. My Fool colleague covered why Core shares are so in demand today earlier, but it looks like this big rise is to thank for the high volumes we are witnessing.

Telstra Group Ltd (ASX: TLS)

The next ASX 200 share up today is the telco Telstra. This Wednesday has seen a weighty 21.01 million Telstra shares change hands as it currently stands. We haven’t heard much in the way of news or announcements out of Telstra today. Or indeed this year so far.

So this volume is probably a byproduct of the volatility we have seen in the telco’s shares this session. Telstra is currently 0.12% in the green at $4.095 a share. But the share price hit a high of $4.12 in early morning trading before dropping this afternoon.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX 200 lithium share rounds out our list today with Pilbara Minerals. A whopping 34.04 million Pilbara shares have been bought and sold on the ASX so far this Wednesday.

Unlike Core Lithium, Pilbara shares have been shunned by investors this session. The company has lost a rather painful 1.23% of its value so far today, putting the company at $4.02 a share.

Again, we’ve seen some volatility with Pilbara today, with stints in both positive and negative territory and a day range of $3.94 to $4.12 a share. This is probably what has elicited the high volume numbers on display.

The post Here are the 3 most heavily traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why is the Core Lithium share price rebounding 5% today?
• 3 ASX 200 shares smashing new 52-week highs on Wednesday
• Why is this ASX 200 mining share halted today?
• Cheap ASX shares: A rare chance to get rich?
• Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24?

Motley Fool contributor Sebastian Bowen has positions in Telstra 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 Telstra 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 share price of All Ordinaries Index (ASX: XAO) medical-technology company Volpara Health Technologies Ltd (ASX: VHT) is soaring on news of its maiden positive cash flow.

It comes just one week after the company announced five new contract wins with a combined value of NZ$12.3 million, or around $11.35 million.

The Volpara share price soared 9% on open this morning to reach 77 cents before continuing on its upwards trajectory, hitting a high of 81 cents – marking a 15% increase.

It has since slipped slightly to trade at 78 cents. Though, that’s still 10.6% higher than its previous close.

All Ords share Volpara rockets 11% on record cash receipts

Here are the highlights from the provider of breast cancer screening software’s December quarter.

All results have been converted from New Zealand Dollars to Australian Dollars at today’s exchange rate (NZ$1 to 92 Australian cents):

• $10.3 million of quarterly cash receipts – a new record and a 60% year-on-year improvement
• Maiden $1.2 million cash flow – up from a $3.5 million outflow in the September quarter
• Added around US$1.5 million of contracted annual recurring revenue (CARR)
• Average revenue per account increased to US$35,900 at the end of the quarter – up from US$31,900 at the end of the September quarter
• Ended December with $11 million of cash and no debt

At the end of the December quarter, the company’s unaudited financial year to date cash receipts came to $26.38 million – a 39% year-on-year increase, or a 23% increase on a constant currency basis.

Its CARR is now around $37.1 million while its annual reoccurring revenue is approximately $28.8 million.

What else happened in the quarter?

The company reached its maiden cash flow well ahead of guidance. The milestone was previously tipped to be achieved in the final quarter of financial year 2024.

An increase in cash receipts due to improved debtors days, costs reductions, government grants, and around $830,000 of research and development tax credit all helped the company hit positive cash flow.

Meanwhile, the final bonus plan payment to CRA employees – worth around $461,230 – was more than offset.

What did management say?

Volpara Group CEO Teri Thomas commented on the news driving the All Ords share higher today, saying:

We are happy to show successful execution of our strategy focused on profitable growth. As planned, our top line continues to increase while our cost base has declined.

We continue to emphasise sales and positive engagements with our customers alongside settling into our streamlined operations.

What’s next?

The All Ords company didn’t provide any new guidance today. However, it did note it doesn’t expect the current quarter’s receipts to match those of last quarter. Though, they are expected to show consistent growth.

It also said its improved cash flow position has led management to believe it’s holding enough cash to fund it through to maintainable cash flow break-even.

It previously expected to post between $30.9 million and $31.8 million of revenue in financial year 2023 – up from around $15.6 million in financial year 2022.

Volpara share price underpeforms All Ords

The Volpara share price has underperformed the All Ords over the last 12 months.

The stock has tumbled nearly 18% since this time last year. Meanwhile, the index has slipped 1.6%.

The post This All Ords share is booming 9% after turning cash flow positive appeared first on The Motley Fool Australia.

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More reading

• Why Lake Resources, Platinum, Polynovo, and Volpara shares are charging higher
• 10 ASX shares I think are buys for 2023

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 Volpara Health Technologies. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Data#3 Limited (ASX: DTL)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $8.95 price target on this information technology solutions provider’s shares. This follows the release of a trading update which revealed that Data#3 expects to deliver first half profit before tax at the top end of its guidance range. Goldman notes that this is ahead of its estimate and implies year over year growth of at least 24%. Outside this, Goldman is positive on its outlook thanks to government and enterprise IT spending and its position as an expert in cloud migrations, software, and cybersecurity. The Data#3 share price is trading at $7.30 on Wednesday.

JB Hi-Fi Limited (ASX: JBH)

A note out of Citi reveals that its analysts have retained their buy rating and lifted their price target on this retail giant’s shares to $55.00. This follows a half year trading update that was well ahead of Citi and consensus estimates. Combined with the update from Super Retail Group Ltd (ASX: SUL), the broker believes consumer health is better than the market’s thinking heading into the second half. The JB Hi-Fi share price is fetching $47.95 this afternoon.

Rio Tinto Ltd (ASX: RIO)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating and lifted their price target on this mining giant’s shares to $134.40. This follows the release of the company’s latest quarterly update. Goldman was pleased with Rio Tinto’s record iron ore production in the quarter and its guidance for an 8% increase in FY 2023. The Rio Tinto share price is trading at $121.78 at the time of writing.

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

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More reading

• Why Ampol, Block, JB Hi-Fi, and Telix shares are racing higher
• ASX 200 mining shares: To buy or not to buy?
• 5 things to watch on the ASX 200 on Wednesday
• Top ASX value shares to buy in 2023
• 5 ASX All Ords shares cracking new 52-week highs on Tuesday

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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. 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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Searing inflation, unrelenting interest rate rises, and an economy walking a recessionary tightrope. The landscape of 2023 is an unfamiliar one for anyone that began building a portfolio this side of the GFC.

Many have resorted to labelling this tightening environment as the ‘new normal’. But for it to be new, it needs to be the first of its kind — but is that really the case for the set of conditions investors are now facing?

The Motley Fool’s chief investment officer, Scott Phillips, suggests otherwise. In chatting with Nabtrade’s Gemma Dale on the latest Your Wealth podcast, Phillips gives his reasoning on why this might be more suitably dubbed the ‘old normal’.

So, how can we better prepare our portfolios for a return to a more conventional share market?

Inflation and interest rates matter

If you were hoping that the New Year marked the end of inflation’s influence on ASX shares, you might be disappointed.

In answering Gemma Dale’s question on whether the hidden tax — alongside interest rates — will make an impact on investments this year, Phillips responded:

[Interest] rates matter to the price of the assets that I buy […], rates matter to the amount of debt a company can affordably carry, and what it can do with that debt; and what my investment thesis looks like with those rates.

Inflation matters because pricing power matters. If you are a business that can’t pass on higher costs, you have no choice but to deliver lower margins, [and] lower profits.

While this might seem like uncharted territory for some, Phillips says this is more akin to the ‘normal economic circumstance’ of the 1980s and early 1990s. A period of time where some level of ongoing inflation was expected and interest rates moved up and down — not just down.

So, what does that mean for investing in ASX shares and portfolio construction?

Build a resilient portfolio

Importantly, the answer isn’t to try and predict winners based on a specific economic situation a year from now. Instead, Phillips opined that a more reasonable approach to this ‘old normal’ is by taking a holistic view of the companies you’re investing in.

Think about the sort of companies you own or might want to invest in. Think about their resilience in the face of a range of economic circumstances. If you look at your company and say, if this happens, it’ll be great… but if that happens, it’ll be terrible. […] I don’t think that’s the smartest way to go about it because I don’t think you want to be in a situation where you you have only one way to win and a very clear way, unfortunately, also to lose.

Essentially, the best companies to invest in are those that can continue to grow through most — if not all — environments that they are faced with. Whereas, companies that are dependent on ultra-low interest rates for their survival are, by nature, less resilient.

Finally, the Motley Fool CIO highlighted some ASX shares that could be well-placed to grow through this ‘old normal’ during the podcast. Companies such as Domino’s Pizza Enterprises Ltd (ASX: DMP), Lovisa Holdings Ltd (ASX: LOV), Resmed CDI (ASX: RMD), and Cochlear Limited (ASX: COH).

On the flip side, Phillips cautioned listeners on price takers, saying “I’d be really careful of businesses that don’t bring pricing power to the table.”

The post How to prepare your portfolio for the ‘old normal’: Scott Phillips appeared first on The Motley Fool Australia.

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More reading

• Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today
• Goldman Sachs says these ASX 200 blue chip shares are buys
• Buy QBE and this ASX 200 blue chip share: broker
• Are ASX 200 retail shares on sale in 2023?
• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally

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 positions in and has recommended Cochlear, Domino’s Pizza Enterprises, Lovisa, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Cochlear, Domino’s Pizza Enterprises, and Lovisa. 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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