Category: Stock Market

The Dubber Corp Ltd (ASX: DUB) share price has returned from its suspension and crashed deep into the red.

In early trade, the cloud-based call recording software provider’s shares are down 35% to 36 cents.

This means the Dubber share price is now down almost 90% since the start of the year.

Why is the Dubber share price crashing today?

Investors have been selling down the Dubber share price in a panic today after the company released a shocking update on its audited results for FY 2022.

In August, Dubber released its unaudited full year results and reported a 75% increase in revenue to $35.6 million.

However, after finally getting its accounts audited, this figure has been revised lower by $10.3 million to $25.3 million. Management commented:

The revenue figure has been adjusted because the Company’s interpretation of accounting standards relating to particularly, Platform Fees and Foundation based revenues has been modified following consultation with the Company’s auditors.

But it gets worse. Dubber has also revised its costs higher following the audit. Total costs are now $8 million more than previously stated, bringing its loss after tax to $83.2 million. This compares to its previously stated loss of $64.7 million.

CFO out

Unsurprisingly given the above, Dubber’s chief financial officer, Peter Curigliano, is leaving the business.

A separate release, which doesn’t even mention Curigliano by his name, states: “The current chief financial officer will step down from that position with immediate effect and assist the Company in the transition of the role.”

Commenting on this disastrous update, Dubber’s non-executive chair, Peter Clare, said:

I would like to sincerely apologise to shareholders, on behalf of the Board and CEO, for the delayed lodgment. A full review is underway and any necessary changes or improvements to avoid such an event occurring again will be implemented with the Board’s full support.

The post Why did the Dubber share price just crash 35%? appeared first on The Motley Fool Australia.

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More reading

• 3 cryptocurrencies that could be set to explode
• Why did the A2 Milk share price rocket 23% in the first quarter?
• These 3 ASX shares hold top spot as my favourite dividend deliverers
• The bear market is becoming a passive-income investor’s dream
• Despite the recent market rout, Wesfarmers shares actually delivered in Q1. Here’s the lowdown

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 Dubber Corporation. The Motley Fool Australia has positions in and has recommended Dubber Corporation. 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.

Staying current with trends is one of the most important facets of successful investing. Being quick to recognize those that will eventually turn into the status quo is one way to build a portfolio that beats the market. 

Imagine investing in some of the most high-profile tech stocks a decade ago. Today, companies like Meta Platforms (NASDAQ: META), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and many others are intertwined with our daily lives. An investor aware of trends a decade ago could have foreseen that and capitalized on those opportunities. In the last 10 years, the tech-heavy Nasdaq Stock Market increased nearly 250% in value. 

Now, hindsight is always 20/20, but there is one trend today that presents a similar opportunity to that of a decade ago.

The new age of the internet

Our reliance on the internet seemingly increases every year. Some companies capitalized on this and now have an omnipresent role in our daily lives. These companies provide technology, track your every move on the internet, and generate an absurd profit from their centralized business models. But it looks like that might be coming to an end thanks to new technology with the potential to upend the current status quo of the internet. 

Known as Web3, this new age of the internet aims to be everything that our current internet, referred to as Web2, isn’t. In Web3, things such as social media, finance, gaming, and the metaverse have the potential to mark a break from today’s centralization. With Web3, decentralized blockchains would be the backbone for an internet that’s open source, offers secure interoperability between apps, and is entirely trustless — meaning no third party, like Google, is needed for the system to function. 

A recent report by Vantage Market Research on the current standing of Web3 valued the sector at just under $3 billion. But the same report says it has the potential to grow to roughly $23 billion by 2028. That’s an increase of more than 700%. So how can investors capitalize on this opportunity?

Well, because blockchains are the foundation of Web3, owning the cryptocurrencies native to those blockchains is one simple way to gain exposure to the new age of the internet. Based on current developments, I believe there are three that are rising to the task of supporting Web3’s future growth: Ethereum (CRYPTO: ETH), Polygon (CRYPTO: MATIC), and Arweave (CRYPTO: AR).

Ethereum

Ethereum is slowly becoming the foundation of Web3. To be straightforward, there is no possibility of Web3 without Ethereum. With its smart contracts, developers can program decentralized apps (dApps) to replace third-party entities, allow user data to flow seamlessly between applications without any collection, and (the best part) be highly secure and execute automatically when conditions are met. There are other smart-contract-based blockchains like Solana (CRYPTO: SOL) and Cardano (CRYPTO: ADA), but Ethereum has risen to the top as one of the most used blockchains. Its popularity has caused it to become the home of the most development for Web3 use cases. It could help to think of Ethereum as the base layer or code that allows Web3 to function, as JavaScript or HTML is for Web2. Any investor interested in Web3 should make sure they have a substantial amount of Ether in their portfolio.

Polygon

This network is positioning itself to become a powerhouse of Web3 as the new age of the internet continues to advance. Polygon is unique because it makes the shortcomings of Ethereum (namely slow transaction speeds and high fees) a thing of the past without sacrificing the security and decentralization that make Ethereum so desirable. To do this, Polygon offloads transactions from Ethereum’s blockchain and then adds them back later. The technology that Polygon uses makes transactions lightning fast at a cost of less than a penny. 

Polygon co-founder Mihailo Bjelic might have said it best when talking about what Web3 needs. For a blockchain to become the “holy grail of Web3 infrastructure” it must have “scalability, security, and Ethereum compatibility.” If Web3 is to support all the internet users of the world, it must remain fast and cheap. With Polygon, that now becomes possible.

Arweave

Last but not least is Arweave. In a world full of data, that data needs a home. Arweave is a data storage solution that uses blockchain technology to provide a simple way to retain information — forever. The best part about Arweave is that no central authority oversees the data, no one can alter the data once it’s on the blockchain. In addition, Arweave is compatible with smart contracts, which means Web3 developers can customize dApps to use the data on Arweave’s blockchain. And, in keeping with Web3 principles, that data can’t be used to generate profits because it’s anonymous, and it can never be altered because it’s secure on a blockchain. 

To understand how Arweave could benefit investors, we must first understand how Arweave works. We will keep it simple, but to store data on Arweave’s blockchain, users must purchase storage space with the AR coin. A user could be a regular person wanting to save a cherished photograph or another blockchain wanting to store its transaction history to free up space. The thinking is that as Arweave’s blockchain grows and supports more data storage for Web3, the AR coin should rise in value as demand for it grows.

Imagine entering the metaverse through glasses or virtual reality goggles and, as on the home screen on your phone, seeing all your favorite apps and games there waiting for you. Those apps and games all communicate with each other seamlessly to provide a unique experience just for you without the need of any Big Tech company. Your bank account, photos, and other information are all stored on the blockchain and are completely secure and anonymous.

Web3 is far from its final form, and it’s difficult to guess just what it might look like, but that is why investors have so much to gain right now. As the internet continues to evolve, investors can take advantage of a trend that has the potential to become the status quo. 

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

The post 3 cryptocurrencies that could be set to explode appeared first on The Motley Fool Australia.

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RJ Fulton has positions in Cardano, Ethereum, and Solana. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Ethereum, Meta Platforms, Inc., Microsoft, Polygon, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns and has recommended Ethereum and Solana. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, 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 market may have been out of form during the first quarter of financial year 2023, but that didn’t stop the A2 Milk Company Ltd (ASX: A2M) share price from shooting higher.

Over the three months, the embattled infant formula company’s shares rose a sizeable 23%.

This compares favourably to a 1.5% decline by the ASX 200 index over the same period.

Why did the A2 Milk share price smash the market during the quarter?

The main catalyst for the strong performance by the A2 Milk share price was the release of a surprisingly strong full year result at the end of August.

For the 12 months ended 30 June, A2 Milk reported a 19.8% increase in revenue to NZ$1.446.2 million and a 42.3% jump in net profit after tax to NZ$114.7 million. This was well ahead of the market’s expectations.

This was driven by the acquisition of MVM, double-digit China label and English label infant formula sales growth, and ANZ and USA liquid milk sales growth of 1.8% and 30.2%, respectively.

Anything else?

Also giving the A2 Milk share price a boost was the announcement of NZ$150 million on-market share buyback. Management explained that this buyback “demonstrates effective capital management and the improved confidence we have in our strategy, execution and outlook.”

Speaking of its outlook, management pleased investors by guiding to high single digit revenue growth in FY 2023 thanks largely to its infant formula business. It is also expecting EBITDA growth with a modest improvement in EBITDA margin.

Where next for its shares?

Opinion remains divided on where the A2 Milk share price is heading from here.

Bell Potter is bullish and has a buy rating and $6.60 price target on its shares.

Whereas analysts at Morgans are sitting on the fence with a hold rating and $5.87 price target and Macquarie is bearish with its underperform rating and lowly $4.25 price target.

The post Why did the A2 Milk share price rocket 23% in the first quarter? appeared first on The Motley Fool Australia.

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More reading

• How did the A2 Milk share price manage to beat the ASX 200 in September?
• A2 Milk share price drops despite buyback kicking off
• Macquarie reveals ASX 200 shares ‘more likely to outperform in a bear market rally’
• Here’s why the A2 Milk share price is storming higher today
• A2 Milk share price drops despite solid start to FY23

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 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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The investment style of my portfolio is to own ASX dividend shares. As I’ve previously written about, every one of my holdings pays a dividend.

I’m a fan of the green energy initiatives of Fortescue Metals Group Limited (ASX: FMG) and the company’s big dividend, though the dividend is not consistent enough to be one of my top picks.

I also like what Altium Limited (ASX: ALU) is doing with its core and newer software offerings relating to electronics. The business has an impressive dividend growth streak going on, though the dividend yield isn’t big enough to really count as an ASX dividend share.

But, these three are my favourites in the portfolio:

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Soul Pattinson is one of the oldest investment businesses in Australia.

It started off as a pharmacy business, however, it has since made many investments in companies like TPG Telecom Ltd (ASX: TPG), New Hope Corporation Limited (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), and Macquarie Group Ltd (ASX: MQG).

One of the main things that I like about this ASX dividend share is that the annual dividend has been increased every year since 2000.

The company has managed to do this by building a portfolio of defensive investments that can produce reliable cash flow, funding the dividend even in difficult times like the GFC and COVID-19.

The portfolio also continues to become more diversified. It reinvests the retained cash flow into more opportunities each year.

In FY22, it grew its annual dividend by 16.1% to 72 cents per share. That works out to a grossed-up dividend yield of 3.75%.

WAM Microcap Limited (ASX: WMI)

I don’t normally write about listed investment companies (LICs) but, for my own portfolio, I think this one makes sense.

There are hundreds of companies outside the S&P/ASX 200 Index (ASX: XJO). I wanted exposure to the small-cap ASX share space, but I think I’d need a lot of hours to research the many smaller opportunities properly. So, I’m happy to delegate the hunt for investments to others.

I think the Wilson Asset Management investment team has done well at finding small-cap ASX shares. The LIC structure allows WAM Microcap to turn investment returns into large and growing dividends, making it an ASX dividend share.

The ordinary FY22 dividend grew by 25% to 10 cents per share. That equates to a grossed-up dividend yield of 9.5%.

Brickworks Limited (ASX: BKW)

Brickworks is another ASX dividend share that has a long history.

It has maintained or grown its dividend every year for more than 40 years. I like that type of stability for my dividend income.

I think it has a number of good assets, which also makes it attractive to me.

For starters, it has a long-term cross-holding of Soul Pattinson shares. Soul Pattinson owns Brickworks shares and Brickworks owns 26.1% of Soul Pattinson.

As I’ve already discussed, Soul Pattinson is a resilient business that pays a growing dividend. So, that is a good source of cash flow to fund the majority of the Brickworks dividend.

The other key element of the Brickworks business that I like is the industrial property trust that it operates along with Goodman Group (ASX: GMG). Impressive warehouses are being built on excess Brickworks land that has been sold into the trust.

The trust continues to complete projects which, in turn, is increasing the value of the trust and generates development profits for the business. Brickworks’ 50% share was worth $1.54 billion at 31 July 2022.

At the end of FY22, the ASX dividend share had an inferred asset backing of $33.15 per share. As such, I think that the Brickworks share price is valued at an attractive discount to the underlying value of its assets.

The FY22 annual dividend was grown by 3% to 63 cents per share. That equates to a grossed-up dividend yield of 4%. Added to that, I think the company’s expanding US brickmaking business is also promising.

The post These 3 ASX shares hold top spot as my favourite dividend deliverers appeared first on The Motley Fool Australia.

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• 4 ASX 200 directors who raised the stakes in their company shares in September
• Why dividends matter
• Top brokers name 3 ASX shares to buy next week
• This was the only ASX 200 share I bought in September. Here’s why
• Here’s why I only invest in ASX dividend-paying shares

Motley Fool contributor Tristan Harrison has positions in Altium, Brickworks, Fortescue Metals Group Limited, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Macquarie Group Limited and TPG Telecom 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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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.

A bear market can be brutal for investors. The more than 20% decline in stock prices has many investment portfolios well off their recent peak.   

However, bear markets can be a blessing in disguise if you own dividend-paying stocks. That’s because there’s an inverse relationship between stock prices and dividend yields. With the bear market taking stock prices down sharply, dividend yields are soaring. That allows investors to reinvest their dividends at higher yields. They can also use their idle cash to generate more income. That can enable investors to supercharge their passive income.   

Get more out of your reinvested dividends

Some investors automatically reinvest their dividends, while others manually invest that cash as they see fit. Either way, a bear market turns that dividend income into even more passive income.

For example, if an investor owned 100 shares of Crown Castle (NYSE: CCI), a leading real estate investment trust (REIT) focused on communications infrastructure, they’d receive $147 per quarter in dividends. If they reinvested that money into buying more shares of Crown Castle earlier this year when shares had a 2.6% dividend yield, it would boost their annualized dividend income by $3.80.

However, with shares falling more than 20% this year, the stock now yields 4%. Because of that, if an investor reinvested the company’s $147 quarterly dividend payment at that yield, it would add $5.88 of annualized incremental dividend income. While $2 of additional annual dividend income might not sound like much, it adds up as it gets reinvested and compounded over the years. Crown Castle expects to grow its dividend by 6% to 8% per year, powered by increasing demand for communications infrastructure to support the build-out of 5G networks. 

Meanwhile, Crown Castle shareholders who don’t automatically reinvest their dividends have the flexibility to invest that money into an even higher-yielding opportunity. For example, they could buy shares of VICI Properties (NYSE: VICI), a REIT focused on experiential real estate. It currently yields 5.1%. Because of that, an investor could turn their $147 Crown Castle dividend payment into a $7.50 and growing passive income stream by purchasing shares of the higher-yielding VICI Properties. The casino owner has recently increased its payout by 8%, its fifth raise since its formation. 

Turn idle cash into an attractive passive income stream

In addition to earning more income by reinvesting dividends, bear markets allow investors to turn cash sitting on the sidelines into a passive income stream.

For example, shares of Agree Realty (NYSE: ADC) have fallen more than 15% from their recent high. That has pushed up the REIT’s dividend yield to 4.1%. At that rate, an investor could turn $1,000 of idle cash into a $3.40 monthly passive income stream ($41 annualized) since it pays a monthly dividend. That income stream will likely steadily rise in the coming years. Agree Realty has grown its dividend payment by 7.8% over the past year and at a 5.5% annual rate over the last decade. The REIT has a solid financial profile, giving it the flexibility to continue acquiring income-producing real estate to keep growing the dividend. 

Meanwhile, the bear market has brutalized shares of Digital Realty (NYSE: DLR). The data center REIT’s stock is down over 40%, pushing its dividend yield above 5%. That would turn a $1,000 investment into a $50 (and growing) annual passive income stream. The company increased its payout by 5% earlier this year, marking its 17th straight year of giving investors a raise. With a strong balance sheet and a large pipeline of data centers under development, Digital Realty should be able to continue growing its dividend in the future. 

Bear markets can accelerate your passive income

For those fully invested in non-dividend-paying stocks, bear markets are a difficult time. However, they’re an opportunity for those with cash or income-producing assets. Bear markets can accelerate investors’ capacity to generate passive income because they can turn dividend income and idle cash into bigger income streams. That can enable investors to make more money in the future, putting them even closer to reaching their financial goals. 

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

The post The bear market is becoming a passive-income investor’s dream appeared first on The Motley Fool Australia.

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More reading

• Despite the recent market rout, Wesfarmers shares actually delivered in Q1. Here’s the lowdown
• 3 beaten-up ASX shares this fund manager thinks are ‘compelling’ buys
• It was a rocky quarter for Rio Tinto shares. What now?
• Here are the 10 most shorted ASX shares
• Have Telstra shares been a good investment so far this financial year?

Matthew DiLallo has positions in Crown Castle, Digital Realty Trust, and VICI Properties Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Crown Castle and Digital Realty Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended VICI Properties Inc. 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.

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

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The three months ended 30 September were rough on the broader market. Yet Wesfarmers Ltd (ASX: WES) shares gained over the period.

After closing June trading at $41.91, the Wesfarmers share price was $42.72 at the end of September. That marks a 1.93% gain for the most recent quarter.

Indeed, at its highest point of the quarter, the S&P/ASX 200 Index (ASX: XJO) retail-focused conglomerate’s stock was swapping hands for $49.27 – 17.5% higher than its June close.

Meanwhile, the ASX 200 tumbled 1.43% over the September quarter.

So, what pushed the Wesfarmers share price to outperform the market? Let’s take a look.

What went right (and wrong) for Wesfarmers shares in Q1?

Certainly, the September quarter was rough on both the ASX 200 and Australians’ back pockets.

The Reserve Bank of Australia hiked interest rates from 0.85% to 2.35% over that period while high energy prices and inflation also took their toll on consumers.

Of course, what’s bad for consumers is generally also bad for S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) shares. And such impacts seemingly took their toll late in the quarter.

However, Wesfarmers’ full-year earnings, released in August, surpassed expectations.

The company posted $36.8 billion of revenue – up 8.5% year on year — and $3.6 billion of earnings before interest and tax, down 3.8%. Its after-tax profits slumped 1.2% to $2.35 billion.

The ASX 200 favourite also upped its full-year dividend offering by 1.1%, declaring a $1 final dividend. That was paid out last week.

Finally, it revealed the first seven weeks of financial year 2023 had brought continually robust trading conditions and benefits for both the company’s retail businesses – including iconic Aussie hardware store Bunnings – and its industrial businesses.

That might have bolstered the market’s hopes for the stock just in time for a September downturn.

The Wesfarmers share price tumbled 9% last month compared to the ASX 200’s 7.3% slump.

And while the stock outperformed over the September quarter, it closed the period nearly 29% lower than it started 2022. For comparison, the ASX 200 dumped close to 15% over the first nine months of the year.

The post Despite the recent market rout, Wesfarmers shares actually delivered in Q1. Here’s the lowdown appeared first on The Motley Fool Australia.

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• Have Telstra shares been a good investment so far this financial year?
• Amid the doom and gloom, Pilbara Minerals shares delivered 100% gains in Q1. Here’s why
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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers 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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This year has seen investors sell off a wide array of ASX shares. Yet, amid the sell-off, one fund manager has named some businesses it thinks are opportunities.

L1 Capital is a fund manager that operates the listed investment company (LIC) L1 Long Short Fund Ltd (ASX: LSF).

The fund manager thinks the recent market sell-off is presenting some “exceptional opportunities”. At present, its median portfolio investment now has a projected FY23 price/earnings (P/E) ratio of 9.7 times, according to its monthly update for September.

L1 said:

While these periods of heightened market volatility can be unnerving, we continue to believe that taking a 2-year view and focusing on enduring investment fundamentals (cash flows, industry structure, management, operating trends and balance sheet) will deliver strong absolute and relative returns.

We continue to find both safety and value in low P/E stocks with undergeared balance sheets and strong cashflow generation. In contrast, we believe high P/E stocks and ‘expensive defensives’ look crowded, risky and unappealing.

What are some examples of the ASX shares L1 is talking about?

The fund manager also outlined some of the companies in its portfolio.

Here are three of the names the fund manager noted:

BlueScope Steel Limited (ASX: BSL)

BlueScope is a steelmaking business in Australia and the US. Steel ‘spreads’ have been falling, but are still “healthy” and starting to “stabilise as the arbitrage on importing steel has now largely been eroded”, according to L1 Capital.

The fund manager pointed to the positives of BlueScope’s plan to grow its US operations with the company planning a capacity expansion. It also noted the acquisition of the US’s second-largest metal coating/painting company Coil Coatings and the establishment of BlueScope Recycling from its acquisition of the MetalX recycling business.

The fund manager pointed out that it has a “strong net cash balance sheet”, so its share buyback is expected to continue, as well as investment in the US and Australian businesses.

L1 said that BlueScope is valued at just six times FY23’s consensus estimated earnings. ‘Consensus’ means the collective average of different expert projections. The fund manager thinks the market is “significantly” undervaluing the business.

Sandfire Resources Ltd (ASX: SFR)

L1 pointed out copper prices are under pressure because of a weaker global economic backdrop. That’s despite the physical copper market continuing to remain “tight”. The fund manager attributes the supply issues to ongoing production challenges in Chile, the number one global producer. This ASX share has seen a decline over the past few months. Indeed, the Sandfire Resources share price is down 30% over the last six months.

In February, Sandfire completed the “transformational” acquisition of the MATSA mine in the south of Spain and is currently developing the Motheo copper mine in Botswana.

L1 said:

We believe the commencement of Motheo production in FY24 will deliver a step-change in free cash flow for the company as capital expenditure declines and the operating cash flow from the mine expands. We see compelling value upside in Sandfire with the company currently trading at a discount to the acquisition price of MATSA alone, before factoring in any value for its other mining assets, including Motheo.

James Hardie Industries plc (ASX: JHX)

Another pick was this ASX building materials company that also has a big presence in the US. L1 describes it as the US market leader in fibre cement siding.

The fund manager attributed its recent share price decline to the expectation that US housing demand is going to drop because of higher interest rates.

Around 65% of the group’s revenue comes from repair and remodelling, while 35% is from new housing.

L1 is confident in James Hardie’s ability to continue to grow market share “for many years to come”.

The fund manager said about the ASX share:

We believe the market correction has provided us the opportunity to invest in a very high-quality company with a decade of structural growth ahead of it at a very attractive valuation. James Hardie currently trades on a FY23 consensus P/E of only ~13x relative to its long-term average of 20x-25x. While we expect US housing starts to be negatively impacted by the steep rise in interest rates, at this valuation, we believe the market is implicitly assuming a ~40% decline in James Hardie earnings. This would be a similar impact to what the company suffered during the GFC, however, the business mix at that time was much more cyclical, with a ~60-65% skew to new housing.

The post 3 beaten-up ASX shares this fund manager thinks are ‘compelling’ buys appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Macquarie reveals ASX 200 shares ‘more likely to outperform in a bear market rally’
• Yes, the ASX is open today, and here’s what’s happening
• ‘Deep value’: 2 ASX shares this expert will pounce on this dip
• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’

Motley Fool contributor Tristan Harrison has positions in L1 LS FUND FPO. 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 Rio Tinto Limited (ASX: RIO) share price has seen plenty of volatility over the last few months.

Let’s look at how the ASX mining share has performed.

In the three months to September 2022, the Rio Tinto share price dropped 9%. The S&P/ASX 200 Index (ASX: XJO) only fell by 1.4% over those three months.

In October to date, Rio Tinto shares have gone up by 3.5%. The ASX 200 has gone up by 4.5% this month.

What could be next for the ASX mining share?

Over the last six months, it has declined by around 18%. Why?

It’s important to remember that the ASX mining share is a (very large) commodity-focused business that relies on selling commodities to customers. Higher revenue because of the resource price should mean more profit, a lower resource price should mean less profit. The Rio Tinto share price can be moved by investors on expectations about its profit.

The iron ore price has been drifting lower over the last few months – not good news for Rio Tinto shares.

While Rio Tinto is involved with other commodities, such as copper, its iron ore business has been the crown jewel in terms of generating profit in recent times. So, it seems that investors are expecting lower profitability for Rio Tinto in the shorter term.

But, the price of the commodity is only one part of the equation. The amount of production is the other main factor. If the price of the commodity stays the same, but Rio Tinto lifts its production by 5%, then the revenue can grow.

Rio Tinto is scheduled to release its 2022 third-quarter production report on 18 October 2022. Depending on whether the production meets expectations or not, the Rio Tinto share price could react positively or negatively. Only time will tell what the actual numbers are and how the market reacts.

Is the Rio Tinto share price a buy?

Different experts have different opinions on the ASX mining share.

For example, the broker Morgan Stanley has an overweight rating on the business with a price target of $118.50. That implies a possible rise of more than 20% over the next year if the broker is right.

The broker thinks that it’s a good move by Rio Tinto to expand in lithium because of the expected long-term growth in demand, plus the ASX mining share could expand its presence in the lithium value chain.

However, then there’s a broker like UBS which is not so optimistic about the short-term future of the Rio Tinto share price. It has a price target of just $90. That implies that the miner could fall by another 7%.

The post It was a rocky quarter for Rio Tinto shares. What now? appeared first on The Motley Fool Australia.

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More reading

• Is the Rio Tinto share price a buy in October?
• The Rio Tinto share price held up surprisingly well in September. Here’s why
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 dividend shares suffer September sell-off
• Why AGL, Northern Star, Qualitas, and Rio Tinto shares are pushing higher today

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

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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) is still the most shorted share on the ASX despite its short interest easing to 14.6%. Concerns over the travel market recovery have been weighing on this travel agent’s shares.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 14.4%. Short sellers may be targeting this betting technology company due to intense competition in the industry and the lofty multiples its shares trade on.
• Block Inc (ASX: SQ2) has seen its short interest rise to 11.1%. Concerns over the prospect of a global recession and regulatory pressure in the BNPL industry could be putting pressure on its shares.
• Lake Resources N.L. (ASX: LKE) has short interest of 10.1%, which is down week on week. Doubts over this lithium developer’s DLE technology appears to be a key reason for the high level of short interest.
• Megaport Ltd (ASX: MP1) has seen its short interest rise to 10%. This may be due to valuation concerns and ongoing weakness in the tech sector.
• Magellan Financial Group Ltd (ASX: MFG) has entered the top ten with short interest of 8.3%. This fund manager has been bleeding funds under management this year. Short sellers don’t appear confident this trend will stop.
• Nanosonics Ltd (ASX: NAN) has short interest of 8.2%, which is up slightly week on week again. Short sellers have been targeting this infection prevention company due to a highly disruptive business model change in the key US market.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) is a new entry in the top ten with 8.2% of its shares held short. Inflationary pressures have been weighing on the pizza chain operator’s performance this year.
• Breville Group Ltd (ASX: BRG) has seen its short interest rise to 7.9%. This high level of short interest may have been driven by concerns over what the uncertain economic backdrop could mean for consumer spending.
• Perpetual Limited (ASX: PPT) has seen its short interest rise to 7.7%. This fund manager’s shares have been hammered this year. Unfortunately, it appears as though short sellers see more pain ahead.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Down 50% so far this year, have Magellan shares got further to fall?
• 2 very exciting ASX growth shares experts rate as buys
• Why analysts say these excellent ASX growth shares are buys
• The Lake Resources share price was never far from the headlines in Q1, but has it paid off?

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 Betmakers Technology Group Ltd, Block, Inc., MEGAPORT FPO, and Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Dominos Pizza Enterprises Limited, Flight Centre Travel Group Limited, and MEGAPORT FPO. 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 Telstra Corporation Ltd (ASX: TLS) share price is an interesting one considering the telecommunications business has a reputation for being a defensive ASX share.

Why could it offer more stability than the S&P/ASX 200 Index (ASX: XJO)? Because its customers pay regularly, such as monthly or quarterly. Relatively consistent revenue can mean fairly consistent net profit after tax (NPAT) and cash flow. That’s the theory anyway.

Certainly, I think people will keep paying their phone bills over other spending categories.

So, how has the Telstra share price performed in recent times?

Recent performance

Since the beginning of 2022, the Telstra share price has declined by 9% while the ASX 200 has declined by 10.9%. The telco takes the win here, slightly.

Looking at the performances in the first quarter of FY23, Telstra shares were flat. The ASX 200 dropped by 1.4%. Another win for the telco.

In October, the Telstra share price is down 0.26%, while the ASX 200 is up 4.5%.

I’d suggest that much of the movement in share prices we’ve seen for Telstra — and many other ASX shares — could be pinned on inflation and rising interest rates. These two factors spark uncertainty. But, in terms of the telco being defensive, it did manage to provide less downside than the ASX 200.

What could have affected the Telstra share price?

Investors usually judge a company by looking at its net profit, growth, and outlook of the business.

The telco told investors that, on a guidance basis, the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 8.4% to $7.3 billion, underlying earnings per share (EPS) increased 48.5% to 14.4 cents, and free cash flow went up 5.9% to $4 billion. Total income dropped 4.7% to $22 billion.

A particular highlight was that the mobile business saw EBITDA growth of 21.2%. Meantime, postpaid handheld average revenue per user (ARPU) grew 2.9% with 6.4% mobile services revenue growth. Telstra also added 155,000 net retail postpaid handheld services.

In FY23, total income is expected to be between $23 billion to $25 billion. Underlying EBITDA is expected to be between $7.8 billion to $8 billion.

One of the most interesting things to me about the Telstra share price is that the company has announced it’s going to increase prices in line with CPI inflation. Not only can it grow revenue through 5G services, but it can grow its ARPU by increasing its prices. Indeed, it could increase prices each year.

Brokers rate the Telstra share price as a buy

A number of brokers rate the telco as a buy.

For example, Morgan Stanley has an overweight rating on the business, with a price target of $4.60. It thinks that Telstra can benefit from subscribers who move to Telstra after the Optus data hack.

Morgans rates Telstra shares as add. One of the reasons it’s optimistic is that the telco’s assets may be undervalued. The broker has a price target of $4.60. Telstra shares closed trading on Friday at $3.84 apiece.

The post Have Telstra shares been a good investment so far this financial year? appeared first on The Motley Fool Australia.

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More reading

• Amid the doom and gloom, Pilbara Minerals shares delivered 100% gains in Q1. Here’s why
• 5 things to watch on the ASX 200 on Monday
• 4 investment truths that have been shattered in 2022
• Could oversold ASX growth shares now be a buying opportunity for value investors?
• Were ASX 200 bank shares a safe place to park cash in Q1?

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 positions in and has recommended 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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