Category: Stock Market

The Australian Foundation Investment Co Ltd (ASX: AFI) (AFIC) share price is in the red right now, hitting a 52-week low, even though the S&P/ASX 200 Index (ASX: XJO) is actually up by around 1.8%.

That may seem strange considering the ASX 200 index and the AFIC holdings list look pretty similar with names like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL) among the top holdings.

As a listed investment company (LIC), the job of AFIC is to invest in other ASX shares and generate returns for shareholders.

Why is it down so much in 2022?

It has been a rough year for plenty of ASX shares this year as investors get to grips with a tricky economic environment. Inflation is elevated, which isn’t good for economic stability. A stable economy is one of the main areas of focus for a central bank.

The Reserve Bank of Australia (RBA), and other central banks, are putting a lot of effort and policy decisions into bringing down inflation back to a more normal level.

Time will tell how long it takes to be successful and how this affects the AFIC share price.

However, in the meantime, interest rates are jumping higher. This is unsettling for markets, such as the ASX share market. Assets are heavily influenced by interest rates, which act kind of like gravity. The higher the interest rate, the stronger it pulls down on asset values, in theory. Warren Buffett once explained:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

Back to the AFIC share price

AFIC, the LIC, has a portfolio of assets that has a value worth many billions. The basket of shares that it owns can go down in value as well as up. However, how much investors decide to pay for that basket of shares can change too. They could pay 10% more than the value of that basket, 10% less than the basket value or any other premium or discount.

For the last two years, AFIC shares have traded at a premium to the underlying net tangible assets (NTA).

Investors may have been attracted to the blue chip investment style and the stable stream of fully franked dividends. However, ‘safe’ places to put cash (like savings accounts and term deposits) are now offering a much better return. Perhaps the AFIC share price has been falling today partly because investors can find income from other sources? The longer-term decline can be explained by the reduction of the asset value of the portfolio in 2022.

The post Why did the AFIC share price just hit a new 52-week low? appeared first on The Motley Fool Australia.

.

More reading

• Do AFIC dividends come fully franked?
• Looking to buy AFIC shares in September? Here’s what you’d be investing in
• How do Argo shares measure up to other LICs like AFIC?
• Are AFIC shares outperforming the ASX 200 this year?

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 CSL Ltd. 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.

from The Motley Fool Australia https://ift.tt/XrAzU4e

It’s a good day overall on the markets today, with the All Ordinaries Index (ASX: XAO) up 1.85% in afternoon trading.

But this little known ASX gold share is leaving those gains in the dust.

We’re talking about Great Boulder Resources Ltd (ASX: GBR), which is up 9.89% at the time of writing after earlier posting gains of more than 15%.

Here’s what’s piquing ASX investor interest.

What’s sending this ASX gold share higher?

The Great Boulder Resources share price is leaping higher after the company reported it has identified a new high-grade gold lode at its Side Well Gold Project, located in Western Australia.

The results come from an area close by the Mulga Bill High-Grade Vein, where Great Boulder has struck significant gold intersections in recent drilling.

The results of the new drill hole, the first drilling in that location, returned 6 metres at 25.83 grams/tonne of gold from 268 metres.

Commenting on the Mulga Bill drill results sending the ASX gold share higher today, Great Boulder Resources managing director, Andrew Paterson said:

There are two results of particular interest in this batch of results. Firstly, the identification of a new high-grade lode where we drilled a deep intersection of 6m @ 25.83g/t Au is a great result with exciting implications for new mineralisation.

Secondly the 3m @ 7.03g/t Au in hole 22MBRC048 sits in the gap between the HGV and Main zones at Mulga Bill, so we are hoping to define a new zone in that area to improve continuity of mineralisation between the two high-grade areas

Reverse circulation (RC) drilling is ongoing at the site, and Great Boulder expects more results in the coming weeks.

Great Boulder Resources share price snapshot

Despite today’s big push higher, ASX gold share Great Boulder Resources remains down 27% in 2022. That compares to a year-to-date loss of 13% posted by the All Ordinaries.

The post Why this little known ASX gold share is rocketing 10% on Thursday appeared first on The Motley Fool Australia.

.

More reading

• Why did the AFIC share price just hit a new 52-week low?
• How big will the ANZ dividend be in 2023?
• New Hope share price up 6%: Why things keep getting better for ASX coal shares
• The Block share price is smashing the market with a 6% gain today
• Nuix share price slides amid ASIC lawsuit

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.

from The Motley Fool Australia https://ift.tt/6faLy9o

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) dividend is one of the most popular options on the Australian share market for income investors.

For decades, the banking giant has been sharing a portion of its profits with its shareholders each year.

In light of this, investors may be keen to know where the ANZ dividend is heading from here.

Let’s take a look at what one leading broker is expecting for the bank’s returns in 2023.

How big will the ANZ dividend be in 2023?

First things first, let’s start with the most recent full year dividend that the bank has paid.

Due to its financial year running 1 October to 30 September, FY 2021’s fully franked dividend of $1.42 per share is the most recent full year dividend.

Looking ahead, according to a note out of Citi, it is expecting the bank to declare a fully franked final dividend of 72 cents per share later this year.

This will bring the ANZ dividend for FY 2022 to a fully franked $1.44 per share, up modestly year over year. And based on the current ANZ share price of $23.43, this will mean a 6.15% dividend yield for investors.

But the good news is that Citi is expecting a much larger increase in the ANZ dividend in FY 2023.

Its analysts are currently forecasting a fully franked $1.56 per share dividend for that financial year, which represents a 12 cents or 8.3% increase on its FY 2022 estimate.

If Citi’s forecast proves accurate, it will mean a generous dividend yield of almost 6.7% for income investors.

But it gets better. Citi also sees plenty of upside for the ANZ share price. It currently has a buy rating and $29.00 price target on the company’s shares. This implies potential upside of almost 24% for investors, as well as those generous dividend payments. Not bad!

The post How big will the ANZ dividend be in 2023? appeared first on The Motley Fool Australia.

.

More reading

• What’s the outlook for ASX 200 bank shares in October?
• Macquarie vs NAB shares: Which bank is the better buy right now?
• Why did the Macquarie share price trail the other ASX 200 banks today?
• Analysts name 2 ASX dividend shares to buy today
• Does ANZ really have the best profit margins of the big four bank shares?

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 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.

from The Motley Fool Australia https://ift.tt/JRVG6Kb

The New Hope Corporation Limited (ASX: NHC) share price is up 6.1% to $6.26 as ASX energy shares lead the market again today.

The S&P/ASX 200 Energy Index (ASX: XEJ) is up 2.71% at the time of writing. More specifically, it’s ASX coal shares that are having a party.

In addition to New Hope being up, Whitehaven Coal Ltd (ASX: WHC) shares are also rising 4.4% to $9.17. The Yancoal Australia Ltd (ASX: YAL) share price is up 3.6% to $5.78.

What tailwinds are pushing the New Hope share price up?

Well, there’s no news out of the company today, and the coal price actually dipped a little overnight.

What’s likely happening today is that investors are just feeling really positive about coal and energy stocks in general. The energy index is up 25% in 2022 so far, and New Hope is up a staggering 169%.

On top of that, a note out of Macquarie yesterday predicted stronger thermal coal prices to come.

That’s great for New Hope shares because the company is a pure-play thermal coal miner. 

The broker says developed economies are showing a “willingness to pay a premium to secure energy supply” given current global challenges.

The broker upped its outlook for the thermal coal price by 38% to 114% over CY23 to CY27.

The coal price hit a record of US$460 earlier this month, according to Trading Economics data. The value of the commodity has more than doubled over the past 12 months.

In turn, Macquarie also increased its forecast earnings per share (EPS) for New Hope. Its expectations are up 34% for FY23, 163% for FY24, and more than 400% in FY25.

The post New Hope share price up 6%: Why things keep getting better for ASX coal shares appeared first on The Motley Fool Australia.

.

More reading

• 3 ASX 200 shares soundly beating the market on Thursday
• Here are the top 10 ASX 200 shares today
• ‘Willingness to pay a premium’: ASX coal shares boom again on Wednesday
• Up 165% so far in 2022, is the party just kicking off for New Hope shares?
• September living up to its ‘worst month of the year’ reputation as ASX 200 finally cracks

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

from The Motley Fool Australia https://ift.tt/Hg7xLNX

The Block Inc (ASX: SQ2) share price has been among the best performers on the ASX 200 index on Thursday.

In afternoon trade, the payments company’s shares are up a sizeable 6% to $89.66.

Why is the Block share price storming higher?

Investors have been fighting to get hold of the company’s shares today after Block’s US-listed shares stormed higher on Wednesday night.

As one ASX-listed Block share is equal to one NYSE-listed Block share, the locally listed shares tend to follow the lead of their American counterparts each day.

The good news for local investors is that Block’s shares rose 7% to US$59.07 overnight after a major rebound in the tech sector, which led to the tech-focused NASDAQ index rising 2.1%.

Based on current exchange rates, this equates to a price of A$91.17, which is a touch higher than where the locally listed Block share price trades today.

What drove the strong gain?

Improving investor sentiment appears to have been the driver of this strong gain. Particularly for beaten down tech and fintech stocks.

It wasn’t just Block that was rising on Wall Street on Wednesday. Rivals Affirm and PayPal also recorded 5%+ gains.

It appears as though investors may feel that US stocks have bottomed after hitting a 2022 low earlier this week. Though, we’ve seen a number of false bottoms in recent months. So, time will tell if things are different this time.

The post The Block share price is smashing the market with a 6% gain today appeared first on The Motley Fool Australia.

.

More reading

• September living up to its ‘worst month of the year’ reputation as ASX 200 finally cracks
• Not all ASX 200 shares are getting hammered today. Here are some winners
• These are the 10 most shorted ASX shares
• Why Block, Brainchip, Domino’s, and Vulcan shares are sinking today
• Here’s why the Block share price is being smashed today

from The Motley Fool Australia https://ift.tt/3NGjYBq

The Nuix Ltd (ASX: NXL) share price is trudging lower in afternoon trade on Thursday.

At the time of writing, Nuix shares are swapping hands at 59.75 cents a piece after drifting more than 2% lower.

In broad sector moves, the S&P/ASX All Technology index (ASX: XTX) has stretched up nearly 2% after a gain early in the session.

What’s up with the Nuix share price?

The share caught the attention of sellers today following a company announcement.

Nuix advised that the Australian Securities and Investment Commission (ASIC) has commenced civil proceedings in the Federal Court of Australia against the company and its directors.

This was for a period from 18 January 2021 to 21 April 2021, the release says, and stems from Nuix’s disclosure of certain figures in its annual numbers.

Specifically, ASIC is concerned with allegedly deficient reporting of the company’s “Annualised Contract Vale (ACV)” figure in its annual report.

The release mentioned:

ASIC alleges that aspects of the company’s market disclosure in that period contravened provisions of the Corporations Act and ASIC Act and that the relevant directors breached their duties in respect of that disclosure.

ASIC isn’t taking any decisions lightly, either.

It is seeking a ‘please explain’ from Nuix, penalties against the company, and disqualification orders against the directors involved.

To push back, Nuix has denied all allegations made against it and its directors, noting it intends to defend against all of the proceedings.

It was not able to provide commentary due to the ongoing nature of the case.

Meanwhile, the Nuix share price is down more than 75% in the past 12 months and is down 73% this year to date.

The post Nuix share price slides amid ASIC lawsuit appeared first on The Motley Fool Australia.

.

More reading

• Here’s why Nuix shares are hitting the headlines again
• Up 20% today, what’s new with the Nuix share price?
• Why De Grey, Mineral Resources, Nuix, and Yancoal shares are racing higher
• Nuix share price rockets 26% on takeover speculation before halt

Motley Fool contributor Zach Bristow 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.

from The Motley Fool Australia https://ift.tt/d6LhqXt

The BHP Group Ltd (ASX: BHP) share price is lifting today, but three ASX 200 mining shares are rising even higher.

The Evolution Mining Ltd (ASX: EVN), Northern Star Resources Ltd (ASX: NST), and Newcrest Mining Ltd (ASX: NCM) share prices are all in the green today.

Let’s take a look at why these ASX 200 mining shares are doing so well today.

Gold prices rise

Evolution shares are surging 4.76% today, while Northern Star shares are up 6.42%. Meanwhile, Newcrest shares are lifting 5.65%. BHP shares are climbing 2.98% at the time of writing.

Evolution, Northern Star and Newcrest are all major gold producers. BHP is a global mining giant producing multiple commodities, including copper, iron ore, nickel, coal, potash, gold, uranium and silver.

The gold price leapt 2% in global markets overnight after the US dollar retreated slightly. US gold futures climbed 2.1% to US$1,670.

High Ridge Futures metals director David Meger, quoted by Reuters, highlighted gold had moved away from previous lows amid a pullback in the dollar and yields. He added:

The factors in regards to Russia and the discussion of annexation… that probably gave a bid to the (gold) market from a safe-haven perspective.

However, iron ore futures dropped 1% overnight amid concerns about Chinese economic growth.

Macquarie analysts have recently lifted the price target on BHP shares to $44. This is a nearly 15% upside on the current share price. Macquarie has increased earning estimates for the mining company by 5% per year through to FY 2026 to reflect higher coal prices.

Share price snapshot

The BHP share price has soared 18% in the past year. In contrast, Northern Star shares have shed 10%, Evolution shares have lost nearly 43% and Newcrest shares have dropped 26%.

The S&P/ASX 200 Materials Index (ASX: XMJ) has climbed 5% in a year.

The post Guess which ASX 200 mining shares are outpacing BHP today appeared first on The Motley Fool Australia.

.

More reading

• The Newcrest dividend is being paid today. Here’s the lowdown
• 5 things to watch on the ASX 200 on Thursday
• Here’s why the Northern Star share price is staging a partial rebound
• Top brokers name 3 ASX shares to buy today
• ‘Willingness to pay a premium’: ASX coal shares boom again on Wednesday

Motley Fool contributor Monica O’Shea 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.

from The Motley Fool Australia https://ift.tt/ujGISJ7

Australian investors, rejoice! The S&P/ASX 200 Index (ASX: XJO) is posting a strong gain on Thursday after two weeks of unbearable tumbles and smaller intermittent gains. But some ASX 200 shares are taking today’s uptick a step further.

Three ASX 200 stocks are surging as much as 6% today despite only silence from the companies.

To put their performance into perspective, the index has lifted 1.8% at the time of writing.

Let’s take a look at the ASX favourites posting major gains on Thursday.

3 ASX 200 shares beating the market today

The first ASX 200 share taking off ahead of the broader market is tech favourite Block Inc (ASX: SQ2). The Block share price is lifting 6.1% to trade at $89.79 right now.

Its rise follows a fortnight in which the stock plunged more than 18% compared to the S&P/ASX 200 Information Technology Index (ASX: XIJ)’s 7% tumble.

Also outperforming is the share price of Aussie fund manager Magellan Financial Group Ltd (ASX: MFG). The stock is up 3.3% right now, trading at $11.74.

Like that of Block, the Magellan share price has struggled through September so far. It has dumped 6% since announcing its funds under management (FUM) saw a $1.3 billion outflow over the course of August, seeing its total FUM hit $60.2 billion.

Finally, the New Hope Corporation Limited (ASX: NHC) share price is launching upwards, gaining 6.6% to trade at $6.29.

It’s just the latest gain posted by the ASX 200 coal share, which has now rocketed 14% since the company released its full-year earnings last week.

The coal producer’s profits soared more than 1,100% year-on-year to $983 million, leading the company to declare a 31-cent final dividend and a 25-cent special dividend.

Combined, the offerings represented a 700% increase on financial year 2021’s seven-cent final dividend.  

The post 3 ASX 200 shares soundly beating the market on Thursday appeared first on The Motley Fool Australia.

.

More reading

• Why is the Woodside share price on the rise today?
• Could this prevent Santos shares from cashing in on gas demand?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why is the Santos share price all over the pitch on Wednesday?

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 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.

from The Motley Fool Australia https://ift.tt/89cq0gC

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.

You might be living under a rock if you haven’t heard the word “recession” being thrown around in the media over the past few months. Thanks to inflation, the Federal Reserve’s efforts to control inflation, and an overflow of global problems, a worldwide economic contraction is on the table (though not guaranteed) in the near future.

And it’s exactly this situation that could make well-prepared investors significantly wealthier a few years down the line. So if you want to address your anxiety while setting your portfolio up for success, here are four simple actions you can take that’ll pay off.

1. Determine when you’ll need your money

The first step to prepare for a recession is to think about your financial goals and clarify them. Specifically, decide when you want to withdraw your investment. Will you need the money a year from now, when it’s time to pay for a large expense? Or perhaps your time frame is five years — or maybe even 30. 

The reason why this step is important is that you probably shouldn’t be investing any of your moola if you’re going to need it within three years. Any investment you make has a solid chance of taking at least that long to break even, which is a key consideration given that you’re buying stocks in a recessionary environment where share prices are apt to fall in the near term.

And it’d be a pity if you were forced to liquidate your position at a loss simply because you didn’t plan ahead and keep your assets in cash or an equivalent instrument. 

2. Identify your vulnerable stocks

The second thing to do if you’re afraid of a recession is to look at your portfolio and assess which of your investments are more vulnerable and could face harsher headwinds in the event of a recession — and which positions may be more stable.

For example, if you own shares of Johnson & Johnson (NYSE: JNJ), you would probably mark it as being relatively sturdy in a recession. The company develops medicines and medical devices that consumers need.  Economic conditions would have to be quite dire for people to start skimping on such necessary products.

In contrast, if you own some Tesla, Inc., (NASDAQ: TSLA) you’d do well to identify it as being very vulnerable to squeezed consumer wallets. Expensive electric vehicles might well be the products of the future, but they’re not high on the list of household priorities to purchase when money is tight.

Likewise, the automaker is vulnerable to all manner of fluctuations in the prices of the commodities it needs to make its vehicles, which might be an additional headwind in a recession.

3. Start stashing cash to build on your high-conviction positions

Now, it’s time to review your positions still further, including your investing thesis for each one, to decide whether their challenges are temporary and caused by macroeconomic factors beyond their control, or whether a recession might usher in conditions that would ultimately be fatal to their long-term returns.

Let’s say you think Tesla could be vulnerable to falling sales during a recession. But you also think that it’ll survive any headwinds and be able to keep growing at a steady pace afterward. You may then want to save up cash to buy more shares — of course, as long as it’s not too large a position and is a part of a diversified portfolio. You could also do the same thing for your less vulnerable stocks, like Johnson & Johnson.

4. Bide your time patiently

The last thing to do if you’re worried about a recession is to set up your watch lists and portfolio alerts to let you know when it may be time to buy more shares of the stocks you’re eyeing. Then, wait patiently, preferably while continuing to save cash and continuing to build on your high-conviction positions that you don’t expect to be vulnerable, like Johnson & Johnson. It’s probably for the best to pause your purchases of highly vulnerable companies like Tesla if you think a recession is coming, though.

That’s right, you shouldn’t stop buying stocks in general if you’re fearful — just prepare to buy more shares if the conditions make it lucrative to do so. In other words, it’s best to make your plans for what to do with your portfolio during a recession, then get on with your life. Most years don’t feature recessions, and many of the predictions about looming recessions tend to be wrong. Once you have a strategy, it should help prepare you for whatever may happen.

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

The post Afraid of a recession? Do these 4 things today appeared first on The Motley Fool Australia.

.

More reading

• Why Tesla stock surged higher today
• 2 high-growth electric vehicle stocks to consider buying (other than Tesla)
• This stock market investment strategy made money 100% of the time over the last century
• Are you attracted to ASX losers?
• Is Tesla stock recession-proof?

Alex Carchidi 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 Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson. 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.

from The Motley Fool Australia https://ift.tt/daA6OBH

The Australian dollar may be wallowing around at more than a two-year low but that spells good news for several S&P/ASX 200 Index (ASX: XJO) shares.

While the Aussie battler bounced more than a cent from its 2020 lows to around US65 cents in the last 24 hours, the trend for our dollar is still down.

Some experts are forecasting the Aussie to fall to around US60 cents before the year end. This is due largely to the faltering global economy driving investors into the relative safety of the US dollar.

How ASX 200 companies can benefit from a weak Australian dollar

It’s bad news for those of us looking to holiday overseas, but the opposite is true for many ASX 200 shares.

This is because several of our larger companies are net exporters. This means they sell their services and wares in US dollars.

The weak exchange rate will boost their revenue, earnings and dividends when these are converted to the Aussie.

Why not all ASX 200 companies are smiling

Make no mistake, a weak Aussie is generally good for the overall Australian economy. This assumes it doesn’t trigger too much inflationary pressure from imported goods and ignores the impact of hedging contracts that a company may have.

Naturally, not all of our largest ASX shares benefit from this thematic. For instance, Woolworths Group Ltd (ASX: WOW), Telstra Corporation Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA) won’t get a free lift. In fact, the downtrodden Aussie could even be a headwind to profitability for some of them.

Why some miners benefit more than others

On the flip side, the ASX 200 companies that are best placed to benefit from the currency trend are those that not only sell most of their products in US dollar, but also have a large Australian dollar cost base.

If a company sells and buys in the same currency, then the exchange rate makes little difference.

From this perspective, miners like Fortescue Metals Group Limited (ASX: FMG) could be in the winner’s circle. It sells iron ore in US dollars but its mines (and most of its workforce) are in Australia.

This assumes the commodity price doesn’t work against the miner in the same time period.

Another ASX 200 company winning from the Aussie

Another currency beneficiary is hearing implant maker Cochlear Limited (ASX: COH). Most of its devices are manufactured in Australia and Sweden while sales in North America make up a substantial percentage of its total sales.

Can ASX tech shares benefit?

ASX tech companies could also be another group that will welcome the falling Aussie – all things being equal. I am referring more to software than hardware innovators. Hardware is mostly made in China and paid for in US dollars, while the main costs for software companies are developers (many of whom may be based here).

Again, I am ignoring the ongoing staff shortages and wage inflation. But if companies can manage their cost base well and sell their solutions in US dollars, then they should be in a sweet spot.

One ASX tech company that I suspect fits this niche is logistics software group WiseTech Global Ltd (ASX: WTC).

Foolish takeaway

Just to be clear, I am not suggesting investors buy an ASX 200 company just based on the exchange rate. There are many other more important variables that need to be looked at when picking ASX shares to buy.

But next time you feel like complaining about the weak Aussie, just remember there are always winners and losers for any event.

The post 3 ASX 200 companies that could benefit from a falling Aussie dollar appeared first on The Motley Fool Australia.

.

More reading

• Own ASX 200 telco shares? Here’s the latest following the Optus hack
• Own CBA shares? Dividends are coming your way today
• Is this ASX 200 share a better buy than Fortescue right now?
• Woolworths shares: Buy, hold, or fold?
• The Fortescue dividend is hitting bank accounts today. Here’s the latest

Motley Fool contributor Brendon Lau has positions in Commonwealth Bank of Australia and Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear Ltd. and WiseTech Global. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited and WiseTech Global. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/gFGfiY9