Category: Stock Market

The Nuix Ltd (ASX: NXL) share price was on fire on Friday morning before being halted.

The investigative analytics and intelligence software provider’s shares were up a massive 26% to 87 cents shortly after the open.

Why is the Nuix share price rocketing higher?

Investors were scrambling to buy Nuix’s shares this morning amid speculation that it could be the latest beaten down tech company to receive a takeover approach.

This follows recent proposals for Nitro Software Ltd (ASX: NTO) and Tyro Payments Ltd (ASX: TYR) from private equity firm Potentia that were swiftly rejected.

On this occasion, Potentia isn’t believed to be in the running for Nuix. Instead, according to The Australian, US-based business intelligence software company Reveal is rumoured to have tabled an undisclosed offer with the help of the team at investment bank Barrenjoey.

Though, it is worth noting that this isn’t the first time that Reveal has been tipped to be interested in Nuix. Just two weeks ago, the media outlet reported that an offer could be coming from the software company. However, that received little to no fanfare from investors. Second time a charm!

As things stand, Nuix has not responded to the takeover speculation, but an announcement is coming soon. The Australian share market has commented:

Trading in the securities of the entity will be temporarily paused pending a further announcement.

Investors will no doubt be wishing that they had done what Nuix’s CEO, Jonathan Rubinsztein, did and bought shares on-market this week.

According to a change of director’s interest notice, Rubinsztein picked up 350,000 Nuix shares for $236,259.60 between Tuesday and yesterday. Based on the Nuix share price prior to the pause, this parcel of shares is now worth just over $304,000.

The post Nuix share price rockets 26% on takeover speculation before halt appeared first on The Motley Fool Australia.

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More reading

• What’s been happening with the Nuix share price of late?
• Nuix share price tumbles following $23m loss in FY22

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 Tyro Payments. The Motley Fool Australia has recommended Nitro Software Limited and Tyro Payments. 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 Mineral Resources Limited (ASX: MIN) share price has taken off this morning after the company addressed rumours it’s considering spinning out its lithium business.

In response to recent speculation, the S&P/ASX 200 Index (ASX: XJO) giant said it “regularly evaluates various strategic options … including in relation to its lithium business”, but any such initiatives “are not sufficiently advanced or certain to warrant disclosure”.

The Mineral Resources share price is trading at $69.98 right now, 11.15% higher than its previous close.

Let’s take a closer look at what’s going on with the mining services business.

Mineral Resources share price surges amid lithium rumours

The Mineral Resources share price is soaring as the company neither confirms nor denies that its considering floating its lithium business.

As The Motley Fool Australia shared earlier, reports the company has enlisted JP Morgan to list its recently separated lithium activities in the United States appeared yesterday evening, published by the Australian Financial Review.

The publication also claimed top brokers Goldman Sachs and Macquarie believe Mineral Resources’ lithium business is behind 50% to 57% of the company’s value.

The ASX 200 giant boasted a near-$12 billion market capitalisation at yesterday’s close.

The company is reportedly considering the move in response to the valuation gap between it and Wall Street-listed lithium companies, such as US$34 billion giant Albemarle Corporation (NYSE: ALB).

About the company structure

Mineral Resources recently restructured its business into four growth pillars: Mining services, iron ore, energy, and lithium.

It mines and produces lithium at its Mt Marion and Wodgina projects. It also holds an interest in the Kemeron Lithium Hydroxide plant.

The Mineral Resources share price is on the move despite bearish comments from Morgans.

The broker believes major increases in lithium carbonate contract prices might not eventuate, saying:

It’s possible that contract prices for carbonate continue to increase but we think substantial increases are less likely … Despite the ongoing acute shortage of lithium products amid high demand for [electric vehicles] we continue to expect that prices will moderate over the next [one to two] years.

In response to such forecasts and other happenings, the broker has downgraded its rating for lithium stock Allkem Ltd (ASX: AKE) to hold. It’s held its price target on the stock steady at $15.40.

The post Mineral Resources share price rockets 11% as lithium spin-off rumours fly appeared first on The Motley Fool Australia.

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More reading

• Mineral Resources share price on watch amid lithium demerger rumours
• Why is the Lake Resources share price leaping 10% on Thursday?
• Here are 2 ASX dividend shares that experts rate as buys
• Why Goldman Sachs is bullish on the Mineral Resources share price
• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping

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 Goldman Sachs. 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.

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Mining is a capital-intensive activity requiring significant debt and equity outlays to start and continue operations. However, some ASX 200 lithium shares are bucking this trend with very low debt levels.

What’s better is that some of these companies have had their price targets upgraded by brokers amid the demand for lithium rising globally.

One method we can use to assess a company’s debt is through using the debt-to-equity (D/E) ratio. This is calculated by dividing the company’s total liabilities by shareholder equity. It provides the added benefit of assessing a company’s financial leverage and is easily comparable from firm to firm.

So let’s cover the top five ASX lithium stocks with the lowest levels of debt and their most recent developments.

Avz Minerals Ltd (ASX: AVZ)

AVZ Minerals has the lowest D/E ratio out of the five at 0.006.

The most recent news for the company is that it was removed from the S&P/ASX 300 Index (ASX: XKO) on Monday amid its shares being halted since May. Shares are frozen at 78 cents each.

The voluntary suspension is in relation to the finalisation and release of an announcement regarding its mining and exploration rights for the Manono Lithium and Tin Project in the Democratic Republic of the Congo.

AVZ Minerals’ share price is down 11% year to date.

Liontown Resources Limited (ASX: LTR)

Liontown Resources has a D/E ratio of 0.063.

The company’s share price and that of its ASX lithium peers rallied on Monday. This was amid a broker improving the price targets of several lithium shares in this list.

JP Morgan lifted its target on the Liontown share price by 45% to $1.60.

Liontown shares are currently swapping hands for $1.81 apiece, down 2.16% on the day.

The company’s share price is up around 5% year to date.

Core Lithium Ltd (ASX: CXO)

Core Lithium’s D/E ratio is 0.238.

The company was one of the most traded ASX shares on Thursday, with it and many of its lithium peers enjoying positive developments. This included data from the Federal Chamber of Automotive Industries (FCAI) revealing electric vehicle sales hit an all-time high in Australia.

At the time of writing, Core Lithium shares are up 2.5% to $1.64.

The company’s share price is up around 160% this year to date.

Allkem Ltd (ASX: AKE)

Moving up higher now is Allkem’s D/E ratio of 11.7.

This company was one of the few that received positive broker coverage this week. Macquarie gave Allkem a price target of $21 per share on Tuesday.

In early trading on Friday, its shares are up 1.85% to $15.45.

Allkem’s share price is up around 38% year to date.

Pilbara Minerals Ltd (ASX: PLS)

Finally, the ASX lithium share with the most leverage on its books is currently Pilbara Minerals, with a D/E ratio of 22.6.

The Pilbara Minerals share price hit a new all-time high of $4.41 on Thursday before closing at $4.25. In early trading on Friday, it has surpassed that mark and is currently at $4.42, up 4% on the day.

The company’s share price is up nearly 25% year to date.

The post 5 ASX 200 lithium shares with the lowest levels of debt appeared first on The Motley Fool Australia.

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More reading

• Up 30% in a month, has the Allkem share price run its course?
• Here are the top 10 ASX 200 shares today
• Why has the Core Lithium share price gained 13% in the past week?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why is the Pilbara Minerals share price surging 6% to another all-time high today?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Matthew Farley 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 Macquarie Group 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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There’s likely to be a corporate apocalypse should we head into a deep economic recession, as some experts are predicting. And ASX shares are right in the firing line.

That’s a fitting appraisal for some entities already operating as so-called ‘zombie companies’ – businesses whose operating profits are persistently lower than their cost of debt.

Recent data suggests that a good chunk of global equities are backed by companies that fall under this criteria. Could you be holding one of these names?

Capital structure matters

The percentage of debt and equity that make up a company’s assets and liabilities is known as its capital structure.

Typically, companies can raise money in two ways: via equity, that is through the issuance of shares; or via issuing debt.

Debt comes with a charge of interest on top of the principal repayments. Regardless of the route to seed capital, it is being spent to create an asset that will generate future economic benefits to pay back the debt.

Institute of International Finance managing director Sonja Gibbs noted on Bloomberg that global debt levels had “skyrocketed” over the past 10-15 years, spurred on by record low interest rates.

Add in record high commodity prices and input costs, and this has created a situation where many companies must continue borrowing to remain solvent.

Gibbs added:

What we mean by zombie companies is a company that essentially has to borrow to keep going. They are highly leveraged, not growing very fast and their revenues aren’t up to par.

You [a company] don’t earn enough revenue to cover your debt costs, and remain solvent.

Meanwhile, the OECD defines a zombie company as a business aged older than 10 years that has an interest coverage ratio of less than one for three consecutive years.

In a nutshell, a zombie company is unable to service the cost of its debt and maintain operations at the same time without having to borrow again.  

That’s a no-no because, as mentioned, raising capital [debt, leverage] should be used to create additional economic value, not to simply get by.

Are we in zombie land?

We checked companies within the ASX 200 to see what names might fit the defined criteria. On a simple stock screen, five ASX 200 companies have an interest coverage ratio (earnings before interest and tax [EBIT] divided by interest expense) less than one.

They are Block Inc CDI (ASX: SQ2), 5E Advanced Materials Inc (ASX: 5EA), Meridian Energy Ltd (ASX: MEZ), Auckland International Airport Ltd (ASX: AIA) and Origin Energy Ltd (ASX: ORG).

Each of these, with the exception of Block, is in a capital-intensive business that has high fixed costs just to maintain operations.

When opening up that criteria to the mid-cap space as well, the list grows to 27 names, including Australia’s flagship airline Qantas Airways Ltd (ASX: QAN).

And with all levels of market cap included, it appears there are 955 names listed on the stock exchange with an interest coverage ratio of less than one.

As to how long these ASX shares have been operating and how long the ratio had been less than one, we weren’t able to define in the stock screen. But it’s something to think about nonetheless.

However, it does present interesting suppositions, especially relating back to what Sonja Gibbs said – that the corporate world is highly leveraged at the moment, and this is a large risk.

This sentiment has been echoed by Christopher Joyce, portfolio manager at Coolabah Capital, in his column with The Australian Financial Review both in December last year and just last month.

Joyce posits that “hordes of zombie companies are about to die” after warning last year to “[b]e afraid [because] the zombie economy can’t last”.

With that in mind, interest rates are front of mind for many equity investors at the moment, and with no signs of the speed of rate hikes slowing down, we very might be heading into zombie land.

The post Could you be holding onto ‘zombie’ ASX shares hoping for new life? appeared first on The Motley Fool Australia.

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More reading

• Megaport share price soars 10% as ASX tech shares trump on Thursday
• Why are ASX 200 tech shares having such a top run on Thursday?
• Why is the Block share price charging higher today?
• ‘Reckless?’ Why the $400 million Qantas share buyback is dividing experts
• Qantas share price falls alongside ASX 200 despite surging airfares

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 positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Fortescue Metals Group Limited (ASX: FMG) share price has opened the session strongly.

In early trade, the iron ore giant’s shares are up 3.5% to $17.37.

Why is the Fortescue share price charging higher?

There have been a couple of catalysts for the gains by the Fortescue share price on Friday.

One is a strong showing in the resources sector. For example, the S&P/ASX 200 Resources index is up 1.5% at the time of writing.

This compares favourably to the 0.1% gain being recorded by the ASX 200 index. In fact, if you were to take the resources gains out of the equation, the benchmark index would almost certainly be in the red.

Also giving the Fortescue share price a lift on Friday has been the iron ore price. With the company currently generating all its revenue from its iron ore operations, its shares are heavily influenced by the iron ore price.

The good news for shareholders is that, according to CommSec, the benchmark iron ore price climbed 3% or US$2.91 a tonne to US$100.09 a tonne overnight.

This was driven by positive news out of China relating to the restart of major housing projects in Zhengzhou. Traders appear to believe this will lead to increased demand for the steel-making ingredient.

The post Why is the Fortescue share price bolting out the gate on Friday? appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price strengthens amid boost in China’s iron ore appetite in August
• Why are ASX 200 mining shares getting blasted on Wednesday?
• The Fortescue share price has cratered 13% in a week. What’s going on?
• Could this be a blow to the fortunes of Fortescue Future Industries?
• Can you buy shares in Fortescue Future Industries?

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.

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On 30 August, the Woodside Energy Group Ltd (ASX: WDS) share price hit a multi-year high of $36.68.

The last time it traded around this level was in January 2020 before COVID-19 hit. Two months later in March 2020, the Woodside share price fell to almost $15. And it’s been a volatile road back.

Woodside shares have since slipped from their multi-year high, partially from falling oil prices but also due to losing 5.5% on Thursday when they traded ex-dividend.

Why did the Woodside share price hit a multi-year high?

The Russia-Ukraine war and the resulting gas supply constraints in Europe have buoyed the Woodside share price.

That’s hardly surprising given the company is one of the top 10 LNG players in the world following its merger with the petroleum business of BHP Group Ltd (ASX: BHP), which was completed on 1 June.

About 70% of Woodside’s assets are involved in gas production. So, a global supply/demand imbalance is a tailwind, to be sure.

Since the Ukraine invasion, growing sentiment in Europe to diversify away from Russia has also been great news for Woodside. Russia supplied the EU with 40% of its natural gas in 2021, with Germany the biggest importer, according to bbc.com.

Those tailwinds have pushed the Woodside share price up by more than 40% in the year to date.

Woodside’s recently released half-year FY22 results have contributed to its share price surge as well.

On 30 August, Woodside announced a 400% profit surge and declared the largest interim dividend since 2014.

The dividend, due to be paid on 6 October, is triple the size of the interim dividend paid for the 1H FY21.

The strong performance was attributed to improved reliability at LNG plants plus one month’s worth of production from the BHP assets. That production ended up being 17% of Woodside’s total production for 1H FY22. Imagine what six months of production will do to Woodside’s earnings.

That BHP merger ended up being a pretty timely acquisition given the geopolitical issues in play today.

Aren’t Woodside shares doomed in the green energy transition?

It’s only natural to assume the global green energy transition is a bad thing for fossil fuel producers like Woodside.

The key word here, though, is transition. Decades of it. The world cannot decarbonise overnight. Renewable energy producers need time to ramp up so they can replace traditional fuels at scale. Additionally, fossil fuels are required to build renewable energy infrastructure like wind turbines.

So, fossil fuel producers like Woodside and Fortescue Metals Group Limited (ASX: FMG) — through its subsidiary Fortescue Future Industries — arguably have the time to adapt their businesses and position themselves to prosper in and after the global green energy transition. And they’re seeking to get in now on the opportunities that the transition presents to them.

Woodside and Fortescue, for example, appear to have a two-pronged action plan. They intend to keep on producing fossil fuels while also diversifying into renewables. Plus, the companies are doing things in-house to reduce their carbon emissions so investors won’t perceive them to be as carbon dirty as before.

A strategy to ‘thrive through the energy transition’

Woodside’s half-year report repeats the same phrase a couple of times. Woodside has a “strategy to thrive through the energy transition as a low-cost, lower-carbon energy provider”.

Woodside CEO and managing director Meg O’Neill explains:

The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on the importance of gas in the world’s energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70% of Woodside’s portfolio.

Safe and reliable supplies of gas are not only critical to global energy security but will play a key role as our customers seek to decarbonise, alongside new energy sources such as hydrogen and ammonia that Woodside is investing in.

Our strategy to thrive through the energy transition as a low-cost, lower-carbon energy provider continues to progress through recently announced initiatives across hydrogen refuelling, carbon capture and storage and carbon to products technologies.

How is Woodside preparing for the transition?

Woodside has set a target to invest $5 billion in new energy products and lower-carbon services by 2030.

Among its projects is H2OK, a proposed liquid hydrogen project in Oklahoma in the United States.

Phase 1 involves the construction of an initial 290-megawatt (MW) facility, producing up to 90 tonnes per day (TPD) of liquid hydrogen through electrolysis, initially targeting the heavy transport sector.

Woodside says it is “actively marketing hydrogen offtake and is advancing a number of agreements in support of a targeted final investment decision (FID) in 2023”.

There’s also H2Perth, a proposed “world-scale liquid hydrogen and ammonia production facility” in Perth, Western Australia. Environmental studies are continuing and Woodside is targeting an FID in 2024.

Woodside also has solar energy, carbon capture and storage, and carbon capture and utilisation projects on the go.

The gas giant said in its half-year report that it’s “made progress towards its goal of a 15% reduction in net equity scope 1 and 2 greenhouse gas emissions by 2025 against its 2016-2020 baseline”.

Woodside said Sustainalytics had recognised it as an ‘ESG industry top rated company’ in 1H FY22.

The post The Woodside share price is trading near multi-year highs. Will the green energy transition spoil the party? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here’s why ASX 200 energy shares are diving lower today
• Why has the oil price been so volatile lately?
• Why is the Woodside share price crashing 7% today?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited and Woodside Petroleum Ltd. 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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Takeover talk has hit tech town, with investment firm Potentia Capital Management having lobbed bids for two ASX shares – Nitro Software Ltd (ASX: NTO) and Tyro Payments Ltd (ASX: TYR).

Each of the offers ­– together worth more than $1 billion – was quickly rejected. Both companies said the firm’s bid undervalued their business.

So, with Potentia seemingly on the hunt for a takeover and having had no luck so far, could other ASX tech shares be in its sights?

Let’s take a closer look at the firm’s apparent wish list and whether other stocks might fit the bill.

Potentia’s $1 billion bidding spree

Nitro and Tyro have both knocked back takeover offers from consortiums led by Potentia recently. The former rejected a $1.58 per share bid late last month and the latter refused a $1.27 per share bid yesterday.

And while they work in entirely different spaces, it’s not difficult to draw parallels between the pair.

Shares in the respective ASX tech titans have fallen 30% and 57% year-to-date.

Interestingly, both companies dubbed Potentia’s respective bids “highly opportunistic”.

Nitro’s chair said the firm’s bid for the company was lobbed in a period of volatility among tech shares on the ASX and around the globe.

With that in mind, let’s look at the pair’s most recent results.

Tyro posted $318.8 million of payments revenue for financial year 2022 (FY22) – a 39% year-on-year increase. Meanwhile, Nitro boasted U$32.7 million of total revenue for the first half of the year – a 36% improvement on that of the prior corresponding period.

It appears Potentia might have a type. Both payment services provider Tyro and document productivity company Nitro boast thriving revenue, zero debt, and a sold-off share price.

And it’s not hard to find other ASX tech shares that fit the bill.

Could these ASX tech shares be in Potentia’s sights?

It’s been a rough year so far for ASX tech shares, in which many have suffered major sell-offs.

For instance, the Pointsbet Holdings Ltd (ASX: PBH) share price has plunged 67% year to date. The company – which grew its revenue by 52% in FY22 and holds no debt – will be dumped from the S&P/ASX 200 Index (ASX: XJO) later this month following its sell-off.

Stock in BetMakers Technology Group Ltd (ASX: BET) has also tumbled 49% so far this year despite the debt-free company recently posting a whopping 371.1% increase in revenue.

Other ASX tech shares that fit the bill include Whispir Ltd (ASX: WSP) and Bigtincan Holdings Ltd (ASX: BTH).

The former posted record FY22 revenue while the latter’s revenue simultaneously lifted 143%. Their stock has fallen 62% and 41%, respectively, so far this year.

The post Nitro now Tyro: Could there be ‘Potentia-l’ for other ASX tech shares? appeared first on The Motley Fool Australia.

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More reading

• Here’s what analysts are saying about the Betmakers share price
• Tyro share price rallies 31% following rejected takeover bid
• 4 ASX tech shares for the ‘patient investor’: expert
• Why Karoon Energy, Pilbara Minerals, PointsBet, and Whitehaven Coal are rising
• Why Adairs, Fortescue, PointsBet, and Qantas shares are dropping

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 BIGTINCAN FPO, Betmakers Technology Group Ltd, Pointsbet Holdings Ltd, Tyro Payments, and Whispir Ltd. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Nitro Software Limited, Pointsbet Holdings Ltd, Tyro Payments, and Whispir Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Allkem Ltd (ASX: AKE) share price has been in sensational form in recent weeks.

This morning the lithium miner’s shares have risen a further 3.5% to a record high of $15.71.

This means the Allkem share price is now up 30% since this time last month.

Has the Allkem share price peaked?

One broker that believes the Allkem share price may have peaked for the time being is Morgans.

According to a note, the broker has downgraded the company’s shares to a hold rating with a $15.40 price target.

This is broadly in line with where its shares are trading today.

What did the broker say?

Morgans remains very positive on the company’s future. However, with Allkem’s shares “trading very close” to its price target and its belief that lithium prices are close to reaching a top, the broker has decided to downgrade Allkem on valuation grounds. It explained:

We still think AKE is one of the best lithium pure plays on the market. However, after such a strong run since the full year result and with no additional announcements we think it’s time for investors to re-evaluate whether they continue to increase their position. Given only 2% potential upside to our price target at today’s close we reduce our rating to HOLD.

It’s possible that contract prices for carbonate continue to increase but we think substantial increases are less likely. […] Despite the ongoing acute shortage of lithium products amid high demand for EVs we continue to expect that prices will moderate over the next 1-2 years. We have seen the market react quickly when it anticipates weaker commodity prices and AKE’s share price is highly sensitive to expectations for lithium pricing.

Not everyone agrees with this view, though. Last week, Macquarie reiterated its outperform rating and $21.00 price target on Allkem’s shares. Time will tell, which broker made the right call.

The post Up 30% in a month, has the Allkem share price run its course? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 4 ASX lithium shares hitting all-time highs on Thursday
• Why is the Lake Resources share price leaping 10% on Thursday?
• Why are ASX lithium stocks having such a stellar run today?
• 2 fantastic ASX growth shares to buy now according to analysts

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

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

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

What happened

Shares of Apple (NASDAQ: AAPL) declined today, falling as much as 2.1% in early trading before moderating those losses to a 1.3% decline as of 1:43 p.m. ET. While not a tremendous decline, it was notably weaker performance than the market overall as well as the tech-heavy Nasdaq Composite, which were both positive on the day at that time.

Today’s weakness could be attributed to some “selling the news” by traders following yesterday’s event, in which Apple unveiled new iPhones, watches, and services, with more incremental innovation than any great leaps forward. Additionally, it appears most large-cap tech stocks of the FAANG cohort were underperforming today, with other lower-valued parts of tech such as semiconductors outperforming, so there may be some rotation going on here.

So what

Yesterday, Apple unveiled a slew of updates to its product portfolio, mostly centering on incremental health and emergency features for the new iPhone 14, as well as improved battery and camera specs. The biggest surprise may have been that Apple wasn’t raising prices on the iPhone 14, perhaps making a play for more market share in order to boost future services revenue. The most “new” product was a $799 Apple Watch Ultra, designed for extreme athletes. However, that is a relatively limited market.

So, there may have been some selling from traders who were hoping for a more “revolutionary” release. However, since other large-cap tech stocks were down today, there could also be some market rotation going on.

This morning, weekly jobless claims came in below expectations, which means the labor market is still incredibly strong despite Federal Reserve’s interest rate hikes. The strength of the labor market seems to indicate the Federal Reserve can perhaps raise rates more than thought without tipping the economy into recession. This morning, Fed Chair Jay Powell gave an interview in which he said he believed the Fed could bring inflation down without the severe social costs seen in the 1980s, when inflation was more entrenched.

Apple, trading at more than 25 times earnings, has become somewhat of a safe-haven stock in the technology world. However, Powell’s remarks may have led some to believe higher interest rates may not lead to a severe recession as some have feared.

Meanwhile, the recent market downturn has really decimated other corners of the tech market, especially quasi-cyclical stocks like semiconductors and formerly high-flying software companies. So, some traders may be selling the large-cap safe havens and buying these other parts of the technology market that have become cheap, assuming no recession.

Now what

While today’s underperformance is notable, one day doesn’t make much difference over the long term, and there are no big worries with Apple at the moment. This Warren Buffett favorite has a tremendously wide moat, tons of cash, and terrific leadership. Meanwhile, the absence of iPhone price hikes this year could lead Apple to gain even more market share against Android-based devices.

While the upside may not be as great as some other more beaten-down, smaller technology stocks, Apple remains a rock-solid company to anchor your portfolio.

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

The post Why the Apple share price fell today appeared first on The Motley Fool Australia.

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More reading

• 6 reasons to buy Apple stock now and never sell
• Why the Apple share price traded lower on Tuesday
• This under-the-radar Apple business is growing by leaps and bounds
• Why the shine was off Apple stock on Monday
• Apple sees this business reaching $10 billion soon

Billy Duberstein has positions in Apple and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. 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 has recommended Apple. 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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We’ve seen a number of companies in the S&P/ASX 200 Index (ASX: XJO) turn ex-dividend this week.

And this streak is only set to continue as more ASX 200 shares take away entitlements to their upcoming dividend payments.

On Monday, three ASX 200 shares are set to turn ex-dividend. This means that today will be the final day to lock in recently-declared dividends from these ASX 200 shares. Let’s check them out.

Chorus Ltd (ASX: CNU)

To kick things off, Chorus shares will be trading on Monday without an unfranked final dividend of 21 NZ cents.

Shareholders electing not to participate in the company’s dividend reinvestment plan (DRP) should see this payment come through on 11 October.

The ASX 200 telco share saw continued growth in demand for fibre broadband in FY22. This helped underlying revenue climb by NZ$4 million to NZ$959 million.

Meanwhile, the company’s cost management initiatives partly mitigated inflationary and COVID pressures. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by NZ$3 million to NZ$660 million.

As a result, the company noted it returned to earning more than it was investing in the network for the first time in a decade.

This helped Chorus declare total dividends of 35 NZ cents, up 40% from the prior year. 

What’s more, the company has increased its FY23 dividend guidance to 42.5 NZ cents per share. It’s also guiding for minimum total dividends of 47.5 NZ cents per share in FY24.

Based on the company’s FY23 dividend guidance, Chorus shares are currently trading on a forward dividend yield of 5.4%.

HUB24 Ltd (ASX: HUB)

ASX 200 financials share HUB24 will also be going ex-dividend on Monday, trading without a fully franked final dividend of 12.5 cents.

Investors who own HUB24 shares by the time the market closes today can pencil in a payment date of 14 October. 

The independent specialist platform provider noted it achieved record levels of organic growth in FY22. 

Combined with acquisitive growth from the addition of formerly ASX-listed Class, HUB24 grew revenue by 76% to $190 million.

On the bottom line, underlying net profit after tax (NPAT) surged by 133% to $36 million.

Importantly, the company continued to carve out more market share across the year, increasing its share from 3.9% to 5.1%.

This record performance saw HUB24 double its total dividends in FY22 to 20 cents per share, fully franked.

As a result, HUB24 shares are currently printing a trailing dividend yield of 0.9%, which grosses up to 1.2%.

Perseus Mining Limited (ASX: PRU)

Rounding out this trio of ASX 200 shares going ex-dividend on Monday is gold miner Perseus.

Today will be the last day to lock in Perseus’ unfranked final dividend of 1.64 cents, which will be paid on 12 October.

The ASX 200 gold miner delivered a record performance in FY22. Revenue surged by 66% to $1.1 billion while NPAT doubled to $280 million.

This result was underpinned by a 50% increase in gold production to 494,014 ounces (oz), a 6% reduction in all-in sustaining costs which came in at US$952/oz, and a stable average gold sales price of US$1,683/oz.

On the back of this record performance, Perseus declared a bonus dividend of 0.79 cents, which is included in the final dividend. Total dividends in FY22 arrived at 2.45 cents.

This put Perseus shares on a trailing dividend yield of 1.5% at the end of the financial year, ahead of the company’s target annual yield of at least 1%.

The post Here are 3 ASX 200 shares going ex-dividend on Monday appeared first on The Motley Fool Australia.

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More reading

• Do ASX 200 gold shares pay regular dividends?
• ‘Incredibly cheap’: Fundie reveals 3 ASX shares he’d buy right now
• Why is the ASX 200 diving 2% on Tuesday?
• Perseus share price falls despite delivering a record year and dividend boost
• Hub24 share price slumps despite dividend doubling on record growth

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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