Category: Stock Market

The Rio Tinto Limited (ASX: RIO) share price is edging lower on Tuesday.

That’s despite the mining giant making an encouraging announcement this afternoon.

At the time of writing, the Rio Tinto share price is down almost 1% to $91.05.

Rio Tinto share price lower despite Turquoise Hill update

Last month, Rio Tinto made an improved non-binding proposal of C$40 cash per share to the Turquoise Hill board to acquire the ~49% of the issued and outstanding shares of Turquoise Hill that it does not currently own. Turquoise Hill is co-owner of the Oyu Tolgoi project in Mongolia.

This offer was then bumped up to C$43 cash per share last week, with an agreement made in principle.

What’s the latest?

The good news is that the transaction has now progressed, with Rio Tinto and Turquoise Hill entering into definitive arrangement agreement today.

According to the release, the Turquoise Hill board of directors unanimously recommends minority shareholders vote in favour of Rio Tinto’s best and final offer. They have also entered into voting support agreements with respect to all of the Turquoise Hill shares they own or control.

Rio Tinto revealed that it has agreed to provide Turquoise Hill with secured short-term liquidity during the transaction period of up to US$1.1 billion. This would need to be repaid from an equity raising in the first half of 2023 if the transaction is not approved by shareholders.

But that won’t be enough to fund the Oyu Tolgoi project alone. Turquoise Hill has estimated that it requires US$3.6 billion of additional funding in total to complete the project. Therefore, Rio Tinto acquiring the company delivers certainty for the financing needs and alleviates any further funding risks for Turquoise Hill shareholders.

Management commentary

Rio Tinto’s chief executive, Jakob Stausholm, was pleased with the news. He said:

This Transaction will simplify governance, improve efficiency and create greater certainty of funding for the long-term success of the Oyu Tolgoi project. Rio Tinto’s offer guarantees Turquoise Hill’s minority shareholders outstanding value through a significant allcash premium for their shares. After extensive negotiations, the terms of the transaction are final and there will be no further price increase. We look forward to working with the Turquoise Hill Board of Directors to ensure Turquoise Hill shareholders are able to realise the significant and immediate value of the Transaction.

The Rio Tinto share price is now down 18% over the last 12 months following today’s decline.

The post Rio Tinto share price lower despite Turquoise Hill agreement appeared first on The Motley Fool Australia.

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More reading

• Own Rio Tinto shares? Here’s why the CEO just met with China Mineral Resources
• Why are ASX 200 mining shares getting hammered on Friday?
• What’s the outlook for ASX 200 copper shares in September?
• Is the Rio Tinto share price a buy post-earnings season?
• 5 things to watch on the ASX 200 on Friday

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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The Pilbara Minerals Ltd (ASX: PLS) share price has shot higher today. It’s currently up by more than 6%.

This means it’s now around 36% higher over the past month and has gone up 90% since the middle of June 2022.

While some of the increase in recent weeks may simply be a reversal of the declines seen earlier in the year, the company is now trading higher than it was before.

So, what could be causing the latest gains?

Brokers are still positive on the Pilbara Minerals share price

According to reporting by The Australian, the broker JP Morgan has decided that the ASX lithium share still has further upside.

The analyst Lydon Fagan from JP Morgan has upgraded the business to an outperform rating and has lifted the price target by another 17% to $4.10. A price target is where the broker thinks the share price will be trading in 12 months from the date of the rating.

A key reason for the increase in the price target is that JP Morgan has increased its long-term estimates for lithium prices because of a “steeper cost curve to incentivise low-grade Chinese supply to fill the supply-demand gap.”

The broker thinks that the lithium market could be undersupplied until 2025. That means the relationship between supply and demand could favour Pilbara Minerals for a while yet.

JP Morgan has increased its long-term forecast for lithium carbonate and spodumene prices — they were increased by 20% and 25% respectively.

Electric vehicle demand is likely to grow in the longer term, but supply chain issues and a recession could hurt growth.

The price target of $4.10 implies a possible rise of around 5% over the next year from the current level.

Another positive rating

JP Morgan isn’t the only broker positive on further gains for Pilbara Minerals.

Macquarie also rates the ASX lithium share as outperform. But it has a much stronger outlook for the Pilbara Minerals share price. Macquarie’s price target is $5.60. This implies a possible rise of more than 40%.

The reason for Macquarie’s optimism is that Pilbara Minerals is predicting that its production could increase by more than half in FY23. When combined with the high lithium price, this combination is expected to lead to a significant rise in net profit after tax (NPAT) and cash flow.

Pilbara Minerals share price snapshot

Over the last six months, the lithium miner’s share price has risen by around 40%.

The post Why broker JP Morgan just upgraded the Pilbara Minerals share price appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Allkem, Capricorn Metals, Lovisa, and Pilbara Minerals shares are rising today
• Up 75% since mid-June, is it too late to invest in Pilbara Minerals shares?

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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Despite bumps along the way, the Woodside Energy Group Ltd (ASX: WDS) share price is flat over the past 10 years.

Indeed, a few market shocks set back the energy producer’s shares, particularly the onset of COVID-19. This caused panic among oil markets as the global economy came to a grinding halt. Even so, the price of oil briefly went into negative territory for the first time in history.

Nonetheless, Woodside shares have been in the spotlight more recently given that energy prices have accelerated. The share price has rebounded to pre-pandemic levels and could even go higher depending on how energy markets play out.

Looking back on 6 September 2012, the company’s shares were trading at $34.54 per share.

Today, Woodside shares are swapping hands at $35.01.

Most people assume the company’s strong bi-annual dividend payout makes up for any stalled or negative growth in a share price.

Further strengthening the above argument, the Woodside board traditionally pays fully-franked dividends.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit that is passed onto shareholders when dividend payments are made by a company. Essentially, the company is paying the tax on the dividends received by the shareholders.

So, does Woodside’s monster dividend make up for the share price remaining flat in the past decade? Let’s take a look to see if it has been worth investing in the company’s shares solely for its upcoming dividend.

Does the Woodside dividend make up for the flat share price?

For argument’s sake, let’s say you bought $10,000 worth of Woodside shares exactly 10 years ago. You would have received approximately 289 shares.

If we take that figure and multiply it by the US109 cent (A$1.60) per share final dividend Woodside is offering, you’d get around $462.40 as a dividend payment.

Added with the current valuation of your Woodside holdings, you’d be on $10,580.29 or $580.29 profit in 10 years. This translates to an average return of 0.57% per year.

In comparison, if you invested in an ASX 200 index-tracking fund, you’d have gotten back a yearly average of 4.82%.

As you can see, the Woodside monster dividend, in my eyes, does not make up for the company’s share price performance over the last 10 years.

Woodside share price snapshot

Looking at a much shorter time frame, Woodside shares have gained 80% in the past 12 months.

Year to date, the company’s share price is also in positive territory, up 60%.

Woodside presides a market capitalisation of roughly $67 billion, making it the eighth largest company on the ASX.

The post The Woodside share price has gained under 5% in 10 years. Does the latest monster dividend make up for this? appeared first on The Motley Fool Australia.

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More reading

• How are ASX 200 energy stocks performing on Tuesday?
• Here are the top 10 ASX 200 shares today
• Why is the Woodside share price surging ahead on Monday?
• 5 things to watch on the ASX 200 on Monday
• Are ASX 200 energy shares a good investment right now?

Motley Fool contributor Aaron Teboneras 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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ASX energy stocks have had a mixed day on the market today amid the European energy crisis.

Energy companies in the green include Whitehaven Coal Ltd (ASX: WHC) and New Hope Corporation (ASX: NHC). Whitehaven shares are up 3.18%, while the New Hope share price is 5.57% higher.

The S&P/ASX 200 Energy Index is also 0.87% in the green.

Meanwhile, gains for Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) are more modest at 0.47% and 0.63% respectively.

Let’s take a look at what could be impacting ASX 200 Energy stocks on Tuesday.

Oil, gas, and coal prices weighing on markets

ASX coal shares are lifting after coal prices surged overnight amid the European energy crisis.

Coal prices in Europe rose 7.6% to hit a record $345 per tonne, Bloomberg reported. Greek energy operator DESFA also announced it will keep its coal-powered stations open in case they are needed as a last resort in the winter, its CEO said.

Russia has cut off the supply of natural gas to Europe, meaning alternative energy sources could be necessary.

Meantime, oil and gas shares Woodside and Santos are having a mixed day on the back of commodity prices.

After climbing overnight, the Brent crude oil price is currently down 0.72% to US$95.05 a barrel. However, WTI crude oil is 2.12% higher to US$77.71 a barrel.

The natural gas price is also 1.26% in the red, currently US$8.68 MMBtu.

European benchmark gas futures rose 15% after soaring 35% on Monday, Bloomberg reported.

Meanwhile, Woodside has revealed it has signed a deal to supply LNG to Europe. The company has entered a flexible long-term sale and purchase agreement with Uniper Global Commodities SE.

Woodside CEO Meg O’Neill said:

Woodside is pleased that this latest agreement with Uniper will provide a new source of LNG for consumers in Europe who are seeking alternatives to Russian gas.

Meanwhile, a potential Reserve Bank of Australia (RBA) rate rise could also be weighing on investors’ minds today. The RBA is predicted to lift the cash rate from 1.85% to 2.35% at today’s meeting.

The post How are ASX 200 energy stocks performing on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Whitehaven share price surges to yet another all-time high, here’s why
• The Whitehaven share price has surged 36% in a month. Why Morgans predicts more ‘supercharged returns’
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• 3 ASX All Ords shares smashing new highs on Monday

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.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been having a tough year.

Since the start of 2022, the travel agent’s shares have lost almost 10% of their value.

Concerns over the stuttering travel market recovery appear to be dragging on Flight Centre’s shares.

Is the Flight Centre share price good value?

The team at Goldman Sachs have been looking at the Flight Centre share price recently and have given their verdict.

According to the note, while the broker sees significant potential value in its shares, it still isn’t enough to warrant a buy recommendation.

Goldman Sachs has a neutral rating and $19.60 price target on the company’s shares. Based on the current Flight Centre share price of $16.90, this implies potential upside of 16% for investors over the next 12 months.

In addition, while the broker isn’t expecting any dividends in FY 2023, it sees scope for them to return in FY 2024.

What did the broker say?

Goldman notes that Flight Centre delivered a mixed result in FY 2022. While it was pleased with its total transaction value (TTV) and profits, it was concerned by the company’s revenue margin. The broker commented:

FLT reported FY22 revenue at A$1007mn (-8.7% vs. GSe and +3.4% vs. Visible Alpha Consensus Data) and underlying PBT loss at -A$-361mn vs. GSe at -A$363.9mn and consensus of -A$368.9mn. While TTV was largely in line with GSe at A$10.3bn, revenue margin was impacted by mix shift towards large corporate, domestic and online businesses, with this being a key area of focus for investors through the post results call. In line with its competitors, staff availability/cost pressures also remained a key point of discussion.

Its analysts were also very pleased with the company’s performance in the ANZ region. Though, once again, this was offset by a surprisingly softer performance in the United States.

In our view, the key area of positive surprise for us was the stronger than expected recovery in ANZ earnings and the continued strength in corporate account wins. However on the flipside, America’s recovery was slower than expected driven by momentum strengthening only in the latter part of the year.

In light of this, it has retained its neutral rating and continues to prefer rival Webjet Limited (ASX: WEB). Goldman has a buy rating and $6.80 price target on its shares.

The post Broker gives its verdict on the Flight Centre share price appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why did the Flight Centre share price beat the ASX 200 in August?
• What’s the outlook for the Flight Centre share price in September?
• Why is the Qantas share price beating the ASX 200 on Wednesday?
• Flight Centre share price up amid M&A rumours

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet 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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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.

Wall Street has many messages for people who are or who may become its customers:

• “We help people, businesses and institutions build, preserve and manage wealth so they can pursue their financial goals.” 
• “Our processes are finely tuned, deliberate, time-tested and risk-aware, all in the mission to achieve sustainable, above-market results.” 
• “Investment professionals design and manage a portfolio aligned to your goals…” 

These messages are designed to make you believe you really need the services of their highly trained, often highly compensated professionals. To be sure, some folks can do very well using such services. But when you do so, you’ll often be paying a not-insignificant fee — perhaps 1% or more of your invested assets, every year. If the company is managing, say, $200,000 for you, it may be collecting $2,000 or more from you every year. Over 10 years, that’s $20,000.

But keep in mind a few things about financial professionals:

• They’re not all equally talented. Some may not be that good at their job.
• Some may have conflicts of interest. If they’re not fiduciaries, they may not act in your best interest.
• Even if they serve you fairly well, a hefty annual fee will shrink your return.

You can do well without Wall Street investment advisors

A key secret that Wall Street doesn’t want you to know is that you can do quite well without their financial advice. If you’re thinking you need to pay a lot to professionals to manage your money because you don’t know much about investing, think again.

In that case, you might just invest in a broad-market index fund that tracks an index such as the S&P 500. Most index funds charge fairly low fees, and many charge minuscule fees. There’s very possibly an index fund or two available in your 401(k) plan’s menu of investments. And if not, you can just set up a brokerage account and buy index fund shares there.

If you’re thinking that opting for index funds will be a kind of compromise or settling, and that it will deliver lower returns than those professionals can deliver, consider this: Over the 10 years ending in 2021, fully 83% of managed large-cap stock mutual funds underperformed the S&P 500 index, and a whopping 94% of them underperformed it over 20 years.

That’s right — it’s really hard to beat index funds as a perfectly powerful way to build long-term wealth.

How money can grow in index funds

Just how powerful can index funds be? Well, know that the stock market has averaged annual returns of around 10% over long periods, though it will likely sport a higher or lower average over your investing time frame, which might be 20 or 40 years.

The table below shows how much you might amass over time if you sock away certain sums every year in an index fund that averages an annual gain of 8%:

Growing at 8% for	$10,000 invested annually	$15,000 invested annually	$20,000 invested annually
5 years	$63,359	$95,039	$126,718
10 years	$156,455	$234,683	$312,910
15 years	$293,243	$439,865	$586,486
20 years	$494,229	$741,344	$988,458
25 years	$789,544	$1,184,316	$1,579,088
30 years	$1,223,459	$1,835,189	$2,446,918
35 years	$1,861,021	$2,791,532	$3,722,043
40 years	$2,797,810	$4,196,716	$5,595,621

Source: Calculations by author.

See? Powerful.

There’s little reason to think that you’re best off handing off your hard-earned dollars to financial professionals who will take a meaningful cut of your profits — especially if they aren’t delivering market-beating, or at least market-meeting, returns.

You can also aim to do better than the market’s average returns, by adding some hand-picked stocks to your portfolio. Take some time to learn a lot more about investing first, though, so that you can be acting with a lot of knowledge and confidence, ideally investing in undervalued stocks.

The case for financial professionals

Despite the arguments above, there are times when it can be smart to tap the services of financial professionals. For example:

• If you are very familiar with a money manager and their track record, and you trust them to deliver solid returns over the long run. (Remember — any investor, amateur or professional, can have a bad year here and there.)
• If you need help with financial planning, such as for drafting a comprehensive retirement plan or for tending to your estate planning.
• If you just cannot bring yourself to do your own investing.

Financial professionals are not necessarily bad at all, but don’t just assume that they will do a better job for you than you can do for yourself, especially if you opt to minimize fees by using low-cost index funds. If you’re considering using a professional, do some digging into who exactly will be serving you and how talented and trustworthy they are.

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

The post The big secret Wall Street will never tell you about investing appeared first on The Motley Fool Australia.

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More reading

• Why Macquarie is tipping 55% upside for ASX lithium share Allkem
• Why is the Nickel Industries share price getting hammered on Tuesday?
• Why is A2 Milk buying back shares?
• Why is the Northern Star share price losing its shine on Tuesday?
• Own Rio Tinto shares? Here’s why the CEO just met with China Mineral Resources

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.

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

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The Allkem Ltd (ASX: AKE) share price is enjoying a rally on Tuesday amid some positive broker sentiment.

Shares in the lithium developer are currently going for $14.025 each, up 4.04%, after hitting an intraday high of $14.14 this morning. That’s almost 5% higher on the day.

For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is 0.11% lower at the time of writing while the S&P/ASX 200 Index (ASX: XJO) is up just 0.05%.

The Allkem price surge comes after Macquarie gave the company a very bullish price target of $21 per share, a further 55% upside. Let’s investigate what the broker said.

Why did Macquarie give Allkem a 55% upside?

Macquarie used a couple of valuation techniques to arrive at the projected fair value of Allkem shares. These included calculating its net present value and forward enterprise value to earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratio, as the Australian Financial Review reported.

The broker said:

AKE continues to highlight the tripling of production by 2026 to 120ktpa and has highlighted that numerous studies are underway to target the next leg of growth beyond 2026. Buoyant lithium prices continue to drive material upside, with [free cash flow] yields above 30 per cent from FY26 at spot prices.

As part of the analysis, the broker also projected free cash flow and sales forecasts for FY23. Macquarie expects Allkem to have a free cash flow of $595 million and sales of $1.57 billion.

This outlook for Allkem comes amid broader positive developments for ASX lithium shares over the last week.

These include an increased price target for lithium itself and the US state of California mandating that all new vehicles sold in the state are to be EV or hydrogen-powered by 2035.

Allkem share price snapshot

The Allkem share price has had a buoyant year so far, trading 34% higher year to date. Meanwhile, the broader Materials Index has recorded an 8% loss over the same period.

The company’s current market capitalisation is around $8.93 billion.

The post Why Macquarie is tipping 55% upside for ASX lithium share Allkem appeared first on The Motley Fool Australia.

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More reading

• Why Allkem, Capricorn Metals, Lovisa, and Pilbara Minerals shares are rising today
• An Allkem director offloaded $20 million in shares this week. What gives?
• Piedmont Lithium share price falls 5% after plans to build the largest US lithium plant unveiled
• The Pilbara Minerals share price surged 30% in August. What now?
• Could this new piece of legislation be a boost for ASX lithium shares?

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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It’s been a bouncy, yet overall negative day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At present, the ASX 200 has fallen by a tentative 0.058% and is trading at just above 6,850 points.

But let’s talk about the Nickel Industries Ltd (ASX: NIC) share price.

Nickel Industries shares closed at 92.5 cents each yesterday. The nickel producer opened at 92 cents this morning and is currently trading down a chunky 3.03% at 89.5 cents per share.

But shareholders shouldn’t get too disappointed by this seemingly nasty fall. For Nickel Industries shares are dropping today for one of the best reasons to have an ASX share fall in value. Nickel Industries is now trading ex-dividend for its upcoming interim dividend payment.

As we covered last month, 31 August saw Nickel Industries report its half-yearly earnings. The company reported a pleasing 43% rise in profit after tax to US$118.4 million, as well as a 37% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $126.9 million.

Nickel Industries share price falls as ex-dividend date arrives

The earnings enabled Nickel Industries to declare an interim dividend of two cents per share, unfranked. This was consistent with the company’s last final dividend payment, as well as the previous interim dividend from last year.

This dividend will hit investors’ bank accounts later this month on 14 September.

When a company trades ex-dividend, it effectively cuts off any new investors from receiving the dividend payment. That is what has happened to the company today. As such, investors needed to hold Nickel Industries shares as of yesterday in order to be eligible for the payment.

Since, for all intents and purposes, Nickel Industries shares are less valuable today than they were yesterday for new investors, the company’s shares have taken a hit in value. That is probably why we are seeing weakness in the Nickel Industries share price this Tuesday.

At the current Nickel Industries share price, this ASX 200 materials share has a dividend yield of 3.11%.

The post Why is the Nickel Industries share price getting hammered on Tuesday? appeared first on The Motley Fool Australia.

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• Nickel Industries share price dips despite 40% profit surge

Motley Fool contributor Sebastian Bowen 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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A2 Milk Co Ltd (ASX: A2M) delivered some bullish news to investors in its earnings card for FY22 posted on Monday last week.

Not only did net profit after tax (NPAT) surge 42.3% to NZ$114.7 million (A$103 million) but it also announced it will repurchase NZ$150 million (AU$ 135 million) worth of shares from the market.

Share buybacks can sometimes be seen as a signal that the company believes its shares are undervalued. It also means shareholders effectively own a larger piece of the company since the number of shares on the market goes down.

Considering these details, let’s consider why A2 Milk is buying up its shares.

Why is A2 Milk buying its own shares?

Several factors combined over FY22 to allow the company to announce a large share repurchasing plan. One is A2 Milk stepping up its presence in China. The company said this led to record market share for its Chinese-labelled infant formula in mother and baby stores and the domestic online market in China.

This carries over to a positive outlook for FY23. The company expects high single-digit growth in revenue, as well as a boost in its earnings before interest, tax, depreciation, and amortisation (EBITDA), and EBITDA margin.

These factors strengthened A2 Milk’s balance sheet, with its net cash line item ending at $816.5 million for the period.

It’s reported the company’s board of directors discussed alternative options but decided that a share buyback was the best use of its capital.

A2 Milk will buy back 37.18 million shares from the market, or around 4.9% of its total outstanding shares of 743.66 million.

The buyback will commence on 28 September and is expected to be completed on 28 August next year.

The A2 Milk share price snapshot

The A2 Milk share price is down 0.87% at the time of writing.

Shares of the infant formula company currently trade at $5.68 a share.

That puts them up around 4% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 9.4% over the same period.

The company has a current market capitalisation of around $4.2 billion.

The post Why is A2 Milk buying back shares? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did the A2 Milk share price smash the market with a 22% gain in August?
• How do A2 Milk shares stack up against Bubs post-earnings season?
• Here are the top 10 ASX 200 shares today
• These were the best performers on the ASX 200 in August

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 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 Northern Star Resources Ltd (ASX: NST) share price is heading south during early afternoon trade.

This comes despite the price of gold elevating 0.62% today and the company not releasing any market-sensitive news.

At the time of writing, Northern Star shares are down 1.87% to $7.33.

Why are Northern Star shares falling on Tuesday?

Investors are offloading Northern Star shares as they trade ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

However, when a company’s shares trade ex-dividend, the share price tends to fall in proportion to the dividend paid out. This can also vary on how the market is tracking for the day as well as investor sentiment.

For those eligible for Northern Star’s final dividend, shareholders will receive a payment of 11.5 cents per share on 29 September.

The dividend is fully franked.

Are Northern Star shares a buy now?

Following the financial scorecard for the full year, a number of brokers weighed in on the Northern Star share price.

As reported by ANZ Share Investing, analysts at Macquarie raised their price target by 5% to $10.50 for Northern Star shares. Based on the current share price, this implies an upside of roughly 43%.

In addition, the team at Citi had a more bullish price, raising its target by 0.9% to $10.90 apiece.

On the other hand, UBS had a slightly bearish outlook, cutting its price target by 2% to $9.60. Nonetheless, this still indicates an upside of 31% from where Northern Star shares trade today.

Northern Star share price summary

Since April 2022, the Northern Star share price has come under selling pressure due to macroenvironmental headwinds.

This includes strong inflationary movements which have prompted central banks to lift interest rates.

Year-to-date, the gold miner’s shares are down 22%.

Based on today’s price, Northern Star commands a market capitalisation of roughly $8.70 billion. It has a dividend yield of 2.64%.

The post Why is the Northern Star share price losing its shine on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Why is the ASX 200 diving 2% on Tuesday?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Everything you need to know about the latest Northern Star dividend

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources 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.

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