Category: Stock Market

The Lynas Rare Earths Ltd (ASX: LYC) share price is climbing from the open on Tuesday.

At the time of writing, shares in the rare earths player are swapping hands for $8.56 apiece, 0.71% higher, following a company announcement after the closing bell yesterday.

The gains reverse course for the Lynas share price which has been heading lower since 17 August. Let’s check the details of the company’s latest news.

What did Lynas announce?

Yesterday, the company advised that it has signed agreements with Japan Australia Rare Earths B.V (JARE).

Lynas notes that JARE is a special purpose company established by Japan Oil, Gas and Metals National Corporation and Sojitz Corporation.

Lynas CEO Amanda Lacaze said the relationship is “significant for the global rare earths industry”.

“We are pleased to have JARE’s continued support, including for our exciting exploration program at Mt Weld,” she added.

The pair are already partnered on a long-term senior loan that pays an interest rate of 2.5% p.a. with the balance currently at US$141 million.

Under the agreement, JARE will provide a contribution of US$9 million to the exploration program at Mt Weld.

It will make the contribution through a US$9 million subscription for ordinary shares in Lynas.

Perhaps most importantly for Lynas shareholders is that restrictive covenants on the abovementioned loan facility will be abolished.

The company said:

JARE has agreed to remove capital management restrictions in the loan facility.

Lynas will no longer be subject to capital restrictions in respect of issuing dividends, share buy backs, capital expenditure or incurring financial liabilities.

Instead, covenants will be dictated by the gross debt-to-equity ratio and backward-looking debt service ratios.

Considering the bulky mining profits that have been on offer these past two years, and the potential for rare earths in Australia looking ahead, this opens the gates for various types of investors to gain exposure to the share.

In the last 12 months, the Lynas share price has climbed more than 23%.

The post Why is the Lynas share price surging higher on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Should investors ‘buy the dip’ in Lynas shares right now?
• Guess which ASX rare earths share is rocketing 13% on a ‘resounding success’. Hint: not Lynas
• Down 24% since April, have investors fallen out of love with Lynas shares?
• Top ASX shares to buy in September 2022
• 5 ASX shares that could rocket from a rare earths crisis: expert

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.

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Commonwealth Bank of Australia (ASX: CBA) shares have slipped 5.6% since the opening bell on 4 May.

The S&P/ASX 200 Index (ASX: XJO) has fared slightly worse, down 6.3% in that same time.

So why are we choosing 4 May as our starting date?

RBA breaks 10-year easing streak

Because that’s the date the Reserve Bank of Australia (RBA) bumped interest rates from the historic low 0.1% to 0.25%.

Somewhat astoundingly, that marked the first rate increase from the RBA since November 2010. At that time, the central bank raised the official cash rate by 0.25% to 4.75%, where it would remain for most of 2011.

With inflation roaring back in 2022, the RBA has raised rates now for four consecutive months. Last month’s 0.5% hike brought the official cash rate to 1.85%. And analysts are widely predicting another 0.5% rise today, which would bring the rate to 2.35%.

Though with central banker’s penchant for round numbers, I expect a 0.65% hike (bringing the rate to 2.5%) isn’t out of the question.

Regardless of the size of today’s increase, CBA is warning that the RBA could be raising rates too aggressively and not bearing in mind the lag period between raising rates and higher mortgage repayments.

CBA cautions on lagging impact of rate hikes

According to CBA’s head of Australian economics Gareth Aird (courtesy of ABC News):

Interest accrues from a lender’s effective rate change date, which is typically about two weeks after the RBA increases the cash rate. This interest is added to a borrower’s outstanding debt. But from a cash flow perspective the impact is not felt for three months on average for a CBA customer.

This means that the bulk of our borrowers have only felt the impact of one 25-basis-point hike on their cash flow, or potentially, as of this week, the cumulative impact of the May 25-basis-point rate hike and June 50-basis-point rate increase.

Noting the risks to the wider Aussie economy of overshooting the size and pace of rate hikes, Aird added:

It has simply been too early for the spending data to pick up the impact of the already delivered rate hikes. There is a clear risk that the RBA continues to tighten policy aggressively because it appears that demand in the economy is not slowing sufficiently to put the desired downward pressure on inflation.

In due time, Aird said, the impacts of the RBA’s rate increases will kick in. “At CBA, for example, by December the impact of already announced rate rises on monthly cash flow for mortgage holders will be a four-fold increase compared to July.”

Then there are the mortgage holders on fixed loans, where the lagging impact of rate rises is even longer.

“There is a large proportion of fixed rate home loans that will expire over the next 18 months,” Aird said. “This creates natural tightening even with the RBA on hold.”

How have CBA shares been tracking longer-term?

While CBA shares have come under some selling pressure this year, they remain up 31% over the past five years. That compares to a 21% gain posted by the ASX 200.

The post Own CBA shares? Here’s the bank’s warning on rapid RBA rate hikes appeared first on The Motley Fool Australia.

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More reading

• How might falling house prices impact the CBA share price?
• Why ASX bank shares are more likely to slowly grind lower than crash, despite famed Wall Street bear saying it’s time to short them
• Is this why the Macquarie share price was ‘steaming ahead’ on Friday?
• Why did the CBA share price go backwards in August?
• What’s the outlook for ASX 200 bank shares in September?

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.

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The Chalice Mining Ltd (ASX: CHN) share price is in the green this morning with the company releasing seismic results that suggest its Gonneville gold project may contain more gold than originally expected.

The gold miner said that its 2D seismic surveys identified the potential plunge extension of the Gonneville Intrusion. The extension ran for around 1.6km northwest of the resource and is circa 500m below the surface.

The news seems to have offset the general gloom hanging over ASX gold shares. The Chalice Mining share price is up 1.57% at the time of writing to $4.52. That’s ahead of the All Ordinaries‘ (ASX: XAO) gain of 0.58% in early morning trade.

Chalice Mining share price climbs

The results highlight significant growth potential for the Gonneville project in Western Australia. Given the sulphide-rich nature of the Gonneville Intrusion, this extension could significantly expand the deposit to this point and, potentially, beyond.

The extension is open to the north. Chalice will soon commence step-out drilling to validate the seismic interpretation.

Drilling results

Meanwhile, the miner added that drilling at the Dampier Target has confirmed “encouraging evidence” of widespread sulphide mineralisation. Chalice believes this indicates a fertile mineral system that’s around 10km north of Gonneville.

The drilling found 9.6m @ 0.2g/t 3E (gold, palladium and platinum). It also found 0.2% copper, 0.03% Co (~0.7% NIEq – nickel equivalent) from 203m.

Further, the drill results contained 41.6m @ 0.5g/t 3E, 0.1% Ni, 0.1% Cu, 0.01% Co (~0.4% NiEq) from 63m.

There are another 27 sites that are yet to be drilled across the ~10km Hartog-Dampier strike length. Chalice is also looking at the financial viability of a smaller “starter mine” as an initial first phase of the project.

Gold losing its lustre

The Chalice Mining share price is climbing in early trading on Tuesday, perhaps also boosted also by a 1% increase in the gold price.

The price of the yellow metal is inching up after falling below US$1,700 an ounce last week. The price of the commodity is making a small recovery as breakeven bond yields fell. The breakeven is the difference between nominal US government bonds and inflation-adjusted bonds.

But investors may be worried that the rebound won’t last given how hawkish the US Federal Reserve (and other central bankers) are.

This probably explains why the Northern Star Resources Ltd (ASX: NST) share price is down 0.87% and the Evolution Mining Ltd (ASX: EVN) share price is steady at the time of writing.

Chalice Mining share price snapshot

Gold has been out of favour as interest rates around the world rise. This is because gold doesn’t pay a dividend, unlike bonds. The higher the yield on bonds, the less attractive holding gold is.

The Chalice Mining share price lost more than 32% in the last 12 months. But at least it is in good company. The Northern Star and Evolution Mining share prices are down more than 25% and 44%, respectively, over the period.

The post Chalice Mining share price lifts on positive exploration results today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why has the Chalice Mining share price dived 13% in the past week?
• Why has the Chalice Mining share price rocketed 33% in a month?

Motley Fool contributor Brendon Lau 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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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.

Every crypto investor has probably heard by now that the Merge will be the single most important event in crypto history. It will transform Ethereum (CRYPTO: ETH) from a proof-of-work blockchain into a proof-of-stake blockchain, ushering in a new era of ultrascalability, lower transaction fees, incredible energy efficiency, and higher throughput capacity. This, in turn, will bolster the number of use cases for Ethereum and guarantee its place as the most important blockchain in the world. 

That has been the primary investment thesis for buying Ethereum this entire summer. However, as we get closer to the expected date of the Merge, it’s worth taking a closer look at some of the key factors that might affect the price of Ethereum. Take a quick look at the chart for Ethereum. After hitting a summertime high of $1,984.72 on Aug. 13, Ethereum actually trended down over the final two weeks of the month, and it now trades around $1,550. That has me thinking that we could already be seeing some profit-taking in Ethereum, and the narrative around the Merge could already be shifting.

‘Buy the rumor, sell the news’

Maybe, just maybe, the hype has already been priced into the Merge. There has been so much speculation this summer about why the Merge is going to be wonderful both for Ethereum and crypto that many investors now assume the case for buying Ethereum is ironclad. 

But step back for a moment and consider that even Vitalik Buterin, the co-founder of Ethereum, now says the Merge will only be “55% complete” this year. There are still four more parts to the process — the so-called Surge, Verge, Purge, and Splurge. So maybe we’re celebrating a bit too early. Some of the earliest predictions about the Merge — for example, that it will enable Ethereum to handle 100,000 transactions per second — may turn out to be hopelessly optimistic. People are also starting to question whether the Merge will actually have any real impact on crypto gas fees, the transaction fees on the Ethereum blockchain.

We could be seeing a classic case of “buy the rumor, sell the news.” In other words, buy Ethereum up to the expected date of the Merge, then sell when the Merge actually takes place. Let’s face it — investors are going to be spooked by any bit of bad news about the Merge. The complexity of the Merge cannot be overstated: Some have compared it to changing the engine of an airplane mid-flight. If there are passengers aboard, there is bound to be a certain amount of anxiety.

Jerome Powell vs. Vitalik Buterin

Moreover, all the enthusiasm surrounding the Merge has to be taken within the context of what is currently happening with the U.S. Federal Reserve. Any negative sentiment about inflation coming out of the Fed these days is bad for crypto. Consider what has happened to the sentiment around Bitcoin (CRYPTO: BTC) and other cryptos ever since the Jackson Hole speech by Fed Chairman Jerome Powell on Aug. 26.

This new investor focus on the Fed could mean that any positive sentiment surrounding Ethereum — no matter how successful the Merge turns out to be — is going to be far outweighed by all the negative sentiment surrounding inflation, interest rates, and the prospect of more Fed tightening. The next meeting of the Federal Open Market Committee (FOMC) will take place on Sept. 20, which is almost exactly when the Merge is scheduled to be completed.

Be prepared for a change of narrative

Opinions about the Merge are much more varied than you might think within the crypto community. People are starting to realize that there are a number of trade-offs involved with any technological upgrade, and that the Merge is no different. Moreover, it’s not exactly the case that all crypto enthusiasts are united in their support of the Merge. As long as the price of Ethereum is going up, they are going to support the Merge, of course. But what happens if the price doesn’t go up? So be prepared for a change of narrative around Ethereum if there are any problems with the upgrade.

The Ethereum Merge will start on Sept. 6, which is almost exactly when relaxed, suntanned investors will be returning from their Labor Day vacations. This is when the real fun starts, because nobody knows the exact date and time of the Merge. It could take place anytime between Sept. 10 and Sept. 20. If people get too nervous, the same people who told you to “buy the dip” might tell you to “sell the rip.” Don’t say you weren’t warned.

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

The post Will Ethereum still be a buy after the merge? appeared first on The Motley Fool Australia.

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More reading

• September could be a crucial month for these 2 cryptocurrencies
• Ethereum Merge first stage set for tomorrow. What can crypto investors expect next?
• Why Ethereum, Dogecoin, and Solana lost altitude on Thursday
• Why the Ethereum price slipped but still outperformed Bitcoin in August
• Why Ethereum and other cryptos jumped Wednesday

Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Michael Thomson for Nine’s Late News on Monday night to discuss the likely rate rise, courtesy of the RBA, plus a nice jump for new S&P/ASX 200 Index (ASX: XJO) additions and the outlook for markets.

[youtube https://www.youtube.com/watch?v=gv8ntZjxvPQ?feature=oembed&w=500&h=281]

The post Are we about to be slugged by the RBA? Plus, new ASX 200 stocks rise. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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More reading

• Why ASX dividend shares might be a double-edged sword against inflation
• ASX 300 telco fined $213,000 for endangering customer lives
• These 9 ASX 200 shares are going ex-dividend tomorrow
• When it comes to AMP shares, is it time for investors to give up the ghost?
• 3 things you shouldn’t do if the stock market crashes

Motley Fool contributor Scott Phillips 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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Following a strong 12 months of business activity, shareholders of ASX-listed companies are now set to be treated to an aggregate $42 billion in dividend payouts in September.

This follows on from a similarly pricey $45 billion collective payout back in December 2021.

The moves signal a strong period of corporate earnings for Australian listed companies, with members of the S&P/ASX 200 Index (ASX: XJO) in particular boasting record dividend payout margins.

Announced share buybacks were also amongst the highest on record as companies seek to return capital to investors en masse this year.

What’s this mean for inflation?

There’s no doubt everyone’s heard of – or felt in their wallets – the latest pandemic, that is inflation, that continues to grip the economy.

The Reserve Bank of Australia (RBA) has taken measures to clamp surging prices by increasing its key policy interest rates for the first time in years.

With that, it hopes to rein in the level of discretionary spending, credit creation, and financial asset growth in Australian markets, thereby slowing price growth.

However, a $42 billion cash injection isn’t exactly conducive to its plans.

Thankfully, not all of the capital being returned to shareholders through dividends will arrive directly into their brokerage accounts.

Some will be directly reinvested back into buying additional shares or funding additional investments, either by design or investor choice.

Another chunk will go to fund the balance sheets of retirees who use annuity-style instruments like dividends as income-producing assets to match their annual liabilities.

However, the transfer of wealth from corporate to residential and institutional Australia comes at a time when spending is on the RBA’s and the government’s radar. Certainly, there’s a good chance a portion of the proverbial cheque will be spent in the real economy.

Exactly where and to what sectors the income will flow is anyone’s guess.

However, given that a good portion of the dividend-paying shares are also tied up ‘escrow’, in vehicles like superannuation funds for instance, the impact mightn’t be as severe as it appears.

Keep in mind, the two largest companies in the world by market value, Saudi Aramco and Apple, recently released their figures. Saudi Aramco posted second-quarter net profit of $48.4 billion while Apple paid a Q2 2022 quarterly dividend of $27 billion alone.

Closer to home, the overarching impact of Australia’s dividend payout figure remains to be seen. In any case, experts are predicting interest rates will continue to rise until inflation cools.

The post Why ASX dividend shares might be a double-edged sword against inflation appeared first on The Motley Fool Australia.

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More reading

• Are we about to be slugged by the RBA? Plus, new ASX 200 stocks rise. Scott Phillips on Nine’s Late News
• ASX 300 telco fined $213,000 for endangering customer lives
• These 9 ASX 200 shares are going ex-dividend tomorrow
• When it comes to AMP shares, is it time for investors to give up the ghost?
• 3 things you shouldn’t do if the stock market crashes

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 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.

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ASX-listed technology company Aussie Broadband Ltd (ASX: ABB) has been fined $213,120 for “large-scale breaches” of rules that protect Australians.

An investigation by the Australian Communications and Media Authority found that the internet service provider failed to provide customer data to the Integrated Public Number Database (IPND) more than 30,000 times between last November and May this year. 

The infringement endangered Aussie Broadband’s own customers’ lives as the IPND is used by the Triple Zero service to locate people in emergency situations.

The database is also used by the Emergency Alert Service to communicate to residents in areas affected by natural disasters.

‘Alarming’ failure in software

ACMA chair Nerida O’Loughlin said Aussie Broadband’s failure was “unacceptable”.

“While we are not aware anyone was harmed due to the breaches, it is alarming that Aussie Broadband did not have effective processes in place to identify that its customer information was not being provided for over six months.”

The industry watchdog has directed Aussie Broadband to continue to comply with the IPND rules or risk court action that could result in penalties of $250,000 per breach.

“While the breaches should not have occurred, we are pleased to see Aussie Broadband moved quickly to upload the missing data once it was brought to its attention and has taken steps to comply in future,” said O’Loughlin.

Aussie Broadband boss apologises

Aussie Broadband managing director Phillip Britt apologised for the error and accepted the penalty.

“Whilst we had several checks and balances in place, these did not go far enough and I’m confident that our new compliance checks will ensure this never happens again,” he said.

“We are deeply sorry that this software failure went undetected leading to inaccurate records in the IPND database.”

Aussie Broadband stated that it has now “implemented further redundancy measures, error notifications, independent monitoring and regular audits” to comply with the IPND rules.

According to the ACMA, it is on an “ongoing campaign” to improve the quality of the data in the IPND to better protect the public.

The watchdog has taken action against 30 telecommunications companies since 2018 for breaching IPND rules, resulting in almost $4 million fines.

The post ASX 300 telco fined $213,000 for endangering customer lives appeared first on The Motley Fool Australia.

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More reading

• Is the Aussie Broadband share price a bargain? Here’s what the founder’s latest ASX transaction says
• Why Aussie Broadband, Grange, NextDC, and PolyNovo shares are being hammered
• Aussie Broadband share price plummets 18% despite record revenue, earnings

Motley Fool contributor Tony Yoo has positions in Aussie Broadband Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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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September promises to be a busy month for ASX dividend investors as the cash from dividends recently declared during ASX reporting season starts landing in shareholders’ bank accounts.

But before these dividends can be paid, companies must first determine which investors are entitled to their upcoming dividends. 

To do so, they set a cut-off date, which is also known as the ex-dividend date. If you buy shares on or after this date, those shares won’t come with the latest dividend payment.

On Wednesday, tomorrow, nine companies in the S&P/ASX 200 Index (ASX: XJO) will see their shares turn ex-dividend.

In other words, today will be the last day to secure the latest dividends from these ASX 200 shares. 

Let’s check them out, starting with the company with the highest trailing dividend yield.

Insignia Financial Ltd (ASX: IFL)

Upcoming dividend: 11.8 cents
Franking: 100%
Payment date: 29 September 
DRP: Yes
Trailing dividend yield: 6.9%

Formerly known as IOOF, Insignia delivered 59% growth in underlying net profit after tax (NPAT) in FY22. This helped the ASX 200 financials business to increase its ordinary dividends by 35% across the financial year, even despite a reduction in its dividend payout ratio.

Viva Energy Group Ltd (ASX: VEA)

Upcoming dividend: 13.7 cents
Franking: 100%
Payment date: 22 September 
DRP: No
Trailing dividend yield: 5.7%

The ASX 200 energy share recently announced its half-year results, posting a 218% surge in underlying NPAT on the back of strong refining margins. As a result, Viva brought forward its refining dividends, including them in the interim dividend instead of the final dividend. 

Healius Ltd (ASX: HLS)

Upcoming dividend: 6 cents
Franking: 100%
Payment date: 21 September
DRP: No
Trailing dividend yield: 4.4%

Progress in its sustainable improvement program and an upswing in COVID-related demand helped Healius to double its underlying NPAT in FY22. Across the full year, the ASX 200 healthcare share lifted total dividends by 21%.

Amcor CDI (ASX: AMC)

Upcoming dividend: 12 US cents
Franking: 0%
Payment date: 28 September
DRP: No
Trailing dividend yield: 3.8%

The ASX 200 packaging company recently declared a fourth-quarter dividend of 12 US cents, taking total dividends in FY22 to 49 US cents, up 4% from the prior year. Amcor also delivered further shareholder returns through share buybacks, repurchasing $600 million of shares in FY22.

Medibank Private Ltd (ASX: MPL)

Upcoming dividend: 7.3 cents
Franking: 100%
Payment date: 29 September 
DRP: No
Trailing dividend yield: 3.7%

The ASX 200 health insurer served up 9% growth in underlying NPAT in FY22, helping the company to raise its full-year dividends by 6% while also marginally reducing its dividend payout ratio.

Brambles Limited (ASX: BXB)

Upcoming dividend: 12 US cents
Franking: 35%
Payment date: 13 October
DRP: Yes
Trailing dividend yield: 2.6%

Brambles’ FY22 results came in ahead of guidance as revenue climbed by 9% and NPAT jumped 18% on a constant-currency basis. The ASX 200 supply chain business boosted its total dividends by 11% compared to the prior year and has reinstated its DRP.

AUB Group Ltd (ASX: AUB)

Upcoming dividend: 38 cents
Franking: 100%
Payment date: 7 October 
DRP: No
Trailing dividend yield: 2.5%

The ASX 200 insurance broker posted NPAT growth of 14% in FY22, underpinned by organic growth in its Australian broking and agencies segments. But despite the rise in profits, AUB held its full-year dividends steady in light of its potential $880 million acquisition of Tysers. Subject to final regulatory approvals, the acquisition is on track to be completed by late 2022.

SEEK Limited (ASX: SEK)

Upcoming dividend: 21 cents
Franking: 100%
Payment date: 4 October
DRP: No
Trailing dividend yield: 2.1%

Across the financial year, SEEK raised its total dividends by 10% as underlying NPAT from continuing operations soared by 81% in FY22. The ASX 200 share experienced record job ad volumes in the Australia and New Zealand (ANZ) region and volume growth across all markets in Asia.

IDP Education Group Ltd (ASX: IEL)

Upcoming dividend: 13.5 cents
Franking: 14%
Payment date: 29 September
DRP: No
Trailing dividend yield: 1.0%

Finally, IDP experienced a strong rebound in demand in FY22 after previously being bogged down by COVID-related challenges. The ASX 200 education business grew revenue by 48% while adjusted NPAT shot up by 120%. This helped the company lift its full-year dividends by 10% compared to FY21.

The post These 9 ASX 200 shares are going ex-dividend tomorrow appeared first on The Motley Fool Australia.

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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 Idp Education Pty Ltd. The Motley Fool Australia has positions in and has recommended Amcor Limited. The Motley Fool Australia has recommended Austbrokers Holdings Limited and SEEK 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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The AMP Ltd (ASX: AMP) share price has put on a disastrous performance over the last few years. Indeed, it has dumped 77% of its value in just five years. But the S&P/ASX 200 Index (ASX: XJO) company looks a touch shinier now.

It’s recently sold its infrastructure debt platform and its Global Equities and Fixed Income business. The company is now working to finalise the sale of its real estate and domestic infrastructure business and its international infrastructure equity business.

AMP – now solely focused on AMP Bank and its wealth management businesses – has also committed to a $1.1 billion capital return.

Does that mean its share price is travelling a path towards recovery? Shaw and Partners senior investment advisor Jed Richards doesn’t think so.

Keep reading to find out why the expert believes investors should abandon the 173-year-old financial services provider.

The AMP share price last traded at $1.13.

What might the future hold for AMP shares?

It’s time to sell AMP shares, according to Richards, as the company fails to garner hope from the expert.

He told The Bull the company’s recent half-year results “showed weak earnings growth in its bank and wealth divisions”.

AMP posted a $117 million underlying after-tax profit for the first half of 2022 – down 24.5% on that of the prior period.

Of that, $46 million was brought in by AMP Bank – down 45% year on year. Its wealth asset management businesses, meanwhile, brought in a combined $53 million, marking a 17% drop.

Richards continued:

While recent asset sales may provide a payout boost to shareholders in the short term, they remove a key growth component from the company’s business strategy.

The expert concluded by noting his belief that recovering AMP’s lost scale will likely demand “significant reinvestment”. Thus, he labels the stock a sell.

The last few years have been rough on the AMP share price, but the stock is outperforming year to date. It has gained 13% since the start of 2022 and is currently trading 2% higher than it was this time last year.

For comparison, the ASX 200 has dumped 10% year to date and 9% over the last 12 months.

The post When it comes to AMP shares, is it time for investors to give up the ghost? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

With the market in a jittery mood thanks to ongoing inflation, interest rate hike mania, and geopolitical instability, nobody can blame investors who are wringing their hands anxiously in anticipation of a potential market crash. Thankfully, the chances of a crash happening are too difficult to determine with any certainty, so it doesn’t make much sense to worry at any particular time. 

That probably isn’t very reassuring. But what will be reassuring is if you have a plan for what to do and what not to do in the event of a crash. For now, let’s work on three things you definitely shouldn’t do if there’s chaos in the market. 

1. Sell your stocks in a panic

The first (and most important) thing you shouldn’t do if the stock market crashes is to sell all of your stocks to try to avoid experiencing any further losses. The problem with panic selling is that it feels like the right move. After all, if you can cut your losses fast enough, the market’s downward move to the tune of 30% might only lead to losses of 10% for you.

Selling eases the sense of anxiety you have about your lack of control over the situation and your fear of losing money. And if you hear from friends or relatives about how much they got whacked by holding on to their shares, you might even give yourself a pat on the back. 

But you’ll probably end up missing out on the rebound afterward. And in many cases, that means you’ll make less money than if you’d simply stayed the course. Let’s examine AbbVie‘s (NYSE: ABBV) performance during the coronavirus crash in March 2020 as an example.

^SPX data by YCharts

As you can see, AbbVie’s shares took a beating during the crash, as did the market. But as the catalyst for the crash, the pandemic, didn’t actually do much to affect the company’s ability to do its business of developing and commercializing drugs, its stock quickly bounced back.

Within a couple of months, it was outperforming the market, and its earlier damage was entirely reversed. The stock even ended the year significantly above where it started, and you’d have missed out on that gain if you had sold your shares. Even if you tried to restart your position, you’d struggle to time it correctly and you’d almost certainly be missing out on some upside. 

There’s absolutely no guarantee that every stock will behave the same as AbbVie’s did during every market crash, and many will not. In cases where the crash isn’t caused by anything that fundamentally impacts a company’s ability to make money as efficiently as it currently does, however, selling is likely to be a poor decision.

2. Dramatically change your investing strategy without good reason

In keeping with the above, the second thing that you shouldn’t do if the stock market crashes is to switch up your game plan for investing without noodling on it for a good while. It’s a fact of life that crashes are often precipitated by economic or global events. Nonetheless, if you have a properly diversified portfolio, it should be unlikely that any specific trend or happening makes all of your stocks genuinely vulnerable to further declines all at once. And that means any changes to your approach should be at the margin, even after a crash.

For example, let’s say before the pandemic you held AMC Entertainment (NYSE: AMC) for exposure to the entertainment industry in the same portfolio as your AbbVie shares. The market’s collapse in March was caused by fears of the coronavirus, and AMC’s share price was hit plenty hard. As an intelligent and far-sighted investor, you held on to your shares at the time. But during your quarterly assessment of your positions, you decide that movie theaters are probably not going to be making a strong comeback for as long as the coronavirus is afoot, and you opt to sell your shares.

So far, so good — it’s important to make adjustments to your strategy when new information makes your original investing thesis incorrect or irrelevant.

Where many investors might go wrong, however, is to then do something like take their proceeds from the sale of AMC and invest them in a way that reduces their portfolio’s level of diversification, perhaps by buying more shares of AbbVie. Such an action is a major departure from your prior approach of buying an entertainment industry stock to give yourself exposure to that industry’s future growth. And by doing so, you’re throwing the baby — your well-reasoned desire for diversification — out with the bathwater, which in this case is AMC’s poorly performing stock in the wake of the crash. 

3. Stay on the sidelines

The final thing investors shouldn’t do if the market crashes is to stay on the sidelines and wait for calmer waters. Instead, they should take action to buy while shares are cheaper than normal. And that’s especially true if you plan to dollar-cost average to build up your positions. For those who have some capital saved up, sharp and panic-driven downturns are opportunities to shore up your holdings with deeply discounted shares — once again, assuming that your original investing thesis about why they’re worth buying is still valid. 

If you do decide to sit on the sidelines during a crash or correction, you won’t be actively harming your portfolio’s value, but you’ll likely be missing out on growth. It’s frightening to buy more shares of a stock when it’s down and when it seems like the sky is falling, but famous investors like Warren Buffett do it. And for companies that pay a dividend, like AbbVie, buying rather than idling means that you’ll be securing shares with higher dividend yields than you could normally get, so you’ll get paid for your smart decision to take a hot bargain for years down the line.

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

The post 3 things you shouldn’t do if the stock market crashes appeared first on The Motley Fool Australia.

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Alex Carchidi 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.

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

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