Category: Stock Market

Are you looking for dividend shares to buy? If you are, then the two named below could be worth checking out.

Both have been named as buys by analysts and tipped to provide attractive yields. Here’s what you need to know about them:

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share to look at is Dicker Data. It is one of the largest technology hardware, software, cloud, cybersecurity, access control and surveillance distributors in Australia and New Zealand.

Dicker Data could be a quality option for income investors thanks to its long track record of earnings and dividend growth and its positive long-term outlook. The latter is being supported by the recent expansion of its warehouse by 70%. This provides a significant runway to capture additional growth in the coming years and is also expected to deliver cost savings.

Morgan Stanley is positive on the company and recently retained its outperform rating and $14.00 price target on its shares.

As for dividends, its analysts are forecasting fully-franked dividends per share of 35.3 cents in FY 2022 and 40.5 cents in FY 2023. Based on the latest Dicker Data share price of $9.89, this will mean yields of 3.6% and 4.1%, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Another ASX dividend share that has been tipped as a buy is Healthco Healthcare and Wellness REIT.

It is a health and wellness focused real estate investment trust that invests in hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

Goldman Sachs is a fan of the company and has a conviction buy rating and $2.14 price target on its shares. Goldman likes Healthco Healthcare and Wellness due to its strong balance sheet and its exposure to government-backed sub-sectors. In fact, the broker said that these qualities make it “one of our top picks in the sector.”

In respect to dividends, Goldman expects dividends per share of 7.5 cents in both FY 2023 and FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.41, this will mean yields of 5.3% for investors.

The post Analysts name 2 ASX dividend shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, Argosy Minerals, Dicker Data, and Life360 shares are falling
• Brokers name 2 ASX dividend shares to buy with big yields
• What’s going on with the Dicker Data share price on Monday?
• These ASX dividend shares have been named as buys
• If you invested $5,000 in each of these ASX shares 10 years ago, you’d be a millionaire today

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 Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data 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 uncertain investing environment continues to make stock-picking a hazardous task.

However, buying ASX shares that represent prudent business models increases the chances of making money in the long run, after riding out shorter-term bumps.

This is especially true of small-cap companies, which have been heavily discounted over the past 12 months. They are often high beta, meaning that while they lose heavily in dark times, they can also gain spectacularly as conditions recover.

The team at QVG Capital this week named three small-cap ASX shares that it holds and explained why they have such faith in them:

The resiliency of this business is still under the radar

Imdex Limited (ASX: IMD) is a stock not often mentioned, but the business has been quietly plugging away serving clients in a very profitable sector in Australia.

The company provides technology, equipment and services to the mining industry.

It seems investors are starting to notice, with the Imdex share price climbing 4.9% in October after a 14.3% climb in September.

“Imdex reported September quarter revenue 22% ahead of the same quarter last year and 12% ahead of the June quarter,” read QVG Capital’s memo to clients.

“This was greater than our and consensus expectations.”

The cyclical nature of mining makes investors anxious about buying into companies like Imdex, but the analysts insisted this was not a concern. 

“Fears around… cyclicality cause investors to under-appreciate the operational changes that have gone on within Imdex to make it a more resilient business,” read the memo.

“This and significant investment in R&D make us very bullish on the long term outlook for the company.”

A fundies’ favourite at the moment

Investment software provider Hub24 Ltd (ASX: HUB) similarly gave a positive performance report, according to the QVG team.

“HUB24 had a very strong September quarter trading update, which showed resilient inflows on to the platform,” read the memo.

“Given the nature of financial markets, we were impressed with the strength of HUB’s flows. Commentary around revenue margins and operating cost growth were also encouraging.”

The Hub24 share price has fallen 15.2% since the start of the year, although it has returned more than 180% over the past five years.

Stocks for the investment platform seem to be a bit of a darling among professional investors at the moment.

According to CMC Markets, nine out of 13 analysts currently rate Hub24 shares as a strong buy.

Not love at first sight

The QVG Capital team admitted it was not a fan of US family safety app Life360 Inc (ASX: 360) when it first floated three years ago.

“Due to the company being loss-making and high churn in the user-base we were initially slow to warm to the 360 story and did not participate in its IPO.”

But now the analysts like what they see.

“In the three or so years since the company listed it has made good progress in improving the product, reducing churn and moving towards profitability,” read the QVG memo.

“The announcement of significant price increases for the monthly subscription saw a strong re-rating in October as the market came to understand the [company’s] latent pricing power and implications of this for an accelerated path to profitability.”

The team also noted Life360 already boasts a significant user population and a paying customer base.

“The app is particularly popular in the US with over 40 million free users and over 1.3 million paid users.”

After losing as much as three-quarters of its valuation this year, the Life360 stock price has now recovered to be 35% down in 2022.

The post ‘Very bullish’: 3 small-cap ASX shares QVG is loving right now appeared first on The Motley Fool Australia.

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More reading

• 5 reasons I would avoid BrainChip shares at all costs
• US$10 billion was just wiped from the value of Atlassian. How are ASX 200 tech shares responding?
• Leading fund manager names the 3 ASX stocks that drove its returns higher in October
• Why A2 Milk, Argosy Minerals, Dicker Data, and Life360 shares are falling
• These were the best-performing ASX 200 shares in October

Motley Fool contributor Tony Yoo has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd, Imdex Limited, and Life360, Inc. The Motley Fool Australia has positions in and has recommended Hub24 Ltd and Imdex 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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Are you interested in adding some ASX growth shares to your portfolio this month?

If you are, you may want to look at the two listed below that have recently been named as buys by analysts at Goldman Sachs.

Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is kitchen appliance manufacturer Breville.

Goldman Sachs believes that Breville is well-placed for growth in the coming years thanks to its three-pronged strategy. The broker expects this to underpin an EBITDA compound annual growth rate of 7% between FY 2023 and FY 2025. It recently commented:

We see BRG as having a three-pronged growth strategy: 1) building on secular growth of the portioned and roast & ground (R&G) coffee market and achieving market share gains; 2) new market entry; and 3) options – ecosystem revenue streams.

Goldman has a buy rating and $24.70 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share that Goldman Sachs rates as a buy is online furniture and homewares retailer Temple & Webster.

Goldman Sachs believes the company is well-placed for long term growth due to its leadership position in a retail category that is still only in the early stages of shifting online.  It commented:

Our Buy thesis is predicated on the following key drivers: (1) we believe TPW is well positioned in the upcoming cycle to continue to grow market share, despite a weaker macro environment; (2) in our view TPW is best placed to be a winner in a category that favours scale players, requires a specialised approach to e-commerce, and has higher barriers to entry vs. other retail categories; and (3) greater focus on costs is a sensible strategy to balance near-term profitability with growth.

Goldman has a buy rating and $7.55 price target on the company’s shares.

The post Goldman Sachs says these ASX growth shares are buys appeared first on The Motley Fool Australia.

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More reading

• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
• Why Baby Bunting, James Hardie, Sims, and Temple & Webster shares are dropping
• Here are the 10 most shorted ASX shares
• 2 excellent ASX growth shares that analysts say are buys
• 3 ASX All Ords shares starting the week on fire

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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 Fortescue Metals Group Ltd (ASX: FMG) share price has dropped 2.9% over the past month.

That’s despite a solid rally over the first seven trading days in November, which has seen shares in the S&P/ASX 200 Index (ASX: XJO) mining giant charge 16.7% higher.

The monthly drop in the Fortescue share price, and the rebound in November, are largely tied in with the iron ore price.

But there’s more to the outlook for Fortescue than the iron ore price. We’ll look at another key factor shortly. But first…

What’s been happening with the iron ore price?

The iron ore price has been trending lower amid a slowing global economy. Lower demand from China, which continues to pursue growth-hampering COVID-zero policies,

The industrial metal traded at all-time highs of US$240 per tonne in May 2021. This year it topped out near US$160 in March. Since then, it’s trended lower.

As for the past month, iron ore fetched US$98 per tonne on 10 October, dropping to US$81 per tonne on 1 November. Hence the significant pullback in the Fortescue share price.

As for the past week’s bounce in Fortescue shares, iron ore has since lifted to US$89 per tonne.

But as we said, there’s more to the outlook for Fortescue than the price of iron ore.

Under pressure from decarbonisation strategy

While seeing the ASX mining giant take a lead in the decarbonisation push may be heartening, analysts have serious concerns about the costs and benefits of that strategy and the green hydrogen ambitions at Fortescue Future Industries (FFI).

As reported by The Bull, Sequoia Wealth Management senior wealth manager Peter Day said Sequoia had downgraded Fortescue “to a sell recommendation”.

Day noted that the cost increases at FMG were “comparable or at the lower end of inflation forecasts across the sector”.

However, he added, “FMG’s decarbonisation strategy is the key driver in reducing our valuation by 19%. We downgrade to a sell recommendation.”

Bell Potter has similar concerns over the outlook for the Fortescue share price. The broker said:

The capital being committed to FFI is increasing significantly, as is the timeframe over which it is being committed. While the energy independence and savings guidance are attractive, much of the technology remains to be commercially developed and quantifying the benefits remains problematic.

Bell Potter also downgraded Fortescue to a sell recommendation.

According to the broker, “The increased expenditure commitment to FFI and FMG’s decarbonisation strategy is the key driver of a 19% reduction to our NPV-based valuation, from $17.33/sh to $14.09/sh.”

The Fortescue share price closed yesterday at $17.12, more than 20% above Bell Potter’s price target.

Fortescue share price snapshot

While down in 2022, the Fortescue share price remains up 20% over the past 12 months. That compares favourably to the full-year loss of 6% posted by the ASX 200.

The post The Fortescue share price has leapt 17% in November. Here’s why it may not last appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price bolting out of the gate on Wednesday?
• Why is the Fortescue share price firing up 4% today?
• Why are ASX 200 mining shares bolting out the gates on Monday?
• Looking to buy Fortescue shares? Here are the questions I asked before jumping in
• Hotels, hurt feelings, and HR hassles, but Fortescue’s biggest shareholder still got richer this week

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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Medibank Private Ltd (ASX: MPL) shares have come under considerable selling pressure following the company’s massive data breach last month.

On 26 October, when the S&P/ASX 200 Index (ASX: XJO) private health insurer emerged from a multi-day trading halt, shares plunged 18.1% over the day.

What’s going on with the data breach?

In a nutshell, hackers — apparently Russian-based — stole sensitive data from 9.7 million of Medibank’s former and current clients. That data includes customer names, dates of birth, addresses, phone numbers and email addresses.

The cybercriminals also accessed health claims data for approximately 480,000 customers.

Earlier this week, the healthcare stock said it would not cave into any ransom demands from the hackers, which saw Medibank shares rise on the day.

The hackers responded by threatening to publish all of the customer data on the dark web. A threat they began to follow through with yesterday.

Do Medibank shares now represent a buying opportunity?

Medibank shares remain down 21% since the company exited its trading halt on 26 October.

So, is it a buying opportunity?

Eliot Hastie, markets analyst at Australian brokerage platform Stake, said that for the platform’s clients, the answer looks to be yes.

“Stake customers have seen this as a buying opportunity, with a 1,426% increase in buys last month, suggesting that many are still positive about Medibank’s long-term outlook,” he said. “In fact, Medibank saw the biggest change from sales to buys of all Australian stocks in October when compared to September.”

According to Hastie:

Cyber security incidents often cause an instant hard shock to a share price, but strong companies have generally been able to recover over the long term. That said, there’s no way of knowing the true consequences of Medibank’s current breach.

There has been a suggestion of a class action lawsuit, which could affect the share price over a longer period, but this situation is still developing, and its impact is yet to be seen.

If you’re considering investing in Medibank shares, there’s also the potential income stream to keep in mind.

As at yesterday’s closing share price of $2.77, Medibank pays a trailing dividend yield of 4.8%, fully franked.

How have Medibank shares been tracking in 2022?

The Medibank share price was in the green, significantly outperforming the ASX 200 over the calendar year, right up until the big selloff on 26 October. That selling now sees Medibank shares down 19% in 2022, compared to an 8% loss posted by the benchmark index.

The post Do Medibank shares now represent a buying opportunity? appeared first on The Motley Fool Australia.

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More reading

• Medibank share price lifts despite hackers leaking data
• Medibank share price slides following latest blows from hackers and customers
• Medibank share price on watch amid class action and new data threat
• Medibank share price lifts on cyberattack ransom update
• Here are the top 10 ASX 200 shares today

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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one of this edition, we’re joined by Romano Sala Tenna, co-founder of Katana Asset Management.

The Motley Fool: In November 2021, you told us, “We are seeing some real structural elements [to inflation]… That is going to have an impact on the Australian landscape.” That’s certainly come to fruition. With interest rates ratcheting up to tame inflation, has that impacted your cash holdings?

Romano Sala Tenna: It has. In terms of our cash weighting, we were up at 38% recently. We’ve gone back to 30% because we’re expecting a short-term bounce. And once we think this current rally’s run its course we’ll start to build our cash position back up again.

MF: How does that compare to your positioning in early 2021, during the ASX bull run?

RST: We generally hold 15% to 35% cash through the cycle, and only very rarely go above or below those two numbers. So for us to be sitting at 38% is at the very extreme end of where we’d normally have cash.

We’re back at 30% at the moment, as I said. But we’d look to build that up to closer to 35% to 40% as we think this current rally runs its course.

MF: Has the higher inflation and interest rate environment changed your investment approach in other ways?

RST: It hasn’t had much impact in terms of our weighting across small and large caps. Generally speaking, we don’t do a lot in the small-cap space. The vast majority of what we do is in the S&P/ASX 100 Index (ASX: XTO).

At a strategical top-down level, going back six months, with the increased volatility we were seeing then, we did make a conscious decision to reduce illiquid holdings. So, if we were to come in one day and need to increase our cash rating dramatically, we didn’t want any anchors in the portfolio that prevented that in terms of liquidity.

Kina Securities Ltd (ASX: KSL) is a great example. A really good company. We are going to own it again at some stage. But the liquidity there was a concern, so we sold our holding.

The major change in the portfolio has been that we normally hold 55 to 65 stocks. We’re currently holding 43. That’s the smallest number we’ve held for a long period of time. And that’s really predicated on the fact that there are many companies we don’t want to hold right at the moment. Great companies with good long-term prospects, but right at the moment, we don’t want to be holding them.

We’re sitting on a large cash weighting. Once we think we’ve seen the bottom, there are a lot of companies we’ll start to invest in.

MF: Atop Kina Holdings, what other ASX shares are on your watchlist once you’re convinced the bottom is in?

RST: For example, the non-bank space is screaming value. All 10% plus yields on a trailing basis, and PEs are four to five times. But they are really in the crosshairs still with what we’re seeing here. Because they don’t even have what banks have, which is the capacity to use their margin from deposits to fund profits.

We think there are a number of NBFIs, non-bank financial institutions, that are rapidly growing market share and executing well.

There’s some like Pepper Money Ltd (ASX: PPM) that will be a big holding in our fund at some stage. Growing at a rapid rate, executing really well, using great fintech, really flexible. We think they’ll really hit it out of the park at some point. But we’ve got to get through the current washout yet before we really start to build a large position.

MF: What do see as the biggest threat for ASX investors in the year ahead?

RST: The washout from central bank policy.

Namely, the impact on consumer spending; the impact on corporate profitability; and the impact on valuations for long-duration assets. Those three things are all directly related to central bank policy and a consequence of inflation.

Those, I think, are the biggest challenges facing our market over the next 12 months.

MF: And what’s the biggest opportunity for investors?

RST: I think there are some sectors that have been well and truly oversold. There are some large opportunities in our universe. But you have to be patient. There are a number of cheap sectors, but they are likely to get cheaper.

The non-banks are a great example.

There are also some fantastic long-term consumer discretionary stocks like Wesfarmers Ltd (ASX: WES) or Domino’s Pizza Enterprises Ltd (ASX: DMP). Some great long-term opportunities.

We’re pretty excited about the next 12 to 24 months. We just think we need to be patient during this phase and make sure we time it as best we can in terms of starting to pick up some of these opportunities.

**

Tune in tomorrow for part two of our interview with Romano Sala Tenna.

(You can find out more about the Katana Australia Equity Fund here.)

The post 4 ‘fantastic long-term’ ASX shares to put on your watchlist: fund manager appeared first on The Motley Fool Australia.

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More reading

• Morgans says these top ASX dividend shares are buys
• This ASX 200 share dumped 16% in the first 3 days of November, and a director went thrift shopping
• A director has been buying up Wesfarmers shares. Should you?
• 3 ASX 200 directors buying up their company shares in the past week
• Here are the top 10 ASX 200 shares today 

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 positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) continued its winning streak with a solid gain. The benchmark index rose 0.6% to 6,999.3 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to fall on Thursday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 38 points or 0.55% lower this morning. In late trade in the United States, the Dow Jones is down 1.5%, the S&P 500 has fallen 1.5% and the NASDAQ has tumbled 1.9%.

Oil prices sink

Energy producers including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices sank on Wednesday night. According to Bloomberg, the WTI crude oil price is down 3.1% to US$86.18 a barrel and the Brent crude oil price is down 2.5% to US$92.99 a barrel. An increase in US crude stockpiles and Chinese demand concerns weighed on prices.

Xero half year results

The Xero Limited (ASX: XRO) share price will be on watch today when the cloud accounting platform company releases its half year results. A note out of Goldman Sachs reveals that its analysts are expecting “Revenue/GP/EBITDA +28/+30/+42% vs. PcP to NZ$648/571/143mn; driven by continued ANZ net add strength, positive ARPU tailwinds from price rises and continued platform performance offset by UK go-to-market weakness.”

NAB rated as a buy

The National Australia Bank Ltd (ASX: NAB) share price remains good value following the bank’s full year results according to Goldman Sachs. This morning the broker retained its buy rating with an improved $35.41 price target. Goldman believes that NAB provides “the best leverage to the thematic that domestic volume momentum will favour commercial over housing volumes over both the short- and medium-term.”

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a poor day after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,707.6 an ounce. The gold price fell after the US dollar strengthened.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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More reading

• Why has the Sayona Mining share price dumped 33% in 2 months?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday
• Coles share price slips as boss says ‘best is still to come’
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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Looking for some dividend shares to add to your income portfolio? If you are, you may want to look at the two listed below that have been tipped as buys by Morgans.

Here’s what you need to know about these ASX dividend shares:

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share that Morgans has tipped as a buy is telco giant Telstra.

It has been a difficult few years for Telstra, but the company has finally returned to form and looks well placed to build on this in the coming years. This is thanks to improving trading conditions and the new T25 strategy which is aiming to deliver solid and sustainable earnings growth.

In addition, Morgans highlights that its company restructure could unlock value for shareholders. That’s because it believes the market is undervaluing some of the telco’s assets that could be sold off.

As for dividends, Morgans is expecting Telstra to continue to pay fully franked 16.5 cents per share dividends in FY 2023 and FY 2024. Based on the current Telstra share price of $3.93, this equates to yields of 4.2%.

Morgans has an add rating and $4.60 price target on the company’s shares.

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that Morgans has tipped as a buy is Wesfarmers.

It is the owner of a diverse group of businesses. These include Coregas, Covant Lithium, Kmart, Officework, Priceline, and Bunnings.

Morgans is a big fan of the company due to its “quality retail portfolio” and “highly regarded management team.” Overall, it believes the company is well-placed for the future and continues “to view WES as a core portfolio holding for long-term investors.”

As for dividends, Morgans is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2024. Based on the current Wesfarmers share price of $46.24, this will mean yields of 3.9% and 4.1%, respectively.

The broker has an add rating and $55.60 price target on its shares.

The post Morgans says these top ASX dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• Why Telstra shares could be ‘worth substantially more’: Morgans
• A director has been buying up Wesfarmers shares. Should you?
• 3 ASX 200 directors buying up their company shares in the past week
• Why is the Telstra share price trailing the ASX 200 on Monday?
• Do Wesfarmers shares really offer 22% upside AND growing dividends?

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 positions in and has recommended Telstra Corporation Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Pilbara Minerals Ltd (ASX: PLS) share price finished Wednesday’s session up 1.29% to $5.50.

Just six months ago, the ASX lithium share was fetching just above $2.50. That’s right, the Pilbara Minerals share price is up an eye-watering 117% over this period. That’s just nuts.

Allow my Fool colleague Sebastian to blow your mind further. A bit over two years ago, Pilbara was a 30-cent share. So, it’s up more than 1,000% in two years.

But according to reporting in the Australian Financial Review (AFR), JPMorgan is neutral on Pilbara Minerals. And that’s an upgrade from its previous forecast.

The broker also has a 12-month share price target of $5.10 on Pilbara Minerals. Oops. Pilbara shares have already soared past that level.

So, has JPMorgan got it wrong?

Why is the Pilbara Minerals share price going gangbusters?

Well, there’s no doubt that lithium shares have got some great momentum right now. They continue to rise on the back of the surge in global electric vehicle (EV) manufacturing and there’s a long way to go.

In a recent investor presentation, Argo Investments Limited (ASX: ARG) demonstrated that global EV sales are expected to climb drastically from about six million in 2022 to 30 million in 2030.

This demand has, in turn, resulted in an astronomical increase in the lithium price, which means every company mining it has been raking in revenue like never before.

The lithium share price hit another record this month, and is up 3.49% over the past week to US$81,759 per tonne, according to Trading Economics.

What do other brokers think?

A quick canvas of recent broker commentary suggests that Pilbara Minerals is looked upon favourably as a business. No doubt, it’s benefitting enormously from the lithium price surge. The only ‘problem’ is the astronomical short-term share price gain, which has potentially made Pilbara Minerals too expensive now.

UBS and Credit Suisse have both slapped sell ratings on Pilbara Minerals shares. Their price targets imply a drop of at least 40%.

Citi has also put a sell on the stock on valuation grounds, saying the Pilbara Minerals share price has risen “too far, too fast.” Citi increased its share price target to $4.60.

Citi said: “[Pilbara Minerals] stock is up by 160% in a year, well ahead of peers; we move to Sell from Neutral on valuation.”

In a recent interview with my colleague Bernd, Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund said Pilbara Minerals “has been a longstanding favourite of ours“.

But he noted that the very strong share price gain meant “maybe some of the best returns are behind it”.

Rehder said:

The stock is up 50% this calendar year, after a 270% rise in 2021. So, maybe some of the best returns are behind it. But it continues to offer high-quality exposure to that green energy thematic, via its long-life, low-cost lithium mines in WA.

Wilsons equity strategist Rob Crookston said the team’s preference among ASX lithium shares is Allkem Ltd (ASX: AKE). They like Pilbara Minerals as well but also draw attention to the stretched valuation.

Crookston said: “While PLS screens attractively on near-term valuation multiples, the company appears to offer less valuation appeal over the medium-term.”

The post The Pilbara Minerals share price is up 117% in 6 months. So, does JPMorgan have it wrong? appeared first on The Motley Fool Australia.

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More reading

• Why did ASX lithium shares smash the market on Tuesday?
• Why did the Pilbara Minerals share price have such a cracker day?
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most traded ASX 200 shares on Tuesday
• Here are the 3 most heavily traded ASX 200 shares on Monday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. 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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It was a great day for the All Ordinaries Index (ASX: XAO) this Wednesday. The All Ords ended up closing at 7,187.4 points, up a healthy 0.52% for the day.

But it was an even better day for quite a few All Ords shares. So let’s now go through three that have recorded new, 52-week and multi-year highs today.

3 All Ordinaries shares hitting multi-year highs today

QBE Insurance Group Ltd (ASX: QBE)

First up is QBE Insurance. QBE shares had a very strong start to the trading day, rising as high as $13.10 a share soon after market open. That was despite the QBE share price falling for most of the afternoon and finishing up at $12.92 by the end of the trading day.

That was despite no real news coming out of the insurance giant this Wednesday. $13.10 a share is QBE’s highest share price level since the pre-COVID highs of February 2020 when QBE was a $14 share.

Mader Group Ltd (ASX: MAD)

We had a rather strange day for this All Ords share. Mader Group started out strong this morning, rising to a new high of $3.85 after closing at $3.75 yesterday.

But investors seemed to have gotten cold feet over the rest of the day, with Mader Group finishing down by a meaty 3.7% at $3.61. Still, this is a new all-time record high for Mader, as well as a new 52-week high. All this despite no news out of the company whatsoever.

Mineral Resources Limited (ASX: MIN)

Last but certainly not least is All Ords mining company Mineral Resources. Mineral Resources had an exceptionally strong day. The company finished up at $82.70 a share this afternoon but rose as high as $83.07. Not only is that a new 52-week high for Mineral Resources, but another all-time record high.

Again, there is nothing out of the company itself. But lithium shares, of which Mineral Resources is often associated with, had a strong day overall as well.

The post 3 ASX All Ordinaries shares that hit multi-year highs today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today  
• 3 ASX All Ords shares cracking new 52-week highs on Tuesday
• Here are the top 10 ASX 200 shares today
• Why are ASX lithium shares smashing the market today?
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now

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 positions in and has recommended Mader Group Limited. The Motley Fool Australia has positions in and has recommended Mader 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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