Category: Stock Market

IGO Ltd (ASX: IGO) shares closed 3.2% lower today at $13.01 apiece. This comes two days after the company released its FY22 results.

Also posting its earnings this week was ASX mining peer Mineral Resources Limited (ASX: MIN). Its share price also finished in the red today, down 1.84% to $62.79.

But how do these two ASX mineral explorer shares compare? Let’s take a look.

IGO FY22 results recap

IGO released a sound set of financial results for FY22, as covered by my colleague Brendon Lau. Revenue rose 34% to $903 million but net profit after tax (NPAT) dropped 40% to $331 million.

The drop in NPAT was due to a tax charge on the sale of the company’s Tropicana asset.

Despite the fall in IGO’s bottom line, it still declared a fully franked dividend of 5 cents per share.

IGO appears to be in a reasonably steady financial position with a cash balance of $367 million and new debt facilities of $900 million.

Current liabilities for FY22 was in the order of $440 million. So, it would seem IGO needs to rely on debt to stay on top of its short-term liabilities because IGO is not free cash flow positive.

On cash flow, IGO recorded operating cash flow of $357.1 million, which is down from $446.1 million in FY21.

The IGO share price climbed 3.79% on the back of these results on Tuesday, and gained another 2.21% yesterday.

How do IGO shares stack up against Mineral Resources?

The FY22 results for Mineral Resources weren’t as good as IGO as revenue fell 8% to $1.02 billion and NPAT declined 72% to $351 million.

My colleague Monica O’Shea covered the results and noted that the fully franked final dividend dropped 42.8% from $1.75 per share in FY21 to $1 per share in FY22.

Net cash from operating activities fell from $1.3 billion in FY21 to $279.8 million in FY22. The big drop was primarily due to an increase in working capital relating to the restart of Wodgina, the ramp-up of Mt Marion production and the conversion of the company’s spodumene concentrate into lithium hydroxide.

I find it interesting that IGO managed to record higher operating cash flow with less revenue. However, it appears the rise in operational expenditure may have been higher than historical levels for Mineral Resources.

Similar to IGO, Mineral Resources is not free cash flow positive.

IGO possesses much more short-term debt at $913.6 million and there is nearly $3 billion in long-term debt sitting on the balance sheet.

Mineral Resources does hold $2.4 billion in cash though.

From a financial strength perspective, it seems like IGO is in a slightly better position.

The Minerals Resources share price fell 1.74% on Monday when the results were announced, but climbed 6.2% the following day. However, it gave up most of those gains on Wednesday, losing 5.87%.

IGO share price snapshot

The IGO share price has risen by 35% in the past year and is 20% higher in the last month. As for the Mineral Resources share price, it has jumped 18% in the last year and has gone up 18% in the past month.

IGO has a market capitalisation of around $9.85 billion. The Mineral Resources market cap is sitting at $11.89 billion.

The post How do IGO shares compare to Mineral Resources following earnings season? appeared first on The Motley Fool Australia.

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More reading

• The Pilbara Minerals share price surged 30% in August. What now?
• Here are the top 10 ASX 200 shares today
• Why A2 Milk, Deep Yellow, Healius, and IGO shares are racing higher
• IGO share price moves higher on record earnings
• Mineral Resources share price slides as dividend drops 43%

Motley Fool contributor Raymond Jang 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 Telstra Corporation Ltd (ASX: TLS) share price may have ended the day slightly in the red on Thursday, but it still outperformed the S&P/ASX 200 Index (ASX: XJO).

Telstra shares fell 0.5% today to close at $3.95. However, the ASX 200 fell 2.02% today. For perspective, the S&P/ASX 200 Communication Services Index (ASX: XTJ) slid 1% today.

Let’s take a look at the latest from Telstra.

New CEO

Telstra’s new CEO Vicki Brady has taken over the top job today. She steps up from the role of chief financial officer, a position she held since July 2019. Brady has been working with Telstra since 2016.

On her first day in the new job, Brady said: “I couldn’t be happier or prouder to lead a team with such a special spirit that delivers so much to Australians and increasingly globally.”

Brady’s focus will be on driving Telstra’s T25 strategy. She said, “our best days are ahead of us”, commenting:

We’ve got a lot of work to do: building on the good work we’ve already done to deliver T25, and really making sure that Telstra is a great place for our customers. 

I couldn’t think of a better way to start this day than at Telstra Vantage, where we are bringing together our enterprise customers and our technology partners to explore new ways to innovate and grow in the new world.

Meanwhile, international division head Oliver Camplin-Warner has hinted Telstra may be looking at expanding to Latin America. However, no formal plans have been announced at this stage.

Speaking at a media round table at Telstra Vantage in Sydney, Camplin-Warner said:

We’re currently having conversations around Latin America, potentially. We have local resources on the ground.

Last week I was with a team in America. We have experts that just get that world – they understand the landscape, considerations, the regulatory side. So they’re really great at qualifying new markets, countries, in or out.

On Thursday, Telstra announced Brad Whitcomb will take over as the new executive for consumer and small business on 16 January. Whitcomb will leave NBN Co to work for Telstra. He takes over from Michael Ackland, who is stepping up to chief financial officer.

Andy Penn finished up as Telstra CEO on Wednesday. On his last day, Penn said he was “very sad to leave” but also “very proud of what we’ve achieved over the last seven years”.

He highlighted Telstra is a “very different company today to that which it was previously”, adding:

We have simplified the business, we’ve digitised the business, the number of complaints has more than halved, we’ve improved the financial trajectory of the business, and we are delivering some great technology solutions.

Telstra share price snapshot

The Telstra share price has climbed 1.5% in the past year, while it has shed 5.5% in the year to date.

In the past month, Telstra shares have lifted 1.5%.

Telstra has a market capitalisation of $45.6 billion based on the current share price.

The post Why did the Telstra share price beat the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Telstra shares offer a dividend yield over 4% right now. Is this as good as it sounds?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• How much income will Telstra shares pay for FY22 after this month’s dividend hike?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation 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 PointsBet Holdings Ltd (ASX: PBH) share price has been having a tough week.

The sports betting company’s shares fell heavily again on Thursday, stretching their week to date decline to over 26%.

This follows the release of PointsBet’s full year results on Wednesday, which revealed even larger losses.

Is the PointsBet share price weakness a buying opportunity?

While the weakness in the PointsBet share price has been disappointing for shareholders, one leading broker believes it could be a buying opportunity for the rest of us.

According to a note out of Bell Potter, its analysts have retained their speculative buy rating and $5.25 price target on the company’s shares.

Based on the current PointsBet share price of $2.44, this implies potential upside of 115% for investors over the next 12 months.

What did the broker say?

Bell Potter was pleased with PointsBet’s performance in FY 2022, noting that its revenue was in line and its sizeable loss of $267.7 million was better than it was forecasting ($314.4 million).

And while the broker isn’t expecting PointsBet to be profitable for several years, it believes the company is sufficiently funded (including its bonus options) to get through to breakeven. It explained:

We continue to forecast positive EBITDA is achieved in FY26. Note we now assume the company exercises the deferred bonus equity option and raises $150m in FY24 at an issue price of $3.00 (so 50m shares are issued). With this raise our forecasts suggest the cash balance remains positive though admittedly it gets tight by the end of FY25.

In light of this, it is focusing more on the company’s strong long term growth potential thanks to its massive opportunity in the United States. It commented:

PointsBet is pursuing a very large opportunity in the sports betting market in North America. The market is still very much in its infancy as, until recently, sports betting was prohibited in the US and Canada and states/provinces across both countries are only now – or recently – introducing legislation which allows a limited number of licensed operators to provide sports betting. PointsBet is aiming to be one of the leading providers (i.e. top 5) of online sports wagering in at least 17 states across the US and one province in Canada over the next two years. The size of sports wagering market in the US alone is estimated to be b/w US$8-10bn in 2025.

All in all, this could make PointsBet one to consider if you’re a patient long term focus investors. Especially with the PointsBet share price now down 76% over the last 12 months.

The post Broker tips PointsBet share price to double appeared first on The Motley Fool Australia.

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More reading

• Why BHP, Deep Yellow, Nickel Industries, and PointsBet shares are dropping
• Why is the ASX 200 diving 2% on Tuesday?
• Why DGL, PointsBet, Tabcorp, and Woodside shares are dropping today
• Pointsbet share price tumbles 10% as full-year losses deepen
• Pointsbet share price in focus as FY22 revenue lifts 52%

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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 A2 Milk Company Ltd (ASX: A2M) share price has risen by 16% since the baby formula company released its FY22 results on 29 August.

The a2 milk share price has outperformed the Bubs Australia Ltd (ASX: BUB) share price in the past five days. But the big question is whether a2 milk shares can continue the momentum over the long run.

Let’s put these two infant formula companies toe-to-toe.

FY22 results recap

A2 milk recorded strong results in FY22 as covered by my colleague, James. Revenue grew 19.8% to NZ$1.4 billion and net profit after tax (NPAT) went up 42.3% to NZ$114.7 million.

Earnings from A2 milk’s core geographies of Australia and New Zealand actually fell from NZ$558.3 million in FY21 to NZ$530.5 million in FY22. This is a bit concerning given these are a2 milk’s local markets.

However, sales in China and other Asian countries produced a major uplift, surging from NZ$583.4 million in FY21 to NZ$726.5 million in FY22. It seems the 36.3% increase in marketing to drive brand awareness paid off.

Operating cash flow improved from NZ$89.4 million in FY21 to NZ$203.8 million in FY22.

However, investors should bear in mind that the stronger performance in FY22 was largely due to the 75% acquisition of Mataura Valley Milk. This resulted in a cash outflow of NZ$213.7 million.

Despite a2 milk being in negative free cash flow territory, broker Bell Potter upgraded a2 milk shares to a buy rating. The price target is up by a third to $6.35.

Analysts at Bell Potter believe a2 milk is capable of producing strong earnings growth to FY26.

A2 milk versus Bubs

Despite recording a record result in FY22, the Bubs share price didn’t move all that much. Revenue grew 123% to $104.2 million in FY22 and the net loss was improved from $74.7 million in FY21 to $11.4 million in FY22.

The significant rise in sales was due to a material supply deal in the United States. The biggest reason for the shortage in supply of baby formula was the closure of Abbott Nutrition’s factory in Michigan.

The US Food and Drug Administration (FDA) closed the largest producer in the country due to the discovery of bacterial infections.

Abbott Nutrition’s factory site has been suspended since February but it restarted production in early June under FDA’s watchful eye.

This development is important because it could ultimately mean reduced reliance on overseas infant formula producers like Bubs.

A2 milk is still yet to benefit from the situation in the US as it awaits FDA approval. However, a2 milk is in a much stronger financial position with NZ$887.3 million in cash whereas Bubs holds $16.3 million and is still not yet profitable.

A2 milk share price snapshot

The a2 milk share price has fallen by 1.4% in the past year. But it has rallied strongly in the past month, rising by 16%. It closed Thursday’s session at $5.70, up 2.7% for the day.

In contrast, the Bubs share price has experienced strong growth of 38% in the past year. But it’s down 2.6% in the past month. Bubs finished the session today at 56 cents, down 0.9% for the day.

The market capitalisation of a2 milk is around NZ$4.73 billion.

The market capitalisation of Bubs is around $418 million.

The post How do A2 Milk shares stack up against Bubs post-earnings season? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These were the best performers on the ASX 200 in August
• Broker says A2 Milk share price can keep rising
• Why Bell Potter is tipping 40% upside for the Bubs share price
• Here are the top 10 ASX 200 shares today

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 and BUBS AUST FPO. 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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One of the biggest news items of the day today has been the news that the Suez Canal has once again been blocked. The Suez, located in Egypt, is one of the most vital arterial trade routes in the world. It enables ships to move efficiently between the Red Sea and the Mediterranean Sea, a far shorter route than the alternative of sailing around the African continent.

According to reporting from the ABC, the Affinity V oil tanker, which is roughly 252 metres long and 45 metres wide, ran aground last night (our time). It took five hours to refloat the ship and get it moving again.

But this is not the first time a ship has come to grief in the incredibly narrow and busy channel. Readers would probably remember the ruckus caused by a similar incident in March last year. That incident had a stuck ship that took more than six days to dislodge, effectively holding up hundreds of other ships carrying vital cargo, including oil shipments.

So how did the ASX react to that globally-destabilising news last time?

Well, as we covered at the time, the primary beneficiaries were ASX energy shares. Oil companies tend to ride or die on the price of crude oil itself. And with such a vital global trade route shuttered in 2021, oil immediately spiked, leading to some outsized gains in ASX oil and energy shares.    

What has happened to ASX 200 oil shares in 2022’s Suez crisis?

So is that what has happened today? 

Well, not quite. As my Fool colleague James reported this morning, this latest blockage in the Suez Canal did little to the oil price overnight. In fact, my colleague reported this morning that “the WTI crude oil price is down 2.7% to US$89.15 a barrel and the Brent crude oil price is down 2.8% to US$96.50 a barrel. Recession fears continue to weigh on sentiment”.

ASX 200 oil shares followed suit today. The Woodside Energy Group Ltd (ASX: WDS) share price closed at $33.47 this afternoon, down 2.28%. Santos Ltd (ASX: STO) shares lost 2.79% to $7.67, while Beach Energy Ltd (ASX: BPT) shares lost a nasty 4.4% to $1.64 each.

So perhaps it’s the fact that the stuck ship this time was dislodged within a few hours, compared to the six days last time, that has left investors unfazed by this latest news. There doesn’t seem to be the dramatic bottleneck of commodity-laden ships that we saw last year this time.

Either way, this week’s ‘Suez crisis’ doesn’t seem to have had nearly the kind of impact on global trade, oil prices or ASX 200 energy shares as the last one.  

The post Blocked again: Here’s what happened to ASX 200 shares last time the Suez was cut off appeared first on The Motley Fool Australia.

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More reading

• How did ASX 200 dividend shares stack up in August?
• Reason for hope as ‘worst month of the year’ starts off badly
• Do Woodside shares still have more upside to come from the company’s BHP purchase?
• 5 things to watch on the ASX 200 on Thursday
• Why DGL, PointsBet, Tabcorp, and Woodside shares are dropping today

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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ASX uranium shares slid into the red today, with major losses occurring across the main players in the industry.

It should be noted that the past month’s performance for these shares, beginning from 2 August to the present day, is overwhelmingly positive, with most companies posting low to mid-double-digit gains.

Some notable mentions include the Alligator Energy Ltd (ASX: AGE) share price, which closed down 14.1% today at 6.7 cents. Despite today’s losses, Alligator Energy remains up 12% over the past month.

The second biggest loser of the lot today is the Deep Yellow Limited (ASX: DYL) share price, which sunk 8.15% to $1.07. However, Deep Yellow remains up a massive 45% over the past month.

And finally, the Paladin Energy Ltd (ASX: PDN) share price closed down 1.18% today at 84 cents. This may look bad, but Paladin is still up almost 17% over the past month.

So while uranium shares are undoubtedly rallying over the past month, what spooked the market on Thursday? Let’s investigate what happened.

What’s going on with ASX uranium shares?

Some contentious news that was posted earlier this week could be being felt today. The United Nations stated that Iran is moving forward with its uranium enrichment program on Tuesday, as originally reported by ABC news.

Upgrades were reportedly made to its IR-6 centrifuges in Natanz, Iran. Diplomats stated that the existing IR-6 models were used to enrich uranium up to 60% purity, which is close to the threshold of being used for weaponisation. The recent upgrade was said to underline the West’s concerns that Iran is progressing towards creating nuclear weapons.

The bigger picture for uranium is that it could enter a supercycle as countries worldwide embrace nuclear power.

Countries such as France, India, Japan, and the United States are ramping up the production of nuclear reactors. The energy crisis caused by the war in Ukraine and the development of miniaturised nuclear reactors have buoyed these countries’ enthusiasm for the controversial energy source.

Nuclear energy is also considered a cleaner form of energy production that produces far less carbon dioxide than burning coal, which accounts for 37% of the world’s energy production. This is an important feature for governments to consider as they attempt to reduce emissions as much as possible.

The post Why did ASX uranium shares get hammered on Thursday? appeared first on The Motley Fool Australia.

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More reading

• Why BHP, Deep Yellow, Nickel Industries, and PointsBet shares are dropping
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Deep Yellow, Nitro, Tyro, and Webjet shares are storming higher
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 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 S&P/ASX 200 Index (ASX: XJO) tumbled for a second consecutive session today to close under 6,900 points for the first time in six weeks. The index closed Thursday’s trade 2.02% lower at 6,845.60 points.

It came as a number of shares including Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), and Blackmores Ltd (ASX: BKL) traded ex-dividend.

But it wasn’t all bad. The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) closed in the green, having gained 1%.  

Today’s worst-performing sector was the S&P/ASX 200 Materials Index (ASX: XMJ), tumbling 4.8%. It was weighed down by the market’s largest participant, BHP Group Ltd (ASX: BHP), which plummeted 7.6% as it traded ex-dividend.

It also followed a bad night for base metals, with all majors except nickel dropping. Meanwhile, gold futures slipped 0.6% to US$1,726.20 an ounce and iron ore futures lifted 0.3% to US$104.76 a tonne.

All in all, only one of the ASX 200’s 11 sectors closed higher on Thursday. But which share outperformed all others? Keep reading to find out.

Top 10 ASX 200 shares countdown

The A2 Milk Company Ltd (ASX: A2M) share price recorded the biggest gain of the ASX 200 today, lifting 2.7%. Find out more about what the company has been up to lately here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
A2 Milk Company Ltd (ASX: A2M)	$5.70	2.7%
Endeavour Group Ltd (ASX: EDV)	$7.46	2.61%
New Hope Corporation Limited (ASX: NHC)	$5.00	2.04%
Lottery Corporation Ltd (ASX: TLC)	$4.51	2.04%
Coles Group Ltd (ASX: COL)	$17.77	1.2%
Woolworths Group Ltd (ASX: WOW)	$36.42	0.91%
Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)	$17.66	0.86%
Metcash Limited (ASX: MTS)	$4.15	0.73%
Elders Ltd (ASX: ELD)	$11.66	0.69%
Ansell Limited (ASX: ANN)	$26.75	0.6%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Is the Endeavour share price a bargain after its big tumble in August?
• Why Coles, Fisher & Paykel, New Hope, and Nitro shares are rising
• 3 ASX 200 shares defying today’s sell-off to surge higher
• How did ASX 200 dividend shares stack up in August?
• Hoping to bag the boosted Coles dividend? Here’s what you need to do

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 positions in and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended A2 Milk, Ansell Ltd., Blackmores Limited, and Elders 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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If you want to build a balanced portfolio, having a few blue chip ASX 200 shares could be a smart move.

But with so many to choose from on the Australian share market, it can be hard to decide which ones to buy ahead of others.

To narrow things down for you, I have picked out two ASX blue chip shares that analysts currently rate as buys:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group.

It is a leading integrated commercial and industrial property company with operations across the world. Among its portfolio are warehouses, data centres, large scale logistics facilities, and business and office parks.

Goodman currently has $73 billion of total assets under management and over 1,700 customers globally. The latter includes the likes of Amazon, Coles Group Ltd (ASX: COL), DHL, Showpo, and Walmart.

Demand for Goodman’s properties has been strong and has underpinned sky high occupancy rates and double-digit earnings growth over the last decade. This demand is being driven by the success of Goodman’s strategy of developing modern, high quality properties in key gateway cities around the world. Management highlights that this has shortened the distance between businesses and consumers and put its customers ahead of the market.

Goldman Sachs is a big fan of Goodman and continues to forecast strong earnings growth (compound annual growth rate of ~14% between FY 2022 and FY 2024). It currently has a buy rating and $25.40 price target on the company’s shares.

Sonic Healthcare Limited (ASX: SHL)

Another ASX 200 blue chip share to consider is Sonic.

It is one of the world’s leading healthcare providers with operations across Australasia, Europe, and North America. Sonic currently employs more than 1,500 pathologists and radiologists, and more than 10,000 medical scientists, radiographers, sonographers, technicians, and nurses.

Thanks to this strong network, and particularly its pathology business, Sonic has been a very strong performer during the last couple of years. This is at a time when many other healthcare companies have struggled. Sonic’s strong growth has been driven by its exposure to COVID testing and the resilient performance of its non-COVID testing businesses.

And while COVID testing is winding down now and its earnings are likely to have peaked for the time being, the team at Credit Suisse still see plenty of value in it shares. It recently retained its outperform rating with an improved price target of $38.50.

The post Analysts name 2 blue chip ASX 200 shares to buy now appeared first on The Motley Fool Australia.

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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 Sonic Healthcare 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 Vanguard Australian Shares Index ETF (ASX: VAS) is a popular way to invest in ASX shares. According to Vanguard, the ETF size is $11 billion. But, is it a good choice for beginner investors?

Investing can be daunting because there are so many choices to choose from. What is a good place to put hard-earned money?

Exchange-traded funds (ETFs) could be a smart choice because it allows investors to invest in a portfolio of businesses in one go. The ETF does all the investing on behalf of investors.

So, that describes what an ETF can do. But what about the VAS ETF specifically? I’m going to outline some of the main positives.

Low cost

One of the advantages of an ETF is that it can have low management fees, depending on the provider.

Vanguard offers a number of ETFs such as the VAS ETF and the Vanguard MSCI Index International Shares ETF (ASX: VGS). The VGS ETF is focused on the global share market and offers access to international technology businesses with attractive growth potential like Alphabet and Microsoft.

One of the key features of Vanguard is that it aims to provide its investment funds to people as cheaply as possible. Vanguard is not a fund manager trying to make big profits.

The Vanguard Australian Shares Index ETF has an annual management fee of 0.10%, which is very low.

Diversified

The VAS ETF enables people to indirectly invest in the businesses in the S&P/ASX 300 Index (ASX: XKO).

It means that we’re investing in 300 names inside the portfolio.

What types of names are in the portfolio? Well, the biggest businesses have the largest allocations in the ETF. At the end of July 2022, here are the names that are at least 2.5% of the portfolio:

BHP Group Ltd (ASX: BHP) – 9.3%

Commonwealth Bank of Australia (ASX: CBA) – 8.1%

CSL Limited (ASX: CSL) – 6.6%

National Australia Bank Ltd (ASX: NAB) – 4.7%

Westpac Banking Corp (ASX: WBC) – 3.6%

Macquarie Group Ltd (ASX: MQG) – 3.1%

Australia and New Zealand Banking Group Ltd (ASX: ANZ) – 3%

Woodside Energy Group Ltd (ASX: WDS) – 2.9%

Wesfarmers Ltd (ASX: WES) – 2.5%

Of course, there are hundreds of other names in the portfolio, so it offers plenty of diversification.

Any negatives about the VAS ETF?

Just because it’s a Vanguard ETF doesn’t automatically mean that it’s the best choice.

The ASX has plenty of exciting potential investments. However, due to the nature of the Australian economy, the portfolio is quite heavily focused on resources and banks. ‘Financials’ and ‘materials’ make up more than 50% of the portfolio. These sectors don’t typically have businesses growing at a fast rate year after year.

The information technology sector can be a fruitful place to find businesses growing revenue (and perhaps profit) quickly, but there’s only a 3.3% allocation to it in this ETF.

So, while this ETF may have a solid dividend yield, the capital growth may not be as much as other options over the long term, such as the VGS ETF. Over the past five years, the VGS ETF has seen capital growth of an average of 9.4% per annum, whereas the VAS ETF’s capital growth has been an average of 3.5% per annum.

The post Is the VAS ETF a good way to get started with investing? appeared first on The Motley Fool Australia.

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More reading

• Could these ASX ETFs soon play a bigger role in Aussie super funds?
• Why are the VAS ETF’s dividends so erratic?
• How does VGS stack up against other ASX index funds?
• 2 ETFs I think would make good additions to most portfolios
• Here’s how much the Vanguard Australian Shares Index ETF (VAS) has paid in dividends over the past 5 years

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), CSL Ltd., Microsoft, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Macquarie Group Limited, Vanguard MSCI Index International Shares ETF, and Westpac Banking Corporation. 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 Endeavour Group Ltd (ASX: EDV) share price dropped 8.2% for the month of August, with a closing price of $7.92 on the last day of July and a closing price of $7.27 on 31 August.

Shares of the alcohol retailer and hotels operator finished the session on Thursday at $7.46, up 2.61%. Earlier this morning, the shares made an intraday high of $7.49.

Endeavour shares experienced a stronger sell-off than many of their peers in the consumer staples sector last month.

That includes Woolworths Group Ltd (ASX: WOW), which lost only 3.81% and ended at a closing price of $36.09 on the last trading day of the month.

Meanwhile, Coles Group Ltd (ASX: COL) also reported a smaller loss than Endeavour Group at 6.35%, ending the month at a closing price of $17.56.

Overall, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) lost only 2.65%.

There’s a bull vs bear case for Endeavour going on in the broker community right now. The question is whether the shares are undervalued at their current level.

Let’s take a look at what the experts have to say.

Is Endeavour Group a bargain, or not?

Last Thursday, a note from Goldman Sachs suggested the Endeavour share price presents a “value entry point” for investors.

The broker gave Endeavour Group a price target of $8.10, representing a potential upside of 8.7% at the time of writing.

The broker said:

Despite the stock sell down on the back of results, our longer-term investment thesis for EDV does not change. We continue to see that EDV has one of the most loyal consumer bases in Retail (unique annual active users +15% YoY to 4.5mn in FY22) and improving VOC NPS. As the company continues to invest in consumer loyalty and digitalization, we expect that this will continue to drive mid-single digit sales growth in mix improvement together with cost efficiencies for margin expansion. We hence view the pull back in share price as a value entry point into a high quality and defensive player in AU Consumer.

Fat Prophets CEO Angus Geddes offered the opposite conclusion from his analysis, as reported by The Bull. Geddes noted that liquor sales and margins could be compressed by tighter household budgets.

Geddes said:

Australia’s dominant liquor retailer and hotel operator offers defensive qualities. Group sales of $11.6 billion in fiscal year 2022 were flat year-on-year. Group earnings before interest and tax of $924 million represented a 2.8 per cent increase on the prior corresponding period. In our view, liquor sales and margins may be impacted by price increases as households tighten budgets. The company is trading above our valuation.

Endeavour Group share price snapshot

The Endeavour Group share price is up 10% year to date. By contrast, the S&P/ASX 200 Index (ASX: XJO) is down 9.8% over the same period.

The company’s market capitalisation is $13.02 billion.

The post Is the Endeavour share price a bargain after its big tumble in August? appeared first on The Motley Fool Australia.

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More reading

• Why Coles, Fisher & Paykel, New Hope, and Nitro shares are rising
• 3 ASX 200 shares defying today’s sell-off to surge higher
• How did ASX 200 dividend shares stack up in August?
• Hoping to bag the boosted Coles dividend? Here’s what you need to do
• Here are 5 ASX 200 shares going ex-dividend tomorrow

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 positions in and has recommended Goldman Sachs. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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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