Category: Stock Market

The Qantas Airways Limited (ASX: QAN) share price is in the red on Wednesday.

Its slump comes amid findings that passengers of the airline and its subsidiary Jetstar suffered more delays and cancellations in May than those of competing airlines.

At the time of writing, the Qantas share price is $4.525, 0.55% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also recording a 0.21% fall.

Let’s take a closer look at what’s going on with Australia’s national airline on Wednesday.

Qantas share price slips amid unfavourable findings

The Qantas share price is sinking amid the release of data from the Bureau of Infrastructure and Transport Research Economics.

The data found Qantas cancelled more flights last month than both Virgin Australia and Regional Express Holdings Ltd (ASX: REX). Qantas’ subsidiary Jetstar also saw more late take-offs and delayed landings than its competitors did.

Here are some of the key figures:

• 38.5% of Qantas’ May flights departed late,
• 39.3% landed late, and
• 7.1% were cancelled

Meanwhile, its subsidiary Jetstar saw 42.3% of flights leave late, 39.4% land late, and 5.7% cancelled.

Rex performed best in terms of delays and cancellations last month. Just 1.4% of its flights were cancelled while 21.5% departed late, and 24.5% landed late.

Meanwhile, 5% of Virgin flights were cancelled, 35.6% took off late, and 34.3% landed late.

However, the news is unlikely to have dinted the ASX 200 airline’s stock today. It’s slipping alongside its home sector – the S&P/ASX 200 Industrials Index (ASX: XNJ). The sector is currently down 0.57%.

The company’s fellow ASX 200 travel stocks are also struggling. The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 3.1% right now, the Webjet Limited (ASX: WEB) share price has slipped 2.65%, and the Corporate Travel Management Ltd (ASX: CTD) share price has fallen 4.64%.

Finally, the share price of Qantas’ ASX-listed competitor Rex is currently up 2.45%.

The post What’s dragging on the Qantas share price today? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 travel shares take off again on Tuesday. Here’s why
• What’s boosting the Qantas share price on Tuesday?
• Why are ASX 200 travel shares lifting off on Monday?
• Qantas share price lifts amid new sustainability partnership
• What happened to the Qantas share price today?

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 recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Megaport Ltd (ASX: MP1) share price has sunk another 2.17% on Wednesday. At the time of writing, it’s sitting at $4.96 on no news.

This brings Megaport’s losses to 33% for the month, or 74% this year to date.

In wider market moves, the S&P/ASX All Technology Index (ASX: XTX) has crept 50 basis points lower today. It too is down, 39% this year to date.

Is the Megaport share price in value territory?

Megaport shares are being punished in 2022. Now, with the market sell-off, losses have extended and the share is deep in the red.

Despite the pressure, analysts at Goldman Sachs remain constructive on its outlook and price Megaport at $13.10 per share.

At the current market price of $4.96, some might suggest it is trading at a deep discount to Goldman’s price objective.

Structural tailwinds in the cloud-usage and networking-as-a-service (NaaS) space are key drivers of Megaport’s growth, Goldman says.

The total market could reach $129 billion for these areas, the broker reckons. Certainly optimistic projections that could bode well for Megaport.

Further, whilst the market has been unkind to Megaport, if it is considered a value share, this could play in well to the case.

That’s because value stocks are likely to outperform growth after a slumped period, according to Cliff Asness, CIO at AQR Capital.

Speaking to Goldman Sachs’ June macroeconomic research paper Top of Mind, Asness said:

Looking ahead, I’m confident that Value can continue to outperform over a medium-term, say, three year, horizon precisely because the valuation spread between Value and Growth remains incredibly stretched, which would represent a stark break from the post-GFC cycle where Value delivered somewhere between subpar and dismal returns.

Irrespective, the Megaport share price has a long way to run to reach its former closing high of $21.88 reached on 17 November 2021.

The post Down 33% in a month, is the Megaport share price in ‘value’ territory? appeared first on The Motley Fool Australia.

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More reading

• Megaport share price slides 11% on dire day for ASX tech
• 3 ASX tech shares that could pop when the mood turns
• 3 ASX All Ordinaries shares that defied Thursday’s slump to leap higher
• 3 fantastic ASX shares that analysts reckon have huge upside potential
• Megaport share price hits multi-year low: Is this a buying opportunity?

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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT 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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It’s no secret that 2022 thus far has proven to be an exceptionally difficult year for ASX shares. Over the year to date, the S&P/ASX 200 Index (ASX: XJO) is still down by a notable 13.7% or so, even with today’s gains. But let’s check out how the Woolworths Group Ltd (ASX: WOW) share price has fared.

Woolworths shares are often held up as ‘defensive’. That’s probably because Woolworths is a large, mature blue-chip, dividend-paying ASX share that operates in the consumer staples sector of the market. Because the company sells food, drinks, and household goods, it has a reputation as being recession-resistant, inflation resistant, and stable.

This is true to an extent. We all need to eat, drink, and keep our households running, no matter the economic conditions.

But does this truly make Woolworths shares a defensive investment? Let’s see how this company has fared over 2022. After all, this year has been dominated by concerns over inflation, interest rates, and a possible looming recession. So it will be interesting to see how Woolies shares have fared amid these concerns, given its defensive reputation.

So Woolworths shares started the year at a share price of $38.01. Today, the company is going for $34.24 a share at the time of writing. That’s a year-to-date loss of 9.9%.

That loss is a few percentage points less than what the ASX 200 has delivered over the year so far. Therefore, we can say that Woolworths shares have outperformed the market over 2022 as it currently stands. And, by extension, we can indeed conclude that, at least over this year, Woolworths has been an effective defensive share.

Is the Woolworths share price a 2022 buy?

It could get even better for Woolies investors too. As my Fool colleague James recently discussed, broker Goldman Sachs reckons the Woolworths share price could decisively recover over the next 12 months. This ASX broker currently rates Woolworths shares as a buy, with a 12-month share price target of $41.70. If that came to pass, it would mean an upside of more than 22% from the current share price.

Goldman justified this optimism by noting it is “encouraged by the resilience and superior operations” of Woolworths. The broker expects continuing price growth from the company, which should protect its margins as “COVID costs roll-off and cost efficiencies continue”.

No doubt that will come as good news for investors today.

At the current Woolworths share price, this ASX 200 blue chip has a market capitalisation of $41.49 billion, with a dividend yield of 2.75%.

The post Has 2022 proven Woolworths is a defensive ASX share? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: St Barbara and Zip drop to multi-year lows
• 3 reasons why I think the Soul Pattinson share price is an excellent buy right now
• Why is the Fisher & Paykel share price heading south today?
• 5 things to watch on the ASX 200 on Wednesday
• How does the Macquarie dividend stack up against the ASX big four banks?

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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It has been another difficult day for ASX lithium shares on Wednesday.

In afternoon trade, a number of lithium shares are underperforming the market and sinking deep into the red.

Which lithium shares are sinking?

Here’s a summary of some of the notable moves in the industry:

• The Argosy Minerals Limited (ASX: AGY) share price is down 7%
• The Core Lithium Ltd (ASX: CXO) share price has sunk 9.5%
• The Lake Resources N.L. (ASX: LKE) share price has dropped 12%
• The Liontown Resources Limited (ASX: LTR) share price is down 5%
• The Sayona Mining Ltd (ASX: SYA) share price has fallen 7%

What’s happening?

Concerns over increasing supply and the potential impact this could have on lithium prices in the coming years have been weighing on lithium shares in recent weeks.

However, today’s decline appears to relate to the demand side of the equation.

This follows reports in Europe that Germany is planning to defy the European Union by backtracking on future plans to outlaw internal combustion engine (ICE) cars.

According to the Financial Times, Germany’s finance minister, Christian Lindner, has rejected plans for the ban on the sale of new petrol and diesel cars by 2035. This raises the prospect that the region’s green agenda will be watered down.

Germany is understood to be against the plan as there are concerns that it could lead to the loss of hundreds of thousands of jobs in the sector.

If Germany does go against the ban and ICE cars continue to be manufactured, this could have a major impact on the number of electric vehicles on European roads in 2035.

This could ultimately mean that lithium demand falls well short of forecasts, meaning we won’t need as much supply as previously thought. This may not bode well for prices of the white metal in the future.

The post Is this why ASX lithium shares are being crushed today? appeared first on The Motley Fool Australia.

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More reading

• Why this top broker is tipping 200% upside for the Liontown share price
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why is the Lake Resources share price crashing 25% today?
• Why Bowen Coking Coal, Lake Resources, Premier, and ResApp shares are tumbling lower
• Why is the Core Lithium share price slipping 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 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 Bitcoin (CRYPTO: BTC) price isn’t exactly rocketing back to new highs after the horror week just past.

But the world’s biggest token by market cap has stabilised, at least.

At the time of writing, the Bitcoin price stands at US$20,401 (AU$29,408). That’s just about where it was trading at this time yesterday, after hitting an overnight high of US$21,620, according to data from CoinMarketCap.

Like we said. Not shooting the lights out. But still some 17% above the US$17,709 lows the token hit on Sunday, its lowest price since 2020.

Why did the Bitcoin price tumble last week?

Bitcoin has been under pressure amid rising interest rates that have driven other cryptos, like the TerraUSD stable coin and its supporting token Luna, over the edge.

The end of historic low rates has seen most risk assets — think high-growth tech shares — sell off sharply.

Last week, the tech-heavy Nasdaq dropped 5%, despite Friday’s rally.

The Bitcoin price fared even worse, with Glassnode reporting that crypto investors’ realised losses on their Bitcoin holdings hit a record US$7.3 billion over the week.

Now what?

Looking ahead, the wider crypto market is unlikely to shake off its notorious volatility any time soon.

Feroze Medora, director of APAC trading at Cameron on the Gemini crypto platform, said (courtesy of Bloomberg), “A toxic mix of bad news cycles and higher interest rates has hurt the crypto market and we can anticipate more volatility in the upcoming weeks.”

Glassnode noted in a report that fewer forced sellers in the months ahead could offer some support to the Bitcoin price. “With forced sellers appearing to drive much of the recent sell-side, the market might begin to eye whether signals of seller exhaustion are emerging over the coming weeks and months.”

But any sustained relief rally looks to be some way off yet.

Discussing the recent Bitcoin price moves, Katie Stockton, founder of Fairlead Strategies, said (quoted by Bloomberg):

It’s a very natural place to see some stabilisation, a kind of relief rally. We do think that relief rally would be muted, however, just given the downside momentum really across the board.

The post What to expect from the Bitcoin price following last week’s thrashing appeared first on The Motley Fool Australia.

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More reading

• Is Solana the next Bitcoin?
• The key driver behind the recovery in Bitcoin, Ethereum, and Solana today
• Bitcoin price rockets 14% but experts say cryptos aren’t out of the woods yet
• Why US$19,500 is a line in the sand for the Bitcoin price
• Why tech billionaire Bill Gates is ‘not involved’ in crypto or NFTs

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 positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 Humm Group Ltd (ASX: HUM) share price is plunging amid news five members of the company’s six-person board have resigned in the wake of the termination of a planned $250 million sale.

The sale was vehemently opposed by Humm founder, director, and largest shareholder Andrew Abercrombie – who the resigning members of the board now reject working beside.

The Humm share price plunged almost 4% to 50.5 cents in early trading today before regaining ground to 51 cents at the time of writing.

For context, the broader market is in the green on Wednesday. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.168% while the All Ordinaries Index (ASX: XAO) has gained 0.12%.

Let’s take a closer look at what might be weighing on the finance and buy now, pay later (BNPL) provider’s stock today.

Humm share price slumps amid board resignations

The Humm share price is sinking on Wednesday. Its tumble comes after the company announced its chair and all directors – except Abercrombie – are stepping down.

It follows last week’s news that the sale of Humm’s BNPL business to Latitude Group Holdings Ltd (ASX: LFS) had fallen through. Its termination was said to be due to “major disruption in financial markets”.

“The events leading to the termination of the proposed sale of Humm Consumer Finance to Latitude Group Holdings Ltd (ASX: LFS) … have caused the majority directors of Humm … to conclude that they cannot remain on the board of directors with Andrew Abercrombie,” the company said in a release to the ASX this morning.

The release detailed the immediate resignation of directors Alistair Muir and John Wylie.

Meanwhile, Humm chair Christine Christian and directors Carole Campbell and Rajeev Dhawan will resign when replacement directors are appointed.

The company noted the gradual handover would allow the company to “deal with the challenges and opportunities ahead”.

Abercrombie labelled the now deceased deal – that would see the company’s BNPL leg sold to Latitude – a “dud” and “nothing but a garage sale”.

That’s despite Humm noting the business hadn’t turned a profit in 2022 and risks the company’s share price.

Board unanimous ‘excluding one lone dissenting director’

The board further outlined its position regarding the failed sale in a letter to shareholders last night that accused Abercrombie of undertaking “a strident campaign against the proposed sale”. The board went on to say:

The majority directors have been prepared to act to secure [the sale] despite multiple aggressively worded private threats of legal action against us personally from Andrew Abercrombie.

[T]his was the entire board of highly experienced people acting unanimously in all these decisions, excluding one lone dissenting director.

Humm’s stock has struggled this year. It has fallen 45% year to date. It’s also 50% lower than it was this time last year.

The post Humm share price tumbles 4% as majority of board exits appeared first on The Motley Fool Australia.

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More reading

• Why Block, Fortescue, GUD, and Humm shares are sinking today
• Latitude share price lifts on cancelled Humm deal
• Humm share price sinks 11% following termination of $250m BNPL sale to Latitude
• Why Humm, Inghams, Link, and Smartgroup shares are falling
• ‘A dud deal’: Why is the Humm share price falling on Thursday?

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 recommended Humm 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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Leading fund manager Wilson Asset Management (WAM) has picked a few S&P/ASX 200 Index (ASX: XJO) shares as opportunities.

There has been a lot of volatility on the ASX share market in recent weeks and months amid the focus on inflation and interest rate rises. No one can truly know when conditions will die down. But experts think that the lower valuations represent good prices for many businesses.

WAM manages a selection of listed investment companies (LICs). These include WAM Capital Limited (ASX: WAM), WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA).

Moreover, a key focus of the WAM LICs is to find “undervalued growth companies” where there is a catalyst that could send the share price higher.

These are two of the ASX 200 shares WAM identifies in its recent update.

ARB Corporation Limited (ASX: ARB)

ARB designs, manufactures, distributes and sells motor vehicle accessories.

In May 2022, the company gave investors a market update citing “numerous” challenges to its business operations. These include an increase in commodity prices, a global shortage of new vehicles, and global logistics and pricing issues. Further to this is a labour and skills shortage and exchange rate volatility.

WAM notes that ARB pointed out it expects an increase in total capital expenditure to $57 million in FY22. That would be up from $33 million in FY21. The company attributes this to costs associated with its factories and upgrades to its retail stores and manufacturing equipment.

The fund manager is “upbeat” that the ASX 200 share will “likely” achieve its projected FY22 revenue of $700 million, supported by its 18% year-on-year increase in sales revenue over the nine months to 31 March 2022.

Wilson Asset Management is positive on the outlook for ARB as it delivers on growth opportunities in Australia and in export markets, development of new products, and fostering of partnerships with major customers.

Worley Ltd (ASX: WOR)

Another business named as an opportunity by WAM is Worley.

Worley provides engineering, procurement and construction expertise to the upstream, midstream, chemicals, power, energy and minerals sectors.

Last month, the ASX 200 share was given three new contracts. It also signed an agreement with Avantium Renewable Polymers to provide engineering, procurement and construction services.

WAM said that the services Worley will provide to these companies aims to support the growth of their assets and their sustainability targets.

With new contracts in the pipeline and FY22 costs expected to be less than half of FY21, the fund manager thinks the revenue and earnings target for the second half of FY22 is “well supported”.

The post This expert thinks these 2 ASX 200 shares are great buys right now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares to pounce on after tax-loss selling: report
• 3 ASX 200 shares rocking new 52-week highs on Thursday
• 2 ASX shares the Aussie lifestyle can’t do without
• 3 high-quality ASX 300 shares trading at 52-week lows today
• 3 ASX shares to buy in troubled times: expert panel

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

Over the past 24 hours, the price of the meme token Shiba Inu (CRYPTO: SHIB) has jumped roughly 27% as of 10:30 a.m. ET for no obvious reason, although the crypto market is rebounding today after what has been a brutal sell-off as of late. 

There are also a few other recent events that show how Shiba Inu continues to gain traction among the crypto and investing community.

So what

Some are touting a new milestone for Shiba Inu because the token recently reached 3.4 million followers on Twitter, which is now tied with Shiba Inu’s rival Dogecoin.

Both are meme tokens and very similar, so investors may view this as Shiba Inu starting to catch up to Dogecoin. Dogecoin currently has a bigger market cap, but it’s definitely within reach. 

Another interesting phenomenon is that Ethereum whales, investors that on average own $14 million in their crypto wallets, seem to be growing more and more interested in Shiba Inu, which runs on the Ethereum blockchain. Shiba Inu is now the second-largest holding among Ethereum whales.

Whales are the crypto equivalent of “smart” money. These are the investors that likely know how to invest in crypto better than the rest, so their moves are followed closely.

Now what

The rebound in the crypto sector today looks to be investors taking a break from what has been intense selling and perhaps using this as an opportunity to buy the dip.

While Shiba Inu certainly moves with the crypto market to some extent, I am not a believer in this token because it possesses no real-world use case or any kind of technical advantage over other cryptocurrencies. 

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

The post Why Shiba Inu popped today appeared first on The Motley Fool Australia.

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More reading

• Thinking about buying Shiba Inu? Read this first
• Why Bitcoin, Dogecoin, and Shiba Inu are falling today

Bram Berkowitz has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. 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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At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on track to record a modest gain. The benchmark index is currently up 0.1% to 6,531.5 points.

Here’s what is happening on the ASX 200 today:

St Barbara share price tanks

The St Barbara Ltd (ASX: SBM) share price has been sold down to a multi-year low on Wednesday. This morning the gold miner revealed that it has deferred making a final investment decision on the Simberi sulphide expansion in favour of a strategic review. St Barbara also advised that there is a near-term risk of disruption to its Touquoy Operation.

Fletcher Building shares jump

The Fletcher Building Limited (ASX: FBU) share price is storming higher today. This follows the release of the building products company’s investor day update. That update reveals that Fletcher Building has reiterated its earnings before interest and tax (EBIT) guidance for FY 2022. It expects EBIT before significant items to come in at ~NZ$750 million.

Zip shares drop to multi-year low

The Zip Co Ltd (ASX: ZIP) share price has continued its slide and hit a new multi-year low. This buy now pay later provider’s shares have come under pressure this week amid speculation it could be about to give up on the UK and US markets. This is due to the large losses the company is making internationally.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Fletcher Building share price with a 6% gain following the release of its investor update. Going the other way, the worst performer has been the St Barbara share price with a 12% decline. This follows the aforementioned update out of the gold miner.

The post ASX 200 midday update: St Barbara and Zip drop to multi-year lows appeared first on The Motley Fool Australia.

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More reading

• 3 reasons why I think the Soul Pattinson share price is an excellent buy right now
• Why is the St Barbara share price crashing 14% to a multi-year low?
• Why is the Fisher & Paykel share price heading south today?
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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 positions in and has recommended ZIPCOLTD FPO. 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 Rio Tinto Limited (ASX: RIO) share price is an interesting investment proposition. The iron ore price has been falling – it’s down 15% in two weeks.

So, does a lower iron ore price mean that Rio Tinto shares are more attractive or less attractive?

Why higher iron are prices are good

As a commodity business, Rio Tinto generates revenue and profit largely by mining resources and selling them to customers.

The higher the commodity price, the better revenue, cash flow, and net profit after tax (NPAT) for the business.

Those bigger financial numbers can also lead to much bigger shareholder payouts in the form of dividends.

So, it’s clear that current, ongoing shareholders would want commodity prices to be higher so that they can boost profit and returns.

Certainly, new investors who buy today can benefit from big dividends while commodity prices are high and cash flow is rolling in.

In Rio Tinto’s FY21 full-year result, it reported that its NPAT rose by 116% to US$21 billion, free cash flow increased 88% to US$17.7 billion, and the total annual dividend was increased by 87% to US$10.40 per share.

But the tricky part for investors is deciding when to buy new shares. Does a lower iron ore price make the Rio Tinto share price more attractive?

My thoughts on the right time to buy Rio Tinto shares

Commodities such as iron ore often work in cycles because of the relationship between supply and demand. Both supply and demand can shift quite a bit during economic cycles.

Sometimes global/Chinese demand for iron ore will reduce and we just don’t know when that will be.

When the iron price falls, the market reduces its profit expectations and then the Rio Tinto share price normally declines. We saw this in 2016 and towards the end of 2021.

Dividends are a good part of the returns, but a 10% decline in the Rio Tinto share price can wipe out the monetary gains of receiving a 10% dividend yield. So, it’s not just about the dividend. I think total returns should be the goal.

I will also point out that some brokers currently rate Rio Tinto as a buy, including Macquarie and Morgan Stanley. The Macquarie price target is $135, implying a possible upside of around 30%, with the broker liking the stronger-than-expected iron ore price which can help profit generation.

It’s impossible to predict when commodity prices and share prices are going to move but I think that when the iron ore price sizeably moves, the Rio Tinto share price is likely to follow it. Since 8 June 2022, the Rio Tinto share price has fallen more than 11%. The share price is now close to the 2022 low.

Foolish takeaway

So, my conclusion is that it’s better to look at Rio Tinto when the share price has fallen significantly along with the iron ore price. I don’t have a crystal ball to know if or when iron ore prices will go below US$100 per tonne or US$90 per tonne, but that’s the sort of level that I’d be looking at the Rio Tinto share price for my own portfolio.

However, I do like that the ASX mining share is exposed to a number of commodities. That means it’s not reliant on just iron ore with assets in aluminium, copper, titanium dioxide, and lithium.

The post The iron ore price has fallen 15% in 2 weeks. So, is the Rio Tinto share price a buy or sell? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy
• Rio Tinto share price sinks on iron ore weakness
• Why are ASX 200 iron ore shares getting hammered on Monday?
• The lithium and iron ore ASX shares that I like right now: expert
• Why is the Rio Tinto share price diving 5% on Friday?

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

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