Category: Stock Market

The Perpetual Limited (ASX: PPT) share price is edging higher on Wednesday following a mixed trading session on the ASX.

At the time of writing, the fund manager’s shares are up 1.59% to $29.43.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is heading the other way, down 0.1% to 6,801 points.

Perpetual confirms unsolicited offers

Investors are welcoming the response from Perpetual regarding “inbound interest” for its business, Perpetual Corporate Trust (PCT).

In its statement, Perpetual confirmed recent media speculation that it has received two unsolicited, non-binding, indicative offers for PCT.

Both offers are considered highly conditional, including being subject to due diligence and regulatory approvals.

Perpetual said:

PCT is a high-quality business that consistently delivers strong, non-market linked revenue growth…

In addition, Perpetual noted that it receives unsolicited, non-binding indicative proposals for PCT from time to time.

However, the company hosed down any assumptions about a potential sale revealing that it’s not currently pursuing divestment.

Perpetual added:

The unique combination of businesses within Perpetual provides earnings stability and optionality to invest through cycles, which creates significant value for our shareholders.

Last week, Perpetual made a $2.4 billion bid to acquire Pendal Group Ltd (ASX: PDL) by a scheme of arrangement.

According to the details, the indicative proposal valued each Pendal share at $6.23.

The consideration is for 1 Perpetual share for every 7.5 Pendal share, along with a $1.67 cash offer for each Pendal share owned.

Perpetual share price snapshot

It’s been a disappointing 12 months for Perpetual shareholders with the company’s shares gradually treading lower.

Over the period, Perpetual shares have fallen 22% – trading just above their 52-week low of $27.32.

Perpetual has a price-to-earnings (P/E) ratio of 15.95 and commands a market capitalisation of approximately $1.64 billion.

The post Perpetual shares climb amid response to media speculation appeared first on The Motley Fool Australia.

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More reading

• Looking for value: The ASX shares this fundie is holding amid rising inflation
• Perpetual share price slides following $7.5 billion of quarterly outflows
• Pendal share price slides amid ‘potential transaction’
• Here are the top 10 ASX shares today

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

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The S&P/ASX 200 Index (ASX: XJO) is having a subdued day on Wednesday. In afternoon trade, the benchmark index is down slightly to 6,805.2 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Block Inc (ASX: SQ2)

The Block share price is down 4% to $98.72. This follows a very poor night of trade on Wall Street for the payments company’s NYSE listed shares. They fell 7% during the session amid broad weakness in the tech sector. This saw the tech focused Nasdaq index lose 1.9% of its value on Tuesday night.

Iluka Resources Limited (ASX: ILU)

The Iluka share price is down 3% to $9.41. This has been driven by the mineral sands company completing the demerger of its rutile business into a separate listed entity – Sierra Rutile Holdings Limited (ASX: SRX). The Iluka board believed the demerger was the optimal pathway for the business to achieve its growth objectives, reach its potential, and maximise value for Iluka shareholders. Sie

Nitro Software Ltd (ASX: NTO)

The Nitro share price is down a further 6% to $1.18. Investors have been selling this document productivity software company’s shares this week following the release of its quarterly update. Although Nitro delivered strong growth during the first half, it has cut its guidance for the full year. Management has decided to balance its pursuit of annual recurring revenue growth while accelerating its cash flow breakeven goals.

Novonix Ltd (ASX: NVX)

The Novonix share price is down almost 4% to $2.38. This follows the release of the battery technology company’s quarterly update this morning. Investors appear a touch underwhelmed with the company’s cash receipts of just $2.5 million and operating cash outflow of $7.9 million.

The post Why Block, Iluka, Nitro, and Novonix shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Down 28% in two days: Is the Nitro share price crash a buying opportunity?
• Why is the Iluka share price sinking today?
• How are ASX 200 tech shares performing on Wednesday?
• Powering down: Novonix share price slumps following quarterly results
• 5 things to watch on the ASX 200 on Wednesday

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 Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Nitro Software 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 Qantas Airways Limited (ASX: QAN) share price is slightly in the red today.

Qantas shares are falling 0.22% at the time of writing, currently trading at $4.49 each. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.13% today.

So what is new at Qantas today?

Qantas highlights new staff, more resources

The Qantas share price is outperforming fellow ASX 200 travel shares today. The Webjet Limited (ASX: WEB) share price is down 2.10% today, while Flight Centre Travel Group Ltd (ASX: FLT) shares are 0.99% in the red.

Qantas domestic and international CEO Andrew David has revealed the airline is hiring more staff. He said since Easter, Qantas has hired 1,000 people.

Speaking on 2GB radio, David issued an apology to listeners, adding:

We are the national carrier, people have high expectations of us, we have high expectations of ourselves and clearly over the last few months we have not been delivering what we did pre-COVID

David said the company has put a “lot of resources” into call centres, leading to single digit response times last week.

Commenting on 13 flight cancellations in Sydney yesterday, David said “our cancellation rate is now close to what it was pre-COVID, it’s not quite there yet”. He added that mishandled bag numbers are almost at pre-COVID levels too, commenting:

On average pre-COVID we had about five mishandled bags in every thousand, when I checked this morning, yesterday it was about seven

In June, BITRE on-time performance figures showed 59.4% of Qantas network planes arrived on time, with 40.6% late. Cancellation rates were 7.5% in June.

As highlighted in a market update in late June, Qantas is reducing domestic flight numbers from October until the end of March 2023.

Qantas share price snapshot

The Qantas share price has descended 4% in the past year and 10% in the year to date.

For perspective, the ASX 200 has slid nearly 9% in the last 12 months.

Qantas has a market capitalisation of nearly $8.5 billion based on the current share price.

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

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More reading

• ‘At tipping point’: Qantas share price slides as chaos continues
• Why are ASX 200 travel shares having such a stellar session?
• Why are Flight Centre, Webjet, and other ASX travel shares sinking today?
• UBS tips Qantas share price to surge 40%
• Qantas share price dips amid record delays

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

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The JB Hi-Fi Limited (ASX: JBH) share price has improved by 11% during the month of July thus far.

That’s more than double the performance of the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) which has gained 5.4% over the same timeframe.

This is pretty impressive given rising inflation (now at 6.1% according to new data today) and interest rates are risk factors for ASX retail shares.

Falling property prices are also a risk because they degrade what’s known as the ‘wealth effect’. When the value of our homes — usually our biggest assets — is rising, we feel wealthier and this translates into more consumer spending. Like buying new electronics or DVD box sets at JB Hi-Fi.

Latest CoreLogic data shows a decline in Australian dwelling values in May and June. Sydney house prices are down 2.4% and Melbourne house prices are down 2.1% in the year to date. That might not sound like much but on a $2 million residence, that’s a $40,000-plus drop in value.

How JB Hi-Fi performed in FY22

As an article in today’s Australian Financial Review (AFR) points out, JB Hi-Fi eventually became a COVID-19 winner after the initial market crash when pretty much every ASX share cratered.

People then went on to buy lots of new things for their homes, to enable them to work and to keep themselves entertained during lockdowns.

The JB Hi-Fi share price reached an all-time high of $55.85 in March as a result. The wealth effect likely helped this price surge as well, with dwelling values up 18.2% over the 12 months to 31 March.

Then the market lost confidence, as it did in many ASX shares, and “a third of its sharemarket value vanished in less than three months as many investors decided this would be as good as it gets, and the dream run may be over,” according to the article.

The share price seemed to find a floor at about $37 in mid-June. Since then, it has risen to $42.92 today.

On 19 July, JB Hi-Fi released its preliminary results for FY22. As my Fool colleague James reported, JB Hi-Fi had a strong fourth quarter which led to record sales and earnings for the full financial year.

Sales were up 3.5% to $9,232 million, EBIT was up 6.9% to $794.6 million, and net profit after tax (NPAT) was up 7.7% to $544.9 million.

What’s next for the JB Hi-Fi share price?

AFR surveyed a bunch of brokers to get their views on where the share price could go from here and why.

Citi analyst Adrian Lemme has a buy rating on JB Hi-Fi, but has reduced his 12-month share price target from $52 to $47.

According to the article:

Lemme said JB Hi-Fi was a strong operator and well-positioned to withstand the drag from increasing cost-of-living pressures in households. The discretionary retailing sector was “unloved” and on a risk-reward basis JB Hi- Fi was looking more favourable for investors after its share price dropped by one third between March 30 and mid-June, suggesting investors had already factored in a tougher outlook.

JP Morgan analyst Bryan Raymond has a neutral rating on JB Hi-Fi and a share price target of $44.

UBS analyst Shaun Cousins has a neutral rating and a price target of $42.

Jarden analyst Ben Gilbert has an underweight rating on JB Hi-Fi shares and a price target of $34.90.

Gilbert said: “The market appears to currently be pricing a scenario whereby house prices fall greater than 20% and spending falls 10%-plus for household goods.”

Gilbert is also concerned about rising competition from Bunnings, Kmart, and Amazon.com Inc.

Goldman Sachs analyst Lisa Deng says sell and has the same share price target as Gilbert.

The post What are brokers predicting for the JB Hi-Fi share price in FY23? appeared first on The Motley Fool Australia.

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More reading

• Down 24% in FY22, can the JB Hi-Fi share price bounce back this year?
• Top brokers name 3 ASX shares to buy today
• Why Iluka, JB Hi-Fi, Megaport, and Zip shares are racing higher
• Why JB Hi-Fi, Mesoblast, Pendal, and Woodside shares are pushing higher
• ASX 200 retail shares rise as consumer confidence improves

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 JB Hi-Fi Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and Goldman Sachs. The Motley Fool Australia has recommended Amazon. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory. At the time of writing, the benchmark index is up a fraction to 6,810.2 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Alcidion Group Ltd (ASX: ALC)

The Alcidion share price is up 15% to 15.5 cents. Investors have been buying this healthcare technology company’s shares after it reported a record performance during the fourth quarter. This led to FY 2022 revenue coming in at $34 million, up 31% year on year. Also getting investors excited was the company reporting positive fourth-quarter operating cash flow of $3.3 million.

Betmakers Technology Group Ltd (ASX: BET)

The Betmakers share price is up 2.5% to 49.7 cents. The catalyst for this was the release of the betting technology company’s fourth quarter and full year update. For the 12 months, Betmakers reported cash receipts of $26.2 million. This was a massive 194% increase on the prior corresponding period.

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price is up 2.5% to $1.19. This follows the release of the semiconductor company’s quarterly update. Although the company reported second quarter cash receipts of just US$1.2 million, that hasn’t stopped investors driving its market capitalisation to the $2 billion mark today.

Zip Co Ltd (ASX: ZIP)

The Zip share price is on form again and up a further 7% to $1.10. Investors have been buying the buy now pay later (BNPL) provider’s shares this week despite there being no news out of it. Though, Zip isn’t alone in experiencing some investor love. Fellow beaten down BNPL share Sezzle Inc (ASX: SZL) is also rocketing higher on no news.

The post Why Alcidion, Betmakers, BrainChip, and Zip shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Why are Zip shares getting the attention of investors today?
• Alcidion share price surges 18% higher on record quarter
• BrainChip share price powers ahead amid quarterly update
• BetMakers share price lifts as full year revenue surges 370%
• Here are the top 10 ASX 200 shares 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 Alcidion Group Ltd, Betmakers Technology Group Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Alcidion Group Ltd and Betmakers Technology 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 CSL Ltd (ASX: CSL) share price has strengthened so far in H1 FY23, gaining 7.5% over the past month of trade.

Meanwhile, the broader sector has pushed higher recently as well. The S&P/ASX 200 Health Care Index (ASX: XHJ) has also lifted around 7% in the past month.

Broker downgrades CSL earnings forecasts

Analysts at investment bank Jefferies have reduced their earnings per share (EPS) projections for FY23 in a recent note.

The broker now estimates CSL will achieve EPS of $2.81 per share for the full year. That’s a 6-cent reduction off previous estimates of $2.87.

However, the consensus of analyst estimates has projected CSL to deliver $2.49 in EPS for the coming 12 months.

Despite the downgrade, Jefferies still sits roughly 15% above the consensus with its bottom-line estimates for CSL. It also forecasts $3.40 in EPS for FY24 from the biotech giant.

Further, every analyst covering the company rates it a buy right now, according to Refinitiv Eikon data.

As such, momentum continues for the company. The CSL share price has opened in the green today and is currently trading at $292.13, up 1.88%.

The company generated $464 million in free cash flow (FCF) last half, with a 14% return on invested capital.

Investors realise a 1% yield on this FCF with a corresponding 1% dividend yield.

It also sits on a debt to asset ratio of 23%, with debt financing just 28% of the company’s total capital, according to calculations derived from CSL’s financial statements.

The consensus price target on the stock is also $316 per share, according to Refinitiv Eikon’s consensus data.

The post Why did Jefferies slash its FY23 earnings forecast for CSL shares? appeared first on The Motley Fool Australia.

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More reading

• Expert prediction: 3 ASX 200 shares that can ‘do well’ in volatile times
• Why these blue chip ASX 200 shares are rated as buys by experts
• Up 10% so far in July, is the CSL share price heading back above $300?
• 2 ASX shares in healthcare ripe to buy right now: experts
• 3 blue chip ASX 200 shares experts say are buys

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 CSL Ltd. 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 Nitro Software Ltd (ASX: NTO) share price has tumbled deep into the red again on Wednesday.

In afternoon trade, the document productivity software company’s shares down a further 7% to $1.17.

This means the Nitro share price is now down a very disappointing 28% over the last two trading sessions.

Investors have been selling the company’s shares after it downgraded its FY 2022 annual recurring revenue (ARR) guidance for FY 2022.

Is the Nitro share price crash a buying opportunity?

The team at Goldman Sachs believe the Nitro share price crash has created a very attractive buying opportunity for investors.

According to a note, its analysts have retained their buy rating with a revised price target of $2.05.

Based on the latest Nitro share price, this implies potential upside of 75% for investors over the next 12 months.

Why is Goldman still bullish?

While Goldman was disappointed with the update it saw enough to remain positive. Particularly given that the company now has a clear path to breakeven.

It explained:

In our view, today’s update should serve to re-base market expectations both in terms of NTO’s growth outlook (lower) and its progression to cash flow breakeven (sooner), which we see as key changes to NTO’s growth narrative going forward.

While digestion of another quarter of sales execution issues may require consecutive quarters of strong performance to rectify, we see the new guidance range as providing a lower hurdle for NTO to clear going forward while operating more efficiently closer to cash flow breakeven.

We think that NTO’s cost out programme largely answers questions on balance sheet risk, with improving execution (within NTO’s control) and more benign macro conditions (out of NTO’s control) dictating NTO’s ability to beat and raise ARR guidance going forward.

The post Down 28% in two days: Is the Nitro share price crash a buying opportunity? appeared first on The Motley Fool Australia.

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More reading

• Why Flight Centre, Iress, Nitro, and Perseus shares are dropping today
• Why is the Nitro share price crashing 29% on Tuesday?
• Analysts have named these top growth shares as buys
• Here’s why analysts are tipping these ASX growth shares as buys
• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23

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 Nitro Software 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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ASX 200 tech shares are slightly in the red today, however, not all technology stocks are falling. Despite the NASDAQ dropping in the US on Tuesday, it is picking up in after-hours trade. This follows strong earnings results from Microsoft Corporation (NASDAQ: MSFT)and Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG).

Among the technology shares falling on the ASX today are Block Inc (ASX: SQ2), WiseTech Global Ltd (ASX: WTC), and NextDC (ASX: NXT). However, the Xero Ltd (ASX: XRO) share price is up in morning trading.

So what is going on with Australian technology shares today?

Why are ASX 200 tech shares falling?

At the time of writing, Block is down 4.66%, WiseTech Global is 3.31% lower, and NextDC is 0.95% in the red. Meanwhile, the Xero share price is 0.44% higher. Block’s US listing also descended 7% on the New York Stock Exchange on Tuesday.

In Australia, the S&P/ASX All Technology Index (ASX: XTX) is currently down 0.86% while the S&P/ASX 200 Information Technology Index (ASX: XIJ) is also 0.83% lower.

This follows the technology-heavy NASDAQ Composite dropping 1.87% in the US on Tuesday. Amazon.com Inc (NASDAQ: AMZN) was among the biggest fallers, slipping 5.23%, while Meta Platforms Inc (NASDAQ: META) slumped 4.5%.

However, in after-hours trade on the NASDAQ, technology shares are picking up on the back of earnings reports from tech giants Microsoft and Alphabet.

Microsoft reported its revenue jumped 18% to $198.3 billion in FY22. Net income soared 19% while diluted earnings per share increased 20%.

Meantime, Alphabet reported revenue of $69.7 billion in the second quarter, up 13% year on year. Microsoft shares are nearly 4% higher in after-hours trade on the NASDAQ while Alphabet shares are up nearly 5%.

However, data released on Tuesday showed consumer confidence fell in the US in July amid inflation and rising interest rate fears. In comments cited by Reuters, Spartan Capital Securities chief market economist Peter Cardillo said:

The majority of companies that reported today beat earnings, and that’s been the case. But of course there have been some warnings, and that’s what the market is focusing on.

The US Federal Reserve is due to make a decision on interest rates on Wednesday.

The post How are ASX 200 tech shares performing on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 ASX growth shares to buy in August
• Top broker rates Xero share price a buy with 20% upside
• These are the 10 most shorted ASX shares
• Why are ASX 200 tech shares having such a lousy start to the week?
• Is the Xero share price heading back over $100?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Block, Inc., Meta Platforms, Inc., Microsoft, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Meta Platforms, Inc. 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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There are some S&P/ASX 200 Index (ASX: XJO) shares this fund manager owns which it thinks can still do well in the current investment environment.

The fund manager in question is Perpetual Limited (ASX: PPT) and the fund is focused on Australian shares, particularly ASX industrial and resource shares. This fund aims to outperform the S&P/ASX 300 Accumulation Index over three-year periods.

At 30 June 2022, the net returns of the fund had outperformed the index by an average of 2.3% per annum over the previous three years.

The fund manager’s view is that “markets are poised for further rotation to a more value-orientated investment environment as COVID-19 disruptions, waning stimulus and war combine keep consumer price inflation at high levels”.

Perpetual’s strategy

With that outlook, Perpetual has a view on what’s going to happen next and what this will mean for certain ASX shares and how to invest. Perpetual said:

In our view, rising bond yields will eventually lead overpriced growth stocks into a more sustained and overdue correction, challenging investors with large growth exposures. We think, in the years ahead, markets will need to become accustomed to more inflation than previously experienced. This distinct shift in the macro backdrop is already playing out across asset classes. In these conditions, our focus on value style investing, buying quality companies with strong balance sheets trading at reasonable valuations, should continue to do well and offer attractive opportunities for investors.

So which ASX shares does it own?

At the end of June 2022, Perpetual had a few key positions in businesses with big weightings in the portfolio.

Some of those big ASX share positions were: Santos Ltd (ASX: STO) at 5.9% of the portfolio, Insurance Australia Group Ltd (ASX: IAG) at 5.8% of the portfolio, and Ramsay Health Care Limited (ASX: RHC) at 4.3% of the portfolio.

Santos is benefiting from the higher energy prices amid the Russian invasion of Ukraine. Perpetual said the spike in prices has contributed to near-term inflation expectations.

Ramsay has been a recent performer after receiving a conditional, non-binding and indicative proposal from a KKR-led consortium to buy the business. Ramsay shareholders will get $88 cash per share, less any dividends paid. The Ramsay board has given the consortium due diligence materials on a non-exclusive basis.

On IAG, Perpetual noted that the insurer has received regulatory approval for the sale of AmGeneral, a Malaysian business in which it holds a 49% stake. The sale proceeds will be around $340 million, with an expected net loss after tax of AU$90 million. However, “it will improve its regulatory capital position by AU$150 million at completion”.

The ASX share recently gave a profit update for FY22 and guidance for FY23.

IAG said its FY23 guidance reflects “strong underlying business momentum”.

IAG expects gross written premium growth to be “mid-to-high single digit growth”. This will be “primarily rate driven to cover claims inflation, higher reinsurance costs and an increased natural peril allowance”.

The reported insurance margin is likely to be higher than FY22. In FY23 the company expects this to be between 14% and 16%.

The post Looking for value: The ASX shares this fundie is holding amid rising inflation appeared first on The Motley Fool Australia.

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More reading

• Is the IAG share price a buy following the insurer’s latest update?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 energy shares fire up on Tuesday?
• Own Santos shares? Here’s why the company’s international exports could come under pressure

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 positions in and has recommended Insurance Australia Group Limited. The Motley Fool Australia has recommended Ramsay Health Care 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 Insurance Australia Group Ltd (ASX: IAG) share price is rangebound today and now trades flat at $4.52 apiece.

After posting its preliminary FY22 results and FY23 guidance last week, IAG shares took off and now trade at their highest mark since June.

The insurer booked a $347 net profit after tax (NPAT) and forecasted FY23 gross written premium in the range of 14–16%.

Is the IAG share price a buy?

Analysts at UBS certainly don’t think so. The broker rates IAG a sell and values the company at $4.10 per share.

Following IAG’s preliminary results, the UBS team was unimpressed with the growth trends and noted profit margins are below consensus estimates.

It said that “[r]eserve levels have again proved insufficient as a further top-up was required,” which poses a key downside looking ahead.

Meanwhile, analysts at Macquarie led by Andrew Buncombe reiterated the bank’s outperform rating with a $5.40 price target.

In fact, Macquarie joined 7 other brokers in revising their price targets and/or recommendations on IAG following its preliminary earnings update, per Refinitiv Eikon data.

This contrasts against 2 brokers rating the IAG share price as a hold and sell respectively.

The consensus price target from this list is $4.98 per share, suggesting a small amount of mispricing versus market price.

It is yet to be seen if further upgrades/downgrades are to come through from brokers covering IAG.

In the past 12 months, the IAG share price has lost 9%, despite clipping a 6% gain this YTD.

The post Is the IAG share price a buy following the insurer’s latest update? appeared first on The Motley Fool Australia.

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More reading

• Looking for value: The ASX shares this fundie is holding amid rising inflation
• Here are the top 10 ASX 200 shares today
• Why Damstra, Flight Centre, IAG, and Pantoro shares are pushing higher
• Why is the IAG share price lifting 6% higher today?
• Why Accent, Humm, IAG, and Webjet shares are dropping

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia 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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