Category: Stock Market

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.

Like many high-growth technology stocks, Amazon.com (NASDAQ: AMZN) has sold off hard in 2022, but it bounced back a bit prior to its recent stock split. Investors without access to fractional share purchases have had the chance to buy Amazon shares at a lower price for a week now, so it’s time for shareholders old and new to refocus on the company’s fundamentals.

While Amazon Web Services is booming, Amazon’s retail business is struggling. Free cash flow has gone negative, but management has also begun repurchasing stock. Amid all these cross-winds, here are the main issues investors should monitor for the rest of the year.

“Still have work ahead of us” in the retail business

The big reason Amazon sold off so much this year is the retail business. After it aggressively built out capacity during COVID-19, demand has slowed as things reopened. Since the capacity build operates with a lag, Amazon has actually overbuilt in the near term.

Complicating matters, Amazon’s head of worldwide retail, David Clark, just announced he would be leaving the company. That adds another layer of uncertainty to the mix, and it’s also an open question as to whether Clark left on his own, or if he was forced out due to recent problems. Of note: Clark just became CEO of logistics start-up Flexport. In the blog post announcing Clark’s retirement, CEO Andy Jassy admitted: “We still have more work in front of us to get to where we ultimately want to be in our Consumer business.”

Amazon noted too much capacity, too much hiring, and high fuel prices as contributing about a $6 billion headwind last quarter, with each component accounting for about $2 billion each. $4 billion of these added costs should stick around this quarter, as the company will need to grow more to fill its capacity, and fuel prices have remained high.

Things to watch in the second half: Productivity, capacity, shipping

First, I’d expect to see progress on the labor front this earnings report. Amazon has the ability to slow or freeze hiring, so investors should assess profitability and the company’s headcount, which it discloses. This was the most “fixable” of Amazon’s problems. 

For the over-capacity, investors may not see any improvement until the second half. That’s because Amazon needs to grow into its capacity, and Prime Day moved from the second quarter last year to the third quarter this year. So, revenue may not grow sufficiently to fill its capacity until Prime Day and then the holiday buying season. Look out for management’s forward guidance and commentary on this front on its next earnings call.

In the meantime, the Wall Street Journal recently reported Amazon is looking to sub-lease space to other tenants in the distribution centers and warehouses. Amazon is reportedly looking to sublet about 10 million square feet of space, with the potential to do more. That 10 million square feet would account for about 2% of Amazon’s total owned and leased square footage at the end of 2021.

Finally, investors should keep an eye on shipping costs. Last quarter, worldwide shipping costs were up 14% even though paid units shipped were flat at 0%. Typically, Amazon has higher shipping costs than paid units, as it monetizes its units in various ways, such as Prime subscriptions and advertising; therefore, investors should see if the spread between costs and units sold widens or narrows. Unfortunately, with fuel prices on the rise, shipping costs could remain high.

Is AWS margin expansion for real?

Turning to Amazon Web Services, last quarter, there was a big step-up in AWS operating margins, which rose from 29.8% to 35.3% quarter-to-quarter. This was largely due to an extension of the useful life of its servers. Investors should also monitor whether AWS is able to maintain these higher margins, or if there is some mean-reversion.

If the new higher operating margin proves to be the new baseline, that could help Amazon’s stock as a whole. That’s because AWS is probably the most valuable part of Amazon, as its most profitable business. AWS made $67 billion in revenue over the past 12 months while growing in the mid-30% range. It seems set to grow for years, perhaps into the multiple hundreds of billions, so a 5% expansion in its eventual operating margin could mean big things for Amazon’s intrinsic value.

It all comes down to profits

Amazon has long gotten a pass from investors in terms of showing current profits for much of its corporate life, but since 2018, Amazon’s profits have taken off. Investors may now be expecting more consistent profitability year in and year out, especially as interest rates have risen. Thus, after the pandemic boom, they haven’t taken very kindly to recent year-over-year declines in operating profit, even as revenue has grown.

The main question across all of these factors is: Will Amazon be able to control costs in an inflationary environment? And where will its operating margins ultimately end up? 

Amazon is a large and complex business, so all the aforementioned factors will need to be examined to get the full picture heading into the second half.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Billy Duberstein has positions in Amazon. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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

The post Amazon Just Split Its Stock: Here’s What Comes Next appeared first on The Motley Fool Australia.

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

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

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

With the recent inflation news driving another massive stock sell-off, investors are once again getting nervous about the future. After all, high inflation means that the Federal Reserve is expected to continue to be forced into raising interest rates , which makes bonds a relatively more attractive investment. Higher interest rates also make it more expensive to borrow, which makes it tougher for businesses to invest in expansion, thus putting demand and growth at risk.

Within that context, it’s pretty easy to make a case for why the stock market could crash again. On top of that, history shows that the market does crash from time to time. As a result, the answer to the question of whether the stock market will crash again is a simple one: Yes, it almost certainly will. The real question to ask, though, is when will it crash?

Are we there yet?

Despite that fear, the reality is that the S&P 500 is already down about 20% from its recent highs. That’s a substantial drop already, and it does offer a sliver of hope that maybe the toughest part of the current market cycle could be behind us.

Still, it’s important to remember that the market attempts to price stocks based on their future value-generating abilities, not based on what their past price movements were. A big reason stocks sold off so heavily when the recent inflation numbers were announced is that those inflation numbers were worse than expected. 

When the market faces substantial negative surprises, it tends to price assets lower to reflect the higher perceived risk and/or lower perceived future returns. As a result, a big part of whether the market will crash again soon depends on how many more negative surprises we have ahead of us.

What can you do about it?

With so much uncertainty facing the market and the near-term future, it can be tempting to get paralyzed into doing absolutely nothing at all. While staying the course is usually a great strategy when it comes to taking part in any recovery that follows a crash, you have to have the right financial foundation in place to really do that.

As a result, now is a superb time to check on that financial foundation of yours and do what you can to get it shored up. That way, when the market does crash again — whenever that may be — you’ll be in a better spot to take advantage of it. the On the flip side, if the market doesn’t crash again within your investing career, having a solid financial foundation in place will still give you great peace of mind even in more typical market volatility.

Key to your financial foundation is to be in control of your debts. About the only reasonable debts to have when you’re investing are ones where all three of the following are true:

• The interest rate is low — interest-free or low single digits.
• The payment is low enough that it doesn’t keep you from covering your basic costs.
• The debt serves a useful purpose for your future.

If your debt doesn’t meet all three of those criteria, making it a priority to either pay off those debts or get them to where they do fit the bill can work wonders for your financial future.

Once your debt is in control, make sure you have a decent — but not oversized — emergency fund in a savings account, CDs, or other very liquid and secure vehicle. Three to six months of your living expenses is a reasonable target. Too much more than that, and you’ll risk losing too much ground to inflation. Too much less, and you’ll risk not having a large enough buffer to cover those ugly surprises that life throws your way.

With your financial foundation in place, it becomes much easier to focus on your future and the longer-term opportunities that stocks can provide. Indeed, if you get that foundation securely enough in place, it can even turn your perspective of market crashes to one where you appreciate the buying opportunities they can provide.

Get started now

The market’s recent declines make it painfully clear that another crash is very possible. The sooner you get your financial foundation in place, the sooner you will get to a point where you can start seeing a market crash as a potential buying opportunity rather than just a reason to panic. So start putting your plans in place now, and make today the day you begin building the foundation that can help you emerge from the next market crash in a much better spot.

Chuck Saletta has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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

The post Is The Stock Market Going to Crash Again? appeared first on The Motley Fool Australia.

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

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Men are more likely to invest in ASX shares than women.

That’s according to a new YouGov survey commissioned by crypto wealth platform Dacxi.

The survey also found that men are almost twice as likely to believe they’ll be rich in their lifetime.

So, what does it mean to be rich?

Some 40% of survey respondents said you needed to earn more than $150,000 a year, after taxes, to be wealthy. Another 36% said you needed a net worth of more than $1 million to qualify. And 23% said you counted as wealthy if you owned your home outright.

Here’s how they plan to get rich.

Inheritances and investment strategies

A total of 24% of participating Australians said the best path towards riches was via family wealth and inheritances.

Having a high-performing investment strategy came in a tight second, with 23% saying this was the best way to become wealthy.

With ASX shares historically offering strong returns over the long-term – the All Ordinaries Index (ASX: XAO) is up 24% over the past five years, without including dividends – we’d have to throw our two cents in with the benefits of having a sound investment strategy.

Interestingly, only 5% said they thought having a financial planner was the best way to grow their wealth.

Asked what they’d do with $10,000 if they had to hold it passively for the next 10 years, 33% of respondents said they’d invest it in ASX shares.

Men ‘more likely’ to invest in ASX shares than women

Men, if we might generalise, tend to take more risks than women.

With that larger risk appetite in mind, 38% of men said they were likely to invest in ASX shares, compared to 28% of women respondents.

A similar pattern emerged in cryptos, with 15% of men saying they’d invest in cryptos like Bitcoin (CRYPTO: BTC) compared to 10% of women.

Commenting on the findings, Dacxi CEO Ian Lowe said:

The best performing assets of the last decade have been the more volatile ones, like cryptocurrency and stocks/shares. With Australian men more likely to choose these assets over women, we can explain a lot of the gap in confidence to become wealthy between men and women in their asset choices…

Ultimately, the big advantage younger generations have is that they can purchase digital or tokenised versions of physical assets like gold and silver as easily as they can a cryptocurrency. Over the long term (multiple decades), diversified portfolios fair best, and it’s never been cheaper or easier to buy and manage one yourself.

The post ASX shares and inheritances: Survey reveals how Aussies plan to get rich appeared first on The Motley Fool Australia.

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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 Kogan.com Ltd (ASX: KGN) share price has had a torrid time over the last year.

Kogan shares have fallen by around 70% in the past 12 months. In just the last month alone, shares in the online retailer have plunged around 15%.

It’s no secret that the e-commerce company has been suffering from several different factors. Sales growth has been declining. It has had too much inventory. Marketing expenses are elevated as it tries to keep shifting products.

Latest business update

The latest insight for investors was in the FY22 third-quarter update. It said that total third-quarter sales were down 3.8% to $262.1 million year-on-year.

However, there were a handful of positives in the growth numbers. Kogan Marketplace revenue rose 19.8% to $78 million, Mighty Ape sales went up 25.8% to $35.4 million, and Kogan First revenue went up 67.9% to $4.2 million.

Gross profit fell by 11.2% to $41 million in the third quarter. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 110.5% to a loss of $0.8 million. Profitability (or lack of) can have a significant impact on the Kogan share price.

However, the company did point out that its active customers grew by 3.6% year on year to 4.1 million, with Kogan First members rising by 264% year on year to 328,000 as of 31 March 2022 – this was a growth of 19.7% since 31 December 2021. It had 345,000 Kogan First members at the end of April 2022.

The company noted that over the next year, it will be “recalibrating its operating costs in line with current growth levels to support a return to the historical operating margins previously generated.”

Kogan’s CEO and founder, Ruslan Kogan, said that while market conditions were challenging right now, it had laid foundations over the past 16 years to put it in good stead today.

Is the Kogan share price an opportunity?

After evaluating the latest update from Kogan, the broker UBS decided the rating on Kogan would be ‘neutral’, and it reduced its price target to $4.30 because the update was worse than expected. However, this price target implies an upside of more than 30%.

The broker thinks that gross profit is going to be hurt because of excess stock. It’s not expecting Kogan to materially improve its profitability until the second half of FY23 (or even later).

Based on a return to profitability in FY23, UBS thinks the Kogan share price is now valued at 45x FY23’s estimated earnings.

Another broker, Credit Suisse, is also negative about the company’s short-term outlook with regard to profitability and costs. However, while it rates it as ‘underperform’, the Credit Suisse price target of $3.75 implies a potential rise of almost 20% over the next year.

Time will tell if the brokers are correct about how much the Kogan share price will rise over the next year. If UBS is right about a return to profitability for Kogan next year, then it could provide a boost for the ASX share.

The post This top broker thinks the Kogan share price has 35% upside appeared first on The Motley Fool Australia.

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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 Kogan.com ltd. The Motley Fool Australia has positions in and has recommended Kogan.com 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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If you’re looking for exposure to the beaten down tech sector, then Xero Limited (ASX: XRO) shares could be the answer.

Last week, two leading brokers reiterated their bullish views on the cloud accounting company’s shares in response to news that it has lifted its prices in the ANZ and UK markets.

What are brokers saying about the Xero share price?

According to a note out of Citi, its analysts have reiterated their buy rating and $108.00 price target.

Based on the current Xero share price of $82.93, this implies potential upside of 30% for investors over the next 12 months.

Citi commented:

We see Xero’s decision to increase prices in ANZ and UK as an indication of the company’s confidence in its position in its core markets. While the changes would not have a full impact in FY23e, we estimate the changes represent a 8% uplift to group ARPU and represents upside to our ARPU forecasts. An increase in churn is a factor to consider especially given the slowing economic outlook.

What else was said?

The team at Goldman Sachs is even more bullish on the Xero share price. Its analysts have retained their buy rating and $118.00 price target on the company’s shares.

This suggests that there’s potential upside of 42% for investors between now and this time next year.

Goldman appears to agree with Citi on these price increases. The broker also suspects that increases may be on the way for the rest of the business. It commented:

We remain confident Xero will be able to execute on these increases while preserving its existing subscriber base, noting their strong track record in putting through increases while driving churn lower. We would also not be surprised if NA/ROW markets were also considered for a pricing increase, given they previously followed ANZ/UK by 2 months in Nov-21.

The post Brokers give their verdict on the Xero share price (hint: they are bullish) 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 positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

Electric vehicles (EVs) will be one of the large secular growth stories of this decade. BloombergNEF researchers estimate that annual unit volumes for plug-in EVs will grow from 6.6 million in 2021 to 20.6 million in 2025.

Considering how much a new car costs, this is a trillion-dollar revenue opportunity for companies to go after.

That is why so many automakers — from EV pioneer Tesla (NASDAQ: TSLA) to upstarts like Rivian to legacy automakers like Ford (NYSE: F), Volkswagen, and Toyota — are investing so much money in their EV product lines.

But which stocks among these automakers provide the best investment opportunity at current prices? Let’s look at two key players — Tesla and Ford — and identify which stock looks most likely to 5x in the shortest time period.

Tesla: The EV pioneer

You probably know Tesla as the company that has driven the EV revolution over the past 10 years. With four models currently for sale and a few more in development, Tesla is the EV leader in many important markets around the world.

In 2021, the company delivered 936,000 vehicles to customers and has grown its production capacity at a rapid rate over the past decade.

Last year, the company reported $53.8 billion in revenue and $6.5 billion in operating income. With $17 billion in cash shoring up its balance sheet, investors are betting that Tesla can capture a good chunk of the projected bump in annual EV sales, driving its annual deliveries into the millions.

Tesla is also making bets on self-driving technology, solar energy, and battery storage deployments. However, it is difficult to estimate how much financial value these segments will provide considering solar/battery storage has negative gross margin right now, as well as the uncertainty around full self-driving technology, which many researchers think is years and years away. For now, it is probably smart for investors to not include these divisions when valuing Tesla stock.

As of this writing, Tesla has a market cap of $730 billion, one of the largest in the world. Tesla stock has a trailing price-to-sales ratio around 14 and investors are already pricing in a lot of growth over the next few years.

In order for the stock to 5x to a market cap of $3.65 trillion, Tesla would need to greatly exceed investors’ high expectations.

Ford: Making the EV transition

Unlike Tesla, Ford is a legacy automaker that still makes the majority of its sales from cars with internal combustion engines (ICEs).

Over the next decade, the company plans to invest heavily in EV operations, with $50 billion in planned spending from now until 2026. According to management, this will enable the company to get to 600,000 in annual EV manufacturing capacity next year and 2 million by 2026.

Looking at Tesla’s financials as a comparison, this could translate into over $100 billion in EV sales for Ford if it can execute on these objectives.

To do so, Ford has a robust lineup of EVs, including the Mustang Mach-E, F-150 Lightning, and E-Transit commercial van. There is a lot of uncertainty, though, as the company has not gotten many vehicles out on the road.

But like with Tesla and the other automotive manufacturers, with so many new sales to go after, there is a gigantic financial opportunity here.

As of this writing, Ford has a market cap of $54 billion and $29 billion in cash and equivalents. In order for the stock to 5x, investors would need to value Ford at a market cap of $270 billion, or less than 10% of what Tesla would need to be valued at in order to achieve the same jump.

A matter of math

I think it is clear that Ford is more likely than Tesla to 5x, simply because Tesla’s stock is valued so richly.

If Ford is able to hit $200 billion in annual sales after ramping up EV production and raise its operating margin to 15% (which is close to Tesla’s), the company would be generating $30 billion in operating income by 2026.

Using a typical earnings multiple for automakers of 10, that equates to a market cap of $300 billion, which clears the 5x hurdle.

Now let’s do the same calculation for Tesla. In order to hit an earnings multiple of 10 on a market cap of $3.65 trillion (Tesla stock’s 5x hurdle), the company would need to be doing $365 billion in operating income a year.

Assuming an operating margin of 15%, this would require over $2.4 trillion in annual sales. Achieving a 5x jump does not seem reasonable unless you think investors will perpetually value Tesla at an earnings multiple much higher than the rest of the industry. 

I don’t think either Ford or Tesla will 5x within the next five years. But if I had to bet on one stock doing this, it would be Ford, simply because of the starting valuation.

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

The post More likely to 5x first: Tesla vs. Ford? appeared first on The Motley Fool Australia.

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Brett Schafer 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 Tesla and Volkswagen AG. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The lithium industry has been running cold in 2022 after being the hottest part of the market in 2021.

Concerns over a potential sharp decline in the price of the battery making ingredient in the near future have been weighing heavily on sentiment.

This is because there are many developers and explorers on the Australian share market that could miss out on the sky-high prices of today and eventually commence operations when prices are much lower. This would have a significant impact on their profitability.

And as the market is a forward-looking machine, these lower future profits impact the valuation of a company today.

Luckily, some ASX lithium shares are already producing the white metal and are benefiting from record-breaking prices.

Which lithium shares are already producing?

Allkem Ltd (ASX: AKE), Mineral Resources Limited (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS) are already producing lithium and have plans to grow their output in the future.

For example, Allkem is planning to increase its lithium production three-fold by 2026 and maintain a 10% share of the global lithium market over the next decade.

Whereas Mineral Resources recently agreed to accelerate the resumption of production from Train 2 at Wodgina. The first spodumene concentrate from this train is expected in July with a nameplate capacity of 250,000 dry metric tonnes.

What about the rest?

There are a number of developers and explorers on the ASX, which are still a little way off producing lithium.

• Liontown Resources Limited (ASX: LTR) is targeting first lithium concentrate production in 2024.
• Piedmont Lithium Inc (ASX: PLL) is aiming for the first half of 2023.
• Sayona Mining Ltd (ASX: SYA) is targeting production during the first quarter of 2023.
• Vulcan Energy Resources Ltd (ASX: VUL) is planning to construct its first commercial plant in 2024.

Finally, the next ASX lithium share that is likely to be producing is Core Lithium Ltd (ASX: CXO). In fact, it proudly labels itself as “Australia’s next lithium producer.” It is targeting production at the Finniss Project by the end of 2022.

What should investors do before investing in lithium?

Valuations arguably got out of control last year with investors valuing companies as if lithium prices would stay at record levels forever. So, just because a share is down 50% from its high doesn’t necessarily mean it is a bargain now.

If you’re looking to invest in lithium explorers, you might want to consider just how profitable (or not) they will be if battery material prices do tumble as predicted by analysts.

The post Which ASX lithium shares are producing and which are not? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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 BetaShares Global Banks ETF (ASX: BNKS) is one of those ASX exchange-traded funds (ETFs) that seems to fly under the radar. Chances are many ASX investors haven’t even heard of BNKS, despite the fact it has been around since 2016.

But in this high inflation, rising interest rate world, bank shares have seen a spike in interest for their supposed inflation-resistant properties. So in light of this, now could be a good time to check out what’s under the hood of this ETF.

The BetaShares Global Banks ETF does pretty much what you would expect it to do. According to the provider, this ETF aims to hold “a diversified portfolio of the world’s largest banks in a single ASX trade”.

BNKS holds 60 different bank shares sourced from around the world, although not Australia, which the provider actively excludes. So don’t expect to see the likes of Commonwealth Bank of Australia (ASX: CBA) or National Australia Bank Ltd (ASX: NAB) here.

What’s under the hood of the BetaShare Global Banks ETF?

Instead, it has significant exposure to US banks, which make up almost 40% of the total BNKS portfolio. Other significant contributors include Canada (18.1%), Britain (7.8%), China (6.4%), and Japan (5.2%).

Of the BetaSahres Global Banks ETF’s 60 bank shares, here are the top 10 that appear in its portfolio as it currently stands:

1. JPMorgan Chase & Co with a portfolio weighting of 8%
2. Bank of America Corp with a weighting of 7.1%
3. Wells Fargo & Co with a weighting of 6%
4. Royal Bank of Canada with a weighting of 5.4%
5. The Toronto-Dominion Bank with a weighting of 4.9%
6. HSBC Holdings plc with a weighting of 4.1%
7. Citigroup Inc with a weighting of 3.7%
8. The Bank of Nova Scotia with a weighting of 2.9%
9. Mitsubishi UFJ Financial Group with a weighting of 2.8%
10. China Construction Bank Corp with a weighting of 2.6%

So certainly a mixed bag there.

According to BetaShares, this ETF currently offers a trailing 12-month dividend distribution yield of 4%, reflecting the traditionally high levels of dividends that bank shares pay out (a phenomenon not confined to the ASX).

However, this ETF’s performance has hardly set the world on fire in recent years. As of 31 May, BNKS has returned -3.57% over the preceding 12 months. It has averaged a return of 3.71% per annum over the past three years and 2.23% over the past five.  By contrast, an ASX index ETF like the Vanguard Australian Shares Index ETF (ASX: VAS) has averaged 8.06% per annum over the past three years and 8.95% over the past five.

The BetaShares Global Banks ETF charges a management fee of 0.57% per annum.

The post Own the BetaShares Global Banks ETF? Here’s what you’re invested in appeared first on The Motley Fool Australia.

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More reading

• 3 high quality ETFs for ASX investors to buy this month

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen has positions in JPMorgan Chase and National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Banks ETF – Currency Hedged. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HSBC Holdings. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Jumbo Interactive Ltd (ASX: JIN)

According to a note out of Morgans, its analysts have retained their add rating but trimmed their price target on this lottery ticket seller’s shares to $18.30. This follows Jumbo’s investor day, which the broker came away from feeling very positive on its growth outlook. Morgans highlights that the company has significant growth opportunities in the US and through the expansion of its SaaS business in the profitable charity sector. The Jumbo share price ended the week at $14.49.

National Australia Bank Ltd (ASX: NAB)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $34.00 price target on this banking giant’s shares. Macquarie doesn’t appear concerned by the Reserve Bank’s rate hikes and sees the recent sector selloff as a buying opportunity. The broker also highlights that the banks could benefit from “lazy” term deposit customers that don’t switch to better offers. It feels these could provide a margin boost over the next 12 months. The NAB share price was fetching $28.06 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at Goldman Sachs have retained their buy rating and $118.00 price target on this cloud accounting platform provider’s shares. According to the note, the broker remains confident that Xero will be able to execute on its subscription price increases while preserving its existing subscriber base. It notes that the company has a strong track record in putting through increases while driving churn lower. The Xero share price ended the week at $82.93.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• 3 ASX 200 shares defying Friday’s falls to leap higher
• Brokers name 3 ASX shares to buy today
• Why Breville, Bubs, Terracom, and Xero shares are pushing higher today
• The NAB share price is down 10% this week: Macquarie says it’s a buy

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 Jumbo Interactive Limited and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Jumbo Interactive 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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There is a lot of volatility on the ASX share market right now. But that doesn’t need to be a negative for those that are waiting to start investing.

At the moment, there seem to be weekly headlines about the latest declines on the stock market. It’s a bit painful for investors with a lot of money already in the market. They may be comforted by looking back at other crashes in history like the GFC and COVID-19 and seeing that, eventually, the share market stopped falling and started a recovery.

But what about investors that don’t have any money in the ASX share market? It could be a really good time to consider starting.

Why now could be an opportune time to invest

Share prices move all the time. Every day, one share goes up and another one goes down. Over a relatively short amount of time, businesses can move significantly up and down.

For example, this week, the Commonwealth Bank of Australia (ASX: CBA) share price has fallen by around 10%.

In the last month, the Zip Co Ltd (ASX: ZIP) share price has fallen by around 40%, and in 2022 it has dropped 85%. I’m not saying those two ASX shares are buys today, just pointing out the big moves.

Ultimately, investing is about making returns. We can’t control what share prices do each week or each month. But, we can control when we invest and the price we buy shares at.

If I’m in a supermarket, I want to buy items for a good price. I wouldn’t enjoy paying $11 for a lettuce. I have similar thoughts when it comes to ASX shares. I’d rather buy ASX shares when they’re cheaper than at a high price. Yet some investors become less interested, or more fearful, to invest when prices drop.

How much cheaper are ASX shares?

The S&P/ASX 200 Index (ASX: XJO) is down close to 10% in 2022. However, the ASX 200 is dominated by miners and banks, which have cushioned the index from the decline.

There are plenty of other ASX shares that have suffered much heavier declines.

For example, the Xero Limited (ASX: XRO) share price has dropped by 44% this year. If Xero shares were to go back to where they were at the start of the year, that would be a rise of 80%. But, it’s impossible to say how long it will take investor sentiment to return for many ASX growth shares.

Another example is the Temple & Webster Group Ltd (ASX: TPW) share price, which has fallen by 65% in 2022. A third example is the Adore Beauty Group Ltd (ASX: ABY) share price, which has dropped more than 70% in 2022.

A lower price doesn’t mean that they’ll automatically jump back up. For some stocks that have declined, it could take months or years to recover. A number of them may never get back to the former level. It’s possible that some may recover quickly.

Some investors may like to consider investing in exchange-traded funds (ETFs), which allow people to invest in a big group of shares at the same time. That way, investors don’t need to identify particular businesses to do well; they can benefit over the long term from a diversified portfolio. Diversification can reduce investment risks.

Two of the more popular ETFs are Vanguard Msci Index International Shares ETF (ASX: VGS) and iShares S&P 500 ETF (ASX: IVV).

Foolish takeaway

It’s possible that share prices could go lower from here.

But, investing should be about the long term, not just trying to pick when the ASX share market is going to hit the bottom.

If ASX 200 shares were to deliver the historical average return of around 10% per year over the next five or 10 years, then investing at today’s prices could be a good call, but my crystal ball isn’t working right now to tell me if today is the best price.

The post Waiting to start investing in ASX shares? Today could be a brilliant time to do it appeared first on The Motley Fool Australia.

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More reading

• Here’s the CBA dividend forecast through to 2024
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• ASX 200 has its worst week in two years
• 3 ASX 200 real estate shares that hit new 52-week lows 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 positions in and has recommended Temple & Webster Group Ltd, Vanguard MSCI Index International Shares ETF, Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Adore Beauty Group Limited, Temple & Webster Group Ltd, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. 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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