Category: Stock Market

It’s been a big week so far for the Carsales.com Ltd (ASX: CAR) share price. Not that you would know it from looking at Carsales shares this week. The ASX 200’s online classifieds company’s shares haven’t moved an inch since last Friday when Carsales closed at $20.76 a share.

This is because the company requested a trading halt yesterday before market open. As we covered at the time, this was initially gazetted as a capital raising endeavour. We found out more soon after market open.

Carsales announced that it was intending to raise $1.207 billion from the placement of new Carsales shares. Eligible existing retail and institutional shareholders will be able to subscribe to one new Carsales share for every 4.16 shares owned for the price of $17.75.

The proceeds raised from this offer will fund the acquisition of the remaining 51% of Trader Interactive that Carsales does not yet own.

Trader Interactive is a US-based platform that is a market leader in recreational vehicles, powersports, commercial trucks, and equipment.

How does the Carsales share price react to acquisitions?

We have yet to see how the Carsales share price will react to this latest news. The shares have not yet resumed trading, which won’t happen until tomorrow.

Carsales bought its initial 49% stake in Trader Interactive back in May 2021. Back then, the company raised $600 million from a prior capital raising program. So let’s look at what has happened to the Carsales share price when the company has made acquisitions in the past.

Carsales’ last acquisition was that initial stake in Trader Interactive, announced on 12 May 2021. Investors initially reacted sceptically at the time, with the Carsales share price dipping from more than $19 on 11 May to $17.63 by 21 May.

On the day that Carsales returned from that trading halt (17 May 2021), its shares fell 7%. But a month later, the shares were back to around $19.50. By September 2021, they had risen to Carsales’ 52-week high of $26.67 – a high watermark that still stands today.

So the last time Carsales halted its shares for an acquisition, it seemed to be ‘dip, then pop’. There’s no guarantee this will happen this time too, but it’s an interesting case study.

Before this, Carsales’ last major acquisition was the 2017 decision to buy the remaining 51% stake of South Korea’s Encar.com for $244 million. Back then, the Carsales share price also reacted positively and gained around 11% in the month following the acquisition.

We shall have to wait and see what happens to the Carsales share price this time around when the company resumes trading tomorrow.

The post How has the Carsales share price performed after past acquisitions? appeared first on The Motley Fool Australia.

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More reading

• Why is the Carsales share price frozen on Monday?
• 2 ASX shares to buy to win the rest of 2022: expert
• These were the best performing ASX 200 shares last week

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 recommended carsales.com 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.

High inflation makes it very difficult to invest, particularly for those of us whose salaries aren’t keeping up with the escalating costs we’re facing. Almost paradoxically though, that same inflation makes it critically important to invest. After all, over the long run, owning shares in companies that are able to adapt, profit, and grow despite that inflation just might be your best chance of protecting your own purchasing power.

The need to keep investing despite those challenges does raise a key question: How exactly do you go about investing during periods of high inflation? When all is said and done, it takes a bit more planning and perseverance than investing in ordinary times, but the tactics involved are very similar.

Keep your costs down

First and foremost, figure out how to get your costs down. Energy costs have been a key driver of the recent inflation we’ve felt. On that front, consider what you can do to reduce your direct energy usage. Can you raise your thermostat a few degrees this summer to cut down on air conditioning bills? What about consolidating your trips, taking the bus, or carpooling more to cut down on gas costs? Do you still have incandescent lights that can be converted to LEDs to reduce their operating costs?

Beyond energy, food has been another pain point from an inflation perspective. Switching to generics and buying in bulk — especially foods that don’t spoil quickly — are time-tested approaches to saving money on food. In addition, taking advantage of free food available to you (such as office coffee) is another way to save money on food. On a related note, cooking more of your own meals rather than relying on take out or restaurants is another approach to save on the costs of eating.

There are often even ways to combine savings in food and energy together. For instance, if you cook in big batches, you can often save energy (and time) versus cooking each meal individually.

Unfortunately, inflation is taking a toll on costs well beyond just food and energy. That’s especially true when it comes to things that have to be transported, thanks in large part to fuel prices that recently hit an all-time high. As a result, it’s often important to find ways to cut back on other costs, as well as food and energy.

If you have a car, for instance, keeping a used one running for longer is often cheaper than trying to buy a new one. That’s especially true these days, when there’s a shortage of car parts, making new vehicles scarcer and more expensive than they used to be. Likewise, repairs may be a cheaper option than replacements for many major appliances like ovens or refrigerators.

Get your debts under control

Once you’ve reduced your ongoing costs, the next big hurdle is paying down your debts. The most efficient way to do that is something known as the debt avalanche method. To use that approach, you line up all your debts in order from highest interest rate to lowest. On all your debts except the highest interest one, you pay the minimum. On that highest-interest-rate debt, you pay as much as you can above that minimum until it’s completely paid off.

Then, once that’s paid off, you take the money that had been going toward that payment and add it to your new highest-interest-rate debt. Keep it up until (nearly) all your debts are paid off.

Some debts, such as your mortgage, might be worth keeping out of your accelerated payoff. It only makes sense to do that, though, if your debt is at a very low interest rate, has a small enough payment that it doesn’t disrupt your life, and the debt plays a clear purpose for your future. Unless all three of those are true, then you’re very likely better off including that debt into your avalanche payoff process before investing.

Make sure you have an emergency fund. Then invest!

By cutting your everyday costs, you free up money to pay down your debts. By completely eliminating many of your debts, you free up even more money. Once those things are true, then you’ve got a decent chunk of money freed up each month that you can sock away for your future.

Before you start aggressively investing in stocks, however, first make sure you’ve got a decently stocked emergency fund. Having around three to six months of expenses in one to handle the unexpected expenses that come up can go a long way toward keeping you from having to sell your shares while they’re down. The good news on that front, though, is that by getting your costs down and your debts paid off, your emergency fund doesn’t have to be as big as it otherwise would have been.

Once that emergency fund is in place, you’re ready and able to put the cash flow you’ve freed up toward investing. Today’s inflation may make it tougher to get there than it used to be, but it also makes it more important than ever. So get started on your plan today, and improve your chances of being able to keep on investing, even in today’s inflationary environment.

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

The post How to keep investing during high inflation appeared first on The Motley Fool Australia.

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• Why is the PointsBet share price sinking on Tuesday?
• Do Adairs shares really boast a 9% dividend yield?
• ASX 200 midday update: Tech shares tumble, Collins Foods jumps

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.

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The 4DMedical Ltd (ASX: 4DX) share price is surging today, up 39.6% after posting gains of as much as 95% in early morning trade.

4DMedical shares closed yesterday at 36 cents and are currently trading for 51 cents.

So what’s driving ASX investor interest in the respiratory imaging technology company?

Nationwide contract inked

The 4DMedical share price is rocketing after the company reported it has signed a nationwide contract with I-MED Radiology Network. I-MED has more than 250 clinics across Australia.

The new three-year agreement formalises an existing commercial arrangement between the two companies. 4DMedical is now cleared to send its lung imaging technology to other selected clinics across I-MED’s network.

Atop the agreement, the company said its agreed to establish a Lung Centre of Excellence together with I-MED. Employing its ling imaging technology, 4DMedical said the centre will “enable world-class research and development activities to advance diagnostic imaging throughout Australia”.

The 4DMedical share price could also be getting a lift from the company’s report that the collaboration with I-MED could streamline the adoption processes of its diagnostic imaging technology without requiring extensive pilot programs.

Commenting on the development

4DMedical CEO, Andreas Fouras said:

Expansion of our proven capability nationwide means many more people will be able to access the latest technology in respiratory imaging. Beyond putting our innovative technology in the reach of more people, this deal represents a significant opportunity to drive revenue for the company. Additionally, this agreement creates a framework for the rapid commercialisation of future 4DMedical products.

I-MED CEO Shrey Viranna added, “Activating this arrangement augments I-MED’s world-class diagnostic imaging offering through access to 4DMedical’s unique functional lung imaging technology.”

4DMedical share price snapshot

Despite today’s big lift, the 4DMedical share price remains down 59% in 2022. By comparison, the All Ordinaries Index (ASX: XAO) is down 13% year-to-date.

The post Why is the 4DMedical share price exploding 40% today? appeared first on The Motley Fool Australia.

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• Why is the BlueBet share price rocketing 16% today?
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BlueBet Holdings Ltd (ASX: BBT) share price is on the move during lunchtime trading on Tuesday.

This comes after the mobile-first online wagering provider announced it has expanded its presence in another US state.

At one point, BlueBet shares soared 42.5% to an intraday high of 67 cents. However, some profit taking by investors has led the company’s shares to retrace to 54.5 cents, up 15.96% at the time of writing.

BlueBet secures market access to Indiana

The latest release by the company has excited shareholders with the BlueBet share price accelerating today.

In its announcement, BlueBet advised it has signed a lucrative online market access agreement with Horseshoe Hammond, LLC.

Based in Indiana, the co-party is a 400,000-square-foot casino that is owned by global casino giant Caesars Entertainment.

In essence, this will allow BlueBet to operate a new online sportsbook in Indiana under its ClutchBet B2C brand. Although, regulatory approval and licencing will need to be acquired first.

The market access agreement has an initial 10-year term.

BlueBet noted Indiana is home to roughly 6.8 million people. The US state first legalised online sports betting in October 2019 and has generated $4.5 billion in wagering handle in the last 12 months.

A number of noted professional sports teams are based in the state such as the Indiana Pacers and Indianapolis Colts.

With market access now expanded to four US states, BlueBet will employ the first stage of its “Capital Lite” US entry strategy. This consists of launching ClutchBet to demonstrate the capability of its technology and team to run profitable sportsbooks in the United States.

The company expects to take first bets in its first US state, Iowa, within the coming weeks. It is set to be followed by Colorado and Louisiana in Q2 FY23 and Indiana in H2 FY23.

Management commentary

BlueBet CEO Bill Richmond touched on the milestone achievement, saying:

BlueBet now has market access in four US states, which provides a strong platform to roll out our B2C brand, ClutchBet, and demonstrate the capability of our technology and team to run profitable sportsbooks in the US.

There is no shortage of opportunities for further B2C expansion in the US, but our focus and capital are pointed firmly towards executing in our initial four states as we seek partners for our Sportsbook-as-a-Solution B2B offer.

BlueBet share price snapshot

Despite rocketing today, the BlueBet share price has tumbled more than 53% over the last 12 months.

These losses have come in 2022 following a major selloff of sports betting shares globally. Year to date, BlueBet shares are down 64%.

Based on today’s price, BlueBet commands a market capitalisation of roughly $106 million.

The post Why is the BlueBet share price rocketing 16% today? appeared first on The Motley Fool Australia.

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• Why is the 4DMedical share price exploding 40% today?
• Why is the PointsBet share price sinking on Tuesday?
• Do Adairs shares really boast a 9% dividend yield?
• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
• Why this smaller ASX travel share is locking horns with Qantas over regulation

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 recommended BlueBet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The PointsBet Holdings Ltd (ASX: PBH) share price is having a tough day on Tuesday.

In early afternoon trade, the sports betting company’s shares are down 7% to $2.60.

Why is the PointsBet share price sinking?

There are a couple of potential catalysts for the weakness in the PointsBet share price today.

The first is broad weakness in the tech sector following a poor night on Wall Street’s tech-focused Nasdaq index. This saw Nasdaq-listed rival, DraftKings, lose approximately 4% of its value during overnight trade.

This weakness has seen most ASX tech shares tumble today, leading to the S&P ASX All Technology index trading 2% lower at the time of writing.

What else?

Also potentially weighing on the PointsBet share price is news that smaller rival Bluebet Holdings Ltd (ASX: BBT) will be joining the company in the Indiana market.

This morning, BlueBet revealed that it has signed a 10-year market access agreement with Caesars Entertainment to operate a new online sportsbook in Indiana under the ClutchBet B2C brand.

Though, it will have some catching up to do. PointsBet has been operating in the Indiana market since March 2020, so has a big head start.

Though, there certainly is a big enough market for both companies and their US rivals to work with. Indiana is a state of ~6.8 million people and first legalised online sports betting in October 2019.

Business has been booming since then. For example, during the last 12 months, the state generated $4.5 billion in wagering handle.

The post Why is the PointsBet share price sinking on Tuesday? appeared first on The Motley Fool Australia.

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• ASX 200 midday update: Tech shares tumble, Collins Foods jumps
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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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended BlueBet Holdings Ltd and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s another rough day for the Adairs Ltd (ASX: ADH) share price, adding to the stock’s recent turmoil.

At the time of writing, the Adairs share price is $1.995. That’s 2.68% lower than its previous close and 50% lower than at the start of 2022.

For context, the S&P/ASX 200 Index (ASX: XJO) is gaining 0.2% today and has slipped 11% year to date. The All Ordinaries Index (ASX: XAO) is also up 0.2% and nearly 13% lower than it was at the start of this year.

But there’s a notable silver lining for the home furnishing retailer’s shares. The stock’s downturn has left it trading with a dividend yield of 9%.

Adairs shares offer a 9% dividend yield

Considering the current Adairs share price and the company’s two latest dividends totalling 18 cents per share, the stock is boasting a 9.02% dividend yield.

Adairs announced it would pay investors a 10-cent final dividend for financial year 2021 in August 2021. Then, in February, it declared an 8-cent interim dividend.

Both dividends were fully franked. That means they provide shareholders with even more value at tax time.

Additionally, Adairs offered a dividend reinvestment plan (DRP) for its most recent payout. That allowed some investors to receive their dividends in the form of new shares rather than cash – thereby cost-effectively increasing their holding in the company.

The last time the market heard price-sensitive news from the retailer was the release of its half-year results in February.

Then, the company noted COVID-19 outbreaks had dinted its earnings. Plenty of eyes will likely be on Adairs in coming months to see if the inflationary environment and interest rate hikes have also taken a toll on its bottom line.

The post Do Adairs shares really boast a 9% dividend yield? appeared first on The Motley Fool Australia.

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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 positions in and has recommended ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS 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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is trading marginally higher after a volatile morning. The benchmark index is currently up 0.1% to 6,712.8 points.

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

Collins Foods charges higher on FY22 results

The Collins Foods Ltd (ASX: CKF) share price is racing higher on Tuesday. This follows the release of the KFC restaurant operator’s full year results for FY 2022. For the 12 months ended 1 May, Collins Foods delivered an 11.1% increase in revenue to $1,184,5 million. This was driven by a combination of same store sales growth and new store openings. Things were even better on the bottom line, with underlying net profit after tax growing 25% to $59.7 million.

Tech shares tumble

The tech sector is a sea of red on Tuesday with heavy declines being recorded across the board following a poor night on the Nasdaq index. Among the worst hit are the likes of Life360 Inc (ASX: 360) and PointsBet Holdings Ltd (ASX: PBH) which are down over 5%. The S&P ASX All Technology index is down 2% at the time of writing.

Retailers downgraded

A number of ASX 200 retail shares are under pressure today after being hit by a broker downgrade. JB Hi-Fi Limited (ASX: JBH) and Wesfarmers Ltd (ASX: WES) are among a group of shares that JP Morgan has downgraded amid concerns over a softer consumer demand backdrop.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Collins Foods share price with a 12% gain. Investors have been buying the KFC restaurant operator’s shares following its strong FY 2022 results. Going the other way, the worst performer has been the Imugene Limited (ASX: IMU) share price with an 11% decline. This appears to have been driven by profit taking after some very strong gains on Monday.

The post ASX 200 midday update: Tech shares tumble, Collins Foods jumps appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Collins Foods Limited and Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited, Life360, Inc., and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Collins Foods Limited and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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News has emerged ASX travel share Regional Express Holdings Ltd (ASX: REX) sought government support to regulate regional routes.

Regional Express shares are currently trading at $1.07, a 2.88% gain. Meanwhile, the company’s larger rival Qantas Airways Limited (ASX: QAN) has seen a 1.4% drop in its share price so far today.

Let’s take a look at what is going on in the travel world.

Regulation battle

Regional Express requested help from the New South Wales Government to regulate regional flight routes but was reportedly knocked back, The Australian reported.

Had Regional Express been successful, airlines, including Qantas, would have had to bid via a tender process for these country flight routes.

Commenting on the news, a spokesperson for Regional Express told the publication:

The only airline that enjoys the benefit of regulated routes in NSW is Qantas.

In late May, Regional Express withdrew regional flights routes to Bathurst, Grafton, Lismore, Kangaroo Island, and Ballina.

At the time, Regional Express chair John Sharp blamed the decision on Qantas’ “predatory actions“. However, Qantas hit back, claiming:

This is just the latest example of Rex blaming Qantas and others for decisions that by its own admission it has made “to look after itself”.

In mid-June, Regional Express announced it would increase weekday services to major regional centres including Albury, Broken Hill, Coffs Harbour, Dubbo, Orange, and Port Macquarie, among others.

Qantas has launched more than 40 new regional flight routes since April 2020. Meanwhile, Regional Express has commenced multiple new interstate flights.

ASX travel share price recap

The Qantas share price has gained nearly 1% in the past year, while the Regional Express share price has lost around 11%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has shed around 8% in the past year.

Qantas has a market capitalisation of $8.6 billion while Regional Express has a market cap of around $116 million.

The post Why this smaller ASX travel share is locking horns with Qantas over regulation appeared first on The Motley Fool Australia.

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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 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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Bitcoin (CRYTPO: BTC), the world’s top crypto by market cap, hasn’t exactly joined the commodity super cycle in 2022.

While most soft and hard commodities have soared this calendar year, this virtual commodity is down 56% since 1 January, currently trading for US$20,716.

Bitcoin is a commodity?

You may not have heard the world’s top crypto referred to as a commodity before.

But that’s how the United States Securities and Exchange Commission (SEC) chairman Gary Gensler labelled the token last night.

Speaking on CNBC’s Squawk Box, Gensler said that Bitcoin was the only crypto the SEC was ready to label a commodity as opposed to a security.

That’s a crucial distinction.

Under US regulations, the SEC oversees securities and companies must observe strict disclosure regimes. Issuers must register with the SEC before any securities can be sold.

Commodities trading is also regulated, but under a different regime overseen by the Commodity Futures Trading Commission (CFTC).

Gensler reiterated the need for more regulatory oversight and clarity in crypto trading. He said, “There’s a lot of risk in crypto, but there’s also risk in classic securities markets.”

He said that many cryptos display the same attributes as securities.

Gensler noted:

The investing public is hoping for a return just like when they invest in other financial assets we call securities. Many of these … crypto financial assets have the key attributes of a security.

Gensler wouldn’t be drawn into extending the commodity label to other tokens beyond Bitcoin. “That’s the only one I’m going to say,” he told CNBC.

He added that the SEC and CFTC are “two great market regulators in this country”. He said they can cooperate to increase transparency and protect investors in cryptocurrencies.

Why have cryptos come under pressure?

Bitcoin and almost every major altcoin are deep in the red in 2022.

While there have been a few headwinds, the biggest driver impacting crypto prices has been the new environment of high inflation and fast-rising interest rates.

Bitcoin has been trading much like other risk assets, such as high-growth ASX tech shares.

The same forces impacting crypto prices have seen the tech-heavy NASDAQ fall 27% year to date as investors reweight their holdings.

The post What did the SEC just say about Bitcoin? appeared first on The Motley Fool Australia.

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More reading

• How crypto miners are squeezing the Bitcoin price
• The Bitcoin price is struggling. When will cryptos see a bottom?
• Why Bitcoin, Ethereum, and Dogecoin are down today
• The ATO is collecting crypto taxes. Here are 5 handy expert tips come tax time
• These 3 cryptos are feeling the Elon Musk effect today

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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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.

Legendary investor Warren Buffett may not be a fan of stock splits when it comes to some stock classes of his own company, Berkshire Hathaway, but several notable names have been going down this route recently.

A split reduces the dollar value of a company’s stock and leads to an increase in the number of outstanding shares — a purely cosmetic move as it doesn’t do anything to boost the intrinsic value of a company. However, companies sometimes turn to stock splits to make the shares more attractive to a larger pool of retail investors. It is believed that the increased accessibility following a split can boost the retail demand for a company’s shares, and thereby lead to an increase in the stock price.

Warren Buffett’s top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. Amazon (NASDAQ: AMZN) is another Warren Buffett holding whose stock split went into effect on June 6. Investors can still buy these stock-split plays from Warren Buffett’s portfolio at attractive valuations right now. Let’s see why that could turn out to be a smart long-term move.

1. Apple

Apple’s 4-for-1 stock split was executed on Aug. 28, 2020. Shares of the tech giant have gained only 12% since then, barely outperforming the S&P 500.

AAPL data by YCharts

Apple’s weak returns can be attributed to the broader stock market sell-off this year. However, this also means that investors who missed buying the stock after its split can still buy it at an attractive valuation following its pullback. Apple currently sports a price-to-earnings (P/E) ratio of 22.4. For comparison, it was trading at over 40 times trailing earnings at the end of 2020.

Buying Apple at this valuation looks like a no-brainer, as the company has multiple catalysts that could send the stock higher in the long run. These growth drivers include the iPhone, the services business, and Apple’s potential entry into emerging technologies such as headsets and self-driving cars.

The iPhone, for instance, is dominating the fast-growing 5G smartphone market. Strategy Analytics estimates that Apple cornered a 31% share of the 5G smartphone market last year. More importantly, Apple is also enjoying robust pricing power thanks to the adoption of 5G smartphones.

That’s evident from the 14% increase in the average selling price (ASP) of the iPhone last year to $825. This was well ahead of the global smartphone ASP of $322. What’s more, Apple managed to boost its iPhone ASP despite increasing its share in price-sensitive emerging markets such as India, Brazil, Vietnam, and Thailand.

According to a third-party estimate, the global 5G smartphone market could clock annual growth of 123% through 2027. So it wouldn’t be surprising to see the iPhone drive impressive growth for Apple in the long run thanks to a mix of higher volumes and healthy pricing driven by the rapid growth of the 5G smartphone market.

Additionally, Apple’s rumored entry into potentially lucrative markets such as autonomous cars could substantially boost the company’s revenue and stock price. So investors who haven’t bought Apple following its split still have an opportunity to do so — it is cheap right now and is sitting on solid catalysts that could supercharge this tech stock in the long run.

2. Amazon

Amazon stock has headed south since splitting earlier this month. It is now trading at 54 times trailing earnings, which, though expensive, is lower than its five-year average multiple of 121.

Amazon stock’s decline following the split is a blessing in disguise for investors looking to buy a growth stock. After all, the company is expected to clock annual earnings growth of 40% for the next five years, which isn’t surprising given the opportunities in the e-commerce and cloud computing markets.

Amazon is expected to generate $525 billion in revenue this year, which would be a 12% jump over 2021. The company’s growth rate is expected to pick up the pace in 2023, with revenue expected to jump an estimated 17% to $613 billion and adjusted earnings anticipated to more than triple to $2.71 per share. Even better, Amazon is expected to sustain its growth trajectory in 2024 as well, as evident from the chart below.

AMZN Revenue Estimates for 2 Fiscal Years Ahead data by YCharts

Amazon could sustain its impressive growth for a much longer time. E-commerce, which is Amazon’s biggest business with 84% of its top line, is set for secular long-term growth. According to a third-party estimate, global e-commerce sales could more than quadruple by 2030 to $17.5 trillion, compared to $4.2 trillion in 2020.

Amazon is a key player in several e-commerce hotspots around the globe, so the company is in a nice position to capitalize on this market’s expansion. Meanwhile, Amazon built a solid position for itself in the cloud computing market, pulling well ahead of competitors with a market share of 33%. This points toward yet another enticing opportunity for Amazon to clock incremental revenue growth, as the global cloud computing market is expected to more than double in revenue by 2026 compared to last year’s levels according to third-party estimates.

So even though Amazon’s stock may not have taken off following its split, investors shouldn’t miss the bigger picture, as its two big growth drivers could lead to healthy upside in the long run.

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

The post 2 monster Warren Buffett stock-split stocks to buy right now appeared first on The Motley Fool Australia.

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More reading

• My top Warren Buffett stock to buy right now
• Is Amazon a buy after the stock split?
• 3 stocks Warren Buffett bought hand over fist as the market plummeted
• Amazon stock post-split: Bear vs. bull
• Nasdaq bear market: Where to invest $1,000 right now

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Harsh Chauhan 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 Amazon, Apple, and Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, and Berkshire Hathaway (B shares). 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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