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.

Stock splits are all the rage in 2022. Amazon just completed its first split in more than a decade; Tesla plans a 3-for-1 split later this year. And Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) will execute a 20-for-1 split on July 1.

Although stock splits don’t affect a company’s fundamentals or overall market cap, they can impact how investors feel about a stock. For many people, paying $2,000 for a single share seems outrageous. So Alphabet plans to fix this problem.

With its shares currently trading near $2,150, the company’s 20-for-1 split will bring the price down to a more manageable figure of around $100. And by lowering the price that much, Alphabet shares might attract more interest from retail investors. 

Why stock splits can spark retail investors’ interest

For the average investor, high stock prices are a problem for several reasons. There’s the obvious aforementioned sticker shock. But there’s also a technical concern: portfolio diversification. 

To understand why diversification is an issue, consider how much money the average retail investors have in their brokerage accounts. Wealth management company Personal Capital produced a study showing that the median balance for investors in their 20s is $10,701. And this gets to the heart of the problem: Many people, particularly young people, can’t invest $2,000 in a single stock without skewing their portfolio.

Most financial professionals advise capping any single stock at 5% of the portfolio’s total value. This supports portfolio diversification, and it provides protection should a single stock experience a catastrophic one-off event. But in the case of Alphabet’s $2,150 stock price, your portfolio would need to have a total value of at least $43,000 to satisfy the 5% rule. And that’s if you wanted to own only one share. If you owned two shares, you’d need a portfolio worth $86,000 to stay diversified. Many investors simply do not have the capital to meet this 5% threshold. So they either pass on Alphabet shares or disregard the rule and blow past the 5% cap.

One way around this problem is through fractional share trading. Many brokerages now offer investors the ability to buy these smaller ‘slices’ of stock. In theory, this solves the problem of high-dollar stock prices. Yet, while this process can help, it’s not without a few drawbacks. For one, not all brokerages offer it. Moreover, fractional share trading can come with additional fees or commissions, and fractional shares can be more difficult to sell than whole shares.

However, if a company initiates a stock split, these fractional share concerns are alleviated. As noted before, a lack of portfolio diversification can be an issue for younger investors, who have limited amounts of capital to invest. And once you consider that many of Alphabet’s own employees are in their 20s and 30s, it provides another reason the company would want to split its shares: employee compensation. 

Once again, cutting the price of the shares helps both the company and investors. Alphabet will be able to dole out bite-size stock compensation; employees will be able to balance their portfolios more effectively.

Alphabet’s fundamentals remain excellent

As for the company’s fundamentals, Alphabet remains a leader in the digital advertising market. It has roughly 27% market share of all digital advertising. Whether it’s through YouTube, Gmail, or its ubiquitous Google Search, the chances are high that you’ll get shown an ad on one of Alphabet’s apps or services today. And when that happens, Alphabet gets paid. 

That’s a big reason why Alphabet’s revenue for the last 12 months is $270 billion. That puts Alphabet No. 8 on the list of the largest American companies by revenue. To put that figure in perspective, Alphabet’s revenue is a few billion dollars more than the combined total sales of Ford and General Motors. And, Alphabet’s not done growing: the company is increasing revenue by 23% year over year.

Yet despite these rock-solid fundamentals, the stock is down 27% year to date. Investors who want to own the company for the long term would be wise to use the stock split to build a position. And now, they’ll be able to do so without putting all their eggs in the Alphabet basket.

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

The post Alphabet’s Stock Split: The Real Reason It Matters appeared first on The Motley Fool Australia.

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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. Jake Lerch has positions in Alphabet (C shares), Amazon, Ford, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Tesla. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. 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 Cochlear Limited (ASX: COH) share price has fallen around 22% over the last year. While that’s not one of the biggest drops on the ASX in recent times, some experts think that the share has upside.

Cochlear is one of the ASX’s largest healthcare businesses. But is it a big opportunity? Some experts have had their say on the hearing device company.

But, first, let’s see how the business has been growing in recent times.

Latest profit update from Cochlear

The cochlear implant business reported in its FY22 half-year result that its 12% growth of sales revenue (in constant currency) to $815 million was driven by strong demand for sound processor upgrades and new acoustic implant products.

In HY22, cochlear implant units increased by 7% to 18,598. While services revenue increased 19% to $256.5 million and acoustics revenue jumped 38% to $100.9 million, cochlear implant revenue only went up 1% to $457.9 million.

The company’s underlying net profit after tax (NPAT) rose 26% to $159 million thanks to the combination of sales growth and an improved gross profit margin. It also experienced lower-than-expected operating expenses.

The business paid an interim dividend of $1.55 per share, representing a 35% increase.

The company said that its FY22 underlying net profit guidance is between $265 million to $285 million, equating to an increase of between 13% to 22% year on year.

Acquisition

A couple of months ago, Cochlear announced it was buying Oticon Medical, Demant’s hearing implant business, for approximately AU$170 million.

As part of the transaction, Cochlear has committed to providing ongoing support for Oticon Medical’s base of over 75,000 hearing implant recipients.

The attraction of the deal was that it would provide greater scale and enable increased investment in research and development, as well as market growth activities.

Oticon Medical is expected to add between A$75 million to A$80 million to annual revenue, though it’s currently loss-making.

Cochlear noted that while it’s a market leader in implantable hearing, it’s a small player in the hearing loss segment where hearing aids remain the primary treatment option.

Is the Cochlear share price an opportunity?

The broker Morgans certainly thinks so with a price target of $244.50. That implies a possible rise of more than 20%. Morgans likes the acquisition of Demant Oticon as it increases market share.

Based on Morgans’ estimates, the Cochlear share price is valued at 49 times FY22’s estimated earnings and 44 times FY23’s estimated earnings. Morgans also thinks that surgery delays caused by COVID-19 will help the outlook.

However, the broker Morgan Stanley only rates the business as ‘equal-weight’, which is like a ‘hold’ rating. It thinks margins could be challenged, though it notes the revenue growth of services and upgrades can help.

Morgan Stanley’s price target on the business is $208, which suggests a high single-digit rise in the share price.

Morgan Stanley thinks the Cochlear share price is valued at 45 times FY22’s estimated earnings and 40 times FY23’s estimated earnings.

The post Down 20% in a year, is the Cochlear share price a bargain buy? 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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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 Fortescue Metals Group Ltd (ASX: FMG) share price is tracking higher in early trade on Tuesday, now up 2.94% at $17.50 apiece.

But, longer-term, the Fortescue share price has tumbled to six-month lows after falling off the cliff’s edge on 10 June.

Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) and S&P/ASX 200 Resources Index (ASX: XJR) have each sunk 10% in the past month of trade. The S&P/ASX 200 Index (ASX: XJO) is also down 6%.

“I don’t know a better industry”

Fortescue’s chairman Andrew ‘Twiggy’ Forrest has warned investors that markets could remain “choppy and uncertain” for the coming years.

Despite this, he said there’s “not a snowflake’s chance in hell” of a global recession, adding that Fortescue is well positioned to weather any global downturn, The Australian Financial Review reports.

Fortescue is also set to benefit from its pivot into renewables, Forrest says. He noted the rapid uptick in commodity prices adds further upside to his case.

“I don’t know a better industry to be pivoting towards when fuel prices are going through the roof than an industry where you can make all your own fuel,” he told the AFR.

“We smoke $3.5 billion worth of fossil fuel into the atmosphere every year,” he added. “That is one hell of a pool of capital annually to invest into your own fuel production and green iron systems.”

Global recession unlikely

Forrest also said that amid surging input costs and a rising cost of capital, commodity prices are also spiking, feeding Fortescue the income it needs to push ahead with its plans.

Even if some countries will see a slowdown in growth, on a global scale, demand is set to remain strong, Forrest said.

Especially given there’s pent-up demand from COVID-19 that’s been increased by the conflict in Europe, according to Forrest.

Demand for iron ore “has remained strong too”, he said.

“And, if global demand for iron ore goes down, the last man standing will be the lowest cost producer. And that is Fortescue.”

In the last 12 months, the Fortescue share price has slipped 20% into the red and is down 9% this year to date.

The post Fortescue’s Twiggy adamant there’s ‘not a snowflake’s chance in hell’ of recession appeared first on The Motley Fool Australia.

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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 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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This year has seen the Zip Co Ltd (ASX: ZIP) share price nosedive, tumbling 88% year to date.

Amid the carnage, the company is rumoured to have brought in a consultant to “consider options” for its UK business.

Experts argue Zip should retreat from both the UK and the US, as well as abandon its takeover of Sezzle Inc (ASX: SZL), according to reporting by The Australian.

At the time of writing, the Zip share price is 52 cents, down 2.83% on its previous close.

For context, the broader market is gaining today. The S&P/ASX 200 Index (ASX: XJO) is currently up 1.32% while the All Ordinaries Index (ASX: XAO) has lifted 1.35%.

Let’s take a closer look at what might be on the table for Zip’s future.

Zip share price down as company ponders future in UK

The Australian claims the company is pondering the future of its British business, as market experts voice encouragement for Zip to scale back and focus on its profitable operations, such as its Australian arm.

The article says:

Market experts believe that the road to recovery for Zip Co involves staging an exit from the US and Britain and focusing on its Australian operation, which is profitable.

This would be tough medicine for Zip, reducing its four operating platforms to one.

Zip first broke into the United Kingdom back in 2019 upon the acquisition of New Zealand-based PartPay. However, the company recently noted that, broadly outside of Australia and New Zealand, it’s not turning a profit.

Staying overseas, the same market experts have reportedly also branded Zip’s US business another dead weight. The company acquired US BNPL business QuadPay in 2020, rebranding it to Zip last year.

Zip has been operating in the US for around four years now. It has previously said its US arm was expected to follow the “glidepath” to profitability that occurred in Australia and New Zealand, which took around five years.

Furthermore, the article said:

[Another] possibility thrown around is a sale of Zip’s Australian operation, but most believe that this is the part of the operation that must be retained in a quest to return to profitability and that it needs to exit other markets.

What about the Sezzle acquisition?

The experts also think Zip should abandon its planned acquisition of Sezzle Inc (ASX: SZL), The Australian reported.

This comes as Zip faces increasing competition and regulatory oversight, as well as rising bad debts and the apparent economic slowdown.

According to its FY22 half-year results, Zip had around $2.37 billion in borrowings and just $1.61 billion in assets.

Based on today’s Zip share price, the company has a market capitalisation of just $364.6 million.

The post Zip share price falling again as market experts argue for UK and US exit 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 ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price has been having a tough time in 2022.

Since the start of the year, the gold mining giant’s shares have lost 14% of their value.

Where next for the Northern Star share price?

The good news for investors is that one leading broker believes the Northern Star share price could be heading a lot higher from current levels.

According to a recent note out of Citi, the broker has retained its buy rating with a trimmed price target of $12.10.

Based on the current Northern Star share price of $8.10, this implies potential upside of almost 50% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividend yields of 2.8% in FY 2022 and 3.5% in FY 2023.

What did the broker say?

Although Citi has reduced its gold price forecasts, it still sees the price of the precious metal remaining elevated for some time to come. In light of this, the broker appears to see recent weakness in the Northern Star share price as a golden opportunity for investors.

It commented:

We’ve trimmed our gold price in FY22/23e. “Push and Pull” frictions can keep average prices elevated, but with upward momentum lagging. On a 6-12m view we now see gold trading at US$1775/oz vs spot US$1853/oz.

We also update for the May reserve and resource update. Key changes are a lower grade at the Thunderbox underground and reduced open cut material at Jundee from Orelia vs prior Echo numbers. EBITDA reduces by 1/8/6% in FY22/23/24e. Our NAV is now A$10.35sh. Our TP reduces to A$12.10/sh on the lower earnings. Next catalyst is the KCGM mill expansion mid-year. We remain at Buy.

The post Broker says the Northern Star share price weakness could be a golden opportunity appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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S&P/ASX 200 Index (ASX: XJO) shares lifted following some encouraging words on Australia’s economic outlook from Reserve Bank of Australia (RBA) governor Philip Lowe this morning.

At the time of writing, ASX 200 shares are up 1.17%.

Though Lowe was clear the road ahead was not without difficulties.

Addressing the American Chamber of Commerce in Australia (AMCHAM), Lowe acknowledged that the global economy was facing challenging times. He added that most nations, Australia and the United States included, are witnessing their highest inflation rates in “many years”.

This, he said, is seeing interest rates “rising around the world from the record lows during the pandemic”, adding that officials find themselves in “a complex policy environment”.

ASX 200 shares will need to prepare for higher rates

ASX 200 shares have struggled this year as inflation in Australia, and indeed much of the world, has come in higher than most economists had forecast. And it’s still heating up.

Australian headline inflation came in at 5.1% for the March quarter, well above the RBA’s 2% to 3% target range. Underlying inflation of 3.7% is also the highest level in many years.

“In both headline and underlying terms, inflation is much higher than we had earlier expected,” Lowe said.

The central bank had earlier expected inflation would top out at 6%, but that’s been revised upwards. “We are now expecting inflation to peak at around 7% in the December quarter. Following this, by early next year, we expect that inflation will begin to decline,” Lowe said.

And it’s not just ASX 200 shares that need to be ready for higher rates.

According to Lowe:

As we chart our way back to 2% to 3% inflation, Australians should be prepared for more interest rate increases. The level of interest rates is still very low for an economy with low unemployment and that is experiencing high inflation.

I want to emphasise though that we are not on a pre-set path. How fast we increase interest rates, and how far we need to go, will be guided by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.

Australia’s economic outlook remains strong

Lowe highlighted that the Aussie economy is heading into this period of high inflation and rising interest rates on a strong footing.

While ASX 200 shares are down 14% year-to-date, household spending remains strong, “with spending bouncing back following the Omicron setback,” Lowe said.

Lowe continued:

Household balance sheets are generally in good shape, with households overall having accumulated more than $200 billion in additional savings during the pandemic. Furthermore, the current rate of saving out of income remains materially higher than it was before the pandemic, so there is a degree of flexibility in many household budgets.

It is also relevant that strong employment growth is continuing and that there are many job opportunities at the moment.

The RBA anticipates the recovery in spending on discretionary services, including travel, to continue. This should be good news for beaten-down ASX 200 travel shares.

As for an imminent recession, that doesn’t appear to be on the cards.

“Although GDP growth had slowed in the March quarter, household consumption had been resilient and timely indicators pointed to solid growth in the June quarter,” Lowe said.

“I don’t see a recession on the horizon here,” Lowe added during question time following his speech.

The post ASX 200 shares lift as RBA says recession not on the horizon appeared first on The Motley Fool Australia.

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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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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.

Since its founding in 2015, Ethereum (CRYPTO: ETH) has skyrocketed nearly 153,000% to an all-time high price of $4,892 in November 2021. However, with the overall decline in the cryptocurrency market, the world’s second most valuable digital asset now sells for $1,077 per token as of this writing. 

Reaching $5,000 per token would equate to a 364% return from today, and it would mean a new peak price for this popular cryptocurrency. Let’s discuss why that lofty target is possible, as well as what might get in the way. 

A budding ecosystem of use cases 

As the first programmable blockchain, Ethereum introduced smart contracts to its network, something that Bitcoin doesn’t have. A smart contract is a computer program that runs if certain conditions are met, allowing two unknown parties to interact and transact with each other, all without the need for a trusted intermediary. It was a fundamental breakthrough that resulted in Ethereum now being called the world’s decentralized computer. 

Whereas Bitcoin is solely just a peer-to-peer payments network, Ethereum has actually spawned real-world use cases. Decentralized applications (dApps) are being developed to disrupt a wide range of industries. For example, two popular categories of dApps include decentralized finance (DeFi) protocols and non-fungible tokens (NFTs).                  

In the DeFi world, services like Uniswap, a decentralized exchange for buying and selling crypto, and Compound, a savings and lending platform akin to a traditional bank, were gaining popularity before the recent crash. And although the market for NFTs has cooled significantly, the potential for this technology, particularly when it comes to things like digital authenticity and identity, is huge. 

Unsurprisingly, Ethereum is the most popular blockchain when it comes to these budding use cases. It has the most active developers working on advancing the network, and in the crypto world, that is a key competitive advantage. 

Watch out for competitors 

Investors hoping for Ethereum to hit $5,000 per token must pay attention to so-called “Ethereum killers.” These blockchains, of which Cardano and Solana are included, are trying to improve upon Ethereum’s weaknesses, which center on speed and scalability. 

Like Bitcoin, Ethereum runs a proof-of-work consensus mechanism, which requires massive amounts of computational power in order to solve complex math puzzles to earn the right to validate and add new transactions to the network. Not only is it energy intensive, but it’s slow. Ethereum is only able to process 13 transactions per second today. 

Cardano and Solana run proof-of-stake algorithms. This energy-efficient process allows actual owners of the tokens to stake their holdings and validate transactions. It’s much faster and much better for the environment. 

Luckily for Ethereum, an upgrade is in the works. Formerly known as Ethereum 2.0, The Merge will increase the capacity of the network by adding a new beacon chain to the fold, at which point the entire network will be proof-of-stake. And possibly in 2023, shard chains will be added. This means more blockchains will work in unison with the main Ethereum network, reducing congestion, increasing throughput, and lowering fees. 

While this upgrade has had its fair share of delays, it could finally be here sometime in August. And this would substantially raise developer interest in Ethereum. If speed and scalability are no longer issues, the possibility of a deeper ecosystem of dApps, as well as rising demand for Ethereum, will support a much higher price over time. 

The path to $5,000 per token will definitely be full of ups and downs, but Ethereum has a real shot at getting there if it can integrate the new update in a timely manner, as well as outpace its rival blockchains. 

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

The post Can Ethereum reach $5,000? appeared first on The Motley Fool Australia.

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• The key driver behind the recovery in Bitcoin, Ethereum, and Solana today
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Neil Patel has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and hasv recommended Bitcoin, Ethereum and Solana. 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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Don’t be fooled into thinking the good times are back with today’s market bounce. But a top broker reckons there are two ASX 200 shares that will do well in this volatile climate.

The S&P/ASX 200 Index (ASX: XJO) is rallying over 1% in midday trading. This marks the first time that the index is gaining ground in the last eight trading sessions!

Given that the headwinds hitting global equity markets are still in play, it is probably too early to call the bounce a turning point.

Two ASX 200 shares to weather the storm

Nonetheless, there are two ASX 200 shares that Morgans has bought more of for its core model portfolio.

Never mind the fact that the outlook for shares is still highly uncertain across capital markets. Investors are still on edge with the faster-than-expected interest rate hikes and geopolitical conflict.

Sentiment has been made worse by the crypto bear market that’s dragging on risk assets here and around the world.

Fundamentals look better than sentiment

Morgans is telling investors not to get too caught up in the negativity.

The broker explained:

We think investors can take comfort that recent volatility looks disconnected from strong corporate fundamentals and a solid outlook for the Australian economy.

Betting on this ASX 200 share

On the back of this belief, Morgans has increased its holdings in Lottery Corporation Ltd (ASX: TLC) in its equities-only model portfolio.

The key objective of this portfolio is to beat the ASX 200 Accumulation Index. It aims to do this with a balance of income (dividend) returns and capital growth.

To that end, the Lottery Corporation ticks the boxes. The company demerged from Tabcorp Holdings Limited (ASX: TAH) last month.

The broker said:

TLC is one of the highest performing lotteries businesses in the world, with long duration and exclusive licences to operate lotteries all over Australia (except for WA).

Filling up on Woodside shares

Another ASX 200 share that Morgans has upped its holdings of is Woodside Energy Group Ltd (ASX: WDS).

Morgans explained:

This was a conscious decision to lift our energy sector exposure, partially as a hedge against the inflationary forces affecting other parts of the portfolio, and because WDS looks abnormally cheap post de-merger.

How cheap is cheap?

Well, the broker noted that the Woodside share price trades at a significant discount to its US peers. It’s also sitting at around a 7% dividend yield.

Even in a rising interest rate environment, that represents a relatively attractive yield.

The post Morgans is urging investors to buy these 2 ASX 200 shares for this challenging environment appeared first on The Motley Fool Australia.

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

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ASX 200 coal shares are enjoying huge gains on the market today.

Multiple ASX 200 coal companies, including Whitehaven Coal Ltd (ASX: WHC), New Hope Corporation Limited (ASX: NHC), and Coronado Global Resources Inc (ASX: CRN), are on the rise today. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is also up 1.23% so far today.

Let’s take a look at what could be impacting ASX 200 coal shares today.

European nations revert back to coal

The Whitehaven share price is soaring 6.72% at the time of writing, while New Hope is jumping 7.48% and Coronado is 7.9% higher.

Coal explorers Yancoal Australia Ltd (ASX: YAL) and Allegiance Coal Ltd (ASX: AHQ) are also leaping 6.36%. and 8.42% respectively.

News out of Europe could be impacting coal shares. The Netherlands, Germany, and Austria are all revisiting coal due to an energy crisis sparked by the Russian invasion of Ukraine, France 24 reported.

Commenting on the decision, Dutch climate and energy minister Rob Jetten said:

The cabinet has decided to immediately withdraw the restriction on production for coal-fired power stations from 2002 to 2024.

European countries relying on coal may provide export opportunities for Australian coal companies. Whitehaven, Coronado, New Hope, Yancoal, and Allegiance all export coal around the globe.

The German government indicated it is taking measures to save gas “in view of throttling of gas supplies from Russia”. Economics and Climate Protection Minister Robert Habeck noted the gas market situation had deteriorated in recent days. He added:

In order to reduce gas consumption, less gas is to be used to produce electricity. Instead, coal-fired power plants will have to be used more. 

Share price snapshot

The Whitehaven share price has gained 159% in the past year, while New Hope has soared 85%. Coronado shares have also rocketed 134% in the past year.

For comparison, the benchmark ASX 200 Index has lost 10% in the last 52 weeks.

The post Why are ASX 200 coal shares having such a smoking session today? appeared first on The Motley Fool Australia.

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• Are these coal miners shaping up to be underrated ASX dividend shares?
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• 2 energy ASX shares to buy while inflation is killing everything else: expert
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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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At last, it’s a green day for ASX shares so far in this Tuesday’s trading session. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has gained a healthy 1.12% and is now back over 6,500 points. But no one seems to have told the Premier Investments Limited (ASX: PMV) share price.

Premier Investments shares have fallen steeply today. This ASX 200 retailer and owner of the Smiggle, Peter Alexander, and Just Jeans brands closed at $20.12 a share yesterday but the company’s share price is down a hefty 3.38% so far today at $19.44 a share.

So why are Premier Investments shares defying the market so decisively today?

Why is the Premier Investments share price plunging 3.38% today?

Well, it’s not as bad as you might think. There’s a good reason Premier Investments is falling today. It has to do with this retailer’s next dividend.

Yes, today is the day that Premier Investments is going ex-dividend. The company is set to pay out its interim dividend for FY2022 on 27 July next month. But if an investor wants to see this dividend arrive in their bank accounts, they would have had to own the shares before today.

An ex-dividend date cuts off new investors from receiving a dividend, which means yesterday was the last day new Premier Investments investors could sign up. Since the value of this upcoming dividend is now unavailable, its value has effectively left the Premier Investments share price. That is why we are seeing this company drop by such a solid amount today.

So investors who were on the books before today can now look forward to receiving the company’s interim dividend of 46 cents per share, fully franked, on 27 July.

It’s going to be a fairly lucrative dividend for investors too. The 46 cents per share is a marked increase on last year’s interim dividend of 34 cents per share. It’s also steady on the company’s last final dividend of 46 cents per share that was paid out back in January.

These dividends now give Premier Investments shares a dividend yield of 4.7% on the current share price.

The post Why is the Premier Investments share price falling today? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy
• Why is the Core Lithium share price slipping today?
• Why this top broker sees 50%+ upside to the Boral share price
• 5 things to watch on the ASX 200 on Tuesday
• Will Westpac shares really pay a 9.6% dividend yield next year?

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 Premier Investments 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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