Category: Stock Market

At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is off its intraday highs but remains on course to record a positive gain. The benchmark index is currently up 0.4% to 7,325.8 points

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

Hamish Douglass resigns as Magellan director

The Magellan Financial Group Ltd (ASX: MFG) share price is trading lower today. This follows news that the embattled fund manager’s founder, Hamish Douglass, has resigned as a director with immediate effect. Douglass took indefinite leave from the role as Chairman last month following a period of intense pressure and focus on both his professional and personal life.

Block share price reaches ASX high

The tech sector has been performing positively on Monday with the Block Inc (ASX: SQ2) share price the highlight. Its shares jumped 11% in morning trade to reach their highest level since listing on the Australian share market. This latest gain means the Block share price is now up over 60% in less than a month. The S&P ASX All Technology index is up 1.9% at the time of writing.

Qube announces $400m share buyback

The Qube Holdings Ltd (ASX: QUB) share price is rising today after the logistics facilities company announced a $400 million off market share buyback. Qube decided to buy back shares following a strong performance during the first half and the completion of the Moorebank Logistics Park transaction.

Best and worst ASX 200 performers

The best performer on the ASX 200 index on Monday has been the Block share price with a gain of almost 9%. This follows a strong rise by its US listed shares on Friday night. The worst performer has been the Atlas Arteria Group (ASX: ALX) share price with a 4% decline on no news. The toll road operator’s shares trade ex-dividend tomorrow but some shareholders aren’t sticking around to qualify for its final dividend.

The post ASX 200 (ASX:XJO) midday update: Hamish Douglass resigns from Magellan, Block jumps appeared first on The Motley Fool Australia.

More reading

• Block (ASX:SQ2) share price jumps 11% to new ASX high
• Qube (ASX:QUB) share price rises amid $400m off-market buyback
• 5 things to watch on the ASX 200 on Monday
• These were the worst performers on the ASX 200 last week
• Is the bull market over?

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. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price spiked just after the open on Monday and is trading at $46.62, up 0.8% at the time of writing.

ASX mining shares have surged these past 6 months. BHP has sprung off a low of $35.36 a share in early November and now trades more than $11 higher. It has rallied as much as 42% in that time.

BHP’s key markets have all staged multi-year long rallies and are now surpassing record highs as global tensions mount and inflationary pressures rise.

Why is BHP staging a rally?

Futures on oil, gold, coal, uranium, and copper have surged to new highs, meaning producers have likely locked in forward earnings on these as well.

Most markets have started to cool, however, this hasn’t slowed the pace of earnings upgrades for companies like BHP for the upcoming 12 months.

The company’s result could be an earnings waterfall that sees shareholders on the receiving end of lucrative dividends, analysts familiar to BHP are saying.

In a recent note, JP Morgan estimates dividends of $3.01 per share in FY22 and $2.26 per share in FY23.

Meanwhile, analysts at Barclays investment bank highlighted the miner’s free cash flow (FCF) was a huge driver of management declaring the H1 dividend of $1.50 per share. This was 35% ahead of Barclays’ forecast and 21% more than consensus.

“The key driver was a much stronger FCF performance on surprisingly low cash tax and capex,” Barclays said in a note from February.

“The H1 dividend payment equates to $7.6 billion (8.7% annualised yield) and compares to H1 FCF of $7.2 billion post-minority dividends.”

It has a hold rating on the stock and values BHP at $47.38, just behind the consensus of $47.41, according to Bloomberg data.

Meanwhile, analysts at Macquarie reckon shareholders are in for a “US$32 billion windfall by September” from the proceeds of its petroleum demerger. Macquarie says “the implied value…has increased from $20 billion at the time of the announcement to $28 billion”.

It rates BHP a buy at a $61 per share price target. This is behind Argus Media which values BHP at $84.75 per share with a buy rating.

The skew of ratings is weighted towards a hold, according to Bloomberg data. It has 50% of analysts neutral on BHP while one-third say to buy BHP right now.

Funnily enough, that’s well down from the 75% saying to buy BHP around 1 year ago. It’s worth noting the spread between the average price target and the BHP share price has narrowed to 0.89. This indicates the share price is trading close to the consensus valuation.

BHP share price snapshot

In the last 12 months, the BHP share price has held gains and is up around 3.7% in that time.

Year to date, it has surged more than 12% (as shown below) after dropping some of its gains during the past week of trading.

It is also now 3% in the red following the consolidation.

The post BHP shareholders set for $30 billion windfall: Macquarie appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Brokers name 3 ASX shares to buy today
• Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?
• BHP share price rebounds after 9-day slide. Here’s why
• This ASX 200 share has the honour of being the biggest dividend payer in the ENTIRE world

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 Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price spiked just after the open on Monday and is trading at $46.62, up 0.8% at the time of writing.

ASX mining shares have surged these past 6 months. BHP has sprung off a low of $35.36 a share in early November and now trades more than $11 higher. It has rallied as much as 42% in that time.

BHP’s key markets have all staged multi-year long rallies and are now surpassing record highs as global tensions mount and inflationary pressures rise.

Why is BHP staging a rally?

Futures on oil, gold, coal, uranium, and copper have surged to new highs, meaning producers have likely locked in forward earnings on these as well.

Most markets have started to cool, however, this hasn’t slowed the pace of earnings upgrades for companies like BHP for the upcoming 12 months.

The company’s result could be an earnings waterfall that sees shareholders on the receiving end of lucrative dividends, analysts familiar to BHP are saying.

In a recent note, JP Morgan estimates dividends of $3.01 per share in FY22 and $2.26 per share in FY23.

Meanwhile, analysts at Barclays investment bank highlighted the miner’s free cash flow (FCF) was a huge driver of management declaring the H1 dividend of $1.50 per share. This was 35% ahead of Barclays’ forecast and 21% more than consensus.

“The key driver was a much stronger FCF performance on surprisingly low cash tax and capex,” Barclays said in a note from February.

“The H1 dividend payment equates to $7.6 billion (8.7% annualised yield) and compares to H1 FCF of $7.2 billion post-minority dividends.”

It has a hold rating on the stock and values BHP at $47.38, just behind the consensus of $47.41, according to Bloomberg data.

Meanwhile, analysts at Macquarie reckon shareholders are in for a “US$32 billion windfall by September” from the proceeds of its petroleum demerger. Macquarie says “the implied value…has increased from $20 billion at the time of the announcement to $28 billion”.

It rates BHP a buy at a $61 per share price target. This is behind Argus Media which values BHP at $84.75 per share with a buy rating.

The skew of ratings is weighted towards a hold, according to Bloomberg data. It has 50% of analysts neutral on BHP while one-third say to buy BHP right now.

Funnily enough, that’s well down from the 75% saying to buy BHP around 1 year ago. It’s worth noting the spread between the average price target and the BHP share price has narrowed to 0.89. This indicates the share price is trading close to the consensus valuation.

BHP share price snapshot

In the last 12 months, the BHP share price has held gains and is up around 3.7% in that time.

Year to date, it has surged more than 12% (as shown below) after dropping some of its gains during the past week of trading.

It is also now 3% in the red following the consolidation.

The post BHP shareholders set for $30 million windfall: Macquarie appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Brokers name 3 ASX shares to buy today
• Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?
• BHP share price rebounds after 9-day slide. Here’s why
• This ASX 200 share has the honour of being the biggest dividend payer in the ENTIRE world

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 Bruce Jackson.

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The Link Administration Holdings Ltd (ASX: LNK) share price is moving higher in morning trade, up 1%.

Link shares closed on Friday at $5.09 and are currently trading for $5.14.

Link, which provides tech-enabled administration services for superannuation funds and corporate markets, released an update on the progress of its acquisition Scheme of Arrangement with Dye & Durham Corp.

Here’s the gist.

What progress was reported in the acquisition scheme?

The Link share price is up today after the company said all applications for regulatory approvals under the Scheme Implementation Deed have now been submitted.

The scheme involves the “conditional, non-binding indicative proposal” from LC Financial Holdings (LCFH) to acquire Link Group’s Banking and Credit Management (BCM) business.

The Motley Fool reported on the proposal when it was first announced on 22 December.

In today’s release, Link reported that its discussions with LCFH have not resulted in a binding agreement for the sale of its business.

Link and Dye & Durham agreed “to use best endeavours” to sell BCM for 12 months after the implementation of the Scheme.

According to the release, if Link Group receives BCM proceeds within 12 months of implementation, Link Group shareholders will be entitled to a maximum of 13 cents per Link share held on the Scheme Record Date, from the BCM sale proceeds.

Commenting on the progress, Dye & Durham Corporation’s CEO, Matthew Proud said:

We remain firmly committed to the acquisition of Link Group in June or July of this year. Link Group is a technology-driven provider of mission critical software for financial services and corporate business segments. This acquisition, which is fully funded, will broaden and strengthen our offering in our key markets and enable us to deliver even greater value to our customers over the long term.

We look forward to working with Link Group to progress the transaction first and foremost, but also to crystalise the value in BCM to the benefit of shareholders.

Link said that, subject to the outcome of the shareholder vote and regulatory approvals, it hopes to complete the Scheme in June or July.

Link share price snapshot

Since announcing the acquisition scheme on 22 December, the Link share price is up 9.1%.

For some context, the S&P/ASX 200 Index (ASX: XJO) is up 0.3% in that same period.

So far in 2022, Link shares are down 7.9%.

The post Here’s why the Link (ASX:LNK) share price is marching higher today appeared first on The Motley Fool Australia.

More reading

• Link (ASX:LNK) share price outperforms today as guidance boosted

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Link Administration Holdings Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

Roblox (NYSE: RBLX) experienced a surge of new customers and engagement at the pandemic’s onset. The metaverse pioneer caters to the younger generation, many of whom were suddenly forced to spend most of their time at home. 

Thankfully, several effective vaccines against COVID-19 have been developed, and governments are increasingly removing pandemic-related restrictions. While it’s good for humanity, the ongoing economic reopening has been bad news for Roblox. Let’s look at the worsening trends for the metaverse stock. 

Headwinds are persisting for Roblox 

In its most recent update on March 15, Roblox said that bookings in February decreased by about 3% from the same month last year. Bookings are customer deposits to purchase an in-game currency called Robux, which eventually becomes revenue when players spend it on gameplay. Therefore, a decrease in bookings indicates a headwind to revenue. Average bookings per daily active user, which considers user totals, decreased by about 25% in February from the same month of the prior year.

The metric started falling in the second quarter of 2021 when economic reopening gained momentum and schools started bringing students back to classrooms. Management thinks the headwinds will continue through the middle of the year and then begin improving around June.

Beyond player deposits, engagement — that is, the amount of time spent on the site — is also falling. In its most profitable U.S. and Canada markets, engagement fell from about 3.2 billion hours in the first quarter of 2021 to 2.5 billion in the fourth quarter of 2021. Similarly, daily active users from the region fell from 12.6 million to 11.2 million in that same period. Management might be predicting a turnaround in the middle of the year, but there is no certainty that will be the case.

The future remains as yet unclear. On the one hand, economies might be reopening, and people are leaving their homes more often. At the same time, the pandemic is far from over. Hundreds of thousands of people are testing positive for COVID-19 daily, and tragically large numbers are becoming hospitalized and worse. All that means the world can do more in the battle against COVID-19.

As progress against the virus does occur and people and families return to pre-pandemic habits, this will be a challenge for Roblox. So on the surface, it looks as though management’s estimate of engagement turning around mid-year might be on the optimistic side. 

A lower price leaves a margin of safety 

Roblox’s stock is paying the price for the headwinds. It’s down 65% from the high reached late in 2021 and 55% year to date in 2022. Judging by the crashing price, the market expects troubling trends to persist a while longer.

Trying to time precisely when things will turn around can be a daunting task and one that few people can do. Instead, investors can look to Roblox’s price-to-sales ratio and price-to-free-cash-flow ratio of 12.2 and 42, respectively. According to those metrics, Roblox stock has hardly ever been cheaper. Of course, that doesn’t mean that it cannot go lower, but the discount gives investors a margin of safety if the headwinds persist longer than expected. 

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

The post Troubling trends continue for this beaten-down Metaverse stock appeared first on The Motley Fool Australia.

More reading

• Here’s why the Link (ASX:LNK) share price is marching higher today
• Top analyst reveals 2 ASX 200 retail shares well positioned for inflation
• Block (ASX:SQ2) share price jumps 11% to new ASX high
• Why is the CBA (ASX:CBA) share price outpacing the other banks in March?
• Qube (ASX:QUB) share price rises amid $400m off-market buyback

Parkev Tatevosian owns Roblox Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Roblox Corporation. 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 Bruce Jackson.

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

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The outlook for retail is challenging with the inflation genie out of the bottle, but there are two S&P/ASX 200 Index (ASX: XJO) retail shares that could buck the trend, according to JP Morgan.

While rising costs are threatening to put a squeeze on margins in the sector, the broker believes the JB Hi-Fi Limited (ASX: JBH) share price and Premier Investments Limited (ASX: PMV) are the ones to buy in this environment, reported the Australian Financial Review.

The best ASX 200 retail shares to buy now

Never mind that households are being forced to spend more on daily essentials like fuel and groceries. This should not be enough to stop JB Hi-Fi and Premier Investments from growing their profit margins, noted JP Morgan.

The broker’s head of consumer research, Bryan Raymond, has two key reasons to be bullish on JB Hi-Fi.

The electronics and whitegoods retailer is well placed to keep benefitting from the ongoing work-from-home demographic shift.

JB Hi-Fi boosted by replacement cycle

“I think most people are still investing in their home offices to some degree,” Raymond told the AFR. “JB is well positioned to continue benefiting from that replacement cycle.”

This should drive demand for IT equipment like laptops and monitors. This is especially so given the life cycle of such equipment is about two years.

What’s more, JB Hi-Fi is successfully embracing the online shopping revolution without sacrificing profitability.

Growing margins despite inflation

Even with COVID-19 supply chain disruptions, the retailer increased its Australian sales by 4.3% overall.

“The business EBIT margin in the three years leading up to COVID was circa 3 per cent to 4 per cent,” Raymond said.

“We think that same margin should be circa 6 per cent over the next three years, on a post-COVID normalised basis. That is not due to housing cycle, that is due to the improved quality of that business.”

Another top ASX 200 retail share to buy in 2022

Meanwhile, apparel and stationery retailer Premier Investments is another that he thinks can expand margins. Like JB Hi-Fi, Premier Investments has successfully executed its online strategy.

“The economics of Premier’s online business are superior to most other businesses in Australia, thanks to the structure of the P&L, which has a relatively high gross margin between 60 and 65 per cent and a relatively low-cost centralised distribution model,” Raymond added.

Another key advantage that Premier Investments has is that its key brands face little competition. This is particularly so for Smiggle and Peter Alexander. Less competition means less discounting.

The latter brand is also benefitting from the work-from-home thematic, with more people lounging around in their pyjamas. This is the new work attire for the modern post-COVID world.

The post Top analyst reveals 2 ASX 200 retail shares well positioned for inflation appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares rated top buys by brokers
• What’s the outlook for ASX retail shares like Kogan (ASX:KGN)?
• 2 top ASX shares this broker loves
• These 5 ASX 200 shares are trading ex-dividend today

Motley Fool contributor Brendon Lau 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 Bruce Jackson.

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The Block Inc (ASX: SQ2) share price is having a very strong start to the week.

In morning trade, the payments giant’s shares were up as much as 11% to $187.50.

This means that Block’s shares have now reached their highest level since listing on the Australian share market following the takeover of Afterpay.

It also means the Block share price is now up an incredible 61% since bottoming at $116.05 less than a month ago.

Why is the Block share price rising today?

Investors have been bidding the Block share price higher today following another strong night of trade for the company’s US listed shares on Friday night.

The company’s NYSE-listed shares rose 10% on Friday after investment sentiment in the tech sector continued to improve.

So much so, the tech-focused Nasdaq index rose a sizeable 2.05% on Friday night, which was more than double the gain recorded by the Dow Jones Industrial Average.

Can its shares keep rising?

The good news is that one leading broker still sees value in the Block share price.

Earlier this month, analysts at Macquarie commenced coverage on the company’s shares with an outperform rating and $230.00 price target.

This suggests that there is still potential upside of 22% for Block’s shares over the next 12 months despite its recent recovery.

The post Block (ASX:SQ2) share price jumps 11% to new ASX high appeared first on The Motley Fool Australia.

More reading

• Guess which ASX tech shares are leading the pack today?
• ASX 200 (ASX:XJO) midday update: Block and Zip shoot higher, Ampol’s acquisition boost
• The Block (ASX:SQ2) share price is soaring 11% today. Here’s why
• Why Arafura, Block, Magellan, and Qantas shares are storming higher
• Why Block, Breville, Megaport, and Webjet shares are falling today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Commonwealth Bank of Australia (ASX: CBA) finished 7 percentage points higher last week to close out at $106.29 apiece.

The bank has outstripped its peers this month and is currently up more than 5% for the year to date after thrusting off lows of $94.50 in early March.

At the time of writing, the CBA share price is 0.77% higher, trading at $107.11.

Why’s the CBA share price pushing higher?

Commonwealth Bank shares have bounced off their previous low with ferocity despite there being no market-sensitive information from the company since 1 March.

The bank also leads the sector as the S&P/ASX 200 Financials index (ASX: XFJ) has climbed 2.5% since January and is now tracking in a vertical uptrend.

Nevertheless, financials are strengthening to now front-run most other corners of the market as of March.

Beforehand, the CBA share price was rangebound and had been stuck in an all-out war between the bears and bulls for around 4 months, with prices dancing within a lengthy sideways channel (shown below).

However, whispers of a potential hike to base interest rates by the Reserve Bank of Australia (RBA), alongside a shifting macroeconomic narrative have seen bank shares flourish lately.

Market pundits have deemed the prospects of a rate rise positive for ASX banks as they are set to benefit from higher average monthly mortgage payments.

For instance, a hike to 2.15% on variable mortgage rates would see average monthly mortgage payments rise by 29% from their February 2022 level.

And it appears banks like CBA are capitalising on the state of affairs. Underwriting on more risky products increased during the most recent quarter, something all banks need to be wary of, according to JP Morgan.

“The proportion of new housing loans funded by the major banks with a debt-to-income [greater than] >6x increased to 28% in the quarter”, the broker said in a recent note.

“We expect growth in higher-risk segments increases the likelihood of APRA introducing new macro-prudential restrictions.”

One other factor is that S&P Global Ratings recently deemed that Australian banks have little to no exposure to Russia, Ukraine and Belarus.

The ratings agency – that provides its economic assessment on the solvency of companies and countries alike – determined the “main fallout for the Australian banks could be a global financial market dislocation, leading to disruption in their access to global funding and a rise in the cost of funding.”

Given S&P’s standing as a gold-standard in ‘safety’ ratings, the market could view its assessment of Aussie banks as a vote of confidence moving forward.

Investors appear to consider the Commonwealth Bank well-positioned from here, possibly backed by robust fundamentals. Its balance sheet has grown substantially over the years, with total assets climbing 18% from FY18 to $1.15 billion.

Meanwhile, its book value and market cap have grown by 11% and 42% respectively in that time, whereas the ASX financials index has climbed just 2%.

It also gave investors a return on equity (ROE) of 15% and free cash flow over $14.5 billion in H1 FY22, whilst analysts estimate a dividend of $2.02 for H2 FY22, per Bloomberg data.

CBA share price snapshot

In the past 12 months, the CBA share price has jumped more than 25% into the green and is now sitting around 7% higher after last week’s trading.

It has flourished this year to date following an 8% spike over the past month and is well ahead of the broad index’s return in that time.

The post Why is the CBA (ASX:CBA) share price outpacing the other banks in March? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• If you invested $10,000 in CBA shares a decade ago, here’s what it would be worth now
• Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?
• CBA (ASX:CBA) share price on watch as CEO sells $1.4m of shares
• ASX 200 shares open with a bang following US interest rate rise

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 Bruce Jackson.

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The Qube Holdings Ltd (ASX: QUB) share price has started the week positively.

In morning trade, the logistics facilities company’s shares are up 3% to $3.10.

Why is the Qube share price rising today?

The catalyst for the rise in the Qube share price today has been the release of a positive announcement this morning.

According to the release, following a strong performance in the first half of FY 2022 and the completion of the Moorebank Logistics Park transaction, Qube will return up to $400 million of capital to shareholders over the remainder of FY 2022.

The company will do this via an off-market buyback program conducted via a tender process that aims to complete in May.

Management commentary

Qube’s Managing Director, Paul Digney, said “The completion of the sale of Moorebank Logistics Park, coupled with Qube’s strong financial performance in achieving record underlying earnings (NPATA) in FY21 and H1 FY22, have contributed to a strong capital position, allowing us to announce this off-market Buy-Back.”

Qube’s Chairman, Allan Davies, revealed that the buyback program was judged to be the best way to return funds to shareholders.

He explained: “The Board has carefully considered how best to return capital to shareholders and we believe that the off-market Buy-Back announced today is the most effective method to return significant value to all our shareholders and optimise our capital structure at this time.”

“It enables a higher number of Qube shares to be bought back in a shorter timeframe and it reduces our share count faster than an on-market buy-back of Qube shares. In turn, a lower capital base and share count supports Qube’s future earnings per share and dividends per share, all things being equal,” Davies added.

What’s next?

Qube advised that it will repurchase shares under the buyback at a discount of between 5% and 14% to the volume weighted average price (VWAP) of the Qube share price for the five trading days up to and including the closing date of 13 May.

The buyback price will comprise a capital component of $1.61 per share and a fully franked deemed dividend equal to the buyback price less the $1.61 per share.

The post Qube (ASX:QUB) share price rises amid $400m off-market buyback appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares we’re holding for both reopening and higher interest rates: expert
• Qube (ASX:QUB) share price rises on ‘strong result’
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) put in a strong showing last week, closing up 2.1%. That leaves the ASX 200 down around 2% in 2022 so far.

But not all ASX 200 shares are created equal.

Commodity and energy shares have tended to outperform this year amid soaring prices. Meanwhile, many formerly high-flying ASX 200 shares in the tech space have been pummelled as investors mull a future with significantly higher interest rates.

This trend has seen the S&P/ASX 200 Energy Index (ASX: XEJ) soar 17.4% year-to-date, while the S&P/ASX All Technology Index (ASX: XTX) has tanked 19.0%.

So, is it time to reduce exposure to commodity and energy stocks and buy the dip in ASX 200 tech shares?

Not according to Australian market strategist at Saxo Markets Jessica Amir.

Fundies likely to rebalance exposures to ASX 200 shares

“Portfolio rebalancing from now to the end of quarter is likely to take place,” Amir said.

Portfolio rebalancing is when fund managers bring their asset allocations back into alignment with their fund’s investment strategies.

Why is that important if you’re investing in ASX 200 shares?

Amir explained:

Commodity darlings that have gone up the most this year, are likely to see some profit taking/selling. And some managers could also be forced to top up (buy) downward facing tech stocks.

Indeed, fintech company Zip Co Ltd (ASX: Z1P), down 63.1% year-to-date, gained 9.5% in last week’s trading.

So, what does this mean for the outlook for sector specific ASX 200 shares?

According to Amir:

Be mindful of end of quarter disillusioned gains, [which are] likely to be short lived. Remember earnings growth drives share price growth. So you should consider companies in growth industries, that are growing their market share and earnings.

If you see profit taking/selling in commodity stocks, you could have your chance to buy companies like Whitehaven Coal Ltd (ASX: WHC) and Woodside Petroleum Ltd (ASX: WPL). Both are trading up 50% this quarter, and operate on low price to earnings (P/E) ratios, meaning they are ‘cheaper’ to buy in comparison to how much ‘earnings’ they make/pay.

Amir concluded, “You could pick up some low hanging fruit end of quarter.”

How have these energy shares been tracking?

The Woodside share price has been charging higher for most of the New Year, up more than 41% on the back of soaring crude oil and gas prices.

Our other leading ASX 200 share, Whitehaven Coal, has done even better. Whitehaven’s share price has rocketed 52% this year as thermal coal hit all-time highs.

And, according to Amir, it will be worth keeping an eye on both these ASX 200 shares to watch for any profit taking in the weeks ahead.

The post 2 leading ASX 200 shares to watch as fundies rebalance portfolios appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns 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 Bruce Jackson.

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