Category: Stock Market

The South32 Ltd (ASX: S32) share price is in the green in early trading today following the release of the company’s financial results for the half year ended 31 December 2021.

At the time of writing, the ASX miner’s shares are trading at $4.55 apiece, up 2.25% on yesterday’s closing price.

South32 share price climbs as margins lift off

Highlights from the H1 FY22 results include:

• Group’s statutory profit after tax increased by US$979 million to US$1.032 billion in H1 FY22
• Strong production results across a number of operations and high operating leverage translated into an improved operating margin of 44% (H1 FY21: 24%)
• Underlying earnings increased by US$868 million to more than US$1 billion
• Generated free cash flow from operations, including distributions from manganese EAI, of US$942 million
• Finished the period with net cash of US$975 million
• US$405 million fully franked interim dividend announced, 40% of underlying earnings
• US$60 million allocated as a part of on-market share buyback program

What else happened this half for South32?

The company also noted its Worsley Alumina site continued to operate above nameplate capacity. Brazil Alumina, on the other hand, was a key takeout and achieved record production in Q2 FY22.

Meanwhile, its Cannington assets continued to perform strongly. Production guidance was revised higher by 5% for FY22 “as the operation prepares to transition to 100% truck haulage in Q4 FY22”.

Additionally, the group’s Cerro Matoso site in Colombia achieved a 26% spike in payable nickel.

Aside from that, South Africa Manganese came in with an all-time production record during Q2 FY22. This was underscored by more deliveries of premium material to market.

Operationally the company also saw “strong production results across a number of operations” that resulted in “high operating leverage”. Consequently, the group’s operating margin improved by 22 percentage points to 44%.

This result was in part helped by controllable costs sitting less than 3% of the group’s cost base, “despite significant external pressure”.

Management commentary

Speaking on the announcement boosting the South32 share price today, CEO Graham Kerr said:

We achieved a record operating margin of 44% and a significant improvement in our underlying earnings to US$1 billion in the half, following a broad recovery in commodity prices, while also making substantial progress reshaping our portfolio.

A number of our operations delivered strong production results during the half. We achieved record quarterly production at Brazil Alumina and South Africa Manganese during the period, while Worsley Alumina continued to operate above nameplate capacity.

Production guidance at Cannington has been revised higher by five per cent as the operation prepares to transition to 100 per cent truck haulage in the June 2022 quarter, which is expected to bring forward access to higher grade material.

This performance, together with our strong financial position, is enabling us to invest in our business, grow base metals production and substantially increase our returns to shareholders, with the board resolving to pay a record US$405 million fully franked ordinary dividend in respect of the period. The board has also resolved to expand our capital management program by US$110M to US$2.1B, leaving US$302M to be returned.

What’s next for South32?

Guidance was unchanged from previous estimates in all areas except Australian Manganese, Illawara Metallurgical Coal and Cannington.

For Cannington, South revised guidance upward by 5% and forecasts 2,750kdmt of ore processed after reinstating its estimates on zinc, silver and lead production.

For the other two sites, the company downgraded guidance by 9% and 7% respectively, as a reflection of COVID-19 impacts.

The company also expects to produce 5kt of alumina at its Brazil Alumina operations by FY22, jumping to 140kt the following year.

South32 share price snapshot

In the last 12 months the South32 share price has jumped more than 64%. It has also climbed 11% this year to date.

Across all time frames South32 is in the green, more than can be said for the benchmark indices in the same time.

The post South32 (ASX:S32) share price jumps as profit soars appeared first on The Motley Fool Australia.

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• Why is the South32 (ASX:S32) share price surging to all-time highs today?

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 Goodman Group (ASX: GMG) share price is charging higher on Thursday morning following the release of its half year results.

In early trade, the integrated property company’s shares are up 4.5% to $25.10.

Goodman share price up on strong half year results

• Total assets under management (AUM) up 32% to $68.2 billion
• Occupancy remains high at 98.4%
• Like-for-like net property income growth of 3.4%
• Operating profit up 28% to $786.2 million
• Operating earnings per share up 27% to 41.9 cents
• Development work in progress up 51% to $12.7 billion across 81 projects
• FY 2022 guidance upgraded

What happened during the first half?

For the six months ended 31 December, Goodman was on form again and delivered a 28% increase in operating profit to $786.2 million.

This was driven by like-for-like net property income growth of 3.4% and a 32% jump in AUM to $68.2 billion. The latter resulted in an 18% increase in management earnings to $258.2 million. Pleasingly, management expects further AUM growth in the coming years due to continued development activity and revaluations.

Management commentary

Goodman’s Chief Executive Officer, Greg Goodman, commented: “The Group’s long-term focus on infill locations is underpinning our strong performance, and driving the volume and scale of the $12.7 billion workbook.”

“It’s also increasing the value of our projects. The average value of our development WIP now exceeds $3,700 per square metre and reflects the prime location, expected growth in rents and consequently better cap rates, for these properties. Goodman continues to grow organically through development activity. This is increasingly reflected in the investment and management business performance as we focus on delivering sustainable opportunities for our customers and investors,” Mr Goodman added.

Outlook

In light of Goodman’s strong performance during the first half, management has upgraded its full year guidance.

It now expects operating earnings growth to be 20% in FY 2022. This compares to prior (also upgraded) guidance of growth in excess of 15%.

However, management has elected to reaffirm its distribution guidance at 30 cents per share rather than upgrade it. This is because it sees attractive opportunities to deploy retained earnings into its development and investment inventory.

Commenting on the company’s outlook, Greg Goodman said: “Our strategy to provide essential infrastructure for the digital economy is delivering. The business is performing strongly across all segments, including our development projects, leasing success, rental growth, significant valuation uplift and the strong performance of our Partnerships.”

“In addition, COVID related disruptions in FY22 have been managed to have less impact on the full year projections than we had initially assumed. The operating outlook for the business is strong and gives us confidence for the remainder of this year. Consequently, we are upgrading our market guidance for FY22, with Operating EPS growth projected to be 20%.”

The post Goodman (ASX:GMG) share price charges higher on results and guidance upgrade appeared first on The Motley Fool Australia.

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• 2 highly rated blue chip ASX 200 shares to buy

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

What happened

Today’s been a relatively muted day in the crypto world. However, certain tokens are seeing outsize moves. One such token that’s worth taking a look at today is Neo (CRYPTO: NEO). As of 2:40 p.m. ET, this token had surged 11.3% higher to move into 59th place in the cryptocurrency market cap rankings. 

Among the key drivers taking this token on a wild ride higher today was news of Neo’s first-ever monthly tech report. This report highlighted progress made on several roadmap items the Neo developer team has been working on for some time. These included a range of bug fixes, as well as new resources and support for developers utilizing Neo to incorporate smart contracts into decentralized applications. 

Additionally, published “gas burn” data directly from the Neo team shows signifiant recent spikes, specifically one at 3 a.m. ET. On the Neo network, Neo tokens are the governance tokens tied to the voting rights for this network, while Gas tokens are the “fuel” that allow for transactions to take place on the network. System fees are burned, with network fees redistributed to census nodes. Higher gas burn rates suggest that transaction volumes spiked over a given period of time.

So what

Neo is a China-based blockchain, often regarded as the first ever from China, launched in 2014. Accordingly, it’s not surprising to see large spikes in what are after-hours trading periods in North America, given this time difference. However, the recent gas burn data provided by Neo does suggest that activity could be picking up on the network. Given the geopolitical concerns coming out of China, this is a bullish factor investors seem to like today.

Additionally, the technical update provided by the Neo team has provided some significant detail on what’s going on behind the scenes. Those with sophisticated knowledge of the inner workings of this network appear to like what they see. Like any investment, more transparency is usually a good thing. This appears to be the case with Neo today.

Now what

Neo is certainly an interesting blockchain network to take a look at. For those bullish on continued global growth in the crypto space, this may be a token to put on the watch list. Indeed, Neo’s rise of more than 11% at a time when the overall crypto market was up less than 1% signals investors believe there’s some real near-term upside potential with this token.

Like all cryptocurrencies, investors ought to take caution and do their due diligence before diving into any token. That said, Neo is one project I intend to look deeper into following today’s news. 

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

The post This cryptocurrency surged 11% higher today, pole-vaulting into the top 60 appeared first on The Motley Fool Australia.

More reading

• Goodman (ASX:GMG) share price charges higher on results and guidance upgrade
• Wesfarmers (ASX:WES) share price on watch after ‘most disrupted period’ since COVID onset
• Why are ASX investors flocking to cash ETFs?
• Hold the phone! Telstra (ASX:TLS) delivers solid underlying growth and declares 8cps dividend
• 3 ASX shares to buy before the market rockets up again

Chris MacDonald 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.

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

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The Wesfarmers Ltd (ASX: WES) share price is on watch this morning after the release of the company’s results for the first half of financial year 2022.

As of Wednesday’s close, the Wesfarmers share price is $54.92.

Wesfarmers share price in focus on challenging first half

• Revenue came to around $17.75 billion – a 0.1% drop on that of the first half of financial year 2021
• Earnings before interest and tax (EBIT) reached $1.9 billion, representing a 12.3% fall
• Net profit after tax (NPAT) reached $1.2 billion – down 14.2%
• Basic earnings per share (EPS) came to 107.3, also representing a 14.2% drop.
• Operating cash flows fell 29.8% to $1.5 billion
• The company announced an 80 cent, fully franked interim dividend – 9.1% lower than that of financial year 2021

The first half of financial year 2022 was the “most disrupted period for our businesses since the onset of COVID-19“, said Wesfarmers’ managing director Rob Scott.

The company’s retail businesses saw around 34,000 store trading days – representing 20% – being impacted by closures during COVID-19 outbreaks.

Wesfarmers was also impacted by supply chain issues and staff absenteeism due to the virus’ spread.

Over the half year, Wesfarmers’ Bunnings business saw its revenue increase 1.7% to $9.2 billion. Its earnings, however, fell 1.2% to around $1.2 billion.

It wasn’t such a good half for Kmart. The business’ revenue dropped 9.6% to $4.9 billion. Kmart and Target combined saw earnings fall 55.8% to $222 million for the half year.

Catch saw its gross transaction value increase 1% for the half and 97.5% on a two-year basis. Its lower earnings were born from investment into its long-term growth.

Meanwhile, Officeworks saw revenue grow 3.7% to around $1.5 billion and earnings drop 18% to $82 million.

WesCEF‘s fertilisers revenue grew 29.8% to $1 billion while its earnings increased 36.3% to $218 million, supported by higher commodity prices.

Wesfarmers’ industrial and safety business‘ revenue increased 5.1% to $944 million, and its earnings grew 10.8% to $41 million.

Wesfarmers had net debt of $2.6 billion at the end of the half.

What else happened during the half?

The biggest news from Wesfarmers last half was its proposed acquisition of Australian Pharmaceutical Industries Ltd (ASX: API).

The company placed a bid for API in July. It has offered to pay $1.55 per API share and, as of early January, is the only entity vying from the company.

Over the half year, Bunnings was hit with extra costs to ensure safety and manage COVID-19-related supply challenges.

It also completed its acquisition of Beaumont Tiles during the half and expanded Tool Kit Depot into Western Australia.

Officeworks, meanwhile, was hampered by COVID-19 restrictions, costs from more ‘click and collect’ style online orders, and its move to a new customer fulfilment centre.

In the non-retail side of the company’s businesses, construction activity ramped up at the Mt Holland Lithium Project.

Finally, Wesfarmers also saw its scope 1 and 2 carbon emissions fall 14.3% under the Market-Based Emissions Standard during the half.

What did management say?

Scott commented on the company’s first half results saying:

The first half of the 2022 financial year was the most disrupted period for our businesses since the onset of COVID-19, with extended government-mandated store closures and trading restrictions in Australia and New Zealand.

The group recognises the alignment between long-term shareholder value and progress on key sustainability metrics, and good progress was made on diversity and inclusion, emissions reduction, and operational waste during the half.

Wesfarmers continued to manage its balance sheet to maintain a high degree of flexibility during the half, and took opportunities to optimise the group’s debt maturity profile and cost of borrowing, including through the issue of a EUR600 million sustainability-linked bond with targets aligned to the Group’s decarbonisation strategies.

What’s next?

Wesfarmers hasn’t given any guidance for the rest of financial year 2022.

However, it has noted ongoing COVID-19 impacts and uncertainty.

Additionally, supply chain issues will continue to hamper many of its businesses with higher expenses expected.

The company is also keeping an eye on inflation, labour availability, and commodity prices.

Wesfarmers recently rebranding the Club Catch subscription program to OnePass. The program’s expansion will continue into the rest of the financial year.

Wesfarmers share price snapshot

The Wesfarmers share price has fallen 8.5% since the start of 2022.

Though, it is 1.4% higher than it was this time last year.

The post Wesfarmers (ASX:WES) share price on watch after ‘most disrupted period’ since COVID onset appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
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• Wesfarmers (ASX:WES) share price lower despite API takeover update
• 2 ASX dividend shares that could provide steady income in retirement

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 no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers 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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Yesterday, we looked at the latest data on the ASX exchange-traded fund (ETF) sector and the gyrations it has experienced in 2022 so far. ETF demand remains robust over the year to date. That’s despite the fact that the sector has experienced some loss of funds under management. Largely due to the volatility and losses we have seen over the past few months.

But looking closer at the data, an interesting trend emerges. And it’s one that is well worth a deeper dive.

So according to ETF provider BetaShares’ Australian ETF Review for January 2022, the ETFs that received the most fund inflows over January were the ones we might expect. Namely index funds like the Vanguard Australian Shares Index ETF (ASX: VAS) and the Vanguard MSCI Index International Shares ETF (ASX: VGS). But it’s the fourth and fifth ETFs in this list that represents an interesting trend.

Cash is king for ASX ETF investors

So below three index funds, the next ETFs receiving the most in fund inflows last month were the iShares Enhanced Cash ETF (ASX: ISEC) and the BetaShares Australian High Interest Cash ETF (ASX: AAA). These ETFs experienced approximately $107.5 million and $100.2 million in fund inflows over January respectively.

Now those ETFs, if you didn’t notice, are both cash-based ETFs. A cash-based ETF has more in common with a bank account than an index fund like VAS. They don’t hold any underlying shares at all. Instead, each unit represents a cash-based asset, which is not too much more than money in a bank account. For example, BetaShares tells us that its AAA ETF “aims to provide exposure to Australian cash deposits, with attractive monthly income distributions… Assets are invested in deposit accounts held with selected banks in Australia”.

So it appears ASX investors are looking to increase their cash exposure via ETF products like AAA and ISEC. This is perhaps not such a surprise. After all, many investors like to move their capital to ‘safe’ assets like cash during periods of market volatility. An interesting insight into how some ASX investors are coping with the recent volatility. 

The post Why are ASX investors flocking to cash ETFs? appeared first on The Motley Fool Australia.

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• Hold the phone! Telstra (ASX:TLS) delivers solid underlying growth and declares 8cps dividend
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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. owns and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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 Telstra Corporation Ltd (ASX: TLS) share price will be one to watch on Thursday.

This follows the release of the telco giant’s half year results this morning.

Telstra share price on watch after delivering solid result

• Revenue down 4.4% to $10.5 billion
• Operating expenses down 6.7% to $7.4 billion
• Reported EBITDA down 14.8% to $3.5 billion
• Underlying EBITDA up 5.1%
• Fully franked interim dividend maintained at 8 cents per share
• FY 2022 guidance reaffirmed

What happened during the first half?

For the six months ended 31 December, Telstra posted a 4.4% decline in revenue to $10.5 billion and a 14.8% decline in reported EBITDA to $3.5 billion. However, it is worth noting that the prior corresponding period had a number of one-offs such as the sale of the Velocity and South Brisbane exchange assets. This means its underlying result is more reflective of its performance.

On an underlying basis, thanks to a 6.7% reduction in its operating expenses to $7.4 billion and positive momentum in the mobile business, Telstra’s EBITDA came in 5.1% higher year on year. This was ahead of what analysts at Morgans were expecting. They had pencilled in a 4% increase in underlying EBITDA for the period.

This puts the company on track to achieve its full year underlying EBITDA guidance of $7 billion to $7.3 billion in FY 2022.

Also largely on track is its free cash flow. On a guidance basis, Telstra’s free cash flow after lease liabilities came in at $1.7 billion. This compares to its full year guidance of $3.5 billion to $3.9 billion.

This allowed the Telstra board to declare an 8 cents per share fully franked interim dividend, which is flat on the prior corresponding period.

Management commentary

Telstra’s CEO, Andrew Penn, was pleased with the half and believes its results reflect the positive momentum delivered through the company T22 strategy. He also believes it puts the company in a strong position as it transitions into T25.

Mr Penn commented: “This was the second consecutive half of underlying growth. The results show we have stayed disciplined and focussed on delivering what we said we would. The benefits of T22 are flowing through for our customers and our shareholders. As the nation has developed an ever-increasing reliance on digital connectivity, we are well placed to deliver the infrastructure, solutions and security needed to support Australia’s aspiration to become a world leading digital economy.”

“Our continued focus on mobile network leadership and building value resulted in five percent post-paid handheld ARPU growth, 6.3 percent mobile services revenue growth and $392 million mobile EBITDA growth. We added 84,000 net retail post-paid mobile services including 62,000 branded with a strong contribution from Enterprise. Our branded performance reinforces the benefits of our clear leadership in 5G.”

Outlook

Management didn’t provide any commentary relating to the second half, but Telstra has reaffirmed all aspects of its FY 2022 guidance.

This includes full year underlying EBITDA of $7 billion to $7.3 billion and free cash flow after lease liabilities of $3.5 billion to $3.9 billion.

The post Hold the phone! Telstra (ASX:TLS) delivers solid underlying growth and declares 8cps dividend appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Thursday
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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 owns and has recommended Telstra Corporation 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 S&P/ASX 200 Index (ASX: XJO) has recovered somewhat this month after tanking almost 10% in January.

But it’s still close to 5% down for the year.

Shaw and Partners senior investment advisor Adam Dawes reckons ASX shares will bounce back.

“It’s what I’m calling a mid-cycle correction,” he told Switzer TV Investing.

“We’re going to see some more volatility around these levels before we start to move again.”

The way inflation and interest rates move will have a big impact on the near-term fortunes of the ASX 200, he added.

“Most people don’t really understand what inflation means, but they can see it in their petrol prices, they can see it in their fruit and veg,” said Dawes.

“That’s where it’s going to hurt the back pocket of the normal public and investors.” 

But with a medium-term rebound in mind, Dawes named 3 ASX shares that he’d pick up right now for a nice return in the months to come:

COVID or not, the planes are packed

One of the most obvious losers out of COVID-19 and its repeated waves is Qantas Airways Limited (ASX: QAN).

But Dawes notes that Australians’ behaviour during the Omicron outbreak has been different to the previous waves.

“I took a plane ride last week for the first time in 2 years. And let me tell you, these planes are absolutely jam-packed,” he said.

“I’m thinking Qantas is a good value play at the moment.”

With Australians getting accustomed to the idea of “living with the virus”, Dawes predicted domestic travel will do well for Qantas.

“The stock has been beaten around but they’ve come out of it — they’ve reduced costs, their labour figures are okay,” said Dawes.

“Oil is probably a bit of a concern for the input costs, but really they’ve left Virgin battered and bruised.”

Qantas shares closed Wednesday at $5.36. The price is up more than 7% this month.

The ASX share that loves when interest rates rise

Dawes admitted insurance is a tough game, but likes the upside in QBE Insurance Group Ltd (ASX: QBE).

“QBE does have a lot going for it at the moment,” he said.

“Management is really picking themselves up and I think there’s value there.”

The share price has already picked up almost 14% this month. It has now grown in excess of 43% over the past 12 months.

He’s not the only one who currently favours QBE. Burman Invest chief investment officer Julia Lee likes how the economic circumstances could give the insurer a real push this year.

“QBE’s investment portfolio benefits when interest rates rise. And, the market is pricing in higher interest rates,” she told The Bull.

“Premium revenue has been growing. Margins have been increasing.”

Coal prices are shooting up

Rail freight provider Aurizon Holdings Ltd (ASX: AZJ) is the third stock in Dawes’ sights.

“Coal is one of those things that’s on the nose, but if you actually look at a coal chart lately, that coal price has really started to move north,” he said.

“That will bode well for Aurizon.”

Dawes also liked last year’s $2.4 billion acquisition that diversifies Aurizon’s haulage. 

Aurizon shares have not recovered as spectacularly as Qantas and QBE, only up 0.84% for the year so far.

It does pay out a tidy 6.9% dividend yield though. 

“Aurizon, in that big-cap space for the income going forward, I think it’s a good play for value.”

Investors Mutual Limited director Anton Tagliaferro last week also singled out Aurizon for praise, saying cash flow is king when interest rates shoot up.

“With interest rates rising, these stocks suddenly don’t look so boring or dull as things normalise,” he said.

“And as investors begin to appreciate real cash flows generated by companies in the next 2  to 3 years, as opposed to hoped-for cash flows in 10 or 20 years time.”

The post 3 ASX shares to buy before market rockets up again appeared first on The Motley Fool Australia.

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• Deal or no deal? Aurizon (ASX:AZJ) share price falls amid sale rumours
• Qantas (ASX:QAN) share price slips amid Bonza plans to launch ‘something very different to the market’
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Motley Fool contributor Tony Yoo 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 Aurizon Holdings 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 Webjet Limited (ASX: WEB) share price has taken off in 2022 despite volatility impacting the S&P/ASX 200 Index (ASX: XJO).

Since the beginning of the year, the online travel agent’s shares have risen by 17% following positive investor sentiment. In contrast, the benchmark index has fallen by 2% over the same time frame.

At yesterday’s market close, Webjet shares finished the day 4.83% higher to $6.08 a pop.

What’s driving Webjet shares higher?

With the re-opening of Australian borders for fully-vaccinated tourists set on 21 February, the Webjet share price has soared.

The announcement made on 7 February by the Morrison government sent Webjet shares 6.17% higher on the day. This was followed by another 7.44% gain on 8 February.

While COVID-19 continues to be on a steady decline, there is hope that the world is starting to move to a post-pandemic phase.

Some countries like Denmark and Sweden have even completely removed restrictions and accepted to live with the virus.

In the United Kingdom where Webjet operates, the British government ended the mask mandate and vaccine passports. Fully vaccinated travellers are no longer required to take a test on or before arrival. This means that passengers can freely travel to the country, encouraging a resurgence in the tourism industry.

Looking ahead, Webjet is scheduled to report its FY22 results towards the backend of May 2022.

Is this a buying opportunity?

The good news for investors is that a number of brokers believe that the Webjet share price is attractively valued.

The team at Morgans raised its price target by 6.5% to $6.60, which implies a potential upside of 8.5%.

In addition, Ord Minnett also lifted its outlook by 2.7% to a more bullish price of $7.31 apiece. This represents a potential upside of 20% from where it trades today.

Lastly, Swiss investment firm, UBS increased its appraisal on Webjet shares by 1.5% to $6.95. Its analysts clearly believe that there is still significant value in the online travel agent and that a recovery is inevitable.

Webjet share price summary

It’s been a rollercoaster 12 months for Webjet investors, with its shares up 27% over the period.

Based on valuation grounds, Webjet has a market capitalisation of around $2.31 billion, with approximately 380.51 million shares on issue.

The post The Webjet (ASX:WEB) share price has climbed 17% so far this year. Is it still a bargain? appeared first on The Motley Fool Australia.

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• Why are ASX travel shares taking flight today?
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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 Webjet Ltd. 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 ASX share market is known for being more volatile than other asset classes like term deposits and bonds. But ASX dividend shares may be able to provide a steady stream of passive investment income over time.

Some businesses have quite volatile dividend movements like Fortescue Metals Group Limited (ASX: FMG) and Woodside Petroleum Limited (ASX: WPL).

But, there are others which are building a reputation for consistent dividends and long-term growth. These two ASX dividend shares may be options for steady passive income:

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as an asset management outfit that aims to apply its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its partners grow. At the end of January 2022, it had investments in 16 boutique asset managers globally.

One of the most important investments in the portfolio is its holding of shares of the now-listed GQG Partners Inc (ASX: GQG).

The business regularly tells investors about the total funds under management (FUM) managed by the asset managers within the portfolio. In the three months to 31 December 2021, the total FUM rose from A$150.1 billion to $165.4 billion. Excluding the new investment in Banner Oak, FUM grew by 5%. GQG growth continued, while Victory Park and EAM posted “particularly strong” inflows.

The ASX dividend share said it was expecting A$3 billion to A$8 billion of gross new commitments/inflows over the next 18 to 24 months for non-GQG boutiques when it released its FY21 result. In the first half of FY22, these boutiques had already received A$2.2 billion of gross new commitments. This caused Pacific to increase its estimate of new commitments to a range of $5 billion to $8 billion.

Pacific is expecting 2022 to be another strong year for many of its investments.

It’s currently rated as a buy by the broker Ord Minnett. With FY23 projections in mind, the Pacific Current share price is valued at 11x FY23’s estimated earnings with a potential grossed-up dividend yield of 8.7%.

Charter Hall Long WALE REIT (ASX: CLW)

This real estate investment trust (REIT) has one of the longest weighted average lease expiries (WALE) on the ASX. This means that its tenants are signed up for the long-term.

At 31 December 2021, it had a WALE of 12.2 years. The REIT noted that this provides long-term income security.

Charter Hall Long WALE REIT was one of the few S&P/ASX 200 Index (ASX: XJO) shares that increased its payment to shareholders during the difficult economic COVID times of 2020.

But the growth has continued. The Charter Hall Long WALE REIT’s operating earnings per security (EPS) increased 5.6% in the first six months of FY22, funding a 5.1% increase of the distribution to 15.24 cents per security.

The property portfolio is now worth $7 billion, with 46% of leases being inflation-linked and achieving a 3.3% weighted average increase of 3.3% in the first half of FY22. The other 54% of leases have fixed increases – the average fixed increase was 3.1%.

Management say that the ASX dividend share continues to grow, diversify and improve the quality of the portfolio with a view to providing reliable and growing returns to investors. Minimal rental relief has been required since the onset of COVID-19. The net tangible assets (NTA) per unit is now $5.89, which is materially above the current Charter Hall Long WALE REIT share price.

FY22 operating EPS is expected to be no less than 30.5 cents, reflecting growth of no less than 4.5% over FY21.

It’s currently rated as a buy by Citi, with a price target of $5.71. The broker is expecting the REIT to pay a distribution yield of 6.2% in FY22.

The post 2 ASX dividend shares that could provide steady passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price could be vastly overvalued and heading sharply lower.

That’s the view of one leading broker which has reiterated its sell rating this morning.

Why is the Fortescue share price overvalued?

According to a note out of Goldman Sachs, in response to the mining giant’s softer than expected half year results, its analysts have retained their sell rating and cut their price target to $14.70.

Based on the current Fortescue share price of $21.15, this implies potential downside of 30% over the next 12 months.

What is the broker saying?

Goldman has warned that Fortescue’s dividend cut with its half year results might be something that investors need to get used to.

Its analysts commented: “The interim dividend of A86cps was a 70% payout, in-line with GSe, but is the start of lower payout ratios going forward (GSe 50% from FY23) in our view, with FMG indicating iron ore sustaining capex will remain elevated at US$1.5bn (US$8/t) in FY23 and Fortescue Future Industries (FFI) spend will likely increase as projects advance (Pilbara decarbonisation and green hydrogen).”

In addition, the broker continues to believe that the Fortescue share price trades on unreasonably high multiples compared to peers BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

Goldman explained: “The stock is trading at a significant premium to BHP & RIO; c. 1.9x NAV vs. RIO at c. 1.0x NAV, c. 5x EBITDA (vs. BHP & RIO on c. 4x), and c. 5% FCF vs. BHP & RIO on c. 10%, which we think is unwarranted considering the lack of diversification and risks around future capital spend and returns.”

Combined with widening low grade iron ore discounts, execution risks on the Iron Bridge project, and uncertainties around the FFI business, Goldman sees the Fortescue as a clear sell.

The post Broker warns that Fortescue (ASX:FMG) share price could fall 30% appeared first on The Motley Fool Australia.

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• Fortescue (ASX:FMG) share price slips on FY22 half-year results

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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