Category: Stock Market

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, SG Hiscock portfolio manager Rory Hunter reveals the 2 medical tech ASX shares that will reward those with enough patience.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Rory Hunter: As the small companies guy, I’d probably mention two smaller caps in this space at the moment, with the caveat of course that within a rising rate environment, you’re going to get to the valuation-multiple compression. So one would have to be quite patient with the stock picks. 

The first one I’d mention would be a company called Beamtree Holdings Ltd (ASX: BMT).

So Beamtree used to be known as PKS Holding, which, I think, was Pacific Knowledge Systems. Basically, it’s a technology that works — they capture, manage, and analyse and review AI [artificial intelligence] analysis to provide to decision support systems — to doctors in hospital settings. 

Operating in the same space — data analytics or health IT — as the likes of Alcidion Group Ltd (ASX: ALC), Mach7 Technologies Ltd (ASX: M7T), and others. 

The first thing I’d say is, Beamtree is a fantastic growth profile. We see the prospect of them getting to about $50 million of ARR [annual recurring revenue] over the next 3 to 5 years from a base of around $10 million they are now. They operate in over 20 countries, 4 continents. 

From a valuation perspective, they’re trading on about 5 times ARR currently. 

If you look at the wider sector, you’ll probably get valuation multiples of, from about 9 to 15 times sales. So with the growth profile, we’re protective of the functionality that they have. Customer satisfaction, they have 99% client retention. We think that they’re fantastically placed to continue to grow really strongly.

Within the healthcare industry, something that’s key to remember, is that when customers come to making a decision on buying a product, technology or anything, a lot of the time it’s about the people involved. They need to be able to trust the people that they’re buying from. 

Tim Kelsey, who’s the CEO of Beamtree, he’s got a fantastic reputation in the industry. He was previously the national director for patients and information in the NHS in the UK. He’s incredibly well connected in this space and has a very reputable track record. 

So bringing all of that together in a really good place.

MF: And your second pick?

RH: I’d say Lumos Diagnostics Holdings Ltd (ASX: LDX). You’ve probably seen there’s been a bit about Lumos in the news over the past few days. 

I think a lot of the institutional and retail holders that took positions in Lumos with the IPO went looking for a bit of a stag [short-term speculation]. And when they didn’t get that, they sold out. They’re not actually long-term holders. That’s why you’ve seen a bit of a weakness in the share price since the IPO. I think it’s a function of the construction of the register as opposed to the health of the company itself.

One thing that has been disappointing is the fact that the approval of their FebriDx product or device by the FDA has been somewhat delayed. We fully expect that approval to come through. We think that will be one huge catalyst. 

Also just looking at the wider thematic, what you’ve seen as a result of the pandemic is that it’s ultimately been a global lesson for consumers in how to undertake home-based rapid diagnostics, in terms of prevention testing. The reality is, that doesn’t stop when the COVID pandemic becomes endemic. Once we get through the other side of the pandemic, there are so many applications for rapid testing. 

Lumos are ahead of the curve, in the sense that they’re developing a test, CoviDx, and that will basically be an all-in-one COVID test with flu test as well. They’ve recently announced that they’re going to receive government funding for a manufacturing facility in Victoria. We don’t know what the quantum of the funding is as yet. But it will give them the capacity to develop or manufacture 50 million tests per annum. 

We fully expect that rapid diagnostics to be undertaken from the home, and will continue to accelerate on the back of the pandemic. We think Lumos is very well placed for that. We have a lot of conviction around the management team in order to execute as well.

MF: Certainly a very topical thematic, isn’t it?

RH: Very topical. I think what you’re seeing is that people are hesitating to buy in because there’s very much a feeling that we’re over the other side in terms of the pandemic, and so they think that actually their earnings profile, or the demand for their products, isn’t that durable. People are missing a trick there. 

MF: After the January sell-off, do you reckon there are plenty of bargains out there?

RH: Yeah. There definitely are. 

Whether the bargains are as good as they’re going to get, is another question.

Without going too deep into the macro… if you see any durability or duration in this rate hike cycle amongst global central banks, then all medical technology or technology healthcare businesses are going to be under pressure for some time, just because my nature they are long duration, so they derive a significant portion of their intrinsic value from earnings found in the future.

So in an environment of increasing bond yields, you’re going to get valuation multiple compression. So they’re going to have to grow at exponential rates. The growth in those businesses is going to have to be absolutely extraordinary for them to push against, or sort of push against the hot flow of water, if you like. 

If you’re looking back on the last 12 months, you’d perceive a lot of the opportunities right now as bargains, but the market could be on sale for a while longer, given what’s playing out now.

I think there is the prospect of central banks actually having to put a stop to the tightening cycle earlier than people expect, and that’s when there will come an opportunity. That’s really why we’ve positioned the fund as we have — we’ve been very defensive. We had 35% of the total fund in large companies and we’ve handled about 20% cash. So less than 50% in smaller companies. That’s basically to… make us as nimble as possible, to actually take advantage of the bargains that present themselves.

If you were to watch our monthly newsletters, what you’ll see, as you expect the sell-off to continue the same pace, you’ll see a lot of that weight in cash and larger holdings shift to smaller holdings, as they get cheaper and cheaper. 

The reality is that even if things play out as we expect them to do, timing is really challenging. So the way we do it is just incrementally shift the weight, just to make sure that we’re constantly topping up at discounted pricing, basically.

The post 2 small-cap ASX shares to handsomely reward patient investors appeared first on The Motley Fool Australia.

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• The Lumos Diagnostics (ASX:LDX) share price is soaring another 8% today. Here’s why
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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. owns and has recommended Alcidion Group Ltd, Beamtree Holdings Limited, and MACH7 FPO. The Motley Fool Australia has recommended Alcidion Group Ltd, Beamtree Holdings Limited, and MACH7 FPO. 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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Fortunately, in this low interest rate environment, the Australian share market is home to a collection of quality dividend shares.

Two that could be in the buy zone are listed below. Here’s what analysts rate these dividend shares as buys:

Elders Ltd (ASX: ELD)

The first ASX dividend share for investors to look at is Elders. It is one of Australia’s largest agribusiness companies providing livestock, real estate, feed and processing, wool agency services, financial planning, and grain marketing services to rural and regional customers.

After going through a tough time during the 2010s, things are now looking very positive for the company. This has been driven largely by the success of Elders’ transformation plan and acquisitions.

Goldman Sachs is a big fan of Elders and has a conviction buy rating and $15.65 price target on its shares. It likes Elders due to the rationalisation of the rural services industry, margin expansion through backward integration, and the benefits of its large scale systems modernisation project.

Another positive is that Goldman expects solid dividend growth in the coming years. It is forecasting fully franked dividends of 40 cents per share in FY 2022 and 42 cents per share in FY 2023. Based on the current Elders share price of $11.72, this will mean yields of 3.4% and 3.6%, respectively, over the next two years.

Transurban Group (ASX: TCL)

A second ASX dividend share to look at is Transurban. It is a toll road operator with a portfolio of important roads throughout Australia and North America. These include CityLink in Melbourne, WestConnex in Sydney, and the Logan Motorway in Brisbane.

Although traffic volumes have been impacted by lockdowns, they are rebounding now Australia is moving on from the pandemic. In addition, with international borders reopening later this month, its airport-focused roads should be given a boost.

Morgans is positive on Transurban. It believes the company will benefit from employment and population growth, urbanisation, and the value of time. It has an add rating and $14.57 price target on its shares.

As for dividends, the broker is forecasting dividends per share of 35 cents in FY 2022 and then 55.3 cents in FY 2023. Based on the current Transurban share price of $12.85, this implies yields of 2.7% and 4.3%, respectively.

The post 2 growing ASX dividend shares analysts rate as buys appeared first on The Motley Fool Australia.

More reading

• 2 highly-recommended ASX shares by experts
• Here’s why Transurban (ASX:TCL) shares could be in for some investor TLC
• Morgans names 4 more of the best ASX shares to buy in February
• Broker names 2 ASX 200 dividend shares to buy in February
• Why has the Transurban (ASX:TCL) share price tumbled 12% so far in 2022?

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 recommended Elders 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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Experts are always looking for investment opportunities as ASX shares. There are some stocks that are highly-recommended by top brokers.

When a business is well-liked by a number of different analysts, it could suggest that it’s a standout opportunity.

With that in mind, here are two that are highly-recommended:

Credit Corp Group Limited (ASX: CCP)

Credit Corp is one of the biggest debt collectors in Australia with a growing position in the US.

It’s currently rated as a buy by at least three different brokers, including Ord Minnett which has a price target of $37 – that’s around 20% higher than it is today.

The broker refers to the company’s recent FY22 half-year result for its latest rating.

In that report, Credit Corp said that its net profit after tax (NPAT) went up 8% to $45.7 million. There was a record half-year investment driven by a step-up in US purchased debt ledger investment to at least $150 million each year, and the Radio Rentals acquisition.

There was 9% growth in the ASX share’s consumer loan book over half to $200 million.

Credit Corp says that it’s on track for strong earnings growth across all segments over the full year. While market volume remains subdued, organic purchasing continues to recover, reaching its highest level since the start of the pandemic.

According to Ord Minnett, the Credit Corp share price is valued at 22x FY22’s estimated earnings.

Elders Ltd (ASX: ELD)

Elders is an agribusiness which works with primary producers to provide products, marketing options and specialist technical advice across rural, wholesale, agency and financial product and service categories. It’s also a leading Australian rural and residential property agency and management network.

In November 2021, it reported its FY21 result for the 12 months to 30 September 2021. Sales grew 22% to $2.55 billion. Statutory net profit after tax also grew by 22% to $149.8 million and underlying net profit after tax surged 40% to $151.1 million. This result also allowed the business to grow the dividend by 91% to $0.42 per share.

In terms of the outlook for FY22, Elders said that continued favourable seasonal conditions and high demand for agricultural commodities are expected to create excellent trading conditions in the first half of FY22.

The ASX share’s rural products outlook remains positive, with the summer crop expected to drive strong demand in the first half of FY22, particularly for agricultural chemicals, fertiliser and seed. Cattle and sheep prices are expected to remain high in the medium-term.

Strong demand for residential and farmland properties is expected to continue.

Management also believes that there are good opportunities in the market for Elders to execute more acquisitions.

Elders is currently rated as a buy by at least three brokers, including UBS. The price target by the broker is $13.43, however it’s expecting cattle prices to drop back over the year.

UBS numbers put the Elders share price at 16x FY22’s estimated earnings.

The post 2 highly-recommended ASX shares by experts appeared first on The Motley Fool Australia.

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• Why Amcor, Ansell, Block, and Credit Corp shares are sinking today
• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
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• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• Credit Corp (ASX:CCP) share price up 5% after smashing first half profit expectations

08Motley 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders 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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It’s bargain hunting season!

The S&P/ASX 200 Index (ASX: XJO) is down more than 6% this year. But with the mining sector carrying the market, most stocks have actually tumbled much more than that.

So which quality shares are selling for a heavy discount at the moment?

Here are a couple of suggestions.

Ready, set, go!

People management software provider ReadyTech Holdings Ltd (ASX: RDY) has seen its valuation shrink 14% so far this year. It’s been a 22% drop since its high in early November.

And it’s not just a general shift away from growth stocks that it can blame, according to Wilsons investment advisor Peter Moran.

“The share price of this software-as-a-service business has fallen significantly in the past three months due to missing out on a government licensing project,” he told The Bull.

But he added that this means now is the perfect opportunity to buy ReadyTech shares.

“ReadyTech has a strong track record of profitability and can still be expected to generate double-digit earnings growth for at least the next few years,” said Moran.

“We hold an overweight rating.”

He’s not the only one who thinks this. According to CMC Markets, all five analysts covering ReadyTech rate the shares as either “strong buy” or “moderate buy”.

An old favourite that won’t let you down

Healthcare giant CSL Limited (ASX: CSL) is Moran’s other tip to buy right now.

Its shares are going for close to its 52-week low currently, after tanking almost 14% this year. It has lost almost 20% of its valuation since late November.

The Wilson team thinks it can only head up from here.

“The pandemic negatively impacted the company’s core plasma collection business,” Moran said.

“Performance is steadily improving amid increasing demand for CSL products. Also, the company has a pipeline of new products.”

Moran also likes CSL’s recent $17.2 billion takeover of a European business.

“The recent acquisition of pharmaceutical company Vifor Pharma, which specialises in renal disease and iron deficiency, should provide additional growth streams,” he said. 

“We hold an overweight rating.”

CSL is currently a favourite of many analysts. 

IML Investors Mutual urged investors to pick up the shares a fortnight ago, and SGH Medical Technology Fund portfolio manager Rory Hunter told The Motley Fool this week it was one of its two biggest holdings.

The post 2 ASX shares at a golden buying opportunity right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. and Readytech Holdings Ltd. The Motley Fool Australia has recommended Readytech Holdings 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 Zip Co Ltd (ASX: Z1P) share price could go through a significant recovery in the next 12 months according to one broker.

Since the start of the year, the Zip share price has sunk 30%. But the last six months has seen a very big drop – down just over 60%.

However, whilst some investors have gone really negative on the company, there are a few analysts that believe the buy now, pay later business can still recover a lot of lost ground this year.

Zip share price target

Ord Minnett has a price target on the company’s shares of $6. That suggests a potential rise of the business of around 100% over the next year.

The broker came to its price target – which was a reduction from the previous target of $9.50 – after seeing Zip’s latest update.

Ord Minnett’s price target reduction came about with the shift in valuation changes for tech shares as well as expecting that over the next few years Zip is going to make bigger losses than previously expected.

Despite those concerns, the buy now, pay later (BNPL) business continues to grow.

Latest quarter

Zip reported a record group quarterly revenue number of $167.4 million, up 58% year on year. Transaction volumes increased 53% to $2.6 billion. Customer numbers increased by 57% to 9.9 million whilst merchant numbers rose 110% to 81,800.

On top of that, it achieved its target of more than $50 million transaction volume per month from expansion markets in both November and December. Those expansion markets include Canada, Mexico, Poland, the Czech Republic, UAE and Saudi Arabia.

It has signed on numerous merchants over the years, with some of the latest being Footlocker, Nespresso, Virgin Australia and Under Armour.

In Australia and New Zealand, the net bad debts increased from 2.44% at 30 September 2021 to 2.83% at 31 December 2021.

Sezzle Inc (ASX: SZL) acquisition?

A couple of weeks ago, Zip confirmed that it’s in discussions with BNPL competitor Sezzle about potentially buying the US-based business, though the talks are preliminary.

The Zip board said that it:

…remains committed to ensuring any transaction delivers value to shareholders and will always be disciplined in its assessment of potential opportunities. It will only pursue transformational transactions that help accelerate the delivery of Zip’s broader strategic objectives such as enhanced scale in core markets, improved customer and merchant propositions and a faster path to profitability through significant synergy opportunities.

Zip share price snapshot

After the heavy decline in recent months, Zip’s market capitalisation is now $1.76 billion.

The post The Zip (ASX:Z1P) share price has 100% upside – broker appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
• BNPL ASX shares in for a ‘tough time’: expert
• Some BNPL shares finished a horror week on a high. Why?
• Why did ASX 200 tech shares get annihilated today?
• Why Cettire, Novonix, Serko, and Zip shares are sinking today

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. 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) fought hard but ended the day in the red. The benchmark index fell 0.1% to 7,110.8 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 futures pointing slightly higher

The Australian share market is expected to open the day slightly higher this morning following a positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 5 points or 0.1% higher. On Wall Street, the Dow Jones is up 0.55%, the S&P 500 is up 0.3%, and the Nasdaq has risen 0.3%.

Macquarie’s operational briefing

The Macquarie Group Ltd (ASX: MQG) share price will be in focus on Tuesday when it releases its operational briefing. This will include an update on the investment bank’s performance during the third quarter of FY 2022. Macquarie is widely expected to have benefited greatly from booming commodity prices.

Oil prices fall

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a difficult day after oil prices dropped. According to Bloomberg, the WTI crude oil price is down 1.1% to US$91.33 a barrel and the Brent crude oil price has fallen 0.5% to US$92.80 a barrel. Oil prices fell amid positive sanction talks between the US and Iran.

Gold price higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.8% to US$1,822.60 an ounce. The gold price rose after inflation risks boosted its appeal.

Suncorp half year results

The Suncorp Group Ltd (ASX: SUN) share price will be on watch today when its releases its half year results. According to a note out of Morgans, its analysts expect the banking and insurance giant to deliver a first half net profit after tax of $300 million. This is ahead of the market consensus estimate of $286 million.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• These ASX 200 shares can beat inflation: expert
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• These 3 ASX 200 shares are topping the volume charts this Monday
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• 2 ASX 200 shares that could make it rain dividends: experts

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 recommended Macquarie Group 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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If you have room for some new portfolio additions, then it could be worth considering the two ASX growth shares listed below.

Analysts are very positive on these shares and have recently rated them as buys. Here’s what you need to know about them:

Allkem Ltd (ASX: AKE)

The first ASX growth share for investors to consider is this leading lithium miner.

Allkem was formed after two leading lithium miners, Galaxy Resources and Orocobre, merged last year to create a top five global lithium miner. It owns a number of operations across the world including Olaroz, James Bay, Mt Cattlin, and the Sal de Vida brine project.

Combined, the company appears well-placed to benefit from sky high lithium prices being underpinned by tight supply, the decarbonisation trend, and the rise of electric vehicles.

Morgans is very positive on lithium prices and has named Allkem its top pick in the industry. It currently has an add rating and $13.25 price target on its shares.

Megaport Ltd (ASX: MP1)

Another ASX growth share that could be in the buy zone is Megaport. It is a leading cloud connectivity and networking solutions provider.

Megaport has been growing at a solid rate in recent years thanks to its first mover advantage in a market benefiting from two long-term structural tailwinds. These are the adoption of public cloud (and multi-cloud usage) and the transition towards Networking as a Service (NaaS).

Goldman Sachs is very positive on Megaport’s outlook and believes it has an enormous growth runway. It notes that the company has a A$129bn opportunity in fixed enterprise networking.

It is for this reason that the broker recently initiated coverage on the company’s shares with a buy rating and $20.00 price target.

The post 2 excellent ASX growth shares analysts rate very highly appeared first on The Motley Fool Australia.

More reading

• ‘Plenty of bargains’ following ASX tech shares sell-off: expert
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• 2 now-cheap lithium ASX shares to buy this instant

Motley Fool contributor James Mickleboro owns Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Global Lithium Resources Ltd (ASX: GL1) share price is exploding this year.

The company’s shares closed at $1.50 today, a 0.67% gain. In comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 0.13% today.

Let’s take a look at what has caused the company’s share price to surge.

Why is Global Lithium having such a good month?

The Global Lithium share price has rocketed 57.89% since the market close on 31 December 2021. As my Motley Fool colleague Bernd reported last week, ASX lithium shares have benefited from skyrocketing prices and supply shortages of battery metal.

Global Lithium Resources is a lithium miner exploring the Marble Bar Lithium Project (MBLP) in the Pilbara region of Western Australia. The company also acquired an 80% stake in the Manna Lithium Project in Kalgoorlie at the end of the December quarter.

Today, the company revealed drilling has started at its flagship WA lithium project. This is the largest drilling program conducted by the company to date and will involve drilling 380 holes. While the Global Lithium share price did not move substantially today, it may be that investors have already priced in the company’s drilling program at the mine.

What did management say?

Commenting on the announcement, Global Lithium chair Warrick Hazeldine said:

The lithium sector in the Pilbara has the potential to become this generation’s mining success story in
Western Australia and deliver parallels to the growth achieved in recent decades by the region’s iron ore
industry.

Global Lithium has a significant opportunity to play a major role in this expansion at MBLP. Not only are we advancing an exciting project in a well-established mining region, but we have also secured a cornerstone strategic investor, Yibin Tianyi, to help drive development of this asset.

January 2022 updates

In late January, the company released its quarterly activities report. However, shares fell 11% on that day. The company reported a cash balance of $11.1 million and no debt. Exploration and evaluation expenses totalled nearly $1.3 million.

Global Lithium also stated it plans to undertake significant exploring activities at its Manna Project in 2022.

On 13 January, the company’s shares elevated 15% on news of new appointments on its board. Ronald Mitchell was appointed executive director of markets and growth, while Greg Lilleyman took on the role of non-executive director.

Lilleyman has 30 years of international experience in the mining sector, while Mitchell has 25 years of industry experience including 10 years in the lithium and battery industry.

Share price snap shot

The Global Lithium share price has exploded by around 650% in the past 12 months. In the past month, it has soared 39%, while it has fallen 3% in the past week.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 4% over the past year.

The company has a market capitalisation of roughly $204 million based on its current share price.

The post How has the Global Lithium (ASX:GL1) share price managed to surge 58% in 2022? appeared first on The Motley Fool Australia.

More reading

• Global Lithium (ASX:GL1) share price soars 13% to record highs

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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With a new year, the ASX now seems to be in the grip of some new fears. As most investors would be aware, 2022 hasn’t been the easiest start to the year. As it stands today, the ASX 200 remains down more than 6.3% in 2022 so far. Why such a disappointing beginning to the year? Inflation concerns have arguably stoked many of the uncertainties we’ve seen across investing markets recently.

Inflation has indeed been on the rise. Just last week, we heard from the Reserve Bank of Australia (RBA) which told the public that inflation was running hotter than it predicted just a few months ago. Seeing as inflation can erode the wealth of all investors, this has understandably prompted some concerns.

So how does one position an ASX share portfolio to beat inflation? Let’s check out the ideas of one investing expert.

Jason Beddow is the managing director of listed investment company (LIC) Argo Investments Limited (ASX: ARG). According to reporting in the Australian Financial Review (AFR) this week, he recently gave an interview discussing the current inflationary environment. Mr Beddow reckons the gains we have seen over the ASX the past 18 months or so are unlikely to be repeated. That’s given the “extreme stimulus” in response to the COVID-19 pandemic is winding up.

ASX expert picks shares to beat inflation

As such, Beddow says that Argo is “moving up the safety scale a bit”.

“I think you’ve got to be in the bigger, quality stocks,” he stated.

So how does one position a portfolio in such an environment when inflation is of major concern? With those same larger, higher-quality companies, according to Beddow. He names CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), and BHP Group Ltd (ASX: BHP) as great places to start.

But Beddow also reckons ASX 200 energy companies like Santos Ltd (ASX: ATO) and Woodside Petroleum Limited (ASX: WPL) are also worthy of a look. Beddow says that demand for oil and gas “should be strong for more than a decade” and those companies are likely to be “solid performers as inflation rises and investment returns are harder to come by”. He says packaging company Amcor (ASX: AMC) is also in the same boat.

Beddow also names the big banks, like Commonwealth Bank of Australia (ASX: CBA), as shares that “should be reasonable investments over the next year”. That’s due to the “traditional rule of thumb [that] their net interest margin would benefit from rising interest rates”.

Mr Beddow’s comments come as Argo reported its half-year financial earnings his morning. As my Fool colleague Bernd covered at the time, Argo reported a 91.5% rise in earnings per share (EPS), as well as a 14.3% rise in its interim dividend. Over the period, Argo topped up its investments in Macquarie, CSL, and EML Payments Ltd (ASX: EML). It unloaded positions in Boral Limited (ASX: BLD), AGL Energy Limited (ASX: AGL), and Crown Resorts Ltd (ASX: CWN).

The post These ASX 200 shares can beat inflation: expert appeared first on The Motley Fool Australia.

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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 CSL Ltd. The Motley Fool Australia owns and has recommended Amcor Limited. The Motley Fool Australia has recommended Macquarie Group 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 Silver Lake Resources Limited. (ASX: SLR) share price pushed higher on Monday. The gold producing and exploration company released an announcement regarding an on-market share buyback.

At market close, Silver Lake shares finished the day up 1.99% to $1.54. It’s worth noting that its shares are down more than 10% in the past month.

Silver Lake set to commence share buy back

In today’s statement, Silver Lake advised it intends to begin an on-market share buyback over the next 12 months. This will see management begin to reduce surplus capital whilst increasing shareholder value.

Basically, this means that when Silver Lake buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.

The company is seeking to buy back up to 10% or approximately 912.48 million ordinary shares within the above period.

The proposed start date will commence on 24 February 2022 and run until 23 February 2023.

Silver Lake noted that its strong balance sheet, as well as forecasted free cash flow generation, provides it ample flexibility.

As such, the board made the decision to undertake the value accretive capital management initiative.

The company stated that the structure of an on-market buyback allows it to take advantage of share price volatility.

By conducting purchases during periods where the share price has fallen significantly, this is an opportunity to benefit the business.

The on-market buyback program does not require shareholder approval and will be executed at the company’s discretion.

Silver Lake share price snapshot

Over the past 12 months, Silver Lake shares have fallen around 1% despite surging since late September. When looking at 2021 alone, its shares are down over 13%.

Silver Lake commands a market capitalisation of roughly $1.41 billion with approximately 912.46 million shares issued.

The post Down 10% in a month, here’s why the Silver Lake (ASX:SLR) share price climbed today appeared first on The Motley Fool Australia.

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• These were the worst performing ASX 200 shares last week
• Why is the Silver Lake (ASX:SLR) share price plunging 13% today?
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• Silver Lake (ASX:SLR) share price drops today following this bidding news

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 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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