Category: Stock Market

Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on this lithium producer’s shares to $14.00. Citi has revised its earnings estimates higher for Allkem. This follows a big increase to the broker’s lithium price forecasts due to demand outstripping supply for the battery making ingredient. The Allkem share price is trading at $9.41 on Wednesday.

BHP Group Ltd (ASX: BHP)

A note out of Macquarie reveals that its analysts have retained their outperform rating and lifted their price target on this mining giant’s shares to $54.00. This follows the release of BHP’s half year results, which were well-ahead of the broker’s expectations. And with spot commodity prices still at high levels, it feels more of the same could be coming in the second half. Macquarie also highlights that the Big Australian’s new debt target range provides scope for M&A activity or increased capital returns. The BHP share price is fetching $47.11 today.

JB Hi-Fi Limited (ASX: JBH)

Analysts at Credit Suisse have retained their outperform rating and increased their price target on this retail giant’s shares to $60.27. In response to its trading update for January and share buyback, Credit Suisse has lifted its earnings estimates. Outside this, the broker likes JB Hi-Fi due to its exposure to the work-from-home trend and improvements from The Good Guys business. The JB Hi-Fi share price is trading at $53.86 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Orocobre 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 Netwealth Group Ltd (ASX: NWL) share price is carrying a heavy weight on its shoulders today after the financial services platform provider released its half-year report.

In afternoon trading, the Netwealth share price is lingering 14% below yesterday’s closing price of $14.85. It is currently trading at $12.79, down 13.87% for the day so far.

Earlier in the day, Netwealth shares reached an intraday low of $12.20, representing a descent of 17.8%.

Netwealth share price feels the heat on mixed first-half result

• Revenue up 17% from prior corresponding period (pcp) to $84.7 million
• Total funds under administration (FUA) of $56.7 billion, increasing 46% pcp
• Record net FUA inflows of $7.6 billion, representing an increase of 71%
• Record underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $43.8 million, up 7%
• Statutory net profit after tax (NPAT) relatively flat at $27.1 million, down 1.8%
• Interim fully franked dividend declared of 10 cents per share, up 10% pcp.

What else happened in the first half?

Despite the disappointment reflected in the Netwealth share price today, the first half was a period of growth in many ways for the company.

According to the release, clients on Netwealth’s platforms increased by 21.4% to 107,103. In the process, its market share increased to 5.2% at the end of September 2021 — rising from 4.1% a year prior.

The company’s funds under management (FUM) also experienced solid growth during the first half. Specifically, Netwealth landed an additional $17.9 billion in funds, taking the total to $56.7 billion, an increase of 46%.

However, beefed-up funds and higher revenue did not make it to the bottom line. Instead, $31 million in employee benefits chewed up the bulk of Netwealth’s elevated top-line income.

The 32% rise in employee benefits is a result of the company’s investment in people. Netwealth grew its team by 86 people to a total of 457. As part of this, a substantial number of those added were dedicated to its IT team.

What’s next?

Moving forward, Netwealth expects growth to continue to accelerate as the industry further consolidates. Notably, Netwealth has been acting as a consolidating force in recent times.

In November 2021, platform rival, Praemium (ASX: PPS) received a non-binding proposal from Netwealth. However, the board of Praemium knocked it back — a move that saw the Netwealth share price sink.

Any lift in interest rates by the Reserve Bank of Australia (RBA) is also being considered a positive outcome for Netwealth. Margins would likely increase above the current 105 basis points if the RBA moved the cash rate above 50 basis points in March. The current cash rate is 0.1%.

Finally, the financial platform expects its forecasted FUA net inflow to exceed $13.5 billion.

Netwealth share price snapshot

In recent times, ASX investors appear unconvinced by the potential in the Netwealth share price. Much like other financial platform peers, shares in the 23-year-old company have fallen over the past year.

Compared to the 5% return delivered by the S&P/ASX 200 Index (ASX: XJO), the Netwealth share price is down 28.6% in the past 12 months.

The majority of this value destruction has occurred in 2022, after a volatile ride throughout 2021.

The post Netwealth (ASX:NWL) share price craters 14% on mixed half-year results appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: CSL upgrades guidance, Treasury Wine jumps
• 3 ‘champion stocks’ for ASX investors in 2022
• Netwealth (ASX:NWL) share price lifts on record net inflows of $3.6bn
• ASX 200 (ASX:XJO) midday update: Zip’s Q2 update, Santos and Woodside deliver record revenue

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Netwealth. The Motley Fool Australia owns and has recommended Netwealth. 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) is edging higher today, up 0.57% in afternoon trade, continuing February’s rebound.

But ASX 200 shares, taken together, remain down 4.5% in 2022.

The local and global equity markets took a big hit in January as investors mulled the impact of looming interest rate rises, both in the United States and here at home.

The US Federal Reserve is widely expected to raise its benchmark rate at least 5 times this year from the current record low of 0.25%.

The Reserve Bank of Australia (RBA) has signalled a more dovish path. But most analysts are predicting the central bank will also be raising the cash rate from the all-time low of 0.10% later this year.

Commonwealth Bank of Australia (ASX: CBA) economists now expect the first RBA hike to come in June.

Then there are the simmering tensions on the Ukraine border. Russian forces remain positioned for a potential invasion despite pulling back some armoured units. Another recent headwind for ASX 200 shares.

With that in mind, is now the time to buy the dip?

Is now the time to buy the dip in ASX 200 shares?

Timing the market is no easy feat, to say the least.

But investors who are eyeing ASX 200 shares following the recent pullback might be interested to hear US investment bank JP Morgan’s bullish outlook for global share markets.

JP Morgan’s latest global asset allocation report was spearheaded by the company’s co-head of global research, Marko Kolanovic.

According to Kolanovic (quoted by The Australian):

Markets have been volatile recently and sentiment dour as investors grapple with monetary policy normalisation and geopolitical risks.

However, we believe risk asset markets have mostly adjusted to monetary policy shifts by now, short-term rates markets have likely moved too far versus what the central banks will ultimately deliver in hikes this year, and a China policy pivot can offset a good part of developed markets’ central bank tightening impact.

While a shooting war between Russia and Ukraine remains a very real risk, Kolanovic said if this eventuated it “would likely prompt a dovish reassessment by central banks” and the impact on global markets, and ASX 200 shares, should be “limited”.

“We expect risky asset markets to rebound as they digest these risks and sentiment improves, aided by inflows from systematic investors and corporate buybacks,” he said.

Advantage commodities

As for how investors in ASX 200 shares might want to position themselves, Kolanovic – addressing global equity markets – said (quoted by The Australian):

We continue to favour value, cyclical and higher beta market segments given their still cheap valuations and light positioning, and since they are beneficiaries of rising bond yields and higher commodity prices. We also retain our commodities overweight, focused on energy, given our supercycle thesis and geopolitical risk asymmetry.

Even as central bank hawkishness has ramped up, with market assumptions perhaps having gone too far in some cases, the silver lining to the recent pain is that equities are better equipped to handle it going forward.

Then there’s the pandemic recovery bounceback coupled with strong employment conditions in the US, Australia, and many developed nations.

JP Morgan’s analysts forecast a “strong cyclical recovery” in 2022 with borders reopening, releasing pent-up demand. The Australian international border will open on February 21.

“Bearish sentiment seems overdone as the conditions for ‘late cycle’ or recession are not met,” Kolanovic said. “Even as inflation has dented sentiment, ultimately the consumer is healthy given the strong jobs market.”

If JP Morgan has this one right, leading ASX 200 shares could enjoy some healthy tailwinds in the months ahead.

The post Is now the time to buy the dip in ASX 200 shares? appeared first on The Motley Fool Australia.

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• Why did ASX 200 energy shares weigh on the index today?
• These 3 ASX 200 shares are topping the volume charts this Tuesday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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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ASX 200 shares are showing signs of a V-shaped recovery with the benchmark S&P/ASX 200 Index (ASX: XJO) climbing 57 basis points this past week.

To further illustrate, the Ishares Core S&P/ASX 200 ETF (ASX: IOZ) has climbed more than 1% during this time, as investors throw support behind the large end of the market once more.

In amongst the noise, there is a little-covered ASX 200 share that released its half-yearly results today and investors are piling in as a result.

At the time of writing, the Orora Ltd (ASX: ORA) share price is up 7.7% to fetch $3.57 on the back of its results for the half year ended 31 December 2021.

Orora touts itself as a leading sustainable packaging and visual solutions provider. It has a foothold in the design and manufacture of packaging products such as glass bottles, beverage cans, corrugated boxes, recycled paper, multi-walled paper bags, and point of purchase displays.

But this ASX 200 share isn’t a small enterprise. At last check, it had a market cap of more than $3 billion and trades on a 4.2% trailing dividend yield.

Orora share price jumps as NPAT, EPS spike in 1H FY22

The company announced several investment highlights in its earnings release today, including:

• Underlying earnings per share (EPS) came in at 11.8 cents per share, up 22.9% year on year
• Underlying net profit after tax (NPAT), before significant items, was $102.7 million, up 12.9% year on year (13.6% on a constant currency basis)
• Sales revenue was $1.98 billion, up 9.6% on the previous year (10.6% on a constant currency basis).
• Underlying earnings before interest and tax (EBIT) was $154.5 million, up 10.4%
• Operating cash flow came in at $145.5 million with cash conversion at 75%
• Return on average funds employed (RoAFE) was 24.8%, up from 21.4% year on year.

What else happened for Orora this period?

The Group reported an increase in underlying NPAT and EBIT with the bottom line growing by 23% from the same time last year.

Orora says this demonstrates the “continued strength of the Group’s diversified packaging assets and sustainable earnings”.

Investors might recall that back in October 2021, Orora announced a $150 million on-market buyback. Today’s release notes, as at 31 December 2021, the buyback is approximately 20% complete.

As a result, 9.3 million shares were bought at an average price of $3.37 per share for total consideration of $31.5 million, the company notes. According to the announcement, the buyback is forecast to be completed during 2022.

The company was also pleased with its Australasian business during the half. It says it largely avoided the impacts of Chinese wine tariffs, noting that “100% of this capacity [is] now redeployed to new product categories”.

Orora also claims it is on track to achieve its “2025 goal of 60% recycled content in the glass packaging it manufactures”.

It also says it is “well on track to achieving a 40% reduction in greenhouse gas emissions for Scope 1 and 2 by 2035 through a range of initiatives which include alternative furnace technologies”.

Management commentary

Speaking on the announcement, Orora Managing Director and CEO Brian Lowe said:

I am pleased to report that Orora delivered a strong result for the first half of the fiscal year 2022. Our performance reflects the unwavering focus of our team on executing our strategic priorities in the context of a global pandemic. The Group reported an increase in underlying net profit after tax and underlying EBIT on the prior corresponding period, demonstrating the continued strength of the Group’s diversified packaging assets and sustainable earnings. Our North American business produced another outstanding result in the first half, continuing to drive improvements in operating and financial performance, exercising pricing discipline in a higher inflation operating environment and delivering strong earnings growth in both the manufacturing and distribution OPS businesses.

What’s next for Orora?

The company is forecasting FY22 EBIT to be higher than the full-year result of FY21. In its Australasia business, “EBIT growth is expected for the Beverage business in 2H22, with FY22 EBIT to be broadly in line with FY21”.

Whereas in North America, “with sustained improvement in the performance of both OPS and OV, we expect 2H22 EBIT to be up on the [prior year] with continued strong earnings growth for the full year”, it said.

Orora share price snapshot

Orora shares have climbed almost 28% in the last 12 months and are up another 2% this year to date.

In fact, the company’s shares are in the green across all time frames, unlike the benchmark indices.

The post This under-the-radar ASX 200 share just jumped 8% following solid half-year results. And it pays dividends! appeared first on The Motley Fool Australia.

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

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The Pro Medicus Limited (ASX: PME) share price is lifting today amid a nearly 53% boost in net profit in its half-yearly results.

The company’s shares are currently trading at $50.31, an 8.59% gain.

Let’s take a look at what the health imaging company reported.

Pro Medicus share price ascends amid half-yearly results

Highlights of the company’s half-year (H1 FY22) results include:

• Revenue up 40.3% to $44.33 million
• Net profit after tax (NPAT) of $20.68 million, a 52.7% gain
• Underlying profit before tax of $28.8 million, a 53.5% improvement
• Cash reserves of $76.17 million, up $14.91 million
• Fully-franked interim dividend of 10 cents per share, a 42.9% boost

What else happened in the half?

Pro Medicus experienced growth in the North American market, where revenue increased by 50%. One highlight was winning a key contract with Novant Health worth $40 million over seven years. The company also renewed a five-year contract with Allegheny Health in Pennsylvania worth $12 million.

The company’s European business also achieved a 39.6% boost in revenue. Key to this was extending a German government hospital contract to a fourth site.

And finally, its Australian business saw a 7.3% gain in revenue compared to the previous corresponding period. Key to this was rolling out the Healius Ltd (ASX: HLS) contract and extending its contract with I-Med.

Pro Medicus continued its major investment in research and development in Australia and overseas.

Big ups from management

CEO Dr Sam Hupert said the result was the strongest half-year revenue and profit in Pro Medicus’ history.

We thought it was a good result with all our key financial indicators heading in the right direction, not just revenue growth but also profit growth, margin expansion and retained earnings.

There were two key drivers behind the result: The first was the significant jump in transaction revenue from our US contracts which grew by 36.8%.

The second key driver was the extension of the German government contract that we announced in 2015 to a
fourth hospital which was a material sale.

What’s next for Pro Medicus?

Pro Medicus is looking to further boost its presence in the United States. It is actively targeting a “growing number of opportunities in this market.”

The company is confident in its future pipeline with a presence across academic, non-academic, corporate and private markets. There is a momentum shift toward cloud-based opportunities with many customers adopting a “cloud-first” strategy. Moreover, Pro Medicus sees this as a strategic advantage given its fully cloud-native offering.

What’s more, the board believes there are enough cash reserves to fund the growth of the business from its internal sources. The dividend will be paid to shareholders on 25 March.

Pro Medicus share price summary

The Pro Medicus share price has climbed 10.2% in the past year. However, Pro Medicus shares are down nearly 20% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.

Pro Medicus has a market capitalisation of $5.2 billion, based on today’s share price.

The post Pro Medicus (ASX:PME) share price surges 8% on historic results appeared first on The Motley Fool Australia.

More reading

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• Leading broker says Pro Medicus (ASX:PME) share price is a buy
• 2 medical tech ASX shares for turbulent times
• 5 things to watch on the ASX 200 on Monday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus 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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There are some ASX shares that are delivering ongoing growth year after year.

Businesses that continue to scale could be ones watch to keep an eye on because of how compounding works over time.

Investors may want to know about these two ASX shares that keep growing:

Pro Medicus Ltd (ASX: PME)

Pro Medicus describes itself as a leading medical imaging IT provider. It provides a full range of radiology IT software and services to hospitals, imaging centres and health care groups around the world.

The company just released its FY22 half-year result which showed that revenue rose 40.3% to $44.3 million. Net profit jumped 52.7% to $20.7 million and the interim dividend rose 42.9% to 10 cents per share.

It continues to win most of the major new contracts that are up for grabs. For example, it won a $40 million, 7-year contract from Novant Health – a community-based integrated delivery network that spans three US States.

Pro Medicus is making significant progress with all key implementations with previously won contracts such as the Intermountain one.

The reason for the big jump in the ASX share’s revenue and profit was the several older wins had come ‘on-stream’ towards the second half of FY21 such as Northwestern, NYU and Medstar.

But there could be more wins to come – management said that the pipeline remains strong with a “good spread” of opportunities in different markets, with many being cloud-based. Many are interested in more than one Visage software solution.

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical essentially describes itself as Australia’s original ethical fund manager, which started in 1986. The idea is to provide investors with investment products that align with their values whilst also providing competitive returns. Those investments are guided by the Australian Ethical Charter.

The company is experiencing ongoing demand for greener and ethically-focused investment strategies, both through the superannuation and non-superannuation investment options.

In the six months to December 2021, the ASX share almost an increase of funds under management (FUM) by close to $1 billion, rising to $6.94 billion. This included $0.6 billion of net flows and $0.27 billion of positive market movements.

FY21 underlying profit after tax grew 19% to $11.1 million. FY22 half-year profit is expected to be between $5 million to $5.5 million. The mid-point increase would be 8% year on year.

Australian Ethical said that it will continue to invest in its high-growth strategy given the positive momentum it’s experiencing and the scale of the opportunity ahead. It’s spending on its investment, sales and customer service teams and enhancing the product development and technology platforms.

The post 2 unstoppable ASX shares growing rapidly appeared first on The Motley Fool Australia.

More reading

• Are ASX growth shares still worth holding in 2022?
• Leading broker says Pro Medicus (ASX:PME) share price is a buy
• 2 medical tech ASX shares for turbulent times
• 5 things to watch on the ASX 200 on Monday
• Green light, red light! Why did the Australian Ethical (ASX:AEF) share price plunge 13% 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 Australian Ethical Investment Ltd. and Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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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What could possibly go wrong with the ASX exchange-traded fund (ETF) sector? ETFs had a spectacular year last year, recording both record inflows and funds under management. So it might come as a surprise to hear that 2022 hasn’t been quite as kind as of yet.

According to the new Australian ETF Review from ETF provider BetaShares, ASX ETFs have indeed had a rough start to 2022. Although inflows towards ASX ETFs were still positive over January 2022, it wasn’t enough to stem the outflowing tide from global markets. According to BetaShares, total funds under management for the sector fell 3.7% over January. That represents a loss of $5.1 billion in funds under management. That left the ASX ETF sector with a total of $131.8 billion in funds under management at the end of January.

That was despite the launch of two new active ASX ETFs during the month, bringing the total number to 282 on the ASX. As an aside, BetaShares is expecting active ETF launches to remain “very frequent” throughout the rest of the year.

ASX ETFs suffer as global markets fluctuate

But even though ASX ETFs had a rough January overall, the sector has still grown by 36%, or $35.5 billion, over the past 12 months.

BetaShares also noted that monthly trading value over January increased by a hefty 26% to $10.3 billion. That’s reportedly the second-highest monthly level on record.

So which ETFs were investors buying and selling over January? The research tells us that the BetaShares Australia 200 ETF (ASX: A200) was the most popular ETF by inflows over the month that was. A bit over $300 million found its way into A200. Next up was the Vanguard Australian Shares Index ETF (ASX: VAS), with slightly more than $220 million. Following that, we had the Vanguard MSCI Index International Shares ETF (ASX: VGS) with roughly $118 million in inflows.

Conversely, the iShares S&P/ASX 200 ETF (ASX: IOZ) saw the largest outflows over January, with more than $353 million leaving that fund. Other ETFs experiencing outflows were mostly bond, or fixed-interest funds. Those included the iShares Core Composite Bond ETF (ASX: IAF) and the iShares Treasury ETF (ASX: IGB). 

So another interesting month for ASX exchange-traded funds over January. The sector is clearly not immune from the market volatility we have seen over 2022 thus far. But it arguably is also showing resilience too. It will be interesting to see what the rest of 2022 brings to ASX ETFs. 

The post What’s going so wrong for ASX ETFs in 2022 so far? 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 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 EML Payments Ltd (ASX: EML) share price has tanked today amid the company releasing its half-year results for the period ending 31 December 2021.

The payment solutions company announced a 209% increase in its record gross debit volume, along with increased revenues.

But it seems investors are not convinced. At the time of writing, the EML share price is down 8.61% to $2.76. Earlier in the session, it fell as low as $2.69.

Let’s take a closer look at what the company announced this morning.

What did EML announce?

Here are the highlights of EML’s half-yearly results:

• Gross debit volume (GDV) of $31.6 billion, up 206% against the PCP
• Gross revenue of $114.5 million, up 20% on PCP
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $26.9 million, down 4% on PCP
• Net profit after tax (NPAT) plus amortisation of $13.1 million, up 6% against PCP
• Underlying operating cash inflows of $14.7 million, down 58%

EML has attributed its record GDV — the monetary value of transactions across its payment products — to “demand for our payment services” and “strong organic growth” during the period.

Within that, the company saw a 431% increase in its digital payments sector. This coincided with the integration of European payments provider Sentenial Limited which it acquired on 30 September. EML expects to continue to reap the benefits from this buy into the next half of FY22.

The company saw a drop in its cash flow during the half due to two major delays in customer receipts. These totalled $8.6 million although 75% of this overdue balance has been recouped, the company said.

Its lower EBITDA was due to “higher overhead costs, lower net interest income (down $2.7 million) and lower European setup fees (down $2.4 million on PCP)”.

EML expects its EBITDA guidance for the full financial year to be between $58-$65 million.

What else did EML report?

The payment company acknowledged ongoing legal proceedings with its own shareholders.

The class action involves EML’s Irish subsidiary PFS Card Services and the Central Bank of Ireland (CBI). It is alleged “EML did not comply with its disclosure obligations and engaged in misleading and deceptive conduct regarding disclosure”.

While EML has denied the allegations and liability, the company says it will “vigorously defend the proceedings” with legal costs potentially amounting to $10.5 million. The matter will be heard in the Supreme Court of Victoria.

Looking ahead to the next half, EML said:

As we head into H2 FY22 and beyond, we expect to see further growth in digital-first solutions with the introduction of open banking products in Europe and the upcoming launch of a new gaming proposition that couples the latest in open banking technology with the Group’s industry leading card solutions for sports betting and social gaming providers.

Work is underway to integrate the Nuapay business and provide customers with the ability to access the full suite of open banking, accounts and card payments via a single integration.

EML share price snapshot

Over the last 12 months, the EML Payments share price has dropped by 33%.

The company saw a 52% plunge in its share price in May 2021 following news of ongoing queries between its Irish subsidiary and the Central Bank of Ireland. At that time, the EML share price hit a low of $2.47.

However, just last week UBS considered the payment company to be potentially undervalued due to its recent business growth.

The company has a current market capitalisation of $1.04 billion.

The post EML (ASX:EML) share price sinks 9% despite record-breaking product demand appeared first on The Motley Fool Australia.

More reading

• Is the EML (ASX:EML) share price the most undervalued growth opportunity?
• Down almost 20% in 2022, is the EML share price now too good to ignore?
• 2 fast-growing ASX shares rated as buys in this correction
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• Why is EML payments (ASX:EML) share price having a rollercoaster start to the year?

Motley Fool contributor Alice de Bruin has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. 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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WiseTech Global Ltd (ASX: WTC) shares are joining the broader rally on the ASX today.

The WiseTech share price is up 1.4% at the time of writing to $46.39 per share.

The company, which provides cloud-based software solutions for international and domestic logistics firms, trades at a price to earnings (P/E) ratio of 135 times.

While that kind of P/E ratio may put some ASX investors off, Elston Asset Management’s Bruce Williams points to the company’s very strong growth as a reason to buy.

Why this fundie is buying WiseTech shares

Speaking to Livewire Markets, Williams said, “We think WiseTech Global is a good opportunity at these levels. It has started to bounce. We’ve owned it for a little while so we’ve readjusted our weighting there.”

Williams indicated the pressing need from today’s snarled logistics operators is offering tailwinds for WiseTech shares. “It provides software services to logistics, and now more than ever, logistics needs to operate well; it’s stressed enough as it is,” he said.

Then there’s the strong growth trend.

According to Williams:

WiseTech is growing very, very strongly. They’ve got a lot of the sector as clients and it’s a five-year integration program. Or up to five years. They continually build revenue, not only from new client wins but from existing clients as well.

But aren’t WiseTech shares a bit pricey?

“The price does worry us. It is something a little outside what we usually pay for assets,” Williams conceded.

However, the fund manager thinks the long-term outlook for WiseTech shares is strong, with the company making it difficult for competitors to take away their market share.

According to Williams:

We think they are creating a real moat around what it is they do. We think there are high barriers to entry. We think they have a strong network effect; they are becoming the system to use for any logistics players.

We very much like its long-term prospects and are happy to buy it at these levels.

WiseTech share price snapshot

WiseTech shares posted a tremendous 91% rally in calendar year 2021.

So far, 2022 has been more difficult, with the WiseTech share price down 23% since the opening bell on 4 January.

All up, over the past 12 months WiseTech shares have gained 41%, handily outpacing the 5% gains posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.

The post Why this leading fund manager is buying WiseTech (ASX:WTC) shares 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 WiseTech Global. The Motley Fool Australia owns and has recommended WiseTech Global. 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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For many ASX investors, much of their excitement of the stock market comes from picking a winning growth share and (hopefully) watching it do its thing.

But have ASX growth shares had their moment? One expert is going against the grain to declare the time has come to turn away from growth shares and towards more established investments.

Are they right? Here are some arguments for and against investing in growth shares in 2022.

ASX growth shares: the bulls and the bears

Epoch Global Equity Shareholder Yield portfolio manager, John Tobin has come out swinging against growth shares today. He believes they will suffer in a rising interest rates environment.

According to Tobin, growth stocks have been outperforming established shares since 2020 due to a period of “artificially low interest rates”.

“Our argument is [growth stocks] are going to face stronger headwinds when rates rise,” he said.

“It’s about the math, you can’t get around it … for a given increase in interest rates, the impact on present value is greater for cash flows in the distant future.”

However, other experts counter Tobin’s bearish outlook with their own bullish arguments.

Montgomery Investment Management chair and chief investment officer, Roger Montgomery claims the pull-back experienced by the S&P/ASX 200 Index (ASX: XJO) in 2022 has left many growth shares trading for bargain prices.

In a piece published to Livewire, Montgomery said, “the current equity correction has taken a lot of the froth out of the market.

“But caught up in the carnage have been a number of high-quality companies with years of growth ahead.”

Among them, are tech shares Megaport Ltd (ASX: MP1) and Pro Medicus Limited (ASX: PME). Each has had their price-to-earnings (P/E) ratios fall between 31% and 33% since the start of 2022, according to the expert.

Meanwhile, those of Transurban Group (ASX: TCL) and Reece Ltd (ASX: REH) have fallen between 25% and 29%.

Montgomery says now is the time to get in on “some of the highest quality names in the market”. He continued:

This is … a plain vanilla correction that will see investors who have taken on too much risk in the quest for returns suffer more than those who have been disciplined about quality and value.

The post Are ASX growth shares still worth holding in 2022? appeared first on The Motley Fool Australia.

More reading

• 2 quality ASX 200 tech shares with ‘years of growth’ ahead: broker
• Goldman Sachs names 2 ASX 200 shares with major upside potential
• 2 ASX tech shares we’re backing through the turmoil: analysts
• 2 top ASX growth shares that are worth buying: brokers
• How did ASX tech shares perform today?

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. owns and has recommended MEGAPORT FPO and Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. 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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