Category: Stock Market

Key points

• Aussie Broadband delivered strong revenue growth during the first half
• Operating earnings margins crunched by its investment in promotions and increased usage costs during lockdowns
• Margins expected to improve in second half

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The Aussie Broadband Ltd (ASX: ABB) share price is on the move following the release of its first half trading update.

In morning trade, the telco’s shares are up 2.5% to $4.33.

Aussie Broadband share price higher on strong first half growth

• Total broadband subscribers up 45% year on year to 494,803
• Total services (broadband, voice, mobile, fetch, managed) up 41% to 636,446
• First half gross revenue growth of 49% to $237.3 million
• Marketing expenses up 69% to $16.4 million
• First half EBITDA (before transaction costs) up 7% to $9.1 million
• Guidance: Full year EBITDA expected to be $27 million to $30 million

What happened during the first half?

Aussie Broadband had another strong half for subscriber and revenue growth. For the six months ended 31 December, the company recorded a 45% year on year (11% quarter on quarter) jump in broadband subscribers to 494,803. This underpinned a 49% increase in gross revenue over the prior corresponding period to $237.3 million.

However, due to its investment in marketing to grow customer numbers, its operating earnings (EBITDA) was impacted. Management notes that promotions were used extensively to encourage customers already on the NBN to switch to Aussie Broadband. This led to its marketing expense as a percentage of revenue increasing to 12.6% from 11.9%. Combined with higher usage costs during lockdowns, this meant EBITDA grew only 7% to $9.1 million.

Positively, management expects its marketing spend as a percentage of revenue to ease in the second half, which should lead to stronger margins.

In light of this and the end of lockdowns, it is forecasting full year EBITDA in the range of $27 million to $30 million excluding acquisition costs and benefits. This will be up from $19.1 million in FY 2021.

Management commentary

Aussir Broadband’s Managing Director, Phillip Britt, commented: “We’re very pleased with how all segments have performed across the quarter, despite the Christmas period impacting residential sales slightly. The business segment remained strong. So far in 1H FY22 we have taken 15% of all NBN enterprise ethernet net service activation orders. We continue to be excited about our Carbon platform (our self-service platform for business), it now has more than 10,000 active services and over 400 MSPs (managed service providers) onboarded.”

“Whilst first half EBITDA has been impacted by increased promotional costs, and CVC expense due to lockdowns, we expect to see the benefits of operating leverage in 2H FY22 with employee, marketing and administration expenses expected to be lower as a percentage of revenue. The second half will also benefit from the organic connection growth achieved in the first half, additional white label migrations, and operating leverage to produce a full year EBITDA in the range $27m to $30m. This validates our strategy of continuing to invest in connection growth at the expense of short-term EBITDA gains,” he concluded.

The post Aussie Broadband (ASX:ABB) share price higher after delivering 49% revenue growth appeared first on The Motley Fool Australia.

More reading

• 3 ASX small cap shares landing on an expert’s buy list

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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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Key points

• The fate of Sydney Airport shares will be decided this week as shareholders vote on a proposed $23.6 billion takeover
• Votes will be taken on Thursday morning AEDT, with the approval of 75% of investors needed for the acquisition to go ahead
• If shareholder approval is granted, Sydney Airport’s stock is expected to be removed from the ASX on 9 February

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The Sydney Airport (ASX: SYD) takeover will be voted on this week. If you own Sydney Airport shares, you’ll get to have your say.

If successful, the takeover will see Sydney Aviation Alliance – a consortium of investment funds – walk away with the airport on its books.

At market open today, the Sydney Airport share price is $8.66. That’s 1% lower than the consortium’s takeover offer of $8.75 per security.

Let’s take a look at what the market can expect from the listed airport this week.

Sydney Airport shareholders to vote on $23.6b takeover

Sydney Airport shares could be wiped from the ASX this fortnight. The airport’s board has already accepted the Sydney Aviation Alliance’s $23.6 billion takeover bid and is urging investors to do the same.

However, the airport’s shareholders still have the power to sink the proposal. They will vote on the takeover this Thursday at 11am AEDT.

For the proposed acquisition to go ahead, more than 75% of Sydney Airport’s shareholders must vote yes for the takeover. Additionally, another clause states 50% of voting members must vote in favour.

Anyone who held shares in Sydney Airport at 7am AEDT today is eligible to vote in the meeting. For interested readers, the takeover’s scheme booklet can be found here.

UniSuper has a 15.01% hold in Sydney Airport. It’s made a deal that will likely see it receive an equal holding in Sydney Aviation Alliance, rather than $8.75 per share in cash.

If the takeover is approved by shareholders, a second court date is expected to go ahead on 9 February. That will likely see the scheme approved and the takeover made effective.

If all goes to plan for the company’s board and the consortium, Sydney Airport shares will be removed from trade as of 9 February.

The board has recommended shareholders vote in favour of the takeover. It believes the all-cash offer is fair and will see investors without risks associated with their investment.

The airport’s passenger traffic numbers were still 69.7% lower than they were pre-pandemic in December of 2021.

That slump looks to have continued into the new year. Preliminary data suggests the airport saw 85% fewer international passengers and 58% fewer domestic travellers over the first 15 days of last month.

The post Own Sydney Airport (ASX:SYD) shares? The takeover goes to a shareholder vote this week. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Tuesday
• Here are the 3 most heavily traded ASX 200 shares this Monday
• Own Sydney Airport (ASX:SYD) shares? Here’s how the company is tracking in the skies
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here’s why 2021 was a stellar year for the Sydney Airport (ASX:SYD) share price

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 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 the S&P/ASX 200 Index (ASX: XJO) falling more than 8% so far this year, there certainly are plenty of discounted stocks out there.

But the trouble is, how do you know which ones are true bargains and which ones will languish?

Taking note of the “buy” conviction of a professional investor is one way to figure it out.

Morgans investment advisor Jabin Hallihan this week picked out one ASX share that he reckons could rise more than 48%, which he definitely rates as a buy.

‘Strong earnings growth’ with a PE ratio below 10

Silk Logistics Holdings Ltd (ASX: SLH) provides port-to-door logistics services for clients in many different industries.

The company only listed on the ASX back in July and has seen its share price tumble in recent weeks as a part of the general market sell-off.

The stock started Tuesday at $2.15.

“We buy Silk Logistics for exposure to the growing container logistics market in Australia,” Hallihan told The Bull. 

“The company offers strong earnings growth and is trading on an attractive price/earnings multiple below 10 times.”

Hallihan’s team has calculated the fair value for Silk Logistics is $3.19 per share, which is 48.4% above the current level.

He added that last week’s $10.5 million acquisition of smaller rival 101Warehousing could be a nice catalyst.

“The acquisition multiple looks attractive, and the purchase is funded mostly from issuing shares, so the balance sheet isn’t put under undue pressure.”

While analyst coverage for the $160 million company is sparse, Shaw & Partners also agrees with Morgans that Silk is a “strong buy”.

Silk Logistics is due to report its financials on 24 February.

“We target 1H22 EBITDA and NPAT growth of c.11% and 59%, respectively,” noted Morgans’ reporting season calendar.

“However, a looming uncertainty is the labour and container logistics supply chain constraints likely to have impacted the business in late 1H22/early 2H22.”

The post Buy this ASX share with 48% upside: expert appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares in January
• These were the best performing ASX 200 shares in January
• Why the share market pessimists are wrong
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today

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 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.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) has taken a bigger hit this January than most of its large-cap index peers. Yet the hardest-hit stocks often see the biggest bounces, and that’s what Nasdaq investors are experiencing on Monday. As of 12:30 p.m. ET, the Nasdaq was up more than 2%, climbing back above the 14,000 mark as it attempts to rebound from a deep correction that took it to the brink of bear-market territory.

There are thousands of stocks listed on the Nasdaq, but its biggest components still have a big impact. This week, earnings season continues to play out, and two of the biggest companies in the world will report their latest quarterly results. What Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Amazon.com (NASDAQ: AMZN) say about their respective performances in recent months could play a massive role in determining whether the Nasdaq continues to bounce or extends its downward move. Below, you’ll learn more about how each stock is faring as it heads toward its key release.

Alphabet searches for greatness

Shares of Alphabet were little changed on Monday afternoon, rising just a third of a percent. The search engine giant will release its latest results on or after the market closes on Tuesday.

Expectations from Alphabet shareholders are high, as most expect that the headwinds that so dramatically affected the company’s advertising revenue should continue to dissipate. The consensus forecast for revenue is a 27% year-over-year jump to $72.1 billion, with earnings expected to come in at $27.32 per share, up about 22% from year-ago levels.

Yet even if Alphabet does post strong results for the fourth quarter of 2021, that doesn’t necessarily guarantee that the stock will move higher. That’s because many companies have seen that new issues like inflationary pressures and supply chain challenges are restraining their projections for future growth in 2022. With key Alphabet businesses like Google Search and YouTube relying on healthy businesses to spend money on advertising, anything that pressures those businesses into pulling back on their marketing spending could have a ripple effect that might lead Alphabet to warn investors about what 2022 could look like.

Alphabet shares lagged behind its FAANG stock  peers for many years before finally making up some ground in 2021. Investors are hopeful that the Google parent can keep up positive momentum and make 2022 a year to remember.

Will Amazon follow Netflix’s lead?

Elsewhere, shares of Amazon were up almost 3%. The e-commerce and cloud-computing behemoth won’t reveal its results until Thursday afternoon, but already, there’s a lot of buzz surrounding what Amazon’s next business move could be.

Unlike Alphabet, Amazon is likely to see some of its key metrics pull back from year-ago levels. Although revenue is seen rising nearly 10% year over year to $137.6 billion, earnings projections for $3.71 per share would be a nearly 75% drop for what Amazon’s bottom line looked like during last year’s fourth quarter as pandemic-induced restrictions led to unprecedented levels of e-commerce activity.

Amazon has already tried to rein in expectations from its shareholders as it deals with a host of potential obstacles. CEO Andy Jassy’s comments after its third-quarter earnings report suggested that difficulties in finding workers, higher wage costs, global supply chain issues, and rising freight and shipping costs would all combine to put pressure on Amazon’s profitability. The company highlighted its commitment to ensure the customer experience would remain positive whatever it took. Yet some believe that Amazon could follow the lead of Netflix (NASDAQ: NFLX) and raise prices on the Amazon Prime service in an effort to boost high-margin subscription revenue.

Both Amazon and Alphabet have seen their shares pull back substantially during the first month of 2022. That could arguably put them in a better position to bounce higher if their results are solid. Yet, as we’ve seen from other large-cap companies, everything depends on just how much shareholders want to see in terms of future growth potential to justify the current share prices of the Nasdaq giants’ stocks. 

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

The post Alphabet and Amazon will make or break the Nasdaq this week appeared first on The Motley Fool Australia.

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Dan Caplinger owns Alphabet (A shares), Alphabet (C shares), and Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Alphabet (A shares), Amazon, and Netflix. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Netflix. 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 S&P/ASX 200 Index (ASX: XJO) had one of its worst months in recent memory in January after investors panicked over potential rate increases in the United States. The benchmark index lost 6.4% of its value during the period and closed at 6,971.6 points.

While a good number of shares dropped lower with the market, some fell more than most. Here’s why these were the worst performers on the ASX 200 last month:

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price was the worst performer on the ASX 200 last month with a 31.1% decline. This was driven by significant weakness in the tech sector and a subdued response to the sports betting company’s second quarter update. In respect to its update, PointsBet reported an 11% increase in group turnover to $1,326 million and net win growth of 61% to $71.9 million. However, its operating loss widened to $51.8 million.

Kogan.com Ltd (ASX: KGN)

The Kogan share price wasn’t far behind with a 29.8% decline during the period. Investors sold off the ecommerce company’s shares in response to another disappointing trading update. That update revealed that Kogan delivered a 9% lift in first half gross sales (thanks to the inclusion of the acquired Mighty Ape business) and a 58% decline in EBITDA to $21.7 million. Management blamed the weak result on supply chain challenges, higher logistic costs, and its investment in marketing.

Megaport Ltd (ASX: MP1)

The Megaport share price was out of form and sank 27.8% last month. Investors were selling the elastic interconnection services provider’s shares amid weakness in the tech sector and the release of its second quarter update. According to the release, Megaport posted a quarter on quarter monthly recurring revenue (MRR) increase of $0.6 million to $9.2 million. This led to an 8% increase in second quarter revenue to $26.6 million. While its revenue was in line expectations, a number of brokers cut their valuations in response to expectations of a higher investment spend.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price was sold off and sank 27.8% during the period. Once again, weakness in the tech sector played a role in this decline. As did a broker note out of Morgans. Early in the month, its analysts downgraded the health imaging company’s shares to a reduce rating on valuation grounds. However, due to its share price weakness, the broker has since upgraded its shares twice. Firstly to a hold rating and then up to an add rating.

The post These were the worst performing ASX 200 shares in January appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in January
• Why the share market pessimists are wrong
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• Why have ASX energy shares become such hot property 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. owns and has recommended Kogan.com ltd, MEGAPORT FPO, Pointsbet Holdings Ltd, and Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Kogan.com ltd and Pro Medicus Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Pointsbet 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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It was a month to forget for the S&P/ASX 200 Index (ASX: XJO) in January. During the period, the benchmark index lost 6.4% of its value to close at 6,971.6 points.

Fortunately, not all shares were dragged lower by the market selloff. Some even recorded solid gains during the month. Here’s why these were the best performers on the ASX 200 in January:

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price was the best performer on the ASX 200 last month with an 18.6% gain. Investors were buying the Canadian iron ore miner’s shares following the release of its third quarter update. While Champion Iron reported a 23% decline in revenue to C$253 million and a 43% reduction in EBITDA to C$122.1 million, this was ahead of expectations thanks to higher iron ore prices. Goldman Sachs was only expecting EBITDA of C$87 million for the three months.

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price wasn’t far behind with a gain of 17.5% in January. This gain appears to have been driven by rising oil prices and the release of a number of bullish broker notes in response to its quarterly update. In respect to the latter, Morgans is one of the broker’s that was pleased with its performance. Its analysts retained their add rating and increased their price target to $1.72. Morgans suspects that Beach could upgrade its guidance with its half year results.

AGL Energy Limited (ASX: AGL)

The AGL Energy share price was on form and charged 15.6% higher over the period. The catalyst for this appears to have been a broker note out of Credit Suisse. According to the note, the broker upgraded the energy company’s shares to an outperform rating with a lofty price target of $8.50. This compares to the end of month AGL share price of $7.10. It appears to believe AGL is over the worst of its issues now.

Woodside Petroleum Limited (ASX: WPL)

The Woodside share price was a positive performer and recorded a 14.3% gain in January. Rising oil prices, optimism over its merger with the petroleum assets of BHP Group Ltd (ASX: BHP), and a strong fourth quarter update boosted its shares last month. In respect to the latter, Woodside delivered an 86% quarter on quarter increase in sales revenue to US$2,852 million. This was driven by a 22% increase in sales volume to 31.8mmboe and a 53% lift in its average realised price to US$90 per barrel of oil equivalent.

The post These were the best performing ASX 200 shares in January appeared first on The Motley Fool Australia.

More reading

• Why the share market pessimists are wrong
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• What is green shorting and which ASX 200 shares are being targeted?
• Why have ASX energy shares become such hot property 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 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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Key points

• Fortescue Future Industries (FFI) has hired a new chief technology offer
• He will be in charge of overseeing technology acquisition and investment, and the provision of key technologies to FFI
• FFI continues to build a portfolio of green tech and green energy projects

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The Fortescue Metals Group Limited (ASX: FMG) share price is in focus after the green division of the business, Fortescue Future Industries (FFI), hired a new chief technology officer.

For readers that don’t know, FFI wants to help develop technological solutions that help reduce emissions in hard-to-decarbonise sectors. Fortescue Future Industries is also aiming to build a global portfolio of renewable green hydrogen and green ammonia projects with a target to supply 15 million tonnes per year of green hydrogen by 2030.

Green hydrogen is hydrogen that is produced from water by using renewable energy, making it a clean source of energy.

Fortescue Future Industries’ new chief technology officer

FFI has hired Stan Knez to be the new technology officer. He reportedly has 30 years of industry experience in global technology portfolios and alliance technology partnerships.

Mr Knez’s most recent role was being the chief technology officer at Technip Energies, a business involved in the energy tranisiton to help lower carbon emissions. His job was to manage the technology portfolio, led the innovation and R&D development programs, as well as overseeing product lines.

FFI believes that Mr Knez has proven leadership skills and a strong track record in identifying early phase energy transition technologies for potential strategic positioning or investment.

His role for Fortescue Future Industries will be to oversee technology acquisition and investment, and the provision of key technologies to FFI. Mr Knez will commence work on 1 February 2022 and will be based in the US.

Why does FFI need a technology officer?

Fortescue Future Industries points out that it has a growing portfolio of technology assets. For example, last week it announced it was going to buy high-performance battery business Williams Advanced Engineering, which will be managed by FFI.

It has also made investments into a number of technology companies including Xergy (which is now called FFI Ionix), HyET Solar and HyET Hydrogen. FFI is also building a multi-gigawatt electrolyser factory in Queensland, along with Plug Power. The construction of this is due to start next month.

Comments from Fortescue Future Industries management

The FFI Chief Executive Officer Julie Shuttleworth said:

Innovation and world-leading technology are key to tackling global warming. FFI’s Chief Technology Officer will be a key contributor to FFI cementing itself as a technology leader.

FFI’s focus on technology will give us the edge in the race to decarbonise the planet and enhance our position to decarbonise heavy industry.

Fortescue Metals share price snapshot

Despite all of the volatility that has occurred since the start of 2021, Fortescue shares have now only dropped around 18% over the past six months. This is due to the Fortescue share price surging almost 40% over the past three months.

The post Fortescue (ASX:FMG) Future Industries hires new tech boss appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares riding the wave of green energy and ethical investing
• Why this broker is bearish on the Fortescue (ASX:FMG) Future Industries business
• Top brokers name 3 ASX shares to sell next week
• What has driven the Fortescue (ASX:FMG) share price up 40% in three months?
• Top brokers name 3 ASX shares to sell today

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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Key points

• BWX and AFG are two ASX shares that are highly rated by brokers
• Australian Finance Group is one of Australia’s major loan broking businesses, which is seeing significant loan volumes
• Natural beauty business BWX is rated as a strong buy by brokers, with international growth potential

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Some of the ASX’s best brokers have looked over the stock exchange for opportunities and have identified some ASX shares that could have significant upside.

There are always some businesses that are liked by individual analysts, but when multiple experts all like a business at the same time then it could be an indictor of compelling potential.

Here are two that are well-liked right now:

Australian Finance Group Ltd (ASX: AFG)

Australian Finance Group is one of the largest mortgage broking businesses in Australia.

AFG said that it finished the 2021 calendar year on a high with record volumes. It revealed residential lodgements were up 24% on the same period last year. It had lodged $24.6 billion for the three months to December 2021.

Residential lodgement volumes across the final three months of 2021 increased in Victoria, Queensland, South Australia and Western Australia whilst activity in NSW slowed marginally during the quarter.

One of the highlights from AFG’s recent update showed that the big four banks of Westpac Banking Corp (ASX: WBC), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) have seen their combined market share drop from 57.31% to 53.55%, their second lowest market share recorded in the past 10 years. ANZ and CBA registered the biggest drops.

This ASX share is rated as a buy by at least three brokers. Morgans thinks that AFG is going to report well in February thanks to volume growth, but changing monetary policies could be a negative.

Morgans has a price target on the business of $3, suggesting upside of more than 30%.

BWX Ltd (ASX: BWX)

BWX is a leading business in the natural beauty industry with businesses like Sukin, Flora and Fauna, Mineral Fusion and Go-To.

Experts are expecting the business to report good revenue and profit growth in the February reporting season.

Citi rates it as a buy with a price target of $5.70. That’s a potential upside of more than 60% over the next 12 months, if the broker is right. Over the last month, the BWX share price has fallen by more than 20% along with many of the other ASX growth shares..

The ASX share has been busy making acquisitions in the last few years to bolster its growth potential and market share.

Flora and Fauna is one of the more recent buys. It’s a leading and fast-growing online retail platform. It complements its existing online platform business Nourished Life and adds scale, diversity and efficiency to BWX’s online offering.

A few months ago, it bought a 50.1% stake in Go-To Skincare. It’s going to expand into the North American market in 2022.

The ASX share says that natural skincare is accelerating, and BWX is building a brand-new operations and manufacturing hub in Clayton, Victoria, to meet this opportunity. Construction is nearing its final stages. This “transforms its ability to grow the business”.

Citi’s numbers suggest that the BWX share price is valued at 18x FY23’s estimated earnings.

The post Brokers rate these 2 top ASX shares as buys in February 2022 appeared first on The Motley Fool Australia.

More reading

• How does the Macquarie (ASX:MQG) dividend compare to the big four banks?
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• Top broker sees 43% upside for the Westpac (ASX:WBC) share price
• Are these beaten down ASX 200 shares now too cheap to ignore?
• 2 buy-rated ASX dividend shares with big yields and huge upside potential

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BWX Limited and Westpac Banking Corporation. 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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So these are the moments when the share market bears say “I told you so” with a smirk.

The S&P/ASX 200 Index (ASX: XJO) has plunged 8% since the start of the year, while the S&P/ASX All Technology Index (ASX: XTX) has lost a horrifying 17%.

GMO co-founder and famous perma-bear Jeremy Granthm was at it again last week, warning that this correction was just the start of a massive crash.

“We are in what I think of as the vampire phase of the bull market, where you throw everything you have at it: you stab it with Covid, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation… and still the creature flies,” he wrote on the GMO blog.

“Until, just as you’re beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies. The sooner the better for everyone.”

He personally would escape shares, especially growth stocks.

“Speaking personally, I also like some cash for flexibility, some resources for inflation protection, as well as a little gold and silver.”

Why pessimists like Jeremy Grantham are wrong

Frazis Capital Partners portfolio manager Michael Frazis told The Motley Fool he disagrees with Grantham.

“Investors who liquidate in market crashes often get temporary relief when markets go lower, but invariably it’s the investors who buy during times like this that make the best long term returns.”

Serial pessimists like Grantham, who predict doom and gloom every year, are bound to look like geniuses every few years, just because of natural market cycles.

According to Frazis, such cynics are “doing no one any favours” by encouraging panic selling.

“Usually constant doomsayers are ignored,” he said.

“The fact Jeremy Grantham is in the headlines now says more about everyone else, and the current state of angst amongst investors, than whether he is right or wrong.”

Frazis pointed out that in retrospect, 2008 — when the global financial crisis hit — was “a great long term buying opportunity”, even though the selling continued into 2009.

“Jeremy Grantham was calling for further crashes in 2010. Similarly, many of the largest investors in the world swore off technology after the tech crash, and then missed the vast bulk of value creation over the following two decades,” he said.

“In both cases, the bearish view was vindicated in the short term, but looking back we can see how misguided that really was.”

Take a long-term view

Frazis urged investors to take a long-term view during turbulent times like now.

“This has been the largest rotation out of technology since the financial crisis, which proved to be an exceptional buying opportunity,” he told The Motley Fool.

“Right now in the middle of a market panic, long term business plans are strongly out of favour.”

According to the fund manager, some sentiment indicators are now at “10-year lows”. It is no time to crystallise paper deficits into actual losses.

“There are good reasons to be apprehensive in the very short term right now,” he said.

“But those who take a long term view and end up holding the shares of companies will end up receiving all the value those companies create in the future.”

The post Why the share market pessimists are wrong appeared first on The Motley Fool Australia.

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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 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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Following a tumultuous start to the trading year, and with another earnings season about to kick off, we asked our Foolish contributors to compile a list of some of the ASX shares experts are loving in February. Here is what the team came up with.

Tristan Harrison: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is a large investment conglomerate that has been listed on the ASX for more than 100 years. The Soul Pattinson share price has fallen by around 11% since the start of this year, boosting the company’s prospective dividend yield.

Soul Patts owns a diverse portfolio of defensive and largely uncorrelated assets including holdings of ASX shares TPG Telecom Ltd (ASX: TPG) and Brickworks Limited (ASX: BKW). Other assets span resources, agriculture, financial services, swimming schools and more.

With a market capitalisation of almost $10 billion, Soul Pattinson has plans to make more long-term investments to continue improving its portfolio. It’s looking at areas such as education, global shares, financial services, agriculture, the energy transition, and health and ageing.

The Soul Patts share price closed Monday’s session 1.04% higher at $27.31.

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Co. Ltd.

Brooke Cooper: Adore Beauty Group Ltd (ASX: ABY)  

Adore Beauty is a pure-play beauty retailer stocking more than 260 brands on its online-only store.  

In October, the company released an update for the first quarter of financial year 2022, stating its active customer count had grown to 874,000. Meanwhile, returning customers had increased 63% compared with the prior consecutive quarter. 

Things haven’t been all smooth sailing for investors in the online retailer, however. The Adore Beauty share price has slipped by around 20% since the final close of 2021, ending Monday’s session at $3.10.  

So, do these recent falls represent a buying opportunity? Some experts believe so, with brokers Morgans and UBS each having a buy rating and $6 price target on the stock. 

Motley Fool contributor Brooke Cooper does not own shares of Adore Beauty Group Ltd. 

Sebastian Bowen: BetaShares Nasdaq 100 ETF (ASX: NDQ)

This exchange-traded fund (ETF) has been in the wars over recent weeks, falling by around 9% since the start of the year. But this is exactly why it might be worth a look in February.

The Nasdaq (the index tracked by NDQ) has not been known to give investors too many pullbacks in recent years, yet here we are. NDQ houses most of the dominant US tech shares. In it, you’ll find everything from Apple and Amazon to Netflix and NVIDIA.

As such, this ETF offers an easy way to gain investment exposure to some of the biggest and most dominant companies in the world.

Motley Fool contributor Sebastian Bowen does not own shares of BetaShares Nasdaq 100 ETF.

Bernd Struben: Janison Education Group Ltd (ASX: JAN)

Janison Education provides technology-based education platforms for students and professionals around the world. The business comprises two primary segments – assessment and learning.

With its roots in Australia, some of Janison’s online assessments include the NAPLAN and ICAS tests. The company also generates some 20% of its sales outside of Australia, with a presence in around 120 countries.

The COVID-19 pandemic has served to accelerate the global transition to digital learning and assessment. Despite an easing of lockdown restrictions, this trend could see the changeover from paper-based exams to online platforms continue.

The Janison Education share price is up by more than 100% over the past 12 months, having hit a record closing high of $1.44 on 22 November. Janison shares closed Monday’s session at $1.255.

Motley Fool contributor Bernd Struben does not own shares of Janison Education Group Ltd.

Aaron Teboneras: Nearmap Ltd (ASX: NEA) 

After losing almost 14% of their value so far in 2022, Nearmap shares could be on the radar for investors this month. 

The aerial imagery specialist provided a sneak peek of its performance for the FY22 period in mid-December. Management highlighted that annualised contract value (ACV) in North America is expected to exceed that of the company’s Australia and New Zealand business for the first time.

In the same update, Nearmap also revealed a guidance range of $150 million to $160 million on a constant currency basis. This represents a potential increase of between 17% and 25% compared with the prior year.

Nearmap is scheduled to report its FY22 first-half results on 18 February. The Nearmap share price closed Monday’s session more than 7% higher at $1.34 following a stellar day for ASX tech shares.

Motley Fool contributor Aaron Teboneras owns shares of Nearmap Ltd. 

James Mickleboro: Breville Group Ltd (ASX: BRG)

Breville could be a top option for investors in February. It is the leading appliance manufacturer behind a number of popular brands including Kambrook, Sage and the eponymous Breville brand.

Breville’s products are sold in more than 50 countries across the world, with markets being added each year. This global expansion, together with favourable consumer trends and the company’s ongoing investment in research and development, has many analysts tipping Breville will grow strongly over the next decade.

One of those is Morgan Stanley. This week, the broker put an overweight rating and $36.00 price target on Breville shares. This represents possible upside of around 26% based on the Breville share price of $28.50 at the close of trade on Monday.

Motley Fool contributor James Mickleboro does not own shares of Breville Group Ltd.

The post Top ASX shares to buy in February 2022 appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETANASDAQ ETF UNITS, Brickworks, Janison Education Group Limited, Nearmap Ltd., and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS, Brickworks, Nearmap Ltd., and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Amazon, Apple, Janison Education Group Limited, Nvidia, and TPG Telecom 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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