Category: Stock Market

It wasn’t that long ago that the National Australia Bank Ltd (ASX: NAB) share price was delighting its investors with a series of new 52-week highs. It was only last Wednesday that NAB shares broke the $30 mark for the first time since September 2019. And back then, it was a fleeting affair.

The last time NAB consistently traded above $30 a share was back in 2017. Yet on 10 November, we saw NAB hit a new 52-week high of $30.30 a share. Year to date until that point, NAB was then up a very pleasing 30.5%. But the past 3 weeks or so have brought NAB shares back to earth. This ASX bank is today trading at $27.34 a share, down a nasty 1.14% so far today.

That means that the NAB share price has given up close to 10% since hitting this new high just this month. It also means that, as of today, NAB’s year to date gains in 2021 so far have fallen to ‘just’ 19.5%. So with this tumble… correction… or whatever else you want to call this short-but-sharp fall, could NAB shares be in the buy zone today?

Top ASX broker puts NAB shares in the buy zone

Well, one ASX broker thinks so. Investment bank and broker Goldman Sachs currently rates the NAB share price as a buy with a 12-month share price target of $31.15. That implies a potential future upside of almost 14% on current pricing, not including any dividend returns.

So Goldman rates NAB as its preferred ASX bank right now. It cites NAB’s “cost management initiatives, which seem further progressed relative to peers”, as well as NAB’s “position as the largest business bank”. This, Goldman posits, will allow NAB to enjoy relatively higher successes from the continuing economic recovery.

Goldman also rates NAB’s current balance sheet as strong and enjoying momentum from “growth across all divisions”. It’s also expecting modest annual dividend rises over the next few years, going from $1.27 in dividends per share in FY21 to $1.48 in dividends per share by FY2024.

No doubt investors will be hoping that these predictions play out.

At the current NAB share price of $27.34, this ASX bank has a market capitalisation of around $89 billion, with a price-to-earnings (P/E) ratio of 14.57 and a dividend yield of 4.64%.

The post Do recent sell-offs make the NAB share price a buy? appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares brokers rate as buys right now
• What is the NAB (ASX:NAB) fully franked dividend worth in November?
• Top broker gives its verdict on the NAB (ASX:NAB) share price
• 5 things to watch on the ASX 200 on Friday
• Green light: NAB (ASX:NAB) share price slips as ACCC gives nod to Citi deal

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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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Shares in Bendigo and Adelaide Bank Ltd (ASX: BEN) are inching higher today after a period of turbulence just after market open.

Bendigo Bank shares traded as low as $8.43 before settling at an intraday high of $8.60 at the time of writing.

Amid a horrendous performance these past 6 months, where shares have gyrated southwards to trade at 52-week lows today, any gain is welcomed by Bendigo Bank shareholders.

Yet, despite the downward pressure, the team at leading investment firm Jefferies just upgraded Bendigo Bank to a buy in a note to clients on Friday.

What does Jefferies see in the Bendigo Bank share price that other brokers may be missing? Let’s take a closer look.

Is Bendigo Bank a buy?

It depends who you ask for this one. In its analysis, Jefferies makes note of a presentation Bendigo made on its “digital transformation roadmap” last Friday.

There, investors were treated to digital initiatives that the bank has already completed in FY20/21, as well as what it has planned for FY22/23.

For instance, the company has already partnered with Tyro Payments, reducing merchant systems from 7 to 1, and now accepts digital uploading of documents.

Moving forward, it hopes to enable Bendigo Home Loan propositions for brokers and bring the first products to market on its new product and pricing engine. In FY24, Bendigo wants its Rural Bank and Adelaide Bank integration completed.

In the note released to clients, Jefferies acknowledges that Bendigo Bank’s digital transformation initiatives are impressive, and align with a modern offering of banking services.

It likes the bank’s move and reflected this sentiment in its commentary on Friday. However, the broker also notes that returns from the bank’s efforts may be a few years in the waiting.

The broker cautioned investors that Bendigo “does not seem to have a pathway to earn its cost of capital” and “may lack the scale to value accretively and fund its ambitions”, but is bullish on the bank’s share price nonetheless.

As a result of its analysis, Jefferies raised Bendigo to a buy from hold, increasing its price target to $10 a share whilst doing so.

But if you ask other experts…

Not all experts familiar with Bendigo Bank’s share price agree with this sentiment, however. Analysts Citi and JP Morgan both agree that the bank is a hold right now, even with its digital transformation.

Citi notes that investors might be feeling disappointed that Bendigo didn’t outline a more extensive rationale for its digital transformation investment.

The broker reckons that Bendigo must outline its plans in further detail to highlight cost efficiencies, plus exhibit how it intends to source a return on the investment.

JP Morgan agreed with this tone and added that Bendigo’s presentation lacked substance on financials, instead focused on bold targets.

The investment bank stated that it is “sceptical on the extent of cost savings and revenue growth required to reach this goal, and we forecast only slight improvements in cost to income to 59.5% in FY24”.

JP Morgan is also neutral on the direction of Bendigo Bank’s share price. Each of Citi and JP Morgan has slashed their price targets on Friday by 4% and 12% to $9.60 and $9.25 respectively.

Picking the direction of Bendigo Bank has turned out to be a difficult task as well, as the track record of analysts covering the bank shows mixed results.

For instance, analysis from Bloomberg Intelligence highlights that investors “who followed [Jefferies] recommendation [on Bendigo] received a negative 15% return in the past year, compared with a negative 1.2% return on the shares”.

It notes Jefferies has rated Bendigo Bank twice as a hold and an underperform once. With these ratings, shares “fell an average 5.9% in the periods rated hold and rose 71% in the periods rated underperform”.

Bendigo Bank share price snapshot

In the past 12 months, the Bendigo Bank share price has slipped over 6% in the red, after posting a loss of 8.5% this year to date.

In the last month alone, Bendigo Bank shares are down almost 10% and are behind a further 3% in the last week of trading.

The post It’s a Buy: Why did Jefferies just upgrade the Bendigo Bank (ASX:BEN) share price? appeared first on The Motley Fool Australia.

More reading

• Why is the Bendigo Bank (ASX:BEN) share price having such a tough time of late?

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bendigo and Adelaide Bank 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 Flight Centre Travel Group Ltd (ASX: FLT) share price is continuing its downward spiral today. This is despite the company’s CEO, Graham ‘Skroo’ Turner, calling for Australians to remain calm as more details of the Omicron variant emerge.

However, it’s doing better now than it was earlier this morning. Shortly after the ASX opened, the Flight Centre share price crashed to $15.21, representing an 11.2% drop.

Right now, the company’s stock is trading at $16.96, 1.05% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 0.22% right now.

Let’s take a look at what’s weighing on the Flight Centre share price.

Flight Centre share price dips amid COVID-19 variant

The Flight Centre share price is suffering despite Turner’s appearance on Nine’s Today show.

There he reportedly said new COVID-19 variants are something we must get used to and are no reason to panic. The Australian quoted Turner as saying:

[Variants are] going to happen every few months, every 6 months, every year, so we just have to learn to live with it and move on and keep the plans open.

I think that’s a really important thing that we just don’t get carried away. We look at the science, on the facts, and not act on emotion.

Turner reportedly noted he particularly hopes Queensland won’t push back its planned reopening date due to the new variant. The state is currently expected to welcome visitors from 17 December.

The Omicron variant was identified late last week. It likely spurred the Flight Centre share price’s 7.4% plunge on Friday.

Then, United Kingdom officials warned they weren’t sure if existing COVID-19 vaccines or treatments will be effective against Omicron.

However, infectious disease expert Dr Nick Coatsworth, who also appeared on the Today show this morning, isn’t worried yet.

He said the variant is so far proving to induce mild symptoms when compared to those of the Delta variant. Though, the major concern surrounding the variant is due to how fast it appears to be spreading.

Yesterday, New South Wales Health confirmed 2 people who tested positive for COVID-19 upon arriving at Sydney Airport on Saturday are infected with the new variant.

The post Flight Centre (ASX:FLT) share price partially recovers as boss calls for calm appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Flight Centre (ASX:FLT) share price crashes 11% amid omicron fears
• These are the 10 most shorted ASX shares
• These were the worst performing ASX 200 shares last week
• What is going so wrong for the Flight Centre (ASX:FLT) share price 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel 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 Nuix Ltd (ASX: NXL) share price is edging higher this afternoon despite today’s announcement of a second class action claim against the company.

At the time of writing, the investigative analytics and intelligence software provider’s shares are trading 0.59% higher at $2.56. In contrast, the All Ordinaries Index (ASX: XAO) is currently down 0.17% at 7,587 points.

What’s happening with Nuix?

In its release today, the Nuix board advised it had become aware of another class action by a number of disgruntled shareholders.

While the company has yet to be served, it understands that the claim has been filed in the Supreme Court of Victoria.

Nuix stated the company had not been contacted by the plaintiff or lawyers involved. However, it advised that specialist litigation law firm, Phi Finney McDonald, was launching a suit on behalf of Daniel Joseph Batchelor and shareholders who bought Nuix shares during its initial public offering (IPO) between 4 December 2020 and 29 June 2021.

The plaintiff alleges that misleading information had been provided in its prospectus based on FY21 revenue forecasts. As such, the accuser believes Nuix did not act honestly and breached its disclosure obligations under the Corporations Act and the Australian Securities and Investments Commission Act.

This is not the only case Nuix has to answer, with Shine Lawyers taking its case to the court. The legal firm also is seeking to hold Nuix accountable, however, the claim did not identify the size of damages sought.

Nuix said that it disputed both claims and would vigorously defend its position.

About the Nuix share price

The Nuix share price has fallen almost 70% in value over the past 12 months. The sharpest decline came towards the end of February 2021 when it lost 44% in a matter of days, and its shares have continued to slide ever since.

Based on today’s price, Nuix has a market capitalisation of around $807.57 million and has approximately 317.41 million shares outstanding.

The post Nuix (ASX:NXL) share price climbs despite second class action appeared first on The Motley Fool Australia.

More reading

• Nuix (ASX:NXL)’s own shareholders are suing it
• ASX 200 tech shares in focus as Nasdaq plunges 1.7%
• Are these 2 beaten-up ASX tech shares now bargain buys?
• Why are ASX 200 tech shares having such a lousy day?
• These were the best performing ASX tech shares in October

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 recommended Nuix Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is having a pretty poor start to the trading week so far this Monday. At the time of writing, the ASX 200 is down by 0.14% at 7,269.4 points after sliding as low as 7,180 points this morning. But one ASX exchange-traded fund (ETF) is making that loss look paltry. That would be the BetaShares Crude Oil Index ETF (ASX: OOO).

OOO units are today down a nasty 5.64% to $5.86 each after closing at $6.25 a unit last Friday. So why such a steep loss for this ASX ETF? Well, to answer that, we first have to examine what kind of investments make up this particular ETF. Like all ETFs, OOO holds underlying securities that make up its fund. But unlike most ETFs, OOO doesn’t actually hold shares.

Instead, this ETF holds futures contracts that are tied to the raw price of crude oil. In this way, it is designed to give investors exposure to the movements in the oil price, hedged to Australian dollars. It holds no shares in any other investment, including those of actual oil companies.

This fund has given investors quite the rise in recent times. As of 31 October, OOO units were up an impressive 131.9% over the past 12 months, including distribution returns. However, OOO has also given investors a negative return of 21.92% per annum on average over the past 3 years up to that date.

So, what’s happened to the BetaShares Crude Oil Index ETF today?

BetaShares Crude Oil Index ETF slips in spilled oil

Well, it’s hard to know with absolute certainty. But it is possible that today’s steep falls are the result of what has happened to the global energy market in the last few days. As my Fool colleague James reported this morning, the global oil market suffered a nasty sell-off on Friday night (our time). As we reported, Friday saw WTI crude oil fall 13.05% to US$68.15 a barrel. And the Brent crude oil price dropped 11.55% to US$72.72 a barrel.

These steep drops are likely a result of the emergence of the Omicron variant, which has spooked investors around the world. Once again, the prospect of more COVID lockdowns, restrictions and shutdowns are looming, it seems.

Since OOO invests in oil futures contracts, the value of said contracts has likely plummeted with these sharp drops in oil pricing. This is the most likely reason why OOO units have dropped more than 5% so far this Monday.

The BetaShares Crude Oil Index ETF charges a management fee of 0.69% per annum.

The post Here’s why the BetaShares Crude Oil Index ETF (ASX:OOO) is sliding 5% today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today

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. 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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Well, if you can believe it, we’re only a few days away from the start of December 2021. Amid the market gyrations that seem to have kicked off this week, it might be a good time to see how some of the ASX’s blue-chip shares typically travel during the silly season. So today, we’re checking out the Wesfarmers Ltd (ASX: WES) share price, and how it has performed in Decembers’ past.

Wesfarmers is one of the oldest blue-chip shares on the S&P/ASX 200 Index (ASX: XJO). It has been around in some form since 1914. Today, it can be called a conglomerate, considering its ownership of such a wide stable of retailing brands. It owns the Bunnings Warehouse chain of course, but also has Target, OfficeWorks, Geeks2U and Kmart. And that’s just its retailing side. Wesfarmers also continues to run its mining, gas and chemical manufacturing divisions, as well as its own clothing line (Workwear).

Last year in 2020, Wesfarmers indeed had a very pleasing Christmas run. It started December last year at roughly $49.45 a share, but by Christmas Eve, it had finished up at $51.10 a share, a rise of 3.34%.

So, do we see this pattern extend to just beyond 2020?

Wesfarmers share price: A Christmas journey

Well, not exactly. Back in late 2019, Wesfarmers shares started December at $42.41 each. But by Christmas Eve 2019, the shares had slipped slightly to $41.79 – a fall of 1.46%.

The prior year in 2018 saw a different outcome again. That year saw Wesfarmers start December at a share price of $31.59 a share… exactly where it ended up on Christmas Eve. So a very flat buildup to Christmas indeed for that year.

Going back to 2017 now (seems like a long time ago these days), and we see a different pattern play out yet again. That year had Wesfarmers begin the silly season at approximately $31.37 a share. By the ‘night before Christmas’, the shares had closed at $31.58. That’s a small gain of 0.67%.

So long story short, there doesn’t seem to be a consistent trading pattern for Wesfarmers shares in the leadup to Christmas. Last year we had a solid gain, the year before a solid loss, then a flat year, preceded by a small gain before that.

Perhaps the lesson we can take here is that no one knows what Wesfarmers shares will do this Christmas. Humans are always good at finding patterns, even when they don’t exist. Wesfarmers’ annual Christmas pilgrimage is a great example.

Wesfarmers is (at the time of writing) trading at a share price of $58.63 a share, up 0.09% for the day so far. At that Wesfarmers share price, this ASX 200 blue chip has a market capitalisation of $66.47 billion, with a dividend yield of 3.04%.

The post How does the Wesfarmers (ASX:WES) share price typically perform in the lead up to Christmas? appeared first on The Motley Fool Australia.

More reading

• This sector could be a $50 trillion investment opportunity: expert
• Wesfarmers (ASX:WES) plans for e-commerce to fuel Bunnings growth
• What is the Wesfarmers (ASX:WES) dividend worth in November?
• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• How much is the Wesfarmers (ASX:WES) dividend expected to grow in FY22?

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. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has bounced back from a very poor start and is trading only slightly lower. At the time of writing, the benchmark index is down 0.2% to 7,265.8 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are pushing higher:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price is up 5% to $131.56. Investors have been buying this pizza chain operator’s shares on Monday despite there being no news out of it. However, the prospect of some European countries locking down because of the Omicron variant of COVID-19 appears to be boosting investor sentiment. Domino’s was a big winner from previous lockdowns.

Healius Ltd (ASX: HLS)

The Healius share price is up 3% to $4.90. This gain appears to have been driven again by news of the new Omicron variant. Healius has been benefiting greatly from elevated demand for COVID testing services. This new variant of concern could underpin strong testing volumes for some time to come.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is up 3.5% to $8.29. Investors may be buying this ecommerce company’s shares on the belief that it could benefit if Omicron forces Australia into another lockdown. In addition, bargain hunters may be swooping in today following another selloff of its shares last week following a disappointing update.

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price is up 3.5% to $10.59. This morning Vulcan announced that it has signed a binding lithium hydroxide offtake agreement with auto giant Stellantis. It is the world’s fourth largest automaker and the name behind brands including Alfa Romeo, Chrysler, Citroen, Fiat, Jeep, Maserati, and Peugeot. Vulcan will supply Stellantis with a minimum of 81,000 tonnes and a maximum of 99,000 tonnes of battery grade lithium hydroxide over a five-year period from 2026.

The post Why Domino’s, Healius, Kogan, and Vulcan shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 healthcare shares jump amid Omicron fears
• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Vulcan (ASX:VUL) share price falls 6% despite auto giant agreement
• These are the 10 most shorted ASX shares
• The Kogan (ASX:KGN) share price just hit another 52-week low, its fourth this week. Can it fall any further?

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 shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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S&P/ASX 200 Index (ASX: XJO) healthcare shares are widely gaining today.

Together, the 12 ASX 200-listed healthcare shares are up an average of 0.6%, with 7 in the green and 5 in the red.

This comes as the broader index is under pressure amid fears the new Omicron COVID-19 variant could derail the global economic recovery and Australia’s own nascent reopening plans. At time of writing the ASX 200 is down 0.4%, having recovered from earlier losses of 1.2%.

Today’s top 3 ASX 200 healthcare share performers

Leading the ASX 200 healthcare shares higher is Ansell Limited (ASX: ANN).

At time of writing, the Ansell share price is up 3.7% to $33.07 per share. Ansell provides health and safety protection solutions. And with the rise of the new Omicron variant, it may be the company’s strong focus on gloves that’s seeing investors hit the buy button.

Coming in at number 2 today, is Healius Ltd (ASX: HLS). The Healius share price is up 2.7% to $4.88 per share. Healius has a large network of pathology laboratories, collection centres, medical centres, day hospitals and imaging sites throughout Australia.

Also well into the green today, and coming in as the third best ASX 200 healthcare share performer, is Sonic Healthcare Limited (ASX: SHL). The Sonic share price is up 2.48% to $42.63 per share. Sonic is a global pathology provider with a significant footprint in diagnostic imaging within Australia.

With investors jittery about emerging COVID variants, all 3 shares are handily outperforming the index today.

What’s the deal with Omicron?

The new COVID variant officially received its Greek designation over the weekend. Last week, it still held the more obscure label of B.1.1.529. But the World Health Organization’s (WHO) decision to label the variant gives some credence to its potential to throw a spanner into the world’s grand reopening and economic recovery plans.

The virus appears to have mutated in South Africa and has already spread into parts of Europe, Asia, and the United States. Two cases have been reported in Australia. The travellers, returning from Africa, tested positive and have been quarantined.

There’s no evidence yet that Omicron is more deadly than Delta, but early research indicates it may be more transmissible.

Australia has joined a growing list of nations to temporarily ban travel from South Africa and neighbouring nations.

While this has seen ASX 200 travel shares hammered over the past 2 trading days, many ASX 200 healthcare shares, like the 3 listed above, have seen increased investor interest.

How have these 3 ASX 200 healthcare shares been performing this year?

The Sonic Healthcare share price has gained more than 29% in 2021.

Healius shares just edge out these gains, up 30% year-to-date.

Ansell has been trending lower since July. Despite today’s bounce, shares in the ASX 200 healthcare company are down 5% this calendar year.

The post ASX 200 healthcare shares jump amid Omicron fears appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Why a leading broker is bullish on these 3 ASX shares
• Analysts name 3 ASX shares to buy now
• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 shares that could be top buys for growth

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 Ansell Ltd. and Sonic Healthcare 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 AMP Ltd (ASX: AMP) share price has been the talk of the town in recent years.

It tumbled as allegations of misconduct were hurled at – and admitted to by –the financial services provider during the Financial Services Royal Commission in 2018.

Since its highest close in March 2018, the AMP share price has tumbled 81% to trade at $1.01 at the time of writing.

So, what might AMP have to do to boost its stock into recovery mode? The Motley Fool Australia analyst, Ed Vesely sat down with our chief investment officer, Scott Phillips last month to discuss just that.

The entirety of the pair’s chat can be found here, and evaluations of plenty of other stocks can be found on The Motley Fool Australia’s YouTube channel, here.

Otherwise, readers can find a breakdown of their conversation below.

A quick note before we start: Vesely and Phillips discussed AMP more than a month ago. Some of the specifics may have changed in the time since but the fundamentals remain valid.

The good and the bad of AMP shares

The Motley Fool Australia’s analysts often chat with Phillips about both the good and the bad of a stock.

However, Vesely only had a few positives to note about AMP and its share price.

Firstly, the company’s stock is cheap. Though, that doesn’t mean it’s good value. It’s also a renowned brand with strong historical appeal.

Another thing Vesely likes about AMP is its banking division. The company’s bank provides a significant portion of AMP’s revenue and a large share of its profits.

That’s just about all the company is doing right, according to Vesely, who noted:

I think that tells you how good AMP bank is, but I think it also tells you how poorly the rest of the business has actually performed.

The rest of AMP’s business is made up of its wealth management division, AMP Capital, and its New Zealand business.

The wealth management section – which includes its financial advisory services, platform administration, and managed investment products – was the division that copped the most heat during the Royal Commission.

Now, AMP’s investment management firm, AMP Capital has involved itself in AMP’s current troubles. Vesely stated:

The source of the problem for AMP [is it’s] got the investment management side of things trying to push their products through the investment advisory network, which has been, of course, AMP aligned and AMP focused.

Additionally, it’s not just in recent years that AMP has been underperforming.

Between 1999 and 2017, AMP’s revenue dipped by 33%.

Vesely also stated that since 2018, AMP’s revenue has dropped another 80%.

So, what can AMP do to right its slump?

Still, there might be a way to boost AMP’s shares back into the green. Here’s what Vesely said:

This is a company that financially, operationally, and I suppose from a branding perspective, is really on its knees right now…

He noted that there is potential that AMP’s management team and its relatively new CEO, Alexis George can improve the company’s business. However, Vesely warned:

There’s a very real chance that investment outflows in the business will continue to go in the wrong direction…

He also stated that new competition from advisors like Hub24 Ltd (ASX: HUB) could be dire for AMP: 

[Investors] can use those platforms, they’re independent, they can provide fearless advice and say: ‘this is what we do, we don’t have any products or any managed funds to sell you’, so that’s a good thing and I think that’s becoming more and more attractive, and if the likes of AMP have to compete on price now, and they’ve got all that baggage with the history through the Royal Commission, I think it’s going to be a hard stop for a number of years yet.

Finally, Vesely had some potentially contentious advice for AMP:

I personally think, Scott, and maybe many people won’t agree, I think that the most value that shareholders can get out of the business today would be if management decide to actually sell off each of the segments, including AMP Bank. They should actually return that capital to shareholders and just wind it up… I just think that there’s probably a lot more potential for each of these businesses to be operating under different names.

The opinions expressed in this article were as at 8 October 2021 and may change over time.

The post What is the AMP (ASX:AMP) share price looking like? Motley Fool Analyst Ed Vesely weighs in appeared first on The Motley Fool Australia.

More reading

• AMP (ASX:AMP) share price on watch after revealing $325 million impairment charge
• How is the AMP (ASX:AMP) share price performing against the financial sector in 2021?
• These 3 ASX 200 shares are topping the volume charts on Monday
• ASX 200 (ASX:XJO) midday update: Lithium miners jump, Flight Centre tumbles
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. Motley Fool contributor Edward Vesely has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Hub24 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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Shares in Tuas Ltd (ASX: TUA) jumped from the open following a company announcement. The Tuas share price is currently 5.81% higher at $1.64.

Tuas has been catching bids today after announcing its subsidiary, TPG Singapore, has been awarded additional 5G network spectrum by Singaporean authorities.

Why is the Tuas share price charging higher?

Tuas announced that in the recent “quantity stage” of the 2.1 GHz spectrum auction conducted by the Singaporean authorities, TPG Singapore was provisionally awarded 10 MHz of spectrum in the 2.1 GHz band for a price of $31.72 million.

The total spectrum will be awarded in 2 paired lots of 5 MHz. An assignment stage of the auction is yet to occur, per the release. This will determine the position of the lots within the spectrum band.

Moreover, the licence of the 2.1 GHz spectrum is 15 years in duration. Providers require the licence for standalone 5G network use. TPG Singapore “intends to move quickly to commence rolling out 5G equipment to make use of this spectrum.”

Tuas is the 100% owner of TPG Singapore. That’s after the latter was spun off from TGG Telecom Ltd when it merged with Vodafone Hutchison Australia.

The announcement comes amid the Tuas share price climbing 90% in the past 3 months. It reached a 52-week high, before blowing off some froth and settling at its current price.

This upward swing has some experts constructive on Tuas. For instance, portfolio manager at Wilson Asset Management Tobias Yao was recently quoted as saying, “The reason we like TPG Singapore is the fact that we think the value offering is very, very attractive.”

Yao added that Wilson Asset Management expects Tuas to gain market share in Singapore and expand into other parts of Southeast Asia.

Speaking on today’s announcement, Richard Tan, CEO of TPG Singapore, said:

We are delighted that we were able to secure this important 5G band which is well supported by the global device ecosystem. Our customers can look forward to very competitively priced 5G services when we embark on our network upgrade, commencing in the first half of 2022.

Tuas share price snapshot

In the past 12 months, the Tuas share price has gained 140%. It has rallied 118% just this year to date.

Over the past month, Tuas shares are up 12% and have started the week on a positive note.

Tuas shareholders are well ahead of the S&P/ASX 200 Index (ASX: XJO) return of around 10% in the past year.

The post Tuas (ASX:TUA) share price jumps 5% on acquisition news appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions 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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