Category: Stock Market

Shares in EML Payments Ltd (ASX: EML) took off in a vertical fashion yesterday after the payments solutions provider confirmed an end to its investigation with the Central Bank of Ireland (CBI).

EML shares were on the down this week just prior to the announcement. They have reversed course over the past 2 days and now trade 32% higher at $3.62. Investors are piling in today as well, with today’s trading volume at 144% of their 4-week average volume so far.

Here are more details.

Go ahead, EML, do your thing

In the update, EML advised that the CBI has given the green light for it to establish a base and start signing customers in Ireland.

EML’s subsidiary, PFS Card Services (Ireland) Limited (PCSIL) was under the Irish regulator’s microscope after it voiced regulatory concerns with the company back in May.

At the time of the announcement, investors punished EML, wiping around half its value off the table in the days afterwards. Its share price had yet to make a recovery – until yesterday’s sprout from the soil of its 52-week lows.

Another positive from the CBI’s ruling is that no controls are set to be imposed on any of PCSIL’s new programs. The subsidiary has also agreed to work with the regulator and ensure all compliance measures are met with certainty.

One limit that was imposed, however, was a growth cap on PCSIL’s total payment volumes. The growth limitation will be in place for a year but could be removed beforehand if PCSIL verifies it is complying with all relevant measures.

The EML share price was catching bids like feeding tuna yesterday, as investors sent its share price flying from a low of $2.75 to close at $3.61.

The frenzy has since cooled off somewhat today, however shares are now up 18% on the month, and are starting to claw back some gains from the longer-term downtrend.

For comparison, just prior to the CBI’s investigation which started in May, EML had just reclaimed its losses from the March 2020 selloff, brought on by COVID-19. Back then it was posting record highs again, right before the news broke.

However, yesterday’s update has commentary shifting back to a more bullish tone. A recent note out of UBS updating its clients suggests that there is more life in the EML share price.

The broker retained its buy rating in the note and values EML at $4.40 per share following the update out of EML’s corner.

UBS reckons that the go ahead improves EML’s company risk profile, which in turn improves the risk and reward prospects for investors. The firm also believes it could re-rate at higher multiples in the future if European profits are high.

EML share price snapshot

These gains are welcomed for the EML share price, having posted a loss of just 1% in the past 12 months now. Despite this, it is still down 13% this year to date.

After wiping half of its value back in May, the EML share price was trading flat until October, where it began losing popularity.

It reached a 52-week closing low on 23 November, just before the CBI’s resolutions were announced, which sent EML shares back north.

The post Here’s why EML (ASX:EML) shares have surged 33% this week appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• These 3 ASX 200 shares are topping the volume charts this Thursday
• Why Adairs, EML, Fisher & Paykel Healthcare, and NRW are storming higher
• ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light
• EML (ASX:EML) share price rockets 17% on new programs green light from regulator

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of 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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As one of the oldest blue-chip shares on the S&P/ASX 200 Index (ASX: XJO), Wesfarmers Ltd (ASX: WES) has amassed a reputation as a solid and reliable payer of dividends over many decades.

Last year that was an extremely difficult one for a number of ASX shares for obvious reasons. As such, many, including the ASX banks, were forced to slash their dividend payments. But Wesfarmers was not among that number.

The company managed to keep its biannual dividends flowing last year, and even shelled out a special dividend in October 2020.

Today, the Wesfarmers share price has lost 1.08% at the time of writing and is sitting at $58.76 a share. That’s down more than 11% from the new all-time high of $67.20 that we saw back in late August.

But as every dividend investor would know, a lower share price means a higher starting dividend yield for any new investment.

So what exactly is the Wesfarmers dividend worth in November 2021?

Breaking down the Wesfarmers dividend

Wesfarmers’ last two dividends were an interim payment of 88 cents per share that investors received in March and a 90 cents per share payment that hit bank accounts on 7 October last month.

If we plug that $1.78 in total dividends into the current Wesfarmers share price, we get a trailing yield of 3.03%. That grosses up to 4.33% if we include Wesfarmers’ full franking.

That’s arguably not too shabby, considering the current record low-interest-rate environment.

But what about the future? After all, just because a company has paid a certain dividend in the past does not at all guarantee it will do so in the future.

Well, as my Fool colleague Tristan covered earlier this week, one broker who reckons investors could be treated to even higher dividends next year is UBS.

UBS is anticipating Wesfarmers to grow its annual dividend for FY 2022 to $1.83 per share, up a healthy 2.8% from FY 2021’s $1.78 per share. If that turned out to be true, it would give this ASX 200 blue chip a forward yield of 3.12% on the current Wesfarmers share price.

The post What is the Wesfarmers (ASX:WES) dividend worth in November? appeared first on The Motley Fool Australia.

More reading

• 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?
• Only a few ASX 200 companies have received this honour and Scentre (ASX:SCG) just joined them
• Why has the Wesfarmers (ASX:WES) share price leapt 8% over the past month?
• Is the Wesfarmers (ASX:WES) share price great value or overvalued?

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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The Helloworld Travel Ltd (ASX: HLO) share price is spiralling today amid the identification of a new COVID-19 variant.

At the time of writing, the Helloworld share price is $2.06 — 5.94% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 1.7% right now.

Let’s take a closer look at what we know of the variant so far.

What’s weighing on the Helloworld share price?

The Helloworld share price is suffering alongside its ASX 200 peers today as the UK Health Security Agency’s CEO Jenny Harries stated a new COVID-19 variant is “a clear reminder to everyone that this pandemic is not over”.

South Africa’s National Institute for Communicable Diseases (NICD) announced it had documented the variant yesterday. The mutation has initially been named B.1.1.529.

The UK has slammed its borders shut to 6 African nations on the back of the discovery. It claimed several mutations, including a change in the virus’ protein spike, could make the variant resistant to vaccines, harder to treat, or easier to spread.  

The NICD stated that, as of yesterday, there have been 22 cases of B1.1.529 in South Africa.

Another 2 cases have been identified in Hong Kong. Authorities there believe it might have spread from a traveller arriving from South Africa. Cases have also been found in Botswana.

Travel between the UK and the 6 banned nations will resume once the UK’s hotel quarantine system is up and running.

When it is operational, travellers to the UK from South Africa, Botswana, Lesotho, Eswatini, Zimbabwe, or Namibia will need to pay for and complete a 10-day stint in hotel quarantine.

The Helloworld share price isn’t alone in its suffering today.

The Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT) share prices have fallen 4.8% and 5.9% respectively.

What’s going on with Australia’s borders?

According to reporting by News.com.au, Australian Health Minister Greg Hunt told a press conference this morning Australia’s border restrictions won’t be changing. The publication quoted Hunt as saying:

If the medical advice is that we need to change [border restrictions], we won’t hesitate…

At this point in time, there’s very little traffic directly between South Africa and Australia.

We also happen to be very, very highly vaccinated now… that’s a very different position from [where we were] when the Delta variant emerged in India

The post Why is the Helloworld (ASX:HLO) share price tumbling 6% on Friday? appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX 200 travel shares are getting hammered 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 shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Helloworld Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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When it comes to ASX dividend shares, there are certainly a lot to choose from if an investor is seeking income. Most companies on the S&P/ASX 200 Index (ASX: XJO) pay a dividend, which immediately gives you a few options, to say the least.

So how does one find the right needles in this haystack of potential income-producing investments? Taking a look at what some of the ASX’s expert investors reckon can always be of assistance.

So here are 3 ASX dividend shares that are currently rated as ‘buys’ by some of the ASX’s most well-known brokers.

3 ASX dividend shares top brokers rate as buys today

National Australia Bank Ltd (ASX: NAB)

As an ASX bank, NAB’s reputation as one of the ASX’s heaviest dividend payers has long been standing. Just today, we charted this bank’s journey from paying 60 cents in dividends per share in 2021 to $1.27 per share in 2021. Broker Goldman Sachs currently rates NAB shares as a buy with a 12-month share price target of $31.15.

Goldman likes NAB’s exposure to the business banking sector, which it sees as stronger than some of the other ASX banks. It also sees NAB’s strong capital position as a positive and notes its current dividend payout ratio of 68%, which indicates its dividends could grow further in the coming years. NAB shares currently have a dividend yield of 4.58%.

South32 Ltd (ASX: S32)

ASX 200 diversified miner South32 is another share that Goldman Sachs rates as a buy right now, a ‘conviction buy’, no less. Goldman currently rates South32 with a 12-month share price target of $4.40. That implies a potential upside of almost 24% on current pricing.

While South32 may have a current dividend yield of 1.84%, Goldman reckons the miner will be able to pay out much stronger dividends going forward on the back of higher commodity prices.

It sees the current South32 share price as offering a forward dividend yield of between 12 and 13% for both FY2022 and FY 2023.

Coles Group Ltd (ASX: COL)

Coles is our last dividend share to check out today. As my Fool colleague James discussed this morning, Coles is currently rated as an ‘add’ by broker Morgans. Morgans is seeing Coles at a share price of $19.90 in a year’s time, implying a potential upside of roughly 10%.

But Morgans is also expecting Coles to shell out 61 cents per share in fully franked dividends for FY 2022, equalling the payouts shareholders have enjoyed over the past 12 months. That implies Coles’ current yield of 3.38% is sustainable going forward.

The post 3 ASX dividend shares brokers rate as buys right now appeared first on The Motley Fool Australia.

More reading

• Why the Shopping Cntrs Austrls (ASX:SCP) share price is lagging today
• What is the NAB (ASX:NAB) fully franked dividend worth in November?
• Top broker gives its verdict on the NAB (ASX:NAB) share price
• Is the Coles (ASX:COL) share price a buy in the lead up to Christmas?
• 5 things to watch on the ASX 200 on Friday

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 owns shares of and has recommended COLESGROUP DEF SET. 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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As the end of 2021 draws closer, fund managers are already sharpening their pencils and running the numbers on which ASX shares could make a bucketload for investors in the year ahead.

Two small-cap companies have made their way into the top picks of two distinguished brokers. Here’s a look at why these shares are a buy in 2022 according to the experts.

These ASX shares make fundies’ 2022 wishlist

Jumbo Interactive Ltd (ASX: JIN)

According to Arden Jennings of Ausbil Investment Management, shares in ASX-listed Jumbo make for an attractive proposition. The online lottery business has been humming along this year, producing record numbers. In its FY21 full-year results, Jumbo reported a 17% increase in revenue to $83.3 million. Meanwhile, underlying net profit after tax climbed 7% higher to $28.3 million.

Jennings, a portfolio manager of a small and micro-cap fund, highlighted an expected increase in the chance of jackpots next year following a change to the Oz Lottery. Bigger jackpots tend to correlate with larger ticket sales, which would benefit the company.

In addition, Jennings shared an appreciation for Jumbo’s approach to international expansion. In November 2019, it acquired UK digital lottery solution provider Gatherwell. More recently, Jumbo announced the acquisition of Stride, opening the gates to the Canadian lottery market.

A big positive, in Jennings’ opinion, would be if the company could get ahold of a US state lottery business in the next 12 to 24 months.

Estia Health Ltd (ASX: EHE)

The other number one ASX share for 2022 is from Tobias Yao of Wilson Asset Management. In Yao’s opinion, the ASX-listed residential aged care provider could be set for a big year in 2022. Despite the lingering concerns of COVID-19, Estia has returned ~24% to shareholders this year, but there could be more to come from Yao’s view.

Importantly, an end to the regulatory uncertainty is anticipated by the fund manager. This would remove a layer of skepticism towards the sector. Additionally, the government spending outlined in the federal budget could give companies like Estia a boost.

Finally, Yao mentioned the heightened merger and acquisition activity within the sector. At a market capitalisation of ~$570 million, the ASX share might find itself a suitor in 2022.

The post Fundies reveal their 2 top ASX shares for 2022 appeared first on The Motley Fool Australia.

More reading

• Why Chalice, De Grey, Estia Health, and Fortescue shares are racing higher
• Why Jumbo, Link, News Corp, and REA shares are storming higher

Motley Fool contributor Mitchell Lawler owns shares of Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive 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 suffering amid headlines a new COVID-19 variant has spurred some countries to implement new border restrictions.

The United Kingdom has halted flights from 6 African nations after South Africa’s National Institute for Communicable Diseases (NICD) announced it has identified a new COVID-19 variant, currently named B.1.1.529.

At the time of writing, the Flight Centre share price is $17.37, 6.21% lower than its previous closing price.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 1.3% right now.

Why is the Flight Centre share price falling?

The Flight Centre share price is struggling today after the announcement of a new hurdle facing the world’s reopening.

As of yesterday, South Africa had recorded 22 cases of the B.1.1.529 variant. Another 2 cases have been found in a Hong Kong hotel where it could have spread from a traveller arriving from South Africa. Cases have also been identified in Botswana.

The variant includes a large number of spike protein mutations, as well as mutations in other parts of the viral genome. These mutations might change the effectiveness of vaccines, treatments, and spread.

In a statement, NICD acting executive director Prof Adrian Puren stated:

[O]ur experts are working overtime with all the established surveillance systems to understand the new variant and what the potential implications could be.

The CEO of the UK Health Security Agency, Jenny Harries, also commented:

This is the most significant variant we have encountered to date and urgent research is underway to learn more about its transmissibility, severity, and vaccine-susceptibility… This is a clear reminder to everyone that this pandemic is not over.

According to reporting by ABC News, Australian Health Minister Greg Hunt has acknowledged the variant. However, he hasn’t acted to change Australia’s border restrictions. The publication quoted Hunt as saying: “If the medical advice is that we need to change [our border restrictions], we won’t hesitate.”

The Flight Centre share price isn’t alone in its tumble today. The share prices of Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) are both down around 5%.

News of the B1.1.529 variant follows reports that Belgium increased COVID-19 restrictions and Austria entered a lockdown earlier this week. The measures to prevent spread followed the outbreak of a fourth wave of cases in parts of the continent.

Additionally, new COVID-19 cases surged 16.1% in the United States last week.

The post What is going so wrong for the Flight Centre (ASX:FLT) share price today? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday
• Why are ASX 200 travel shares having such a shocker today?
• How do you value the Flight Centre (ASX:FLT) share price?
• Why is the Flight Centre (ASX:FLT) share price tumbling 6% to a 2-month low?
• Here’s why ASX 200 travel shares are getting hammered 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 and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) share price is underperforming its peers today after getting hit by a broker downgrade.

Shares in the neighbourhood shopping centre operator tumbled 1.7% to $2.85 during lunch time trade.

It doesn’t help that the S&P/ASX 200 Index (Index:^AXJO) is getting sold off, although other mall operators are holding up better than the Shopping Centres Australasia (SCA) share price.

The Unibail-Rodamco-Westfield CDI (ASX: URW) share price is flat. The Vicinity Centres (ASX: VCX) share price dipped 0.4% and Scentre Group (ASX: SCG) share price shed 1.1%.

SCA share price hit by downgrade

A downgrade by Macquarie Group Ltd (ASX: MQG) is a likely explanation for the underperforming SCA share price.

Macquarie’s decision to cut its rating on the ASX property group to “neutral” comes even as the broker upgraded its forecasts for the shares.

The increase in earnings estimates is driven by SCA’s recent acquisitions. But Macquarie warns that growth will be more difficult to come by from here.

Running out of puff

“Over the last five years, SCP has on average acquired ~$230m of assets p.a. SCP has now acquired $348m of assets in 1H22,” said the broker.

“However, with gearing now ~36% on a pro-forma basis, there is more limited headroom for further acquisitions.

“In addition, SCP has also flagged a potential shift into funds management on behalf of institutional equity. With cap rates compressing in key sub-sectors, we believe this is a signal SCP is finding it more difficult to acquire assets above their WACC.”

One also shouldn’t forget that it takes time for funds management platforms to generate meaningful earnings.

COVID winner losing its shine

This leaves the SCA share price vulnerable to a sell-off after its 14% rally this year. The regional mall operator has been a beneficiary of the COVID-19 lockdowns as more Aussies shop local.

The tenants at these centres are usually the major supermarket chains, which also benefited from the rolling lockdowns. This explains why the Woolworths Group Ltd (ASX: WOW) share price and Coles Group Ltd (ASX: COL) share price have held up over the course of the pandemic.

What is the SCA share price worth?

But the tide is turning for SCA even though the shop local theme will remain a feature on the retail landscape, added Macquarie.

“However, the share price implies ~60bps of cap rate compression (or 12% increase in asset valuations), which we believe captures this upside risk,” said the broker.

“With a more limited balance sheet, and downside risk to free cashflow, we downgrade to Neutral.”

Macquarie’s 12-month price target on the SCA share price is $2.94 a share.

The post Why the Shopping Cntrs Austrls (ASX:SCP) share price is lagging today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday
• ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit
• Is the Coles (ASX:COL) share price a buy in the lead up to Christmas?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today

Motley Fool contributor Brendon Lau owns shares of Macquarie 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 owns shares of and has recommended COLESGROUP DEF SET and Shopping Centres Australasia Property Group. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has been enduring a rather disappointing four weeks or so of performance. Over the past month, the ASX 200 is down by roughly 1.7%, including the nasty 1.2% fall we’ve seen so far today. One ASX exchange-traded fund (ETF) is certainly putting the ASX 200 to shame over this period. That would be the ETFS Battery Tech & Lithium ETF (ASX: ACDC).

While the ASX 200 has gone backwards over the past month, the ACDC ETF has gone from a unit price of $93.91 to $96.95 that it is commanding currently. That’s a very pleasing gain of 4%, despite the 1.25% it has lost today thus far.

So how has a new ETF like ACDC pulled this off?

ACDC ETF gets a power surge

Well, let’s dig a little deeper into what kind of investments ACDC actually holds. An ETF is only worth the sum of its parts, after all.

So according to the provider ETFS, ACDC is an ETF dedicated to companies in the battery technology and lithium mining spaces. It is designed to track “the performance of companies that are providers of electrochemical storage technology and mining companies that produce metals that are primarily used for the manufacturing of battery-grade lithium batteries”.

The top part of the Battery Tech & Lithium ETF portfolio is currently (as of 31 October) positioned as follows:

1. BYD Co – weighting of 5.9%
2. Pilbara Minerals Ltd (ASX: PLS) – weighting of 5.3%
3. Tesla Inc (NASDAQ: TSLA) – weighting of 4.9%
4. SolarEdge Technologies Inc (NASDAQ: SEDG)– weighting of 4.7%
5. Livent Corp (NYSE: LTHM)– weighting of 4.6%

Over the past month, BYD shares are up 1.86%.

Our own Pilbara Minerals is up a pleasing 15.7%. 

Tesla is up 9.6% over the past month.

SolarEdge shares have risen 11%

And Livent Corp stock is up 19.1%.

Since these 5 companies comprise 25.4% of this ACDC ETF’s portfolio, it’s perhaps no surprise that ACDC has also had a successful month.

The ETFS Battery Tech & Lithium ETF charges a management fee of 0.69% per annum. Since its inception in August 2018, it has returned an average of 25.6% per annum.

The post Here’s why the ETFs Battery Tech & Lithium ETF (ASX:ACDC) is having such a rocking month appeared first on The Motley Fool Australia.

More reading

• Why is the Brickworks (ASX:BKW) share price struggling this week?
• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday
• Here’s why the FBR (ASX:FBR) share price is sinking 7% today
• Why are ASX 200 travel shares having such a shocker today?
• The Telstra (ASX:TLS) share price is having a good month. Here’s why these top brokers are expecting more of the same

Motley Fool contributor Sebastian Bowen owns shares of Tesla. 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 Brickworks Limited (ASX: BKW) haven’t found range today and are inching lower at $23.30. It looked like a positive start to the day for investors, but shares fell south by mid-morning.

It’s been a wavy ride these past 3 months for Brickworks investors as well. Shares have bounced from a top of $25.93 in late September, and the trend has spilled over into this week’s trading.

Let’s take a closer look.

What’s got Brickworks share price battling this week?

The Brickworks share price has been underperforming the benchmark S&P/ASX 200 Index (ASX: XJO) these past few days.

Investors responded poorly to the company’s AGM presentation and trading update on Tuesday. In it, the company outlined both investment highlights and challenges to its shareholders.

The company says it has made a steady start to FY22, with first quarter revenue and EBITDA slightly ahead of the prior corresponding period.

However, sales in Sydney and Melbourne, Brickworks’ two largest markets, were impacted by construction restrictions due to the pandemic.

Sales across concrete products, including Austral Masonry, were down on the prior period, with this business “more exposed to the current weakness in the multi-residential segment”.

Meanwhile, construction of its brick facility at Horsley Park in Sydney is also “well underway” and is expected to be completed in around a year’s time.

Whilst Brickworks recorded a strong increase in sales, margins in its North America business remain compressed. It says it is experiencing cost pressures across the supply chain, including direct production inputs and transportation.

Labour shortages are resulting in higher wage rates to attract and retain staff, and activity in the higher margin commercial segment is expected to remain weak until Spring.

The company acknowledged that “there remains work to do to ensure this business reaches its full potential”, but that it is confident that North American operations will deliver improved earnings in the years ahead.

What’s the outlook?

Regarding the company’s outlook, management noted that within Australia, sales momentum is improving. It hopes the activity can remain elevated for the rest of the financial year.

In North America, it reckons FY22 earnings will benefit from capital management and rationalisation initiatives, despite ongoing margin pressures.

The merger of Soul Pattinson Ltd (ASX: SOL) and Milton Corporation Ltd (ASX: MLT) triggered a one-off non-cash profit to Brickworks, due to Brickworks’ share of the larger WHSP.

This profit will be in the range of $375-425 million (after-tax) and will be recorded in the first half of FY22.

Speaking on the company’s outlook, Brickworks’ Managing Director Lindsay Partridge said:

The pandemic has accelerated industry trends towards online shopping, and this is continuing to drive industrial property values higher. With our annual revaluation process to be completed prior to the end of the first half, we anticipate these trends will result in further revaluation gains across our portfolio.

Partridge continued:

In both countries [North America and Australia], there remains an ever-present threat of further unforeseen disruptions from the pandemic and related supply chain issues. Another strong half is expected for Property, and WHSP is expected to deliver a stable and growing stream of earnings and dividends over the long term.

Brickworks’ shares are down 5% on the month but have clawed 15% higher in the past year. This has come after rallying 21% since January 1, but its share price is now well off its 5-week high of $26.32.

The post Why is the Brickworks (ASX:BKW) share price struggling this week? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 2 ASX dividend shares offering solid income and growing yields
• Why is the Brickworks (ASX:BKW) share price having such a lousy month?
• Why is the Washington H. Soul Pattinson (ASX:SOL) share price struggling in November?
• 2 ASX shares that could be buys for both growth and dividends

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Webjet Limited (ASX: WEB) share price is dropping again. It is currently down by another 5% at the time of writing.

But this adds to declines that the business has seen over the last couple of weeks. Since Monday 8 November 2021, it has fallen by 19%.

But Webjet isn’t the only one suffering today. Other S&P/ASX 200 Index (ASX: XJO) shares are also in the red. The Corporate Travel Management Ltd (ASX: CTD) share price is down 5%, the Flight Centre Travel Group Ltd (ASX: FLT) share price is down 7.5% and the Qantas Airways Limited (ASX: QAN) share price is down 5.3%.

What’s going on with the Webjet share price

Sometimes investors are willing sell first and ask questions later when it comes to potential problems.

COVID-19 has been impacting the travel industry for almost two years now.

But whilst it seemed like everything was settling down, there are reports of a new COVID-19 variant that could be about to put a spanner in the works for the Webjet share price, and potentially many others.

According to reporting by various media, such as News.com.au, there is variant that prove to be even more troubling than the Delta strain.

The BBC reports that scientists say the variant has 50 mutations overall and more than 30 on the spike protein, which is the target of most vaccines and the “key the virus uses to unlock the doorway into our body’s cells”.

It’s reported that experts in South Africa have said the variant is “very different” to others that have circulated, with concerns that it could be more transmissible but also able to get around parts of the immune system.

Prof Ravi Gupta, from the University of Cambridge, said the new variant had the potential to escape immunity and have increased infectivity.

The BBC reported Prof Neil Ferguson, from the Imperial College London, has said it’s concerning the new variant appeared to be “driving a rapid increase in case numbers in South Africa” and said the move to restrict travel was “prudent”.

UK restricts travel

The UK has decided to act quickly to stop this variant getting into the country. People coming from several southern African countries – South Africa, Namibia, Zimbabwe, Botswana, Lesotho and Eswatini – will have to quarantine. All flights from those countries have been suspended.

Any British or Irish resident arriving from the countries will have to quarantine in a hotel from Sunday morning.

The BBC reported the flight ban will remain in place until the hotel quarantine system is up and running.

A big question for the Webjet share price, the ASX 200 travel share sector and the wider world will be what happens next if this new variant escapes southern Africa? Will there be more travel bans and quarantining?

UK Health Secretary Sajid Javid said these actions were about “being cautious and taking action and trying to protect. as best we can, our borders”.

What is the Australian response?

The World Health Organization’s technical working group is going to meet on Friday to discuss this new variant.

However, at this stage, Australia is not going to make any changes. The Guardian and many other media outlets reported that the Australian health minister, Greg Hunt, has told media there will be no changes to flights from South Africa.

But the Australian government will remain flexible and could make changes if needed. But passengers from South Africa are currently going through 14-day quarantine anyway.

Webjet share price snapshot

Despite the fact that Webjet shares are down so much over the last month, it is still up 7% in the last six months and 4% in 2021 to date.

The post Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday appeared first on The Motley Fool Australia.

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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 Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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