Category: Stock Market

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.

What happened

Shares of Tesla (NASDAQ: TSLA) jumped on Wednesday, climbing 3.6% by the time the market closed. The move extends the stock’s recent bullish momentum.

While there was no specific reason for the growth stock‘s gain on Wednesday, shares have been generally trending upward lately. This could be a continuation of that trend. In addition, it was an upbeat day for the overall market, with the S&P 500 and the Nasdaq climbing about 0.7% and 1%, respectively.

So what

Highlighting Tesla stock’s momentum recently, shares have surged 71% over the past three months and 57% in the last 30 days alone. With so much momentum, it’s not surprising to see shares trading higher again. Of course, investors shouldn’t count on this near-term momentum to continue. Any pullback after such a staggering run-up could be sharp.

Tesla’s third-quarter momentum has had many analysts recalibrating their models for the stock higher. The company has made significant progress in manufacturing, sales, and profitability — even during a challenging operating environment. Third-quarter vehicle deliveries increased 73% year over year to more than 241,000, and management said it was able to achieve an annualized production run rate of more than 1 million cars by the end of the quarter.

Now what

The downside to a soaring stock price, of course, is that expectations are increasing. This means investors expect Tesla’s impressive business momentum to persist. Looking ahead, investors will want to look for the company to continue growing deliveries and profitability.

Fortunately, management seems to think Tesla is just getting started. In its third-quarter shareholder update, the company guided for 50% annual growth in deliveries over “a multi-year horizon.” 

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

The post Why Tesla stock jumped on Wednesday appeared first on The Motley Fool Australia.

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• Why Tesla stock jumped on Thursday
• Why Tesla stock revved even higher on Tuesday
• Why is the Liontown (ASX:LTR) share price roaring 5% higher today?
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• Why ASX lithium shares are surging higher on Tuesday

Daniel Sparks 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.

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

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The Suncorp Group Ltd (ASX: SUN) share price is trading lower on Thursday morning.

At the time of writing, the insurance giant’s shares are down 1% to $11.23.

Why is the Suncorp share price under pressure?

The Suncorp share price has come under pressure this morning after following the lead of rival Insurance Australia Group Ltd (ASX: IAG) by releasing an update on recent claims.

This follows the hail and wind event which occurred on 28 and 29 October, impacting South Australia, Victoria and Tasmania.

According to the release, as of 3 November, Suncorp had received approximately 12,000 home and motor claims. However, as the full extent of damage is still unfolding, the company expects claims to rise further.

So much so, Suncorp is forecasting the total cost from the event to be in the range of $225 million to $250 million.

Suncorp’s Group CEO, Steve Johnston, said: “Our local assessors and tradespeople are on the ground and helping affected customers.”

“One of the key elements of our Best in Class Claims strategy is a more flexible workforce, which has been successfully scaled up to support this event. Our focus on the digital customer experience is also yielding positive results with more than half of all home and motor claims from this event lodged online.”

“The Group’s supply chain is responding well and we are not currently experiencing issues due to border restrictions. We will continue to work closely with governments and the Insurance Council of Australia to ensure we can respond to customers as quickly as possible,” he added.

What about other events?

Suncorp revealed that there was a total of six declared weather events in October.

And while it is too early to accurately estimate the ultimate costs of the more recent events, Suncorp estimates that its hazard costs currently stand at $597 million to $702 million financial year to date. This is up from $382 million and $492 million just last week.

As a result, the company is forecasting full year natural hazard costs is in the range of $1.105 billion to $1.130 billion. This will exceed its FY 2022 allowance of $980 million by between $125 million to $150 million.

The post Why the Suncorp (ASX:SUN) share price is dropping today appeared first on The Motley Fool Australia.

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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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It’s been a good 30 days for the Megaport Ltd (ASX: MP1) share price. It’s soared 19.6% since this time last month to finish yesterday’s session at $19.29.

For context, the S&P/ASX All Technology Index (ASX: XTX) has gained 5.3% over the last 30 days.

That means, over the month that’s been, the Megaport share price has beaten the average performance of its peers by an impressive 14.3%

So, what’s lead to the software-defined network service provider to outperform other ASX tech giants? Let’s take a look.

The month that’s been for Megaport

Megaport has only released one price sensitive announcement to the ASX in the last month, and it seemed to be a good one.

The company provided the market with an update on its September quarter on 21 October.

However, the market was seemingly disappointed. On the day Megaport released its only news of the last 30 days, the company’s share price dipped 0.7%.

Within the update, Megaport detailed a period in which its monthly reoccurring revenue increased to $8.6 million, 14% more that of the previous quarter.

The company’s quarterly revenue also came to $24.6 million, 8% greater than that of the June quarter.

Megaport’s CEO Vincent English commented on what seemed to be a successful quarter, saying:

With a record quarter of [monthly reoccurring revenue] growth and a continued increase in long-term commitments from our customers, we are seeing more substantial adoption of our platform.

Megaport share price snapshot

The gains experienced by the Megaport share price over the last month have boosted it further into the green on the ASX.

Right now, the company’s stock is trading for 35% more than it was at the start of 2021. It has also gained 33% since this time last year.

At its current share price, the company has a market capitalisation of around $3 billion.

The post Megaport (ASX:MP1) share price outperforms All Tech Index by 14% over the past month appeared first on The Motley Fool Australia.

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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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Westpac Banking Corp (ASX: WBC) share price had a relatively uneventful month of October. The company’s shares continued to tread close to its 52-week high of $27.12, before plummeting on 1 November.

At Wednesday’s closing bell, the bank’s shares began to recoup some losses by edging 0.09% higher to $23.15.

How did Westpac shares fare in October?

Investors remained undecided during October as Westpac shares went through a horizontal channel. This came despite the company releasing a price-sensitive market announcement advising of notable items affecting its second-half profit.

The news appeared to barely both shareholders, with Westpac shares falling just 1.65% that day to $25.63.

For the month, the bank’s shares dipped just under 1%, which fared worse than the S&P/ASX 200 Index (ASX: XJO). The benchmark index rose by 2% in value over the period.

However, while last month seemed quiet, the company’s release of its full-year results on November 1 had a detrimental impact on its shares.

Westpac revealed a step in the right direction with increases across key metrics. But the financial scorecard missed the mark with investors who were expecting more. This led the company’s shares to sink 7.36% to $23.78 apiece.

In addition, Australia’s oldest bank stated that it is conducting a $3.5 billion off-market share buyback.

What do the brokers say?

Following the FY21 results, a number of brokers weighed in on the company’s share price.

Analysts at Morgan Stanley downgraded their outlook to an “equal weight” rating from “overweight” for the Westpac share price. The broker cut its price target by 14% to $24.80.

Goldman Sachs also reassessed their rating, reducing the view on Westpac shares by 11% to $25.60. Based on the current share price, this implies an upside of approximately 10%.

The most recent note came from multinational investment bank, Bell Potter. The firm discounted Westpac shares by 4.1% to a 12-month price target of $26.

Westpac share price summary

Over the past 12 months, the Westpac share price has gained around 30% in value. It is also up by about 20% this year to date. Although, when looking over a 5-year time frame, Westpac shares are down by more than 20%.

Westpac has a price-to-earnings (P/E) ratio of 21.98 and commands a market capitalisation of roughly $87.24 billion.

The post How did the Westpac (ASX:WBC) share price perform in October? appeared first on The Motley Fool Australia.

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

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ASX shares are poised to open higher this morning after the US Federal Reserve reassured markets about inflation and interest rates.

The futures market is pointing to a 0.5% rise in the S&P/ASX 200 Index (Index:^AXJO) this morning.

ASX shares are poised to rise with US shares, which recovered from early losses after the Fed released its policy decision.

How the Federal Reserve is stimulating ASX shares

The Fed said it will par stimulus but played down the prospects of an early rate hike to cool a spike in inflation.

The US central bank will reduce its bond purchase by US$15 billion to US$105 billion from this month. It said it is planning on completely stopping these purchases by 2022.

The Fed has been buying US government bonds and mortgage-backed securities to inject cash into the financial system. The Reserve Bank of Australia (RBA) have a similar but smaller scale program here.

It’s all about interest rates, stoopid

While such stimuli have been a big driver for the bull run in equities, the move has been well flagged. The market knew this was coming.

The wildcard was the Fed’s stance on interest rates. Credit markets pricing in rate hikes well ahead of what the Fed had telegraphed.

On that front, Fed chair Jerome Powell gave the bulls what they wanted – he stuck to the script. Powell said that rising cost pressures would prove to be “transitory”. This means a faster increase in interest rates won’t be required to control inflation.

ASX shares gets reassurance from the Fed

Markets have been obsessed by interest rates. This is true in Australia as well with ASX shares hanging on to the words of the RBA as credit markets here are also pricing in faster than forecast rate hikes.

Central banks use interest rates to control inflation, which have surged due to disruptions cased by the COVID-19 pandemic.

Higher commodity prices and the shortage of workers in multiple industries are also adding upward pressure on prices.

How big a deal is interest rates on shares?

But as international borders reopen and as some commodity prices, like iron ore, have pulled back from their peaks, the Fed is betting that inflation will ease.

The RBA is counting on the same thing. While everyone knows that interest rates can’t stay at record lows forever, ASX shares and international equities are not pricing one in for next year.

Share investors and credit traders are at loggerheads and one group will be paying a high price for getting the rate call wrong.

Not sure about you, but I know which team I am cheering for.

The post What’s going on with the Federal Reserve and how might it impact ASX shares? appeared first on The Motley Fool Australia.

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

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The AVITA Medical Inc (ASX: AVH) share price will be keenly watched when the ASX opens on Thursday after some big news overnight pushed its US shares up 7%.

The company provides regenerative medical technology, with its ReCell spray-on skin for burn patients its flagship product.

Overnight Avita revealed that US authority Centers for Medicare & Medicaid Services (CMS) approved ReCell for a transitional pass-through payment device category code that will provide payment for “procedures that are performed in hospital outpatient facilities and ambulatory surgical centres”.

What does this mean?

A prominent fund manager told The Motley Fool that it’s a huge boost for the adoption of ReCell in the US market.

“Doctors will get reimbursed for the cost of the device when they use it for burns treatments outside a hospital setting.”

Avita shares on the NASDAQ rocketed overnight

The company, founded by 2005 Australian of The Year Dr Fiona Wood, is listed on both the ASX and the NASDAQ.

In what could be an omen for the Australian market, AVITA Medical Inc (NASDAQ: RCEL) shares shot up 7.12% in overnight trade.

The news will be some relief to shareholders, who have had their faith sorely tested in the past 18 months.

After reaching as high as $16.30 in February 2020 before the COVID-19 crash struck, Avita’s ASX shares have sunk 73% since then.

Avita’s ASX shares closed Wednesday at $4.43.

Avita chief executive Dr Mike Perry said the CMS approval could be a precursor for future subsidies.

“This device code lays the reimbursement foundation for the soft tissue repair indication we are working towards, which has a serviceable addressable market valuation of US$450 million.”

Despite its recent struggles, Avita shares continue to be a favourite among analysts.

According to CMC Markets, 5 of 6 analysts rate it as a “strong buy”.

Montgomery Fund portfolio manager Joseph Kim in July told The Motley Fool it’s a stock he would hold on for 5 years.

“It’s going to take time. And there’s always going to be people that won’t use it because they’re just stuck in their ways,” he said.

“But then, ultimately, as a doctor with the duty of care, you’ve got to provide the best outcome to your patients. I think from that perspective, I’m pretty optimistic now.”

The post Why this medical tech ASX share could rocket today appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Avita Medical Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a reasonably disappointing month for the Telstra Corporation Ltd (ASX: TLS) share price in October.

The telco giant’s shares ended the period almost 3% lower than where they started it at $3.82.

This was despite Telstra announcing an agreement to acquire Digicel Pacific together with the Australian Government.

What happened to the Telstra share price in October?

The Telstra share price appeared to run out of steam in October after some sensational gains year to date.

For example, despite its hiccup last month, the company’s shares are still up approximately 30% since the start of the year. This is almost triple the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.

Investors have been bidding the Telstra share price higher this year following a solid performance in FY 2021 and the unveiling of its new T25 strategy.

What is T25?

T25 is Telstra’s new strategy, replacing its highly successful T22 strategy at the end of the current financial year.

Telstra’s CEO, Andrew Penn, explained that T22 was based on transforming the company, whereas T25 will be about driving growth.

Management is aiming for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share (EPS) compound annual growth rates (CAGR) from FY 2021 to FY 2025.

Goldman Sachs is a fan of the new strategy and believes it will lead to a long-awaited dividend increase in the near future.

Its analysts are forecasting dividends of 16 cents per share in FY 2022 and FY 2023, before an increase to 18 cents per share in FY 2024 and then 19 cents per share dividend in FY 2025.

In light of this increasingly positive outlook, the broker has put a buy rating and $4.40 price target on its shares. Based on the current Telstra share price, this implies potential upside of almost 13% for investors.

This means November has the potential to be a much better month for the Telstra share price.

The post Here’s what happened to the Telstra (ASX:TLS) share price in October appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Telstra Corporation 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 Afterpay Ltd (ASX: APT) share price will be one to watch on Thursday.

This follows news that its takeover by Square has taken a major step forward this morning.

Why is the Afterpay share price on watch?

The Afterpay share price could be on the move today after the payments company released an update on Square’s takeover proposal.

According to the release, Square shareholders have now approved the issuance of Square Class A common stock (including the shares underlying CHESS Depositary Interests) to Afterpay shareholders as contemplated by the scheme implementation deed the two parties entered into in August.

Approval for this issuance from Square shareholders was one of the major conditions of the transaction.

As a result, Afterpay can now push ahead with things. This includes holding its first court hearing later today. After which, the company expects to release its scheme booklet tomorrow, subject to court approval and following registration with the Australian Securities and Investments Commission.

If all goes to plan, Afterpay expects the transaction to close during the first quarter of calendar year 2022.

What is the current value of the takeover?

In August, the two parties agreed an all-scrip deal, which will see Afterpay shareholders receive a fixed exchange ratio of 0.375 shares of Square Class A common stock for each Afterpay share they hold on the record date.

Based on the current exchange rates and the latest Square share price of $252.48 (A$338.92), this equates to $127.10 per Afterpay share.

Due to the Square share price trading sideways since announcing the deal, this is broadly in line with the takeover price at the time the offer was made. It also represents a premium of 4.5% to the current Afterpay share price of $121.53.

The post Afterpay (ASX:APT) share price on watch after Square takeover update appeared first on The Motley Fool Australia.

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• What happened for the Afterpay (ASX:APT) share price in October?
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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 AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price was out of form again in October.

During the month, the mining giant’s shares lost a further 7% of their value.

This means that the Fortescue share price is now down 42% year to date.

Why did the Fortescue share price have such a lousy month?

Investors were selling down the Fortescue share price again last month following further weakness in iron ore prices and the release of its first quarter update.

In respect to the latter, during the first quarter, Fortescue shipped 45.6 million tonnes of iron ore. This was up 3% on the prior corresponding period and a record high for the first quarter.

However, taking the shine off its strong operational performance was the price the company was commanding for its iron ore.

Fortescue revealed that its average revenue per dry metric tonne fell 30% quarter on quarter to US$118. This represents revenue realisation of 73% of the average Platts 62% CFR Index during the period, compared to 84% during the fourth quarter.

The latter essentially means the discount for the company’s low grade iron ore is widening as end users opt for higher (and less polluting) grades.

And while a widening of this discount was expected by the market, it wasn’t expecting a realisation as low as 73%.

For example, according to a note out of Goldman Sachs, its analysts (and the consensus estimate) were forecasting a price realisation of 77%.

Goldman commented: “FMG shipped 45.6Mt of iron ore in the Sep Q (-2% vs GSe) at an average price realisation of 73% vs. the 62% Fe benchmark, below GSe/consensus (77%) on provisional pricing impacts. Production of the higher grade 60% Fe West Pilbara Fines (WPF) declined to 3.7Mt or 8% of the product mix, well short of the targeted 15-20%, despite the new Eliwana mine now fully ramped-up to 30Mtpa.”

In response, Goldman retained its sell rating and cut its target on the Fortescue share price down to $11.00.

If Goldman is on the money with its recommendation, the Fortescue share price could still have 23.5% to fall before it bottoms. This could potentially make November another tough month for the mining giant’s shares.

The post Why did the Fortescue (ASX:FMG) share price have such a lousy month in October? appeared first on The Motley Fool Australia.

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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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There are number of ASX shares that could be compelling ideas to consider for the long-term, starting from November 2021.

Share markets around the world have had a strong run over the last year. But some businesses may still be able to produce growth from here over time.

These two potential investments are benefiting from rising underlying demand:

Betashares Global Cybersecurity ETF (ASX: HACK)

This exchange-traded fund (ETF), as the name suggests, is about global cybersecurity businesses.

There are a number of different sectors within this portfolio related to fighting against cybercrime, including systems software, communications equipment, internet services and infrastructure, research and consulting services, IT consulting and other services, application software and so on.

This ETF is invested in a total of 36 positions. There are plenty of different names in the portfolio like Palo Alto Networks, Okta, Crowdstrike, Cloudflare, Tenable, Zscaler, Cyberark, Juniper Networks, Mimecast, Splunk, Fortinet, Verisign and Rapid7.

There is not a lot of geographic concentration within this ASX share’s with more than 90% of the holdings being from the US. There are only three other countries that have a weighting of at least 2%: France (2%), Japan (2.5%) and Israel (3.7%).

Betashares Global Cybersecurity ETF has produced an average return per annum of 21.6% over the last five years. The cybersecurity industry is seeing ongoing growth of demand as more systems and information goes digital.

It has an annual management fee of 0.67%.

REA Group Limited (ASX: REA)

This business is building a diversified array of digital assets relating to real estate.

It operates the leading residentials and commercial property websites in Australia – realestate.com.au and realcommercial.com.au. REA Group also owns the market leader of share property, flatmates.com.au.

In recent years, the ASX share has been expanding into the mortgage broking sector with the Smartline Home Loans and Mortgage Choice businesses. It also owns PropTrack, a leading provider of property data services.

The business also has various global investments as well. It has a controlling stake of REA India, which was previously called Elara Technologies, which operates websites like Housing.com. Makaan.com and PropTiger.com.

REA Group also owns leading portals in Hong Kong with Squarefoot.com.hk and China (myfun.com). It also owns a sizeable parts of Move Inc (operator of realtor.com in the US) and the PropertyGuru Group which has leading sites in Malaysia, Singapore, Thailand, Vietnam and Indonesia.

The global operations provides REA Group with plenty of growth avenues.

FY21 was another year where the business demonstrated growth, combined with operating leverage. Revenue rose 13%, whilst net profit grew 18% to $318 million and earnings per share (EPS) also increased by 21% to $2.47. This funded a 19% increase of the full year dividend to $1.31.

Whilst listing were affected by lockdowns in the first few months, REA Group continues to have monthly visits to realestate.com.au site that’s more than 3x more than its nearest rival and it’s benefiting from price increases.

REA Group will release its first quarter trading update later this week. The REA CEO Owen Wilson said a couple of months ago:

REA is entering the new financial year with strong momentum, despite ongoing lockdowns. This momentum, coupled with our strategic investments and exciting product roadmap, provides an excellent platform for our continued growth.

The post 2 compelling ASX shares that could be buys in November 2021 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. owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended REA 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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