It’s been a wild journey for TPG Telecom Ltd (ASX: TPG) shares over the past few years. Acquisitions, court hearings, and attempted deals with their biggest competitor. If the telecommunications industry was your thing, you could almost make a movie from the twists and turns that TPG has traversed in recent times.

Once upon a time, I was a shareholder in TPG — impressed with its rise to prominence in a competitive market. The company held a spot in my portfolio for close to four years, commencing in April 2017.

I decided to sell out of my holding completely once all the dust settled on its merger with Vodafone. At that point, TPG was at the largest, and arguably, most competitive position in its history.

What was the thinking behind this decision?

Where it began

To understand why I eventually hit sell on my TPG shares, I need to explain why I originally invested in the underdog.

At the time, I was still green in terms of my investing experience. As with most newcomers, the speculative neck of the woods is where curiosity first led me.

However, I soon got a taste for value-orientated companies. Businesses that were proven, profitable, and showed promise for delivering shareholder returns exceeding that of the S&P/ASX 200 Index (ASX: XJO).

In my search, I stumbled upon a company I had heard of before, TPG. My partner — who lived in Sydney back then — was a TPG customer. She opted for NBN internet with them over the other big names, such as Telstra Group Ltd (ASX: TLS) and Optus, due to their cheaper pricing.

To my excitement, I found that TPG — despite undercutting its competition — was growing its net profits after tax (NPAT) at an incredible rate. Earnings were $207.5 million at the end of the first half of FY17. Comparatively, the company’s first-half NPAT was $90.1 million only three years prior, as shown below.

In my eyes, here was a company that could deliver a competitive service at a cheaper price thanks to its growing participation in industry consolidation. Additionally, word on the street then was that TPG had plans to expand its successful campaign against the incumbents in the 5G mobile market.

It ticked my boxes: a history of a proven strategy, signs of competitive advantage, room for further growth, and an invested CEO steering the ship (founder David Teoh).

Why I sold my TPG shares

Fundamentally, the unravelling of my original investment thesis is what prompted me to sell my TPG shares in April 2021 for $6.10 apiece.

Firstly, the telecom provider’s plans of delivering a low-cost 5G mobile network began to crumble in 2019 amid a ban on Huawei infrastructure. The China-made devices were intended to underpin TPG’s competitive small-cell network.

Fortunately, TPG has managed to still tap into the opportunity through the merger with Vodafone Hutchinson Australia. However, I was concerned that Vodafone might come with some unwelcomed baggage given a series of $100 million-plus losses prior to the deal.

Furthermore, the entrepreneurial spark of David Teoh was extinguished on 26 March 2021 when the founder decided to resign.

Simply put, most of the factors that played into my justification for buying were now gone — or at minimum, far murkier than before. Feeling unconfident, it seemed only reasonable to sell my TPG shares and reassess my options.

Time to take another look?

Including dividends, TPG delivered a 15.2% total return over my holding period. Since selling, shares in the telco giant have netted a 12% loss after dividends.

I’m not going to claim that I knew the share price was going to fall, because I didn’t. I was more at odds with the likelihood of TPG shares outperforming the Aussie benchmark over the next five years.

When I sold, I was not convinced that this Aussie internet provider could unlock enough value to beat an equal investment in something like a Vanguard Australian Shares Index ETF (ASX: VAS).

Credit where it is due, TPG has been growing its earnings and dividends while keeping debt under control, as pictured above. As a result, shares in the company now offer a respectable dividend yield of 3.6% at a 65% payout ratio.

If the second-largest internet provider is able to continue to steadily grow earnings by chipping away at the market share of Telstra and Optus, I’d consider making a spot for TPG shares in my portfolio again.

However, the competitive pressures from new retail service providers and emerging low Earth-orbiting (LEO) satellites leave me with reservations.

In conclusion, I believe I made a reasonable investment decision at the time. As famed investor Peter Lynch once said, “Know what you own, and know why you own it.”

Following the changes at TPG, I personally no longer knew a solid reason for owning a piece of the company.

The post Was I dumb to sell my TPG shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Tpg Telecom. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a strong start to the trading week for the S&P/ASX 200 Index (ASX: XJO) so far this Monday.

The ASX 200 doesn’t seem to have been held down by any Monday-itis today thus far, with the index currently boasting a pleasing gain of 0.69%, lifting the ASX 200 to just over 7,333 points.

Let’s hope this optimism holds for the rest of the week. But let’s now turn to the ASX 200 shares that are currently at the top of the share market’s trading volume charts, according to investing.com. 

The 3 most traded ASX 200 shares by volume this Monday

Liontown Resources Ltd (ASX: LTR)

First up today we have ASX 200 lithium stock Liontown. This Monday has seen a decent 14.58 million Liontown shares trade hands as it currently stands. There’s been no fresh news or announcements out of the company itself today.

But that hasn’t stopped this ASX 200 share from rocketing by a pleasing 4.91% up to $1.71 a share. It’s this gain that seems to be responsible for so many Liontown shares trading today.

Pilbara Minerals Ltd (ASX: PLS)

Next up we have another ASX 200 lithium stock in industry-leader Pilbara Minerals. So far today, a hefty 17.25 million Pilbara shares have been bought and sold on the markets. There’s been no new news out of Pilbara either. But this company’s shares don’t seem to have been invited to the party that Liontown is at.

Pilbara has gone the other way so far today, with its shares presently down by a meaningful 1.67% to $4.11 each, despite spending some time in the green this morning at up to $4.26 a share. It’s probably this bouncing around that has prompted the high number of Pilbara shares flying across the ASX today.

Core Lithium Ltd (ASX: CXO)

Lastly this Monday, let’s check out yet another ASX 200 lithium stock in Core Lithium. So far this session, a notable 20.24 million Core shares have been traded on the share market. In Core Lithium’s case, we do have some news that the shares might be reacting to today.

This morning, the company announced that it has doubled its resource estimate at its flagship Finniss Lithium Project. The Core Lithium share price was up 11% at one point this Monday at $1.07 a share, but investors have since cooled their jets, with the company now up by 6.25% at $1.02 a share. No wonder this stock is topping our charts today with that kind of volatility.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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Inflation and interest rate hikes have inflicted a lot of damage in the last few months. Central banks are trying to do what they can to calm down demand and slow price increases.

Some companies have been hit hard by the difficult economic situation, while others are barely over the impacts of COVID-19.

So while share prices are down, it can be very interesting when a director decides to buy shares.

Directors may decide to sell shares for a number of different reasons, but the reason to invest in the market is usually because of just one factor – the director thinks the business is good value.

Here’s why this S&P/ASX 200 Index (ASX: XJO) share could be an underrated buy.

Buy signal for this ASX 200 share?

Scentre Group (ASX: SCG) has been through plenty of volatility since the start of COVID-19.

It was announced that director Ilana Atlas recently bought 50,000 Scentre shares on the market at an average price of $2.935 per security. That translates into a total investment of around $147,000, bringing the director’s total ownership to 130,856 Scentre shares.

This investment comes after Scentre, the owner of Westfield shopping centres in Australia and New Zealand, unveiled its FY22 results a couple of weeks ago.

It revealed that its funds from operations (FFO) – essentially the net rental profit – increased by 20.6% to $1.04 billion. The FFO was 20.06 in per-security terms. It also announced that its distribution would be 15.75 cents per security, up 10.5%. Both the FFO and distribution were more than guided.

In 2022, it saw 480 million customer visits, up by 67 million compared to 2021. When it announced its result, Scentre revealed that in 2023 to date it had seen 70 million customer visits, an increase of more than 10 million compared to the same period in 2022.

The business noted that its portfolio occupancy increased to 98.9% at 31 December 2022, up from 98.7% at the end of 2021.

Looking ahead

The ASX 200 share gave guidance for the year ahead, revealing that it’s expecting FFO for 2023 to be in the range of 20.75 cents to 21.25 cents per security, an increase of between 3.4% to 5.9% for the year.

The distribution is expected to be at least 16.50 cents per security, which would represent an increase of 4.8% for the year. At the current Scentre share price of $3.02, that distribution guidance represents a yield of 5.2%.

The post Guess which ASX 200 director just bought 50,000 of their company’s shares appeared first on The Motley Fool Australia.

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• This ASX 200 dividend share failed to be one of the world’s biggest payers in 2022. Could it get worse?

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 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 Scott Phillips.

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While interest rates are rising, investors can still beat the returns on offer with savings accounts easily with ASX dividend shares.

But which shares should you buy for dividends? Two that have recently been rated as buys for investors are listed below. Here’s what you need to know about them:

Elders Ltd (ASX: ELD)

This agribusiness company could be an ASX dividend share to buy according to analysts at Goldman Sachs.

With its shares down materially from their highs, the broker believes investors should be snapping them up before it’s too late. Particularly given that Goldman feels “the fundamentals of this company remain unchanged.” The broker also notes that “ELD is very well positioned to grow through the cycle.”

Its analysts have a conviction buy rating and $18.40 price target on Elders’ shares.

As for dividends, Goldman is forecasting fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $9.07, this will mean yields of 5.8% and 6.3%, respectively.

Mineral Resources Ltd (ASX: MIN)

Another ASX dividend share for income investors to consider buying is Mineral Resources.

Bell Potters appears to believe it could be a top option for investors right now. That’s because the broker expects the mining and mining services company’s lithium exposure to support strong earnings and big dividends in the coming years.

Its analysts currently have a buy rating and $110.00 price target on its shares.

In respect to its dividends, Bell Potter is expecting fully franked dividends of $3.73 per share in FY 2023 and $9.41 per share in FY 2024. Based on the current Mineral Resources share price of $88.70, this will mean 4.2% and 10.6% dividend yields, respectively.

The post Want passive income? These are the ASX dividend shares to buy according to experts appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

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 recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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BHP Group Ltd (ASX: BHP) shares are down 0.4% in afternoon trading.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining company are currently changing hands for $48.12 apiece, down from Friday’s closing price of $48.32 per share.

That’s today’s price action for you.

Now here’s what BHP is looking for from the government.

What kind of action is the ASX 200 miner suggesting?

If you own BHP shares you may be aware that the miner covered a range of topics in its submission to the federal budget.

As we covered earlier today, what the mining giant certainly does not want is for the federal government to impose a Queensland-style tax on ‘super-profits’.

Should that come into play, BHP CEO Mike Henry warned it would lead to “reduced investment, fewer jobs and, in the long term, lower living standards for Australians”.

As for what BHP would like to see, the company pointed to the Inflation Reduction Act (IRA) recently enacted by the United States. Among the specifications, the IRA provides US$437 billion worth of subsidies for new energy projects.

“If Australia is to attract global capital and become a leader in the race for critical minerals, it needs to ensure it is globally competitive,” BHP stated (quoted by The Australian Financial Review).

“Australia is the dominant global player in the mining of battery materials, but plays a relatively narrow role focused on mining and distribution of raw materials,” the ASX 200 miner added. “The economic case for moving up the value chain is strong.”

Indeed, rival ASX 200 iron ore miner, Fortescue Metals Group Limited (ASX: FMG), is already increasing its focus on US opportunities via its off-shoot, Fortescue Future Industries (FFI).

With a focus on ‘green steel’, Mark Hutchison the head of FFI, returned to the US last Wednesday to discuss the opportunities presented by green hydrogen with government and business leaders.

How have BHP shares been performing?

As you can see in the chart below, BHP shares are down 4% over the past 12 months. Longer-term, shares in the ASX 200 miner are up 70% over five years.

The post Own BHP shares? Here’s what the ASX 200 miner wants from the government appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Scott Phillips.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

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

Nufarm Ltd (ASX: NUF)

According to a note out of Citi, its analysts have retained their buy rating and $6.90 price target on this agricultural chemicals company’s shares. This follows an update from the U.S. Department of Agriculture (USDA) Chief Economist Seth Meyer on the outlook for U.S. agriculture. Citi notes that the USDA expects a 3% increase in corn, wheat, and soybeans acreage to 228 million acres in 2023. It feels this bodes well for Nufarm. The Nufarm share price is trading at $5.70 this afternoon.

Rio Tinto Ltd (ASX: RIO)

A note out of Goldman Sachs reveals that its analysts have put a conviction buy rating and improved price target of $140.40 on this mining giant’s shares. Goldman is bullish due to Rio Tinto’s iron ore production growth outlook and its potential free cash flow per tonne improvements. Combined with its compelling relative valuation versus peers, the broker feels the miner is a strong buy. The Rio Tinto share price is fetching $125.02 today.

Sonic Healthcare Limited (ASX: SHL)

Another note out of Citi reveals that its analysts have upgraded this healthcare company’s shares to a buy rating with an improved price target of $36.00. Citi sees value in Sonic Healthcare’s shares at the current level and highlights its strong balance sheet. With its net debt to EBITDA at 0.5x, this is well below its long-term average of 2.5x. Citi feels this gives Sonic plenty of capital to deploy on acquisitions/new contracts or share buybacks. The Sonic Healthcare share price is trading at $33.29 today.

The post Leading brokers name 3 ASX shares to buy 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 recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a very positive start to the trading week so far this Monday for the S&P/ASX 200 Index (ASX: XJO). At this point of the trading day, the ASX 200 has gained a healthy 0.8%, putting the index at just over 7,340 points. But ASX 200 tech stocks like Xero Limited (ASX: XRO) are putting that gain to shame. 

The ASX 200 tech sector is currently leading the market in terms of gains. And the top ASX 200 gainers today are almost all tech shares. Xero is in the vanguard here, recording a very pleasing gain of 4.88% so far this session to $79.31 a share:

But it’s not just Xero. Block Inc (ASX: SQ2) has notched a 5.4% rise to $120.42 a share. Megaport Ltd (ASX: MP1) is just behind with a 5.1% gain to $5.78 a share. WiseTech Global Ltd (ASX: WTC) has just hit a new record high. And Brainchip Holdings Ltd (ASX: BRN) has rocketed by a whopping 17.65% to 60 cents a share.

So what’s going on with ASX 200 tech stocks today that have yielded such stellar performances?

Why are ASX 200 tech stocks on fire this Monday?

Well, Brainchiop has had some specific developments which seem to be boosting the company’s share price. As we covered this morning, Brainchip has announced the launch of its second-generation Akida platform, which seems to be getting investors hot under the collar.

But apart from that, there are no other specific announcements from these ASX 200 tech stocks that seem to be a factor here.

As such, we can probably thank the performance of the US tech markets on Friday night (our time) for the strong start to the week that the tech sector is currently enjoying.

The ASX is usually quite receptive to the movements of the US markets, given their dominance of global financial markets. If US shares have a good run, it’s unusual not to see ASX shares follow suit (and vice-versa). And ASX 200 tech stocks seem to be particularly sensitive to the movements of their American counterparts.

Last Friday, the tech-heavy NASDAQ-100 Index had an exceptionally strong session, rising by 2.04% by the end of the trading day. US shares like Amazon, Apple, Microsoft and Tesla all shone, with Amazon, Apple and Tesla rising by more than 3% each. It was a similar story with other prominent US tech shares like Adobe, PayPal and Intuit.

So given the magnitude of these gains enjoyed by US tech investors last week, ASX 200 tech stocks were always going to have a strong day back across the Pacific.

The post Why are ASX 200 tech stocks like Xero having such a stellar start to the week? appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Adobe, Amazon.com, Apple, PayPal, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Amazon.com, Apple, Block, Intuit, Megaport, Microsoft, PayPal, Tesla, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe, long March 2023 $120 calls on Apple, short April 2023 $70 puts on PayPal, short January 2024 $430 calls on Adobe, and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Block, WiseTech Global, and Xero. The Motley Fool Australia has recommended Adobe, Amazon.com, Apple, Megaport, and PayPal. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. In afternoon trade, the benchmark index is up 0.8% to 7,341.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher on Monday:

Block Inc (ASX: SQ2)

The Block share price is up 5.5% to $120.71. This follows a strong session for this payments company’s shares on the NYSE on Friday night. Investors were piling into the tech sector on easing rate hike concerns. This led to the tech-focused NASDAQ index charging 2% higher at the end of last week.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is up 18% to 60.2 cents. This follows news that the semiconductor company has released a new version of its Akida platform. Management says the new platform was designed in response to customer feedback. If the sales don’t start rolling in now, then perhaps they never will.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 6% to $1.02. Investors have been buying this lithium miner’s shares following the release of a mineral resource estimate update. According to the release, Core Lithium has more than doubled the resource estimate of the Finniss Lithium project from 4.37Mt at 1.53% lithium oxide to 10.1Mt at 1.48% lithium oxide.

Life360 Inc (ASX: 360)

The Life360 share price is up 13% to $5.42. As well as benefiting from a booming tech sector, this location technology company’s shares have taken off today after it was added to the ASX 200 index. Life360 is one of four ASX shares that will join the benchmark index at the next quarterly rebalance on 20 March.

The post Why Block, Brainchip, Core Lithium, and Life360 shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• This ASX tech share is leaping 13% today as it readies for an entrance into the ASX 200
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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block and Life360. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a solid gain. At the time of writing, the benchmark index is up 0.75% to 7,338.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Fortescue Metals Group Ltd (ASX: FMG)

The Fortescue share price is down 2.5% to $22.22. Investors have been selling Fortescue and other mining shares today amid concerns that demand for iron ore from China may not be as strong as hoped. This follows the release of China’s GDP target for 2023. It is targeting 5% growth with less of a focus on the infrastructure and property sectors.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is down over 5% to $7.38. This rare earths producer’s shares have come under pressure recently after Tesla announced plans to shift away from using rare earths in its cars in the near future.

Myer Holdings Ltd (ASX: MYR)

The Myer share price is down 4% to 86 cents. This is despite there being no news out of the department store operator today. However, it is worth noting that Myer is scheduled to release its half-year results later this week. And with its shares up over 100% since this time last year, some investors may be taking a bit of profit off the table.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is down 4.5% to $5.51. This appears to have been driven partly by the release of a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the coal miner’s shares to hold rating with a $6.50 price target. It made the move on valuation grounds.

The post Why Fortescue, Lynas, Myer, and New Hope shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 dividend share failed to be one of the world’s biggest payers in 2022. Could it get worse?
• What’s moving the Fortescue share price this week?
• Here are the top 10 ASX 200 shares today
• Why is the Lynas share price being thumped on Thursday?
• Has this ‘completely changed the landscape’ for the future of Fortescue shares?

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 Scott Phillips.

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The latest expert views on two S&P/ASX 200 Index (ASX: XJO) healthcare shares have just come in.

It’s positive news for shareholders of both companies because the broker has improved the rating of those businesses.

Healthcare is an interesting sector for investing in. It’s seen as defensive because many of them can benefit from ongoing patient demand, regardless of the economic situation – most people don’t choose when to get sick. I’d imagine being alive and healthy is a priority for most people, so they’d be willing to spend on healthcare services.

But, there are also some positive tailwinds for the sector, including an ageing population, a growing population and increasingly advanced healthcare treatments.

Let’s look at two of the latest ratings.

Pro Medicus Limited (ASX: PME)

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

The broker Citi has just increased its rating on the ASX 200 healthcare share to neutral. Citi’s price target on Pro Medicus was raised to $61. A price target is where the broker thinks the share price will be in 12 months from when the call was issued.

Therefore, the broker doesn’t think the Pro Medicus share price is going to move much from here.

In the company’s FY23 half-year result, it reported that revenue went up 28.3% to $56.9 million, while net profit after tax (NPAT) improved by 31.5% to $27.2 million.

The Pro Medicus boss Dr Hupert said that the company’s pipeline remains strong:

We have a very good spread of opportunities across different market segments, with opportunities in academic/IDN, corporate and private markets. Pretty much all of them are cloud-based with a growing number looking for our “full stack” solution which includes all three of our modules, namely Viewer, Archive and Worklist; a trend we see continuing.

Sonic Healthcare Limited (ASX: SHL)

The other ASX 200 healthcare share that Citi likes the look of is Sonic Healthcare, the global pathology business.

Citi increased its rating on Sonic Healthcare to buy. The price target on Sonic Healthcare is $36. That implies a possible rise of 8% for the business.

While the business saw the FY23 half-year earnings drop as COVID-19 testing slowed, its profit is still significantly higher than the FY20 first half – the pre COVID times. Compared to HY20, the FY23 half-year total revenue was up 22%, operating cash flow was up 47% and net profit after tax (NPAT) was up 50%.

Its non-COVID testing revenue and earnings continue to grow, as does the dividend. It has a progressive dividend policy, meaning that the board wants to grow the dividend each year.

The ASX 200 healthcare share is focused on automation and other efficiency gains, as well as procurement savings, which could help it maintain and grow its margins.

Sonic Healthcare is also hoping to win more outsourcing contracts from hospitals and other healthcare providers. It’s also progressing “additional acquisition opportunities to add to future growth.”

The post 2 ASX 200 healthcare shares just upgraded by Citi analysts appeared first on The Motley Fool Australia.

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More reading

• For $200 in weekly passive income, buy 10,300 shares of this ASX 200 stock
• 3 ASX dividend stocks to try and turn $10,000 into $1 million!
• Why I’m more eager than ever to buy Sonic Healthcare shares following earnings
• 2 ASX shares to buy with exciting global growth potential: fund manager
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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