The Whitehaven Coal Ltd (ASX: WHC) share price has dropped 26% since 21 December last year.

After such a significant, rapid drop in the ASX coal miner’s share price, could it make sense to invest in the business?

Firstly, Whitehaven reported its half-year result yesterday. That gives us a good insight into how much profit the company is making.

Earnings recap

Whitehaven reported that for the six months to 31 December 2022, it made $1.8 billion of net profit after tax (NPAT).

The coal miner also reported $2.7 billion of earnings before interest, tax, depreciation, and amortisation (EBITDA), which was significantly higher than the $0.6 billion of EBITDA in the first half of the prior year.

This came with $3.8 billion of revenue, thanks to an achieved average coal price of A$552 per tonne, up from $1.4 billion of revenue and an average price of A$202 in the first half of last year.

It generated $2.5 billion of operating cash flow, up from $567.4 million in the first half last year.

Whitehaven declared a fully franked dividend of 32 cents per share and noted it had bought back around 7% of its issued share capital through its share buyback, which came at a price of $592.8 million.

Its FY23 half-year shareholder payments amount to $641.4 million, representing a total payout ratio of just 36% of half-year net profit.

The just-declared dividend of 32 cents per share amounts to a grossed-up dividend yield of 5.7%.

Guidance

The Whitehaven share price can also be influenced by the outlook and guidance.

Management pointed out that there is a global energy supply shortfall, particularly for “high-quality thermal coal”. The company expects the rebalancing of global energy demand and supply to take “several years”.

It notes that baseload fuels will continue to be needed, particularly for coal that Whitehaven produces which has a higher energy content and lower emissions profile compared to other coal products.

The lack of Russian coal being sold to Europe and Japan is also providing price support for high-quality thermal coal.

It stated it’s on track to deliver within its guidance ranges of overall production, sales, and cost guidance for FY23.

NSW coal reservation scheme update

Whitehaven also announced that from 1 April 2023 to 30 June 2024, its mines will be obliged to make a certain volume of thermal coal available for domestic power stations. In total, those volumes are capped at the lower of 200,000 tonnes per quarter, or 5% of each mine’s expected saleable thermal coal production.

The required volumes under the scheme are to be made available at a maximum delivered price of A$125 per tonne for 5,500 kcal coal. If the production cost of the delivered coal, plus royalties, and a reasonable margin exceeds the price cap, an application can be made to push the price cap up.

Is the Whitehaven share price a buy?

Whitehaven shares are valued at two times FY23’s estimated earnings and four times FY25’s estimated earnings, according to Commsec. The company could pay a grossed-up dividend of 17% in FY23.

I think it’s highly likely that net profit is going to reduce over the next few years as energy prices normalise. However, the price/earnings (P/E) ratio could be so low that it can achieve market-beating returns if the dividend payout ratio (DPR) is healthy enough.

But, the idea of investing in a business with the prospect of falling earnings isn’t appealing to me.

The post Should I buy the dip on Whitehaven shares? appeared first on The Motley Fool Australia.

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More reading

• What’s going so wrong for ASX coal shares today?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why AMP, Evolution, Perenti, and Whitehaven Coal shares are dropping
• Everything you need to know about the monster Whitehaven dividend
• Whitehaven Coal share price sinks despite 423% profit jump

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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The Suncorp Group Ltd (ASX: SUN) share price has lifted nearly 11% over the last 10 years.

An investor buying $1,000 worth of the company’s stock in February 2013 likely would have walked away with 86 shares, paying $11.54 apiece.

Today, that parcel would be worth $1,100.80. The Suncorp share price closed Thursday’s session at $12.80.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has lifted 47% in that time.

So, have the dividends on offer from the financial services conglomerate made up for its stock’s sluggish performance? Let’s take a look.

All the dividends offered by Suncorp shares since 2013

Here are all the dividends paid to those invested in Suncorp shares over the last 10 years:

Suncorp dividends’ pay date	Type	Dividend amount
September 2022	Final	17 cents
April 2022	Interim	23 cents
September 2021	Final and special	40 cents and 8 cents
April 2021	Interim	26 cents
October 2020	Final	10 cents
March 2020	Interim	26 cents
September 2019	Final	44 cents
May 2019	Special	8 cents
April 2019	Interim	26 cents
September 2018	Final and special	40 cents and 8 cents
April 2018	Interim	33 cents
September 2017	Final	40 cents
April 2017	Interim	33 cents
September 2016	Final	38 cents
April 2016	Interim	30 cents
September 2015	Final and special	38 cents and 12 cents
April 2015	Interim	38 cents
October 2014	Final and special	40 cents and 30 cents
April 2014	Interim	35 cents
October 2013	Final and special	30 cents and 20 cents
April 2013	Interim	25 cents
Total:		$7.18

As the chart above shows, Suncorp has paid $7.18 of dividends per share since February 2013.

That means our figurative parcel has likely yielded $617.48 of passive income in that time, bringing our return on investment (ROI) to 73%.

And that’s before considering the potential tax benefits the company’s fully franked dividends could have brought, or the further gains compounding those dividends could have brought.

Right now, Suncorp shares are trading with a 3.1% dividend yield.

And eager passive income investors won’t have to wait much longer to receive another payout.

Suncorp declared a 33 cent per share interim dividend last week. That will be paid late next month.

The post Bought $1,000 of Suncorp shares 10 years ago? Here’s how much passive income you’ve received appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week
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• Macquarie has these ASX 200 dividend shares in its income portfolio
• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• 5 things to watch on the ASX 200 on Thursday

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

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The fund manager Wilson Asset Management (WAM) has revealed two ASX shares that could deliver good earnings growth in the coming years.

WAM tries to fund undervalued growth companies that could outperform the market. Ideally, the investment team aims to find a catalyst that can accelerate returns for investors.

The fund manager runs a number of listed investment companies (LICs) including WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

Every month, WAM likes to pick out some of the ASX shares that it thinks have compelling futures. Below are two of them, which are growing worldwide.

Pro Medicus Limited (ASX: PME)

WAM describes Pro Medicus as a business that provides medical imaging software and services to hospitals, imaging centres and healthcare groups worldwide.

The fund manager noted last month that the business announced it had signed a seven-year, $25 million contract with the University of Washington for its academic health system.

The ASX share also announced a $12 million contract with Oregon-based Samaritan Health Services spanning eight years, which has a network that includes five hospitals.

WAM pointed out that contracts will see its cloud-engineered imaging platform implemented at the institutions and will reinforce Pro Medicus’ “strong presence” in the north west region of the US.

The fund manager explained why it’s optimistic:

We expect its strong sales pipeline will continue and we look forward to the possible announcement of new contracts in the months to come.

Pro Medicus recently reported its FY23 half-year result which showed revenue growth of 28% and net profit after tax (NPAT) growth of 31.5%.

PWR Holdings Ltd (ASX: PWR)

WAM described PWR Holdings as a business that specialises in cooling products and solutions to the motorsports and technology sectors.

In January, the company announced that it had acquired Bespoke Motorsport Radiators (BMR), which is reportedly one of the leading manufacturers and suppliers of high-performance motorsport radiators, intercoolers and oil coolers in the UK.

BMR has a four-year average revenue of £520,000 per annum.

WAM said that it’s expected that BMR will operate as part of PWR Holdings Europe and expand the ASX share’s manufacturing capabilities.

The fund manager explained:

We believe the acquisition will continue to expand PWR Holding’s European business and strengthen its ability to execute large projects over the medium-term.

The post 2 ASX shares to buy with exciting global growth potential: fund manager appeared first on The Motley Fool Australia.

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• ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call
• 3 ASX 200 shares on the move amid strong earnings updates
• ASX shares: Is this my once-in-a-lifetime chance for mega returns?
• Happy days! 8 ASX 200 shares smashing new 52-week highs on Thursday
• 5 ASX 200 shares smashing new 52-week highs on Wednesday

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 PWR Holdings and Pro Medicus. The Motley Fool Australia has positions in and has recommended PWR Holdings and Pro Medicus. 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 an exciting earnings season so far for passive income investors, with many dividend-paying S&P/ASX 200 Index (ASX: XJO) shares bolstering their offerings. But not all has been well in dividend land this week.

Three ASX 200 shares have slashed their dividends, one by as much as 50%. Let’s take a look.

3 ASX 200 shares slicing their dividends this week

First out of the gate is ASX 200 iron ore giant Fortescue Metals Group Limited (ASX: FMG). The company reported its first-half earnings on Wednesday.

It posted a 3.6% slump in revenue, falling to US$7.8 billion, and a 4.7% fall in net profit after tax (NPAT), which came in at US$2.4 billion.

The average iron ore price realised by the miner also tumbled last half to US$87 per dry metric tonne. For comparison, that figure was US$96 a tonne in the prior comparable period.

Finally, Fortescue declared a fully franked interim dividend worth 75 Australian cents – a 12.8% year-on-year drop.

Having a better half was Evolution Mining Ltd (ASX: EVN). Though, the ASX 200 gold share still slashed its dividend on Thursday.

It declared a 2 cents per share fully franked interim dividend – down from 3 cents per share this time last year. That marks a 50% reduction.

The company instead chose to put much of its extra cash towards growth projects at its Cowal and Red Lake assets.

It posted $101 million of statutory NPAT, an 11% improvement, and $446 million of earnings before interest, tax, depreciation, and amortisation (EBITDA), a 13% jump.

Finally, South32 Ltd (ASX: S32) also cut its interim dividend to 4.9 US cents, down from 8.7 US cents in financial year 2022 – a 43.7% drop.

The company posted its first-half earnings on Thursday, declaring a 34% drop in profits and a 44% fall in underlying earnings. They came in at US$685 million and US$560 million respectively.

Weighing on its finances were falling commodity prices, inflation, and uncontrollable costs.

The post Passive income watch: 3 ASX 200 shares that slashed their dividends this week appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Evolution Mining share price dives after 50% cut to dividend
• Here are the top 10 ASX 200 shares today
• Why did the ASX 200 leap higher on rising unemployment data?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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

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With interest rates skyrocketing over the past 12 months or so, cash investments like term deposits are suddenly back in vogue. In 2021, it was hard to find even a two-year term deposit yielding 1%. Today, you can give your money to the bank for safekeeping, and get an interest rate as high as 4.5%.

Now many investors might appreciate the safety of this kind of guaranteed yield. After all, the dividends from ASX shares are never guaranteed to keep flowing.

But with higher risk often comes higher return. As such, there are still many ASX dividend shares out there that are offering trailing dividend yields far greater than 4.5% today. If those yields come fully franked, then even better. Let’s check out five

5 ASX dividend shares that crush a term deposit today

Adairs Ltd (ASX: ADH)

ASX 200 homewares retailer Adairs is our first dividend machine worth checking out. Adairs shares have been fairly consistent dividend payers for years now. In 2022, this company doled out two fully-franked dividends worth 8 cents and 10 cents per share respectively.

These two dividends give this share a trailing yield of 7.5% today. Even better, that yield grosses up to a whopping 10.71% with that full franking.

Westpac Banking Corp (ASX: WBC)

ASX 200 bank share Westpac would be a company almost all of us would be familiar with. ASX banks are known for their dividend prowess, and Westpac is no different.

Over 2022, this bank dealt out two fully-franked dividends. The first was worth 61 cents per share, fully franked. The second was a 64 cents per share dividend, also with full franking.

Today, this gives the Westpac share price a trailing yield of 5.49%. That’s 7.84% grossed-up.

Dusk Group Ltd (ASX: DSK)

Another ASX homewares retailer, Dusk specialises in candles, oils, fragrances and other similar items. This company was a real pandemic winner, with Dusk shares rising as high as $4 each in 2021. However, the past year or so has been less forgiving, and Dusk has sunk to under $2 at present.

But this fall has done wonders for Dusk’s dividends. The company shelled out two dividends last year worth 10 cents per share each. Both came fully franked too.

At the current Dusk share price, we are looking at a dividend yield of 11.2%, or a whopping 16% grossed-up. Take that, term deposit!

Super Retail Group Ltd (ASX: SUL)

Retail is starting to be a theme here. Our penultimate share to look at today is Suepr Retail Group, the company behind popular stores like Rebel, BCF and Super Cheap Auto.

This is another ASX dividend share that has supersized its payouts in recent years. 2019 saw the company fork out 5 cents per share in dividends, but last year, Super Retail made it rain with a total of 70 cents per share. All fully franked too, of course.

Just yesterday, the company announced that its first dividend for 2023 would come in at 34 cents per share, which is a massive increase over 2022’s interim dividend of 27 cents per share.

At the last Super Retail share price, this company has a yield of 5.61% on the table, or 8.01% grossed-up.

Harvey Norman Holdings Limited (ASX: HVN)

Our fifth and final ASX dividend machine to consider today is another famous name in retail. Harvey Norman truly has a hardly normal dividend yield right now. The homewares and electronics retailer has also been suffering a bit in recent years, share price wise.

But that didn’t stop Harvey Norman from doling out its highest-ever annual dividend in 2022. Last year, the company showered investors with a total of 37.5 cents per share in fully franked dividends.

Together, these give Harvey Norman shares a trailing dividend yield of 9.08% today. That’s a good 12.97% grossed-up with those franking credits.

Foolish takeaway

Against these ASX dividend shares, term deposits – eat your heart out.

The post Why term deposits can’t compete with these 5 ASX dividend machines appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Friday
• Westpac share price on watch following Q1 update
• 5 things to watch on the ASX 200 on Friday
• Super Retail share price roars on 30% profit boost
• 11% dividend yield! Is this the greatest ASX 300 bargain?

Motley Fool contributor Sebastian Bowen has positions in Adairs and Dusk Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Harvey Norman, and Super Retail Group. The Motley Fool Australia has positions in and has recommended Adairs, Harvey Norman, and Super Retail Group. The Motley Fool Australia has recommended Dusk Group and Westpac Banking. 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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There is much debate about inflation peaking, but even if the top has passed it is still extraordinarily high for comfort.

For the 12 months ending December, Australia’s consumer price index rose 7.8%.

That means $100 in your wallet a year ago is now worth just $92.20.

So passing the peak is somewhat meaningless for all those consumers out there whose spending power has been decimated.

According to DeVere Group chief Nigel Green, this has a severe impact on stock investors too.

“Stubborn inflation affects stock markets because central banks — including the [US] Fed, Bank of England and European Central Bank — will have to continue to step in and raise interest rates,” he said.

“This means people adjust and rein-in their spending, it cools the economy and companies can struggle to make profits.”

The trouble is that prices of ASX shares are correlated to profitability of the underlying businesses.

“In this environment of higher rates for longer than had previously been anticipated, some companies are going to find it difficult to maintain margin and, as we’re now seeing, are failing to report earnings as had been expected,” said Green.

“In other words, if costs are going up, firms can’t maintain margin, so that company is unlikely to be a good investment until things change.”

What’s more, the current high level of inflation means any investments you make have to return 7.8% per annum for it to just break even.

Four sectors that will keep earning in 2023

So it’s a tough time to pick the right stocks.

To assist, Green’s team identified four sectors that might prove to be “resilient in this current environment”.

“We’re looking at sectors that can maintain margin, despite inflation and interest rate hikes,” said Green.

“These include healthcare, luxury goods, energy and agriculture.”

Healthcare is “robust” through economic downturns because everyone still needs to look after their health regardless of disposable income.

Green added that this thesis has become even more prevalent since the COVID-19 pandemic.

“Also, despite wider market volatility, there’s strong earnings potential due to ageing populations and other demographic changes,” he said.

“Plus, healthcare is becoming increasingly tech-driven, which offers fresh opportunities.”

Luxury goods might be a surprising sector to back during tougher economic times.

But Green argues that producers of aspirational “elite and exclusive” goods can maintain their large margins from affluent clientele that may not suffer from a drop in income as much as others.

“We’ll look at energy because there’s a shortage of energy in the world right now,” he said.

“Agriculture is another one as populations in emerging markets around the world are eating more meat. As they eat more meat, there needs to be more grain produced.”

Aside from picking the right stocks and sectors, Green reminded investors that the most important defensive tool is diversification.

“Inflation is going to be an issue for investors for a while yet,” he said.

“However, these can also be times of opportunity if you stay fully and wisely invested.”

The post Inflation refuses to die: Expert reveals where to invest your hard-earned appeared first on The Motley Fool Australia.

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More reading

• Why term deposits can’t compete with these 5 ASX dividend machines
• Earnings preview: Here are the ASX shares reporting on Friday
• ‘Attractive opportunities’: Fund reveals why 2 ASX 200 shares are its biggest holdings
• Westpac share price on watch following Q1 update
• 3 ASX 200 shares Firetrail Small Companies fund is overweight in right now

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

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This week of the earnings season is ending on a quieter note. Unlike yesterday, there are only a handful of major ASX shares expected to release their results today.

Nevertheless, it is helpful to know which companies are set to release their results. Here’s a quick summary of what is coming up today so you don’t miss any of it.

ASX shares primed to report today

Ranked in order of market capitalisation (largest to smallest)

Westpac Banking Corp (ASX: WBC), $79.9 billion

QBE Insurance Group Ltd (ASX: QBE), $19.9 billion

Latitude Group Holdings Ltd (ASX: LFS), $1.4 billion

Inghams Group Ltd (ASX: ING), $1.0 billion

HealthCo Healthcare and Wellness REIT (ASX: HCW), $501.6 million

Baby Bunting Group Ltd (ASX: BBN), $331.9 million

What can we expect to see?

The elephant in the room is Westpac’s first quarter update today. Shareholders will be putting the major bank under the microscope to see how it compares with recent releases from the Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB).

Credit quality is the question on all investors’ lips as concerns of a hard landing escalate. Writing loans and collecting interest has been a boon for the banking sector. However, the quality of those loans is now arguably the most important criterion in a high-rate environment.

At the other end of the market cap spectrum, Baby Bunting Group is one ASX retail share that could draw a crowd today.

Shares in the baby goods retailer have tumbled 37% since the company’s annual general meeting. It was at the AGM that shareholders were first informed of a difficult landscape for profitability as Baby Bunting competed more on price.

Heading into today, consensus estimates placed net profit after tax (NPAT) at $8.5 million for the first half. Any insight into how the company’s management plans to improve earnings moving forward will be a topic of interest for shareholders.

You now have a headstart on the day! Don’t forget to check back for our results coverage of these ASX shares and more.

The post Earnings preview: Here are the ASX shares reporting on Friday appeared first on The Motley Fool Australia.

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• Westpac share price on watch following Q1 update
• 5 things to watch on the ASX 200 on Friday
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• 3 catalysts for Westpac shares to take off in 2023
• Westpac share price higher amid latest BNPL moves

Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Baby Bunting Group. The Motley Fool Australia has recommended Baby Bunting Group and Westpac Banking. 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 Westpac Banking Corp (ASX: WBC) share price will be one to watch on Friday.

This is because Australia’s oldest bank has just released its first quarter update.

Westpac share price on watch

Investors will be watching the Westpac share price closely today after the banking giant’s first quarter update was released to the market.

Unfortunately, the banking giant’s update isn’t as thorough as the one from rival National Australia Bank Ltd (ASX: NAB) on Thursday and doesn’t include any profit details.

However, it does provide a few metrics that gives investors an idea of how Westpac is performing right now.

What did Westpac report?

Westpac’s update provided details on its credit quality, capital position, and funding and liquidity.

In respect to credit quality, Westpac reported that its 90+ day mortgage delinquencies were down five basis points to 0.7%.

It also revealed that its provisions to total committed exposure (TCE) edged slightly higher to 40 basis points from 39 basis points. Though, this is still lower than the prior corresponding period.

As for its capital position, Westpac reported a CET1 ratio of 11.13% and an 0.6% or $2.8 billion increase in risk weighted assets (RWA) to $480.4 billion. The latter was driven by higher lending.

Finally, the banking giant provided investors with a funding and liquidity update, which revealed that both measures have strengthened during the quarter.

Westpac’s liquidity coverage ratio (LCR) was up 7 percentage points to 139%, its net stable funding ratio (NSFR) was up 1 percentage point to 122%, and its deposit to loan ratio came in 1.1 percentage points higher at 84%.

The Westpac share price is down 3% over the last 12 months.

The post Westpac share price on watch following Q1 update appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• 3 catalysts for Westpac shares to take off in 2023
• Westpac share price higher amid latest BNPL moves
• 3 of the best ASX 200 shares to buy now: broker

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. 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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Despite the buoyant stock market so far in 2023, it’s confusing to investors to know which ASX shares to pick up right now.

That’s because much uncertainty still abounds. 

Regardless of the opinions you hear, no one truly knows how the economy, inflation, interest rates, geopolitics, and earnings will turn out this year.

In this environment, it might help to see where professional investors have their money parked.

The Firetrail Small Companies Fund this week revealed three S&P/ASX 200 Index (ASX: XJO) shares that it’s “overweight” in, and the rationale behind the investments:

Outlook remains strong for this hammered stock

The Incitec Pivot Ltd (ASX: IPL) share price has started the year poorly, dropping more than 6% so far.

Firetrail analysts put this down to the “falling European gas price and rising Australian dollar”. 

“An unusually warm European winter resulted in lower gas demand than expected,” read their memo to clients.

“With the price of ammonia largely driven by the cost of marginal European production, the warm winter has been negative for global fertiliser companies.”

But the team is happy to buy up Incitec shares while they’re cheap, as “energy-exposed” businesses are a favoured theme at the moment.

“We view these [headwinds] as temporary. The medium-term outlook for Incitec Pivot’s fertiliser business remains strong.”

Demand for EV materials will continue

Lynas Rare Earths Ltd (ASX: LYC) shares have risen more than 6% to kick off 2023, although they’re still 12% down from a year ago.

The post-COVID reopening of the Chinese economy plus a positive performance update helped.

Businesses that produce materials that go towards electric vehicles are winners for the Firetrail team. As such, it will stick with its Lynas shares. 

“December quarter production of Lynas’ main rare earth product NdPr [neodymium and praseodymium] improved 44% on the September quarter, as water outages in Malaysia were successfully rectified.”

US housing downturn not as bad as first thought

Another theme Firetrail analysts currently like is “globally exposed cyclicals”.

This rationale is behind its backing of plumbing equipment supplier Reliance Worldwide Corporation Ltd (ASX: RWC).

The stock has rocketed 17.5% up so far this year.

“Reliance Worldwide outperformed in January. US market sentiment improved following [US] Fed chair Jerome Powell’s less hawkish comments at the January FOMC meeting.”

The great tailwind for Reliance is that the duration and severity of a housing downturn in the US could be “less pronounced than expected”. 

“Reliance Worldwide has 20% of revenue linked to new housing construction, and 80% linked to repair & replace (R&R) activity.”

The post 3 ASX 200 shares Firetrail Small Companies fund is overweight in right now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 stocks marching higher following earnings updates
• Here are the top 10 ASX 200 shares today
• Buy Lynas shares now for 25% upside: UBS
• Lynas share price marching higher on licence update
• Lynas share price sinks 8% amid license concerns

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Reliance Worldwide. The Motley Fool Australia has recommended Reliance Worldwide. 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) returned to form and stormed higher. The benchmark rose 0.7% to 7,410.3 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to edge higher

The Australian share market looks set to edge higher on Friday despite it being a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 7 points or 0.1% higher this morning. In late trade in the United States, the Dow Jones is down 0.4%, the S&P 500 is down 0.4% and the NASDAQ index has dropped 0.5%. A hot inflation report but a decline in jobless claims showed the US economy is holding up despite the Federal Reserve’s rate hikes. This sparked fears that more are coming.

Oil prices fall

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a poor finish to the week after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 0.3% to US$78.40 a barrel and the Brent crude oil price is down 0.35% to US$85.11 a barrel. A stronger US dollar weighed on prices.

NAB rated a buy and Westpac’s Q1 update

The National Australia Bank Ltd (ASX: NAB) share price is great value according to analysts at Goldman Sachs. In response to its first quarter update, the broker retained its buy rating with a $35.42 price target. It commented: “NAB has released its 1Q23 trading update, with unaudited cash earnings from continuing operations of A$2.15 bn, up 18% on the previous period average, run-rating 3% above what is implied by our current 1H23E forecasts.” Elsewhere, fellow ASX 200 bank Westpac Banking Corp (ASX: WBC) is scheduled to release its first quarter update.

Gold price rises

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a good finish to the week after the gold price rose overnight. According to CNBC, the spot gold price is up 0.5% to US$1,854 an ounce. Strong US economic data put pressure on the precious metal.

QBE full year results

The QBE Insurance Group Ltd (ASX: QBE) share price will be one to watch on Friday when the insurance giant releases its full year results. Goldman Sachs is expecting a net profit of $676.1 million and a 25 cents per share dividend. However, it is QBE’s guidance that the broker thinks will be the more important aspect of the result. It believes the company could surprise with FY 2023 underlying insurance margin guidance close to 12%, compared to consensus estimate of 11.5%.

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why did the ASX 200 leap higher on rising unemployment data?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why are Newcrest shares slipping on Thursday?
• 2 ASX 200 shares soaring over 9% on strong results

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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