We all love buying things on sale! And why would you pay full price for an item if you can get it at a discount?

The theory of value investing is that sometimes the market’s assessment of what a company is worth is inaccurate. And this presents opportunities for savvy bargain hunters to swoop in and buy quality ASX shares for less than their true value.

But, naturally, the key to successful value investing is learning to differentiate between truly great-value companies and those that may not be as cheap as they appear.

So, we asked our Foolish writers which ASX shares they reckon have been mispriced by the market and offer compelling buying for value investors in February. Here is what they said:

6 best ASX value shares for February 2023 (smallest to largest)

Adore Beauty Group Ltd (ASX: ABY), $104.01 million

Temple & Webster Group Ltd (ASX: TPW), $681.14 million

HomeCo Daily Needs REIT (ASX: HDN), $2.8 billion

Metcash Limited (ASX: MTS), $4.0 billion

Whitehaven Coal Ltd (ASX: WHC), $7.31 billion

Woodside Energy Group Ltd (ASX: WDS), $67.65 billion

(Market capitalisations as at market close on 3 February 2023)

Why our Foolish writers love these ASX value stocks

Adore Beauty Group Ltd

What it does: Adore Beauty claims to be the leader of online beauty retailing in Australia. It sells around 12,000 products from more than 270 brands. The company has recently launched two of its own private brands – Viviology and AB Labs.

By Tristan Harrison: I think this ASX All Ords share now looks great value after falling 75% since the beginning of 2022.

In the first quarter of FY23, returning customers increased by 14% year over year, and were up 85% over two years. The business is growing sales numbers through its app, and continues to onboard more brands (such as Dior).

Adore is expanding into New Zealand and is also working on delivering scale benefits, which should help with earnings before interest, tax, depreciation and amortisation (EBITDA) margin expansion over time.

I also think consumers will continue increasing the amount they shop online over time, which should be a tailwind for Adore Beauty in the coming years.

Motley Fool contributor Tristan Harrison does not own shares in Adore Beauty Group Ltd.

Temple & Webster Group Ltd

What it does: Temple & Webster is Australia’s leading online furniture and homewares retailer.

By James Mickleboro: Although it has rebounded strongly from its lows, I still see a lot of value in the Temple & Webster share price for patient, long-term investors. That’s because, despite this rebound, the online retailer’s shares are still trading at an almost 50% discount to its long-term-average-enterprise value to gross-profit multiple.

I believe this makes Temple & Webster shares great value given the company’s exceptionally strong, long-term growth potential, thanks to its leadership position in a retail category that is still in the early stages of shifting online.

Goldman Sachs agrees and is forecasting a +22% 10-year EBITDA compound annual growth rate (CAGR).

Motley Fool contributor James Mickleboro does not own shares in Temple & Webster Group Ltd.

HomeCo Daily Needs REIT

What it does: HomeCo Daily Needs is a real estate investment trust (REIT) holding properties that house the retailers and services Aussies turn to in their day-to-day lives. Its $4.6 billion portfolio boasts a 99% occupancy rate with Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES), and Coles Group Ltd (ASX: COL) among its largest tenants.

By Brooke Cooper: The HomeCo Daily Needs unit price tumbled 19% over the course of 2022 despite the REIT posting a 30% lift in funds from operations last financial year. While the stock has recovered slightly in 2023, I believe it still offers great value.

It currently boasts a 6.1% dividend yield and a price-to-earnings (P/E) ratio of 10.96, according to CommSec data.

But it’s not just those figures catching my eye. I like the strategic positioning of many of this ASX 200 stock’s assets and its exposure to discretionary retail.

Morgans also has an add rating and a $1.52 price target on the REIT – a potential 10.5% upside at the time of writing.

Motley Fool contributor Brooke Cooper does not own units in HomeCo Daily Needs REIT.

Metcash Limited

What it does: Metcash is the supermarket and hardware distribution company behind the famous chains IGA, Mitre 10 and Bottle-O.

By Sebastian Bowen: When it comes to ASX 200 consumer staples shares, Metcash is often overlooked in favour of its peers like Woolworths. But I think this has resulted in some significant value.

Metcash shares currently trade on an earnings multiple far lower than either Woolworths or Coles. This has resulted in a substantial, fully-franked dividend yield of more than 5% today.

Back in December, Metcash announced that it had grown revenue by almost 8%, profit by more than 9% and dividends by 9.5%. I think these are all great signs and prove that Metcash is still a compelling value share in February 2023.

Motley Fool contributor Sebastian Bowen does not own shares in Metcash Limited.

Whitehaven Coal Ltd

What it does: ASX 200-listed Whitehaven Coal explores for and produces high-quality thermal coal (primarily used to generate electricity) and metallurgical coal (primarily used for steel making).

By Bernd Struben: The Whitehaven share price has slipped 11% so far in 2023, making it a top ASX value stock, in my opinion. Shares hit all-time highs in October but have dipped as coal prices retraced from their own records. Yet, I expect global demand for quality Aussie coal to remain strong as the Ukraine war drags on.

And don’t forget the record half-year Whitehaven reported last month, with an all-time high of $2.6 billion in earnings before interest, tax, depreciation and amortisation (EBITDA) over six months.

Whitehaven pays a trailing dividend yield of 5.8%. The share price is up 202% over 12 months.

Motley Fool contributor Bernd Struben does not own shares in Whitehaven Coal Ltd.

Woodside Energy Group Ltd

What it does: Woodside is an Australian oil and gas company and the largest energy business listed on the ASX. It is a global, top-10 producer of liquefied natural gas (LNG) and hydrocarbon.

By Bronwyn Allen: It might seem odd to pick an ASX share trading at close to its 52-week high as a value buy. But this oil and gas giant is only trading on a price-to-earnings (P/E) ratio of 8.4!

Woodside is also riding a wave of high commodity prices right now. It’s just reported record full-year production and revenue for 2022, beating its own production guidance with full-year revenue up 142% compared to 2021.

This reflects not only high oil and gas prices but also the value of Woodside’s merger with the petroleum business of BHP Group Ltd (ASX: BHP). This was finalised on 1 July 2022. So, these full-year results represent only half a year’s worth of production from these new assets.

That’s what has me excited about Woodside’s future earnings potential. It’s also a good dividend payer, and the company has hinted at special dividends and share buy-backs post-merger, too.

Motley Fool contributor Bronwyn Allen owns shares in Woodside Energy Group Ltd.

The post Top ASX value shares to buy in February 2023 appeared first on The Motley Fool Australia.

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More reading

• How to create a million-dollar ASX share portfolio in two decades
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Did you buy $1,000 of Whitehaven shares 10 years ago? If so, here’s how much passive income you’ve received
• 5 things to watch on the ASX 200 on Friday
• Up 37% in 12 months: Here’s why this fundie still sees value in Woodside shares

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool Australia has recommended Adore Beauty Group, Metcash, and Temple & Webster Group. 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 ASX share market can be the ticket to becoming a millionaire in two decades — or even quicker if things go well.

Now, I’m not about to say that investors should jump in and buy the next hottest thing to get rich. That has the potential to turn out badly.

However, investors may be wondering about the best way to become wealthy. Personally, I prefer investing in ASX shares because of how little groundwork is required, and unlike property investment, you don’t have to take on piles of debt to participate.

These days, people can get a decent return from savings accounts. But I don’t think they’re the best choice for growing wealth. Saving is good, but it could take a lot of money to become a millionaire through a savings account.

Let’s say we use a savings account with an interest rate of 3.5%. Someone would need to save around $3,000 per month to get to approximately $1 million after 20 years.

How ASX shares can accelerate wealth

Here’s an example of how ASX shares can produce good returns for investors.

At 31 December 2022, Vanguard Australian Shares Index ETF (ASX: VAS) had returned an average of 8.5% per annum over the prior 10 years. The average has now increased given the exchange-traded fund’s (ETF) recent performance, up around 9% since the start of 2023.

If someone put $2,900 per month into the ASX share market and that investment returned an average of 9% per annum over the next 20 years, this would become $1.78 million.

But, we’re not aiming for $1.78 million.

To get to $1 million, we’d only need to invest $1,650 per month if our investments returned 9% per annum.

What to look out for

The ASX share market is a good place to invest. However, it’s dominated by large bank and mining shares such as Commonwealth Bank of Australia (ASX: CBA), ANZ Group Holdings Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

These giants are very good at what they do, but they’re already huge, so I’m not sure how much more some of these names can grow.

Smaller companies or those targeting the global economy could have better growth potential over the long term. They have a longer growth runway and more room to re-invest.

I think we can see this with the returns generated by Vanguard MSCI Index International Shares ETF (ASX: VGS), which has returned an average of 10.6% since its inception in November 2014. If this ETF were to achieve the same returns over the next two decades, with its portfolio of global shares, investors would only need to invest $1,370 per month.

Which investment options could outperform?

I believe that there are some ASX growth share investments that can achieve stronger returns than 10%.

Smaller businesses could deliver a lot of growth. I think names like Airtasker Ltd (ASX: ART), Temple & Webster Group Ltd (ASX: TPW), Adore Beauty Group Ltd (ASX: ABY), Lovisa Holdings Ltd (ASX: LOV) and Healthia Ltd (ASX: HLA) could grow a lot over the next decade.

But, there are also some other options that could deliver outperformance. ETFs such as VanEck Morningstar Wide Moat ETF (ASX: MOAT), VanEck MSCI International Quality ETF (ASX: QUAL) and Betashares Nasdaq 100 ETF (ASX: NDQ) could deliver good growth from the current valuations.

The post How to create a million-dollar ASX share portfolio in two decades appeared first on The Motley Fool Australia.

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More reading

• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• A new bull market is coming: 3 ASX shares I’d load up on before it gets here
• Why did the Vanguard Australian Shares Index ETF lag the ASX 200 in January?
• Need passive income? Turn $5,000 into $800 every month
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season

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 BetaShares Nasdaq 100 ETF, Healthia, Lovisa, Temple & Webster Group, and Vanguard Msci Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group and Airtasker. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Adore Beauty Group, Healthia, Lovisa, Temple & Webster Group, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares ETF. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Core Lithium Ltd (ASX: CXO)

According to a note out of Macquarie, its analysts have retained their outperform rating and $1.30 price target on this lithium developer’s shares. This follows the release of the company’s quarterly update. Macquarie was pleased with what it saw and notes that spodumene production is expected to commence during the second half of FY 2023. It expects this milestone to boost its shares when it happens. The Core Lithium share price ended the week at $1.13.

Megaport Ltd (ASX: MP1)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this network as a service provider’s shares with a lowered price target of $8.10. Although Goldman wasn’t impressed with operational trends during the first half, the broker remains positive. This is because of Megaport’s clear product advantage versus peers and its decade-long runway for growth. The Megaport share price was fetching $5.97 at Friday’s close.

Telstra Group Ltd (ASX: TLS)

Another note out of Goldman Sachs reveals that its analysts have upgraded this telco giant’s shares to a buy rating with a $4.60 price target. The broker sees Telstra as an attractive option for investors right now due to the defensive nature of telecoms in an uncertain environment. In addition, Goldman has highlighted Telstra’s low risk earnings (and dividend) growth over the coming years and the favourable outlook for the mobile market. The latter follows price rises from competitors. The Telstra share price ended the week at $4.15 today.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d start building a second income this February, for $30 a week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Core Lithium: An ASX 200 share to buy in February? 
• Brokers name 3 ASX shares to buy now
• Tech boom! Buy these ASX tech shares before it’s too late: broker

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 positions in and has recommended Megaport. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Megaport. 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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If you’re searching for dividend shares to buy when the market reopens, then it could be worth checking out the two listed below.

Here’s why they have been tipped as buys:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that has been tipped as a buy is footwear and apparel retailer Accent. It is the owner of a growing portfolio of retail brands such as Hype DC, The Athlete’s Foot, Glue, Platypus, Sneaker Lab, and Stylerunner.

Its shares have been on fire in recent weeks thanks to a particularly positive trading update. Goldman Sachs was impressed, commenting:

AX1 has provided a trading update which was a +12% beat on revenue and +35% beat on EBIT for 1H23 vs. GSe. The revenue beat was consistent across key banners, and commentary on trading through January suggests strong trading is ongoing. January and back to school is a key period for AX1, so this gives us confidence in FY23.

In response to the update, the broker has reiterated its buy rating with an improved price target of $2.75.

As for dividends, the broker is forecasting a fully franked dividend of 12.2 cents per share in FY 2023. Based on the current Accent share price of $2.28, this will mean a yield of 5.4%.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX share to consider is Pilbara Minerals. Although the lithium miner has yet to pay a dividend, one is expected to be declared later this month.

This follows the announcement of the company’s capital management framework late last year. This was put into place in response to the miner generating mountains of cash from its lithium. It commented:

A target dividend payout ratio of 20-30% of free cash flow has been adopted by the Company. This target payout ratio is designed to provide a sustainable dividend return to shareholders, but also reflects the early stages of Pilbara Minerals’ growth cycle, with the remaining cash flow able to be allocated to organic and inorganic growth opportunities.

According to a recent note out of Macquarie, its analysts are expecting the miner to be in a position to reward shareholders with a 30 cents per share dividend in FY 2023. So, with the Pilbara Minerals share price currently fetching $4.89, this equates to a 6.1% dividend yield.

Macquarie also sees plenty of upside for the company’s shares with its outperform rating and $7.50 price target.

The post Buy Pilbara Minerals and this ASX dividend share: experts appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 lithium stocks that leapt beyond 20% in January
• Can buying Pilbara Minerals shares today create long-term wealth?
• Dividend forecasts: 3 ASX 200 shares with 6%+ yields
• 3 ASX All Ordinaries stocks hitting new 52-week highs today
• Should I buy ASX 200 lithium shares now or not?

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 Accent Group. 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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ASX shares are divided into 11 market sectors which are represented by their own ASX 200 indexes.

If we take a look at the year-to-date performance of these 11 sectors in 2023, there are three categories that stand out for share price growth.

Seems like everyone is buying ASX 200 property shares — otherwise known as real estate investment trusts (REITs). Next on the list are ASX 200 retail shares and ASX 200 technology shares.

To date in 2023, the S&P/ASX 200 A-REIT Index (ASX: XPJ) is up 14%. Coming in close behind is the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) which is up 12.9%.

The next sector in line is the S&P/ASX 200 Information Technology Index (ASX: XIJ) with a 10.9% gain.

Are you detecting a pattern here?

Why are these ASX 200 shares rocketing in 2023?

The answer is pretty simple. These three sectors were pummelled the most during the 2022 sell-off, so they’re having the biggest bounceback today in a newly optimistic market.

These S&P/ASX 200 Index (ASX: XJO) shares suffered the most last year because rising inflation and interest rates are particularly impactful in these sectors.

That turned investors off, which meant buyer demand fell, and some even decided to sell.

The result? A substantial fall in the prices of ASX 200 shares in these three indexes.

The technology index fell 34% over the 12 months of 2022, the A-REIT index fell 24%, and the consumer discretionary index fell 23%.

Here’s why these ASX 200 shares were hit hardest among the 11 market sectors.

Generally speaking, rising inflation is bad news for most companies. It means their input costs increase, and if they can’t raise the prices for their products and services, this usually reduces their margins.

In terms of rising interest rates, they hurt the economy on many fronts. Every company and household with debt faces rising costs, and people cut back spending on discretionary items.

Rising rates are especially bad for Australian tech companies and REITs.

Many listed Australian tech companies fit into the growth shares category. That means they’ve typically got a fair bit of debt and are spending a lot to get established while not necessarily making a profit.

Meanwhile, rising rates also bring property prices down because demand goes out of the market. While REITs managing shops, offices, commercial, and residential property can raise the rent when leases turn over, most leases outside residential are multi-year agreements that can’t be changed in the short term.

The ASX 200 appears to be turning

ASX 200 shares have lifted 8.8% already in January. That’s a clear indication of new confidence.

The Reserve Bank told us this week that inflation has peaked in Australia, and recent US inflation news was positive.

If inflation is coming under control, that means interest rates won’t have too much further to go.

That’s got investors excited enough to get back into the market in 2023 and buy the dip while they can.

Which shares in these sectors should you buy?

A good starting point when researching a market sector is to first look at the top ASX 200 shares by market capitalisation to see how they’re performing.

The biggest ASX property share by market cap is Goodman Group (ASX: GMG). It lost 35% in value in 2022. So far in 2023, Goodman Group shares are up by 21%.

The biggest ASX retail share is Wesfarmers Ltd (ASX: WES). Wesfarmers shares lost 23% in 2022. So far in 2023, the Wesfarmers share price is up by 12%.

The biggest ASX tech share is WiseTech Global Ltd (ASX: WTC). The Wisetech share price fell 13% in 2022. So far in 2023, the shares are up by 26%.

The post Which ASX 200 shares are rebounding fastest in 2023? appeared first on The Motley Fool Australia.

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More reading

• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Here’s how I’d start building a second income this February, for $30 a week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• A rare day in the green: Magellan share price soars 5%

Motley Fool contributor Bronwyn Allen has positions in Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended Wesfarmers and WiseTech Global. The Motley Fool Australia has recommended Goodman Group. 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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Are you buying ASX shares as a beginner? Congratulations! Investing in shares is one of the best ways to build long-term wealth, achieve passive income, and perhaps even retire early.

But, like any other asset class, investing in ASX shares successfully is not easy. There are many mistakes you can make along the way. It’s fine to make mistakes, how else would we learn?

So here are some of the things I’d wish I knew before I got started with investing in shares. Hopefully, you can avoid making the same errors as I did.

3 things I wish I’d known when I started investing

Index funds are your friend

An index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) is a single investment that puts your money into a basket of shares. In most cases, it will be the 200 or 300 largest shares on the share market. With an index fund, you are getting the return of the broader market, no more, no less.

When I started out, I had grand plans of smashing the market, year in, year out. But being able to do this takes a lot of time and experience. I wish I started investing in an index fund as my first investment rather than choosing the individual shares I did at the start of my journey.

These days, I invest in both index funds and ASX shares. That way, I can get the market’s return on some of my capital while using the rest to try and achieve outperformance. But I wish I had started out that way. If I had, I would be in a better financial position today.

You can be too diversified

As a beginner investor, you will constantly hear about the benefits of diversification or ‘not putting your eggs in one basket’. This is sage advice. But it is possible to have too much diversification. When I started my investing journey, I wanted to have a finger in every pie.

I held dozens and dozens of shares after a few years, covering emerging markets, the US markets, the ASX, and ‘alternative assets’ like water rights and property.

But after a while, I realised I had too many investments in my portfolio to properly keep track of. And this started to hurt my returns. If I could go back and do things differently, I would stick to a portfolio of 15-20 investments that I have a deep understanding of from the start.

Boring can be best

When I first began my investing journey, I loved investing in exciting companies that were ‘disruptive’, were ‘doing things differently’ and that I found exciting. As the years went on, many of these investments turned out to be lemons.

Today, I have rediscovered the beauty of a boring investment. Companies that have been around for decades might not be the most exciting investments out there. But most old companies are old for a reason – they know how to run their business, sell their products, survive and thrive during the inevitable recession.

That’s why some of my favourite investments today do not feature the likes of Zip Co Ltd (ASX: ZIP), Brainchip Holdings Ltd (ASX: BRN) or Nuix Ltd (ASX: NXL)

Instead, some of my favourite investments include Washington H Soul Pattinson and Co Ltd (ASX: SOL), Coca-Cola Co (NYSE: KO), Wesfarmers Ltd (ASX: WES) and McDonald’s Inc (NYSE: MCD).

Sometimes, especially for new investors, boring can be better.

The post Buying ASX shares as a beginner? Here are 3 things I wish I’d known appeared first on The Motley Fool Australia.

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More reading

• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• Here’s how I’d start building a second income this February, for $30 a week
• 3 of the safest ASX 200 dividend stocks in Australia
• Why did the Vanguard Australian Shares Index ETF lag the ASX 200 in January?
• These 2 ASX 200 shares yield 5% and 6% and I can’t wait to buy them

Motley Fool contributor Sebastian Bowen has positions in Coca-Cola, McDonald’s, Vanguard Australian Shares Index ETF, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Zip Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. 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 are plenty of exchange traded funds (ETFs) for investors to choose from on the Australian share market.

But which ETFs might be top options right now? Listed below are three exciting ETFs that could be worth considering:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. This ETF gives investors exposure to the best tech stocks in the Asian market. This means you’ll be buying the likes of ecommerce giant Alibaba, search engine company Baidu, and WeChat owner Tencent. And with tech stocks back in favour with investors, China reopening, and the BetaShares Asia Technology Tigers ETF still down meaningfully from its highs, this could be an opportune time to make an investment.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF could be another ETF for investors to consider buying. This popular ETF gives investors exposure to the 100 largest (non-financial) stocks on Wall Street’s NASDAQ index. These are many of the largest companies in the world and household names such as Amazon, Alphabet, Apple, Meta, Microsoft, Netflix, Nvidia, and Tesla. And despite a recent rebound, the ETF is still down 16% over the last 12 months. This could make it a good time to consider an investment.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A third and final ETF for ASX investors to consider buying is the VanEck Vectors Video Gaming and eSports ETF. This tech-focused ETF gives investors access to a global video game market estimated to comprise almost 3 billion active gamers and growing. Among its holdings are game developers such as Electronic Arts, Nintendo, Roblox, and Take-Two.

The post 3 scintillating ETFs for ASX investors to buy this month appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended VanEck Vectors Video Gaming And eSports ETF and Betashares Capital – Asia Technology Tigers Etf. 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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Regular readers of The Motley Fool would not need reminding that technology shares took a brutal beating in 2022.

But with the S&P/ASX All Technology Index (ASX: XTX) up 15.5% already this year, one expert has declared the sector is back with a vengeance.

DeVere Group chief executive Nigel Green said that financial updates from US tech giants this week would commence “The Great Rotation back into growth stocks”.

“As market conditions shifted in 2022, investors dumped growth stocks, like tech, in favour of value stocks which were deemed more suitable to the challenging environment,” he said. 

“But what is happening now, we believe, is the beginning of a rebound.”

Mixed results for tech giants

Green did admit the short-term results for big tech were mixed.

“Facebook’s parent company Meta Platforms Inc (NASDAQ: META) has exceeded estimates for revenue in its fourth-quarter earnings report, with the stock soaring in extended trading on the results,” he said.

“While Amazon.com Inc (NASDAQ: AMZN)’s earnings are expected at $0.15 per share, which would be an 89% decrease from the same quarter in 2021.”

Green predicted that Apple Inc (NASDAQ: AAPL) would see declining revenue for the first time since early 2019.

“Alphabet Inc (NASDAQ: GOOGL), the parent company of Google, is expected to report a third consecutive quarter of declining earnings.”

But this won’t stop long-term investors piling back into the tech sector, according to Green.

He cited two reasons why The Great Rotation is on in earnest.

“First, valuations of tech and other growth stocks are currently low having been hit by the previous rotation into value stocks,” said Green.

“Investors are now eyeing these super attractive entry points to top-up their portfolios as the trend is reversing.”

Secondly, investors are looking forward to how macroeconomic factors might change.

“Inflation has seemingly peaked and interest rates are set to stabilise, which takes away a major obstacle for tech stocks.”

Bet on still-cheap tech for strong returns 

Green thus declared that “tech stocks are back” and urged punters to take advantage.

“Rotation into the right growth stocks will provide strong returns.”

He warned, though, that this is not a time for investors to “buy everything”.

“There will be big winners and losers. They must concentrate on high quality, profitable companies which can consistently maintain or steadily grow margin[s].”

And despite lukewarm results, the tech giants shouldn’t be written off.

“[They] still have piles of cash, in some cases hundreds of billions of dollars, and remain enormously profitable,” said Green.

“In addition, these companies maintain considerable user bases, world-class research and development, plus some of the smartest talent on the planet.”

The post ‘The Great Rotation’ has begun: Expert declares tech shares will provide ‘strong returns’ in 2023 appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo has positions in Alphabet and Amazon.com. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, and Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, and Meta Platforms. 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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An ASX 200 dividend stock with a five or ten-year streak of raising their dividends is usually a good sign that you’ve found a quality income stock. But an ASX 200 dividend stock with a 20-year-plus streak? That’s ASX dividend royalty.

That’s exactly what the Washington H. Soul Pattinson Co Ltd (ASX: SOL) share price has on offer for income investors today.

Why Soul Patts is a quality ASX 200 dividend stock

I already own Soul Patts shares – in fact, the company is one of my top ASX holdings. But I plan to add far more of this would-be ASX dividend aristocrat to my portfolio in 2023, if the pricing allows it.

I would go one step further and argue that if I had to own just one ASX 200 dividend stock in my portfolio, this would be it.

But let’s backtrack a little and get into the weeds of what makes this company such a special ASX dividend share.

So Soul Patts is one of the oldest companies on the ASX 200. It first put down roots way back in 1872, but become the company we know today in 1903. Its first calling was pharmacies, but today, Soul Patts is a bit of a hard company to pigeonhole.

Its primary business is owning large stakes in other investments for the benefit of its shareholders. In this way, it arguably functions closer to a listed investment company (LIC) or a managed fund rather than the typical kinds of companies we see on the ASX.

Soul Patts invests prudently in a large and diversified portfolio of assets. These include a portfolio of blue-chip shares gained in the LIC Milton Corporation acquisition in 2021. But it also includes its large, strategic investments in a handful of ASX shares. 

For example, Soul Patts owns 12.6% of TPG Telecom Ltd (ASX: TPG), 39.9% of New Hope Corporation Limited (ASX: NHC) and 43.3% of Brickworks Limited (ASX: BKW).

The company also owns a stable of unlisted assets, which includes assets ranging from industrial property to swim schools.

An ASX dividend aristocrat?

This diversified investment portfolio has given Soul Patts the unique distinction of being able to fund annual dividend increases every single year since the year 2000. That’s throughout both the global financial crisis of 2007-2009, as well as the COVID pandemic.

This is an ASX dividend record unmatched on the ASX 200 or, indeed, on the entire ASX. It’s the closest thing the ASX has to a United States-style ‘dividend aristocrat’, which is a US share that has increased its dividends every year for 25 years.

Back in December last year, Soul Patts announced during its annual general meeting that its total shareholder return (share price gains and dividends) came to an average of 12.5% per annum over the 20 years to 30 November 2022.

That was a good 3.4% per annum above what the ASX All Ordinaries Accumulation Index had achieved over the same period.

So, in conclusion, this is an ASX 200 dividend stock I will never own enough of. I can’t wait to add to my position in 2023. If there’s a compelling price point, I’ll be loading the boat with this top-notch company.

The post 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023 appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. 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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One of the world’s most famous investors is Warren Buffett.

Over several decades, through his Berkshire Hathaway business, the Oracle of Omaha has delivered stunning returns for investors.

The good news is that Buffett has achieved these feats without any fancy high frequency trading strategy. Instead, he has made long term investments in high quality companies and let compounding work its magic.

The even better news is that there’s nothing to stop you from following Buffett’s investment style to grow your own wealth.

But which ASX shares could be Buffett-style investments right now? Two that tick a lot of boxes are listed below. Here’s what you need to know about them:

Transurban Group (ASX: TCL)

One quality that Buffett looks for when making investments is a competitive advantage or moat. This is something that this toll road operator has with its portfolio of key assets across Australia and North America. If you want to drive across Melbourne and Sydney quickly, you’re probably going to have to use its roads. In fact, the company estimates that customers using Transurban roads (compared to alternative routes) saved a total of 323,000 hours of travel time each workday in FY 2022.

Citi is a fan of Transurban and has a buy rating and $15.70 price target on its shares. Its analysts are also forecasting consistent dividend growth through to FY 2025, which is likely to go down well with an investor like Warren Buffett.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another (simple) way to invest like Buffett is to buy the VanEck Vectors Morningstar Wide Moat ETF. This is a Warren Buffett-inspired ETF that gives investors access to a diversified portfolio of companies with sustainable competitive advantages and fair valuations. At present, its holdings include businesses with strong moats such as Amazon, Intel, Microsoft, and Walt Disney.

Over the last 10 years, the index that the fund tracks has beaten the market with a total average return of 18.11% per annum. This would have turned a $10,000 investment into over $50,000.

The post Invest like Warren Buffett with these ASX shares 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 positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway and VanEck Morningstar Wide Moat ETF. 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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