Small cap ASX shares have the potential to deliver big returns because they are starting from an earlier point in their journey compared to an established blue chip share. But how do you know which small cap company will go on to greater heights?

One fund manager has picked out Gentrack Group Ltd (ASX: GTK) shares as a major opportunity.

The ASX tech share is a software provider for utility businesses and airports around the world. It helps clients with efficiency and to deliver their customers better services. It’s also helping utilities ‘transform’ in this ‘sustainable era’ to meet customer demand for how they purchase and consume energy and water. Gentrack says that “it is not a case of if utilities transform to meet these demands, but when”.

Below is a snapshot of Gentrack’s share price history.

The NAOS Asset Management investment team believes Gentrack shares offer considerable upside, saying it has a high level of conviction in the business as a core investment over the next three to five years. They give two main reasons.

Industry tailwinds for the small cap ASX share

NAOS said the first reason to be positive is the “significant” industry tailwind of all meter points globally transitioning to new IT systems.

According to NAOS, this represents an opportunity worth more than $1 billion across around 200 utility companies.

The fund manager noted that Gentrack has been able to secure new tier 1 and tier 2 customers and successfully implement their systems in a seamless manner, which was described as a “key risk” for any IT migration.

Gentrack share price valuation

NOAS says the small cap ASX share’s valuation is also “extremely attractive”.

The fund manager pointed out that Gentrack’s customers operate in a highly regulated environment and are therefore “rather sticky clients”.

NAOS analysts think the business generates excellent cash flow and has good cash conversion. It was noted that all of Gentrack’s research and development is expensed (rather than spreading out the cost over multiple years, which is what a lot of other ASX tech shares do by capitalising those costs).

The fund manager pointed out that while Gentrack largely operates in three international markets, the small cap ASX share is now executing on a global expansion strategy. This was illustrated by the recent signing of a large utility company in Singapore. NAOS is particularly pleased by this foray because many ASX tech shares only operate within Australia and New Zealand.

The fund manager revealed how much future upside there might be with the Gentrack share price:

If management forecasts are to prove correct and in FY25 GTK produces $175 million of revenue and an EBITDA margin of 17%, then cash EBITDA for GTK would be ~$30 million. Of note would be the net cash position of the business which could reach close to $50 million. Using Objective Corporation Limited (ASX: OCL) as a comparative software business, which has similar attributes albeit a higher level of recurring revenue, OCL trades on 29 times EV/EBITDA. Even if you apply a 30% discount this would result in a valuation of $6.42 / share for GTK based on FY25 targets, which we see as particularly compelling given Gentrack’s current share price.

The post This obscure small cap ASX share is ‘extremely attractive’: expert appeared first on The Motley Fool Australia.

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More reading

• Goldman Sachs names 2 ASX dividend shares to buy now
• 3 things that could super-charge your investment returns over the long term: Scott Phillips
• Why I think Woolworths shares aren’t worth the worry
• What could propel Telstra shares over the next year?
• Invested $1,000 in Mineral Resources shares 10 years ago? Here’s how much passive income you’ve made

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 Objective. 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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Most people would probably say they’d like to achieve the best investment returns they can to grow their wealth. In this article, we’re going to look at three of the most useful tips.

There are a number of different factors which impact how much wealth someone is able to build. How much someone earns from their job/business can play an important factor. How much they save and invest of that earned income is another factor. Generating good investment returns can also play its part.

Let me show you how much difference it can make.

Using a compound interest calculator, we’ll compare two scenarios over a 30-year time period, starting at $0 and investing $1,000. In one scenario we’ll look at the portfolio earning a return of 9% a year and the other will make 10% a year.

For the 10% figure, it grows to $1.97 million. For the 9% figure, it achieves $1.64 million. In other words, that 1% a year ended up being a lost opportunity cost of more than $300,000!

The Motley Fool’s Scott Phillips went on NABTrade’s podcast to discuss the sorts of things that people can do to accelerate their wealth and for their investments to be as effective as possible.

Utilise tax-efficient vehicles

Phillips acknowledged that it can be difficult to choose the right structure but that there is a whole industry of professionals who are experts at helping people identify what’s best for them.

He said the right structure can provide opportunities for people if they know what they’re doing.

Phillips pointed out that the tax effectiveness of superannuation is “through the roof”. He did say that some people may have money outside of super “and they probably should”, admitting some of his own investing is done outside of superannuation.

The 15% tax rate of superannuation during the accumulation phase and 0% at retirement (depending on individual circumstances) is “stupidly generous”. He proposed that the amount of tax saved could add more than good stock picking.

Phillips also noted that family trusts and companies could be beneficial, but said that’s for other experts who know more about that side of things to provide the detail. He said that being able to split income with a lower-tax partner could make a big difference.

Basically, he was pointing out that saving on tax could make a big difference to the end result of investment returns. However, Phillips said that investors shouldn’t make an investment just because of the tax implications. It’s the after-tax return that is the important number.

Even so, it’s worth thinking about at the beginning of an investment plan because it can make big difference over time.

Benefit from franking credits

The Motley Fool expert also brought up the tax imputation credits called franking credits. This is a refundable tax credit that is attached to dividends paid by Australian companies. It aims to ensure that company profits are not taxed twice before reaching shareholders’ bank accounts.

He noted that Australian companies that pay dividends enable investors to achieve stronger after-tax returns.

For investors with a low (or 0%) tax rate, franking credits boost the dividend return that investors receive, once they have completed their tax return.

Telstra Group Ltd (ASX: TLS) shares are an example of an investment that pays fully franked dividends.

Lower fees

Phillips also said that fees can play a big part in long-term returns. We often see ads comparing super funds showing how much higher fees can hurt a super balance over time. Phillips referenced a statistic that showed someone’s superannuation balance could be 30% to 40% higher if they choose the lower-cost fund option.

The investment expert also noted that online brokers have significantly brought down the cost of each transaction for investors. This is a “huge benefit”, he said.

Whatever their investment choices, if people trade too frequently it could mean “paying too much” in fees and losing some of their investment returns.

However, he pointed out that he isn’t anti-fees. If someone will earn a massive return for him, he’s happy to pay a bit more or even a lot more.

Phillips said “the after-fee returns are what we should care about…it makes sense to reduce those fees as much” as we physically can.

Foolish takeaway

By utilising these tips, investors may be able to boost their wealth quite significantly over the long term.

As I showed at the start of this article, the difference over time could amount to hundreds of thousands of dollars.

The post 3 things that could super-charge your investment returns over the long term: Scott Phillips appeared first on The Motley Fool Australia.

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More reading

• What could propel Telstra shares over the next year?
• Does Telstra sell bonds to ASX retail investors?
• Telstra shares: ‘Some healthy options that are underappreciated’
• ‘Fierce competitor’: Expert names 2 big brand ASX shares ready to take off in 2023
• How much profit could Telstra shares make in 2023?

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 positions in and has recommended Telstra 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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Woolworths Group Ltd (ASX: WOW) shares are a popular blue-chip investment on the ASX, beloved by many. As Australia’s largest grocer and supermarket operator, Woolies is one of the best-known businesses and brands in the country.

It is undoubtedly a quality business. It has a strong and mature earnings base, domination of its industry, and a long-standing dividend policy.

But I’m not wild about Woolies shares right now. And I would certainly not want the worry of Woolworths in my share portfolio at present.

Charlie Munger, the right-hand man of legendary investor Warren Buffett, once said that “no matter how wonderful a business is, it’s not worth an infinite price”.

This is essentially my problem with Woolworths shares today. As we’ve already established, Woolworths is a wonderful business in my opinion. But it is also one that is not growing at a very fast rate.

Its latest full-year earnings (covering FY2022) revealed group sales rose 9.2% over FY2022 to $60.85 billion. But earnings before interest and tax (EBIT) dropped by 2.7% to $2.69 billion, while net profit after tax (NPAT) rose 0.7% to $1.51 billion.

This is understandable. After decades of expansion, Woolies is basically at saturation point. There are only so many groceries Australians are going to buy each year, no matter how much advertising the company does. And Woolworths is arguably at the point where adding more stores will not generate more sales.

That’s all fine. The company is still very profitable and is able to return a large slice of those profits back to shareholders each year.

My problem with Woolworths is its valuation.

Are you getting your Woolies’ worth with Woolworths shares?

At present, the company is trading on a price-to-earnings (P/E) ratio of 27.62. This means that investors are being asked to pay $27.62 for every $1 of earnings Woolworths makes. In my view, that is expensive. Very expensive:

To illustrate, let’s compare this P/E ratio to those of Woolies’ rivals. Coles Group Ltd (ASX: COL) currently trades on a P/E ratio of 21.8. IGA-operator Metcash Limited (ASX: MTS) has a P/E of 16.58 at present.

Woolworths looks even more expensive compared to ASX retail shares outside the supermarket space. Harvey Norman Holdings Limited (ASX: HVN) shares are presently on a P/E ratio of just 6.93. JB Hi-Fi Ltd (ASX: JBH) is sitting just above that on 10.08.

These businesses operate in a very different environment to Woolies. But still, this difference is a veritable ocean.

You can even buy shares of US-listed tech giants like Apple Inc (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) on a lower P/E ratio than Woolworths today. Netflix Inc (NASDAQ: NFLX) is only just ahead of Woolies.

And those companies clearly have (at least in my view) far longer growth runways in front of them than Woolworths.

This goes a long way in explaining why the current dividend yield of Woolworths shares is so low compared to shares like Coles or Metcash.

So long story short, Woolworths is far too expensive for me to consider as an investment today. The company is of top-notch quality, to be sure. But it would have to fall by quite a lot for me to consider adding it to my portfolio.

The post Why I think Woolworths shares aren’t worth the worry appeared first on The Motley Fool Australia.

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• Want $500 in monthly passive income? Buy 27,000 shares of this ASX stock in 2023
• I think Coles shares are a top ASX 200 buy for 2023
• ‘Fierce competitor’: Expert names 2 big brand ASX shares ready to take off in 2023
• Did Woolworths just become 18% more valuable?
• Coles shares: Here are the dividend forecasts for 2023 and 2024

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, Harvey Norman, and Netflix. 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 positions in and has recommended Coles Group and Harvey Norman. The Motley Fool Australia has recommended Alphabet, Apple, Jb Hi-Fi, Metcash, and Netflix. 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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Telstra Group Ltd (ASX: TLS) shares could go higher in 2023 if the company is able to unlock hidden value within the business.

There are a number of different parts to the business, including its mobile segment, NBN earnings, Telstra Health, the acquired Digicel Pacific, and so on.

While some areas are seen as core parts of the business, Telstra has been selling off some of the assets it doesn’t see as integral.

Expert upgrades rating

According to reporting by The Australian, the broker Macquarie has recently upgraded its rating on Telstra to outperform, up from neutral. The target price was increased 13% to $4.50. This implies that Telstra shares could rise by 10% over the next year.

What was the cause of the upgrade to the rating?

Macquarie said (according to The Australian):

Telstra is trading largely in line with our measures of fair value.

However, we believe the monetisation of Telstra’s FibreCo will be a catalyst for the stock in the next 6-12 months.

In addition, we expect a positive result in February 2023 as subscriber numbers are likely to be a positive surprise to consensus.

While Telstra generates a lot of its earnings from its mobile segment, the company is working on other infrastructure as well. In the company’s annual general meeting (AGM), it outlined some of its projects:

Our inter-city fibre project announced in February will provide ultra-fast connectivity between capital cities and improved regional connectivity. We have finalised contract negotiations for the first stages of the build and we have held detailed discussions with customers including signing up Microsoft as a major anchor tenant.

In satellites, Telstra will build and manage the ground infrastructure and fibre network in Australia for Viasat’s new series 3 satellite system and construct a major fibre project to build state-of-the-art inter-city dual fibre paths across the country. We also announced an MOU [memorandum of understanding] with LEOSat provider OneWeb and are working towards building a commercial relationship with testing of their network underway.

In terms of mobile subscribers, in FY22 the business added 155,000 net retail postpaid mobile services including 121,000 branded ones. Retail prepaid unique users were up 215,000. Telstra may also be benefiting from subscribers moving from Optus after the cyber hack of the business.

Telstra share price valuation

Looking at the current estimates on Commsec, Telstra is projected to generate earnings per share (EPS) of 16.5 cents per share. This would put the Telstra share price at 24 times FY23’s estimated earnings.

The post What could propel Telstra shares over the next year? appeared first on The Motley Fool Australia.

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More reading

• Does Telstra sell bonds to ASX retail investors?
• Telstra shares: ‘Some healthy options that are underappreciated’
• ‘Fierce competitor’: Expert names 2 big brand ASX shares ready to take off in 2023
• How much profit could Telstra shares make in 2023?
• Telstra share price is ‘undervalued’ right now: broker

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 Microsoft. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Macquarie 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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After sticking to a strict ‘zero-COVID’ policy for three years, the Chinese government finally relented last month.

In a country where dissent is rare and severely punished, by November many Chinese people had had enough of lockdowns and protested in multiple cities.

Spooked by the anger, the authorities abruptly ended zero-COVID and started opening up individual and business liberties.

That’s despite an elderly population with a low vaccination rate and those that were inoculated, underprotected with inferior Chinese vaccines.

To make it worse, there has been a massive movement of people for Lunar New Year, spreading the coronavirus like a bushfire.

While in the short term, the population and the economy are both suffering, many experts agree in the long run, China will be better off moving into the post-COVID era like its western counterparts did a year ago.

Even diplomatically, Beijing has taken a more conciliatory stance towards the rest of the world, declaring the country “open for business” at the Davos economic conference this month.

Can Canberra and Beijing get along again?

So which ASX shares might rise from China’s reopening?

Tribeca portfolio manager Jun Bei Liu, speaking at a GSFM briefing on Tuesday, had some ideas.

“We do have a few other core holdings where it’s been the China reopening beneficiary, the likes of A2 Milk Company Ltd (ASX: A2M) and Treasury Wine Estates Ltd (ASX: TWE), which we held for many years.”

Treasury Wine was devastated in 2020 after a diplomatic spat between Australia and China over an enquiry into the origins of the pandemic.

Beijing, as retaliation, slapped a massive tariff on Australian wine imports, which effectively killed Treasury’s Chinese business overnight.

But just as fast as that downturn, Liu can potentially see an instant tailwind coming.

“Treasury Wine is interesting because now there’s a rumour of [the] relationship thawing between Australia and China,” she said.

“If there’s any positive news on reduction of the tariff they put on the Australian wine that was 100% — even if you reduce to 50%, maybe it just means that there’ll be a whole lot of wine that can be sold.”

At current levels, Liu feels like the Treasury shares haven’t yet priced in this enormous potential in China.

“You have an earnings upgrade of between 15 to 20% for that company just on the basis of [a tariff reduction]. The share price hasn’t really reflected that yet.”

Chinese citizens are ready to break out

A2 Milk also took a massive earnings hit in 2020 as the lack of international travel put an end to its daigou (Chinese expatriate) sales channel.

As Chinese citizens are allowed more freedom of movement, the dairy producer could cash in big time in the coming months.

“Chinese students will return — then your whole daigou channel is going to take place again.”

Another beneficiary of the Chinese resurgence could be international student placement provider IDP Education Ltd (ASX: IEL).

Its share price has already climbed 45% since June.

“It’s done very well, but still the students [have] yet to fully return.”

Liu did warn that it’s not a matter of buying up every stock that does business with China.

“There’s a lot of pockets of opportunity. You just got to find them and it’s very much bottom-up [analysis],” she said.

“Top-down, it’s harder to really see the opportunity… You need to find individual stocks and [their] earnings.”

The post 3 ASX shares to cash in on China’s reopening to the world: Jun Bei Liu appeared first on The Motley Fool Australia.

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More reading

• If I invest $1,000 in A2 Milk shares now, what could my return be this year?
• 3 ASX 200 shares smashing new 52-week highs on Wednesday
• 5 ASX All Ords shares cracking new 52-week highs on Tuesday
• My 3 best ASX shares of 2022 – and why I think they’ll win again in 2023
• The A2 Milk share price rocketed 20% in 2022. Is it too late to buy for 2023?

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 IDP Education. The Motley Fool Australia has recommended A2 Milk and Treasury Wine Estates. 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 bought Mineral Resources Ltd (ASX: MIN) shares in January 2013, you’re likely pretty happy with your investment.

The ASX mining stock has been a sure-fire winner in that time, leaping around 841%.Indeed, an investor who bought $1,000 of Mineral Resources shares 10 years ago likely walked away with 99 stocks, paying $10.01 apiece.

Today, the share is trading at $94.20 – leaving the figurative parcel with a value of $9,325.80.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained around 54% in that time.

But how much have shareholders received when we also factor in the materials giant’s dividends? Let’s take a look.

All dividends offered by Mineral Resources shares since 2013

Let’s take a look at all the dividends offered by the ASX 200 mining giant over the last 10 years:

MinRes dividends’ pay date	Type	Dividend amount
September 2022	Final	$1
August 2021	Final	$1.75
February 2021	Interim	$1
August 2020	Final	77 cents
March 2020	Interim	23 cents
September 2019	Final	31 cents
March 2019	Interim	13 cents
September 2018	Final	40 cents
February 2018	Interim	25 cents
August 2017	Final	33 cents
February 2017	Interim	21 cents
September 2016	Final	21 cents
February 2016	Interim	8.5 cents
September 2015	Final	15 cents
March 2015	Interim	7.5 cents
September 2014	Final	32 cents
March 2014	Interim	30 cents
September 2013	Final	32 cents
March 2013	Interim	16 cents
Total:		$8

Each Mineral Resources share has paid out $8 of dividends over the last decade. That means our 99-share-strong parcel has likely yielded $792 of passive income in that time.

That sees our figurative total return on investment (ROI), including both dividends and share price increases, soaring to a whopping 921%.

Just imagine the gains an investor might have realised had they reinvested their dividends in the company’s stock, thereby compounding their earnings.

Not to mention, all Mineral Resources’ dividends in that time have been fully franked. Thus, they might have provided even more benefits come tax time.

Right now, shares in Mineral Resources boast a modest 1.06% dividend yield.

The post Invested $1,000 in Mineral Resources shares 10 years ago? Here’s how much passive income you’ve made appeared first on The Motley Fool Australia.

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• Investing in ASX 200 copper shares? Here’s the outlook for the red metal in 2023
• Why Best & Less, Evolution, Mineral Resources, and St Barbara shares are dropping

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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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Eley Griffiths portfolio manager Nick Guidera takes a look at three heavily discounted small-cap ASX shares.

Cut or keep?

The Motley Fool: Let’s examine three ASX shares that have been devastated in the past year, and see if you think each of these fallen stars are now a bargain to pick up or if you’d stay away.

The first one is Wisr Ltd (ASX: WZR), a fintech stock that’s plunged 64% over the last 12 months.

Nick Guidera: At this point in time, we believe it is too early [to buy]. 

The team at Wisr have built a disruptive next-generation personal lender with a focus on building financial products, apps, and services that are designed to improve the wellness of Australians. A track record of growing new loans since inception, Wisr now has a sizable loan book of close to $900 million and is targeting profitability in 2023. 

While the market opportunity is large, competition remains intense, and higher interest rates have meant the cost of funding has increased. As the economic outlook deteriorates in Australia, there is also likely to be further pressure on the consumer.

MF: Art marketplace Redbubble Ltd (ASX: RBL) has been slashed 76% in the past year. Would you pick it up as a bargain?

NG: At this stage, no. Redbubble has delivered a series of successive earnings downgrades, as the inflated revenue unwinds from the COVID bump. The CEO is embarking on a turnaround of sorts, however, the challenging trading conditions have meant there is a need to focus on cost out to conserve cash. 

MF: How about online furniture retailer Temple & Webster Group Ltd (ASX: TPW)? It’s dropped about 40% over the past 12 months.

NG: At this stage, yes we are likely to [buy]. 

While there are consumer headwinds in Australia, Temple & Webster is the clear leader in the online furniture and homewares category. It has demonstrated it can continue to grow its customer base at a time where penetration remains low for online spend in the category relative to other developed markets.

The post Bargains or traps? Fundie reveals if these 3 ASX shares are worth buying cheap appeared first on The Motley Fool Australia.

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More reading

• Top ASX growth shares to buy in 2023
• I’d aim for $1 million buying just a few ASX shares
• My top predictions for ASX All Ords shares in 2023
• 3 reasons to buy these top ASX growth shares: experts
• Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today

​​DISCLAIMER: This presentation has been prepared and issued by Eley Griffiths Group Pty Limited (ABN 66 102 271 812, AFSL 224 818) (EGG) as the investment manager of the Eley Griffiths Group Small Companies Fund and Eley Griffiths Group Emerging Companies Fund (Fund). The Trust Company (RE Services) Limited ABN 45 003 278 830, AFSL 235 150 (Perpetual) is the Responsible entity and issuer of units in the Fund. It is general information only and is not intended to provide you with financial advice and has been prepared without taking into account your objectives, financial situation or needs. You should consider the product disclosure statement (PDS), prior to making any investment decisions. The PDS and target market determination (TMD) can be obtained for free by visiting our website https://www.eleygriffithsgroup.com/invest/.  If you require financial advice that takes into account your personal objectives, financial situation or needs, you should consult your licensed or authorised financial adviser. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. 

Neither EGG, nor any company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital. Neither EGG nor Perpetual give any representation or warranty as to the reliability or accuracy of the information contained in this presentation. Any opinions, forecasts,  estimates or projections reflect judgments of EGG as at the date of this document and are subject to change without notice. Rates of return cannot be guaranteed and any forecasts, estimates or projections as to future returns should not be relied on, as they are based on assumptions which may or may not ultimately be correct. Actual returns could differ significantly from any forecasts, estimates or projections provided. Past performance is not a reliable indicator of future performance.

Motley Fool contributor Tony Yoo has positions in Redbubble and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Redbubble and Temple & Webster Group. The Motley Fool Australia has recommended 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red after a hotter than expected inflation reading. The benchmark index fell 0.3% to 7468.3 points.

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

ASX 200 expected to rebound

The Australian share market looks set to rebound on Friday following another positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 36 points or 0.5% higher this morning. In late trade in the United States, the Dow Jones is up 0.3%, the S&P 500 is up 0.7%, and the NASDAQ index is charging 1.3% higher.

Oil prices higher

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a solid finish to the week after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.4% to US$81.27 a barrel and the Brent crude oil price is up 1.8% to US$87.66 a barrel. Chinese demand optimism boosted prices.

Quarterly updates

The ResMed Inc (ASX: RMD) share price will be on watch on Friday when the sleep disorder treatment company releases its quarterly update. It won’t be alone, though. A number of other quarterly updates are expected to be release, including one from mining giant Fortescue Metals Group Limited (ASX: FMG).

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued finish to the week after the gold price fell overnight. According to CNBC, the spot gold price is down 0.7% to US$1,929.70 an ounce. Strong US economic data put pressure on the precious metal.

MinRes downgraded

The Mineral Resources Ltd (ASX: MIN) share price could be fully valued according to analysts at Goldman Sachs. This morning, the broker has downgraded the mining and mining services company’s shares to a neutral rating with a $91.00 price target. Goldman made the move on valuation grounds, noting: “Since upgrading MIN to a BUY on 11 April 2022, the stock is up ~58% vs. the ASX200 roughly flat (-0.2%) over the same period.”

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

• How much profit could Fortescue shares make in 2023?
• Could this ASX 200 share be a dividend gem hiding in plain sight?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Forget gold! ASX 200 blue-chip shares could be the new safe-haven asset
• Investing in ASX 200 copper shares? Here’s the outlook for the red metal in 2023

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 ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 a lot of exchange traded funds (ETFs) out there for investors to choose from.

Three popular ETFs that you may want to look deeper into are listed below. Here’s what you need to know about them:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF for investors to look at is the BetaShares Global Energy Companies ETF. With oil prices trading above US$80 per barrel, energy producers are generating significant free cash flow at present. This bodes well for the companies held by this ETF, which include the leading players in the energy sector. Among its holdings are the likes of BP, Chevron, ExxonMobil, and Royal Dutch Shell.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF that could be worth looking at is the BetaShares NASDAQ 100 ETF. As its name implies, this exchange traded fund gives investors exposure to the 100 largest non-financial businesses on Wall Street’s famous NASDAQ index. This means that you will be owning a slice of tech giants such as Amazon, Apple, Alphabet, Facebook/Meta, Microsoft, Netflix, and Nvidia. And with the NASDAQ still down materially on a 12-month basis, now could be a good time to consider making a long term investment in this quality group of stocks.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for investors to consider buying is the Vanguard MSCI Index International Shares ETF. This popular ETF give investors easy access to many of the world’s largest listed companies. This means that rather than just investing in the Australian market, investors can take part in the long term growth potential of international markets. Among the ~1,500 companies included in the ETF are Apple, Johnson & Johnson, JP Morgan, Nestle, and Visa.

The post 3 popular ETFs that could be top picks right now appeared first on The Motley Fool Australia.

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More reading

• 2 ASX ETFs I’d buy for a tech rebound in 2023
• 3 wonderful ETFs for ASX investors to buy next week
• Forget gold, I’m using the Warren Buffett method to try and get rich!
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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 and Vanguard Msci Index International Shares ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended 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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There is an increasing amount of angst about celebrating Australia Day on January 26.

And those raised tensions are on both sides of the debate, with increasingly vocal groups arguing for change, or for retention.

There is no small irony in the fact that our national day – when we celebrate us, and our country – is one of the more divisive days on our calendar.

Personally, almost for that reason alone, I think we probably should change it. I also think those who argue for a change have a good case. January 26, 1788, was a momentous day that had a large impact in shaping the country we are today. In good ways, but also in bad. I’m not sure it’s the right date to celebrate our nationhood.

But, as I’ve done in years prior, because today is officially Australia Day, I’m going to reflect on the incredible privilege and opportunity we have as Australians.

We have, despite our challenges and shortcomings, a helluva lot to be proud of, and thankful for.

We are, overwhelmingly, peaceful and free.

We have, even with its imperfections, an enviable system of justice and governance.

We look out for each other.

And we look after each other.We have the ability to discuss, argue and peacefully protest.

We can stand for parliament, free of religious, gender or other restrictions.

We live in what I reckon is the most beautiful, if sometimes harsh, place in the world.

We are enormously prosperous.

I hope you realise all of that.

In the past, I’ve worked for some wonderful businesses, and some not-so-wonderful.

When I worked for the former, I’d sometimes come across a colleague who’d been at that one company for many years.

They’d complain and whinge about all of the problems, seemingly oblivious to the positives.

And I’d often remark – usually to myself! – that they’d only need to spend a few weeks working somewhere else to realise just how good they had it.

That didn’t mean, by the way, that some of those issues weren’t real, or that they didn’t need addressing.

But those colleagues had let the real and perceived problems become so overwhelmingly prominent that they’d lost sight of the bigger picture.

Because that bigger picture was of a wonderful business that, while it had its issues, was better than many, perhaps most, other places to work.

They were lucky to work there.

And that, I reckon, is how we should think about Australia, today and every day.

I worry that, in our focus on the stuff that’s broken, many of us miss the fact that most other countries would kill for our problems, rather than theirs.

Those people spend so much time, effort and energy thinking about the imperfections and issues, and too little being grateful for the positives.

Seriously, in which other country would you rather live?

Which country is more peaceful? Wealthier? More free? Safer? Which country is more beautiful? Has a healthier rule of law? Has a fairer distribution of tax collection and spending? Is more multicultural? And has a better national character?

Now, I’m not saying we’re top of the pops in each category (though we’d be bloody close!). But I am saying that I reckon you’d be hard pressed to score us on those things, and then find another country that beats us, overall.

As an investor, I reckon we’re bloody lucky, too. Because all of those things, and more, give us the opportunity to build real long-term wealth.

Right now, some of you are doing the ‘yeah but what about…’ thing.

Good. Me too.

We have lots of opportunities to be even better.

We’re not taking sufficient care of our environment. Not everyone has an equal shot at success. Our political system is showing some wear and tear. We don’t look after each other the way we used to, and individualism means there’s more “I’m alright, Jack” and less “Fair go” than in times past.

We should work very hard to deal with those things.

So my call is not for complacency, or to rest on our laurels.

But it’s also not a despairing resignation or choosing to wallow in a bleak selective view consisting only of our problems and shortcomings.

Australians have a lot to celebrate, and to be proud of.

Some of it luck. Most of it, the lottery of birth, or the happy circumstances that led us to arrive on Australian shores.

Much of it, left to us by those who came before us; an inheritance we should consider ourselves duty-bound to cherish, protect and then pass on.

And some of it – enough to be proud of, but not so much that we get arrogant – the efforts we’ve made to make this country a better place in which to live and work.

So, let’s celebrate all of that.

Because, despite our problems, we are some of the luckiest people on the planet.

Please don’t be like my former colleagues who had become so insular and lacking in perspective that they could only see the bad things, and not how lucky they were.

Please don’t fall for the doom and gloom – investing, or otherwise.

Do we have challenges? You bet we do.

Will we overcome them, just as we’ve overcome every other challenge in the past? Bloody oath we will.

It takes effort. And goodwill. And a little care for each other. But we have a great base from which to start.

Or rather, from which to continue.

And we should. We owe it to ourselves and to each other.

I hope you have a great Australia Day. If the date itself is painful, I understand. I hope you can at least celebrate, disconnected from the date itself, how lucky we are to be Australian.

And let’s commit ourselves to making sure that, each Australia Day (on whatever date it falls), we can look back at the previous 12 months, and be proud of the progress we’ve made.

And of the country we’re leaving to our kids.

Fool on!

The post appeared first on The Motley Fool Australia.

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More reading

• Add these ASX shares to your retirement portfolio for growing income: analysts
• How much profit could Fortescue shares make in 2023?
• How I would use these 3 ASX shares to build a portfolio from scratch
• How to generate $50,000 of passive income from BHP shares
• Could this ASX 200 share be a dividend gem hiding in plain sight?

Motley Fool contributor Scott Phillips 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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