The share price of S&P/ASX 200 Index (ASX: XJO) miner Nickel Industries Ltd (ASX: NIC) isn’t going anywhere today.

The nickel pig iron turned nickel matte producer has kicked off a $673 million capital raise to help fund two major acquisitions.

Additionally, the stock may have caught the market’s attention with the miner’s quarterly report. It was also released today, along with details of the unfortunate deaths of two construction contractors working at the company’s Oracle Nickel Project in Indonesia.

The Nickel Industries share price has been halted at its previous close of $1.12. And that’s where it’s expected to stay until the market opens tomorrow morning.

Let’s take a closer look at the avalanche of news from the ASX 200 mining share today.

ASX 200 nickel share halted amid EV battery agreement

The Nickel Industries share price is halted amid news the company has executed an electric vehicle battery supply chain strategic framework agreement with its major shareholder, Shanghai Decent.

It has also made agreements with the investment company to buy a 10% interest in two nickel-producing assets.

The first will be an indirect stake in PT Huayue Nickel Cobalt (HNC), to be purchased from Shanghai Decent’s affiliate Newstride for $386 million. HNC is a high-pressure acid leach project in the Indonesia Morowali Industrial Park.

Nickel Industries also plans to buy another 10% stake in Oracle, bringing its interest to 80%. It will pay $107 million to Shanghai Decent for the extra hold.

As part of the strategic agreement, Nickel Industries has also forked out $57 million for options to collaborate with the investment company.

That could see the ASX 200 nickel miner participating in the development of a nickel sulphate and electrolytic nickel plant using the HPAL process, dubbed the DAWN HPAL+ Project.

It would also give it the option to invest in and construct a low-grade to high-grade nickel matte converter at Oracle for US$40 million.

$673 million capital raise kicks off

To fund the acquisitions, the ASX 200 nickel miner is currently undergoing a $264 million institutional placement.

New shares are being offered for $1.02 apiece under the raise – an 8.9% discount to the stock’s previous close.

Another conditional placement would see Newstride snap up around $386 million worth of shares at the same price. Meanwhile, approximately $21 million would be bought by Shanghai Wanlu Investment Co and around $2 million will go to non-executive director Mark Lochtenberg.

The latter placement is subject to shareholder approval and, in the case of Newstride, the Foreign Investment Review Board’s approval.

Finally, a share purchase plan is expected to raise up to $29 million.

Quarterly report

But preceding the major news from the ASX 200 nickel miner today was its quarterly report.

Nickel Industries achieved record nickel metal production in the December quarter, coming in at 23,072 tonnes – a 13.8% quarter-on-quarter jump.

It also produced its maiden nickel matte, which is suitable for use in batteries.

It posted earnings before interest, tax, depreciation, and amortisation (EBITDA) of US$106.1 million from operations last quarter.

Its EBITDA margins also improved from US$2,261 a tonne in the September quarter to US$4,146 a tonne in the December quarter on the back of improved contract pricing and lower cash operating costs.

However, the company also announced the deaths of two construction workers at Oracle. An investigation into the deaths is ongoing, as well as a review into how the site’s safety measures can be improved.

The post Why is this ASX 200 mining share halted today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Cheap ASX shares: A rare chance to get rich?
• Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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.

from The Motley Fool Australia https://ift.tt/cYyHZPN

The S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory. In afternoon trade, the benchmark index is up slightly to 7,388 points.

Four ASX shares that have not been able to follow the market higher today are listed below. Here’s why they are sinking:

HUB24 Ltd (ASX: HUB)

The HUB24 share price is down 6.5% to $24.95. In response to this investment platform provider’s “weaker than expected” quarterly update on Tuesday, analysts at Citi have retained their neutral rating but cut their price target to $29.00. HUB24’s funds under administration was 2% lower than Citi’s estimates.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is down 2% to $25.29. This morning, analysts at Morgan Stanley downgraded the retailer’s shares to an equal-weight rating with a $25.00 price target. The broker has concerns that demand could be easing.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is down 12% to 50 cents. This ecommerce company’s shares have been sold off following the release of another disappointing update. Redbubble revealed that trading conditions have been “increasingly challenging” during the first half. This has led to the company reporting an $18 million operating loss for the half, down from an operating profit of $10.5 million a year earlier.

Warrego Energy Ltd (ASX: WGO)

The Warrego Energy share price is down 2.5% to 37 cents. This is despite there being no material news out of the company today. However, investors appear to have been betting on a bidding war inflating the takeover price for the energy explorer. They may now be concerned that the war is over and the takeover offer price won’t rise beyond current levels.

The post Why HUB24, Lovisa, Redbubble, and Warrego shares are sinking today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ASX shares making big moves following quarterly updates
• Are ASX 200 retail shares on sale in 2023?
• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally
• Still shopping, share price not dropping: Lovisa shines among 3 best ASX 200 retail shares of 2022
• Falling inflation! Could the party be back on for ASX 200 retail shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Lovisa, and Redbubble. The Motley Fool Australia has positions in and has recommended Hub24. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/HJY9mMQ

The DroneShield Ltd (ASX: DRO) share price is heading skywards today, up 17% despite no news from the company.

The defence tech business has been on a tear of late, with its shares up 69.44% over the past four weeks.

The DroneShield share price is currently trading at 31 cents.

So, what’s been sending DroneShield shares northwards lately?

Why is the DroneShield share price shooting the lights out?

DroneShield has got great momentum at the moment following a series of positive announcements.

The latest big news is an $11 million government contract announced on 9 January.

This follows another $11 million government contract awarded in December, which was described by CEO Oleg Vornik as a “transformational next step in DroneShield’s growth”. 

Other wins in 1H FY23 included a $2 million European order and a $1.8 million order from the United States Department of Defense.

In November, DroneShield was named Australia’s 37^th fastest-growing company of 2022 in the 2022 AFR Fast 100 list.

Last we heard, DroneShield had a $50 million pipeline of sales for the December 2022 quarter. It was projecting a $180 million pipeline for 2023 and beyond.

DroneShield’s amazing growth story

As reported by abc.net.au today, DroneShield has an incredible story to tell about its rapid growth since its crowdfunded beginnings in 2014.

What was initially intended to be a company providing privacy services for celebrities and hotels needing paparazzi drones detected and shooed away, DroneShield has now evolved into a significant defence technology organisation.

The unprecedented use of drones in the Ukrainian war has really amped things up for DroneShield.

Their ‘drone guns’ — which shoot a scrambling radiofrequency into the air to disable enemy drones — have proven invaluable to Ukrainian soldiers in preventing artillery strikes from Russia.

Prior to this, airports began buying DroneShield’s products after the 2018 Gatwick Airport incident, when unconfirmed sightings of unidentified drones closed the airport and grounded hundreds of flights for two days.

Other customers include prisons seeking to prevent contraband from being dropped into yards.

DroneShield share price snapshot

DroneShield shares are up 60.5% over the past 12 months. Since listing in 2016, they are up 32.6%.

The post Why has the DroneShield share price rocketed 69% in a month? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Guess which ASX share is rocketing 25% on a record $11m government contract

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

from The Motley Fool Australia https://ift.tt/xd9UepR

There have been a number of quarterly updates being released this week. Some have gone down well with investors, some have not.

For example, listed below are two ASX shares that have made big moves in opposite directions on Wednesday following the release of their updates. Here’s what’s happening:

Ampol Ltd (ASX: ALD)

This fuel retailer’s shares were up as much as 4% to $29.87 following the release of its quarterly update. Ampol, formerly known as Caltex, revealed that its fourth quarter group RCOP earnings before interest and tax is expected to be slightly ahead of the third quarter result.

The company also revealed that the Lytton Refiner Margin (LRM) for the fourth quarter remained above historical levels averaging US$11.75 per barrel. Furthermore, refinery production for the period was 1,580 ML, increasing from 1,546 ML in the third quarter.

Overall, a solid quarter from the fuel giant.

Redbubble Ltd (ASX: RBL)

Investors have been selling down Redbubble’s shares after the release of yet another disappointing update. The ecommerce company’s shares are currently down over 12% to 50 cents, which means they are now down approximately 80% since this time last year.

This morning, Redbubble reported a modest increase in second quarter marketplace revenue, which led to flat first half revenue. However, higher costs mean that it expects to post an $18 million operating loss for the half. This compares to a $10.5 million operating profit a year earlier. Management blamed “increasingly challenging” trading conditions and higher promotional activity.

This loss has led to Redubble’s cash balance falling by approximately $46 million over the last 12 months to $97 million.

Unfortunately, management expects “macroeconomic conditions to remain challenging in the near term.” As a result, the company has decided to adjust its operating expenditure with the aim of being sustainably cash flow positive by the end of 2023.

The post 2 ASX shares making big moves following quarterly updates appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 little-known ASX 300 shares with big potential: expert
• I wouldn’t touch this popular ASX dividend share with a 10-foot pole
• Fortescue shares: 4 reasons to buy (and not buy) in 2023
• Coles shares: Here are the dividend forecasts for 2023 and 2024
• Cheap ASX shares: A rare chance to get rich?

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 Redbubble. 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.

from The Motley Fool Australia https://ift.tt/Rs1utX8

The S&P/ASX 300 Index (ASX: XKO) is full of interesting businesses. A leading fund manager has picked out two lower-profile ASX 300 shares that could do well.

Wilson Asset Management (WAM) operates a number of listed investment companies (LICs) including WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA).

Over the long term, many of the fund manager’s LICs have outperformed their respective benchmarks. So, it could be worthwhile to pay attention to the names that WAM suggests are opportunities.

So, let’s look at some of the opportunities that WAM has picked.

Neuren Pharmaceuticals Ltd (ASX: NEU)

WAM said that Neuren Pharmaceuticals is currently developing new therapies for “highly debilitating neurodevelopment disorders that emerge in early childhood, which currently do not have approved medicine to treat the condition[s].”

The fund manager pointed out that Neuren announced in late 2022 that the US Food and Drug Administration (FDA) approved a priority review for its Rett syndrome therapy with the results due in February 2023.

WAM also noted that in December, the ASX 300 share announced it had submitted an investigational new drug application for FDA’s approval to proceed with a phase 2 trial for a therapy for Prader-Willi syndrome.

It was a “significant milestone” for the development of the new therapy, according to the fund manager.

Neuren Pharmaceuticals noted positive results from its two other trials for therapies for Angelman syndrome and Phelan-McDermid syndrome, which showed “good safety and tolerability profiles”. WAM concluded with its thoughts on the business:

We look forward to the announcement of further top-line results from these trials in the second half of 2023.

Perenti Ltd (ASX: PRN)

Perenti was another ASX 300 share picked out by the investment team. This business was described as one that provides mining services including contract mining, mining support services, and future technology solutions.

Last month, Perenti announced another earnings guidance upgrade – FY23 revenue is now expected to be between $2.7 billion to $2.9 billion. FY23 earnings before interest, tax, and amortisation (EBITA) guidance is for between $230 million to $250 million.

WAM explained that this upgrade was because of improved commercial conditions across several Australian and African projects. As well, the company has been awarded a new contract for development work with Evolution Mining Ltd (ASX: EVN) and its work scope with Regis Resources Ltd (ASX: RRL) is expanding.

Last month, Perenti announced a contract extension for its surface mining business in Africa, valued at approximately US$185 million over four years. The fund manager concluded its thoughts on the ASX 300 share with these comments:

We are pleased to see continued positive developments in Perenti’s business, which contributes to the company’s FY25 target of achieving an EBITA margin of 10%.

The post 2 little-known ASX 300 shares with big potential: expert appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 ASX All Ordinaries shares defying today’s downturn to rocket higher

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.

from The Motley Fool Australia https://ift.tt/7Mop9Zl

When it comes to ASX dividend shares, income investors are spoilt for choice. The ASX has dozens and dozens of dividend payers that call it home.

When choosing an ASX dividend share, many investors use a company’s raw dividend yield as their most important criterion. But this could be a mistake. There is always the possibility that a company with a high trailing yield turns out to be a dividend trap.

But there are other pitfalls of a high yield. Let’s talk about one popular ASX dividend share that seemingly offers a massive yield today, but which I think could result in sub-par returns for investors regardless. It’s the WAM Capital Ltd (ASX: WAM) share price.

WAM Capital is a listed investment company (LIC) that has been around since 1999.

Right now, WAM Capital shares have a fully franked trailing dividend yield of 9.69%. That comes from the 15.5 cents per share the company has paid out over the last 12 months. WAM Capital has paid this same fully franked dividend out every year since 2018.

So that all looks pretty good, right?

This ASX dividend share offers income, but poor returns

Well, consider this. Since January 2018, the WAM Capital share price has gone from $2.48 to $1.60. That means that investors have lost, on average, 8.4% of their capital in share price returns alone. Even including the company’s dividends, investors have barely broken even.

LICs’ share prices can perform independently of their underlying investment portfolio, however. And over the five years to 31 December, WAM Capital’s investment portfolio has increased by an average of 4.5% per annum.

However, even though that includes dividend returns, it doesn’t come close to matching the 7.2% per annum return of the S&P/ASX All Ordinaries Accumulation Index that WAM Captial uses as a benchmark.

It doesn’t include WAM Capital’s hard-to-find 1.25% per annum management fee either, which further shaves down the returns investors have enjoyed.

Put simply, investors are being asked to pay a rather steep 1.25% management fee every year for chronic market underperformance. Investors would have been far better off sticking with an ASX 200 index fund like the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

This exchange-traded fund (ETF) returned an average of 7.1% per annum over the five years to 31 December. That includes the fund’s far more reasonable 0.09% per annum management fee.

So considering all of this, WAM Capital is an ASX dividend share that I wouldn’t touch with a 10-foot pole today. Nor would I touch most of the other LICs that Wilson Asset Management has on offer, for similar reasons.

Sometimes, a 9.69% dividend yield isn’t worth all it might be cracked up to be.

The post I wouldn’t touch this popular ASX dividend share with a 10-foot pole appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 reasons to invest in the ASX 200 in 2023
• How to make passive income from ASX dividend shares with only $50 a week
• Will 2023 get better for ASX 200 shares?

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

from The Motley Fool Australia https://ift.tt/VcjGRlg

The Fortescue Metals Group Limited (ASX: FMG) share price has been like a runaway train for the past six months. Yet, after clawing 30% higher during this time, shares in the iron ore producer are only 6.2% above where they were a year ago.

It’s no secret that the Fortescue share price tracks closely with the price of the steelmaking commodity it produces. As such, the short-term performance of the company will likely be guided by iron ore supply and demand.

However, there are other factors that I believe are important in considering whether to buy or avoid Fortescue shares in 2023.

Two reasons to buy

One of the most enticing aspects of Fortescue Metals Group is its low cost of production.

In September 2022, the company stated that its C1 costs (mining costs) came in at US$17.69 per wet metric tonne. That makes it a highly competitive producer against miners that are much larger such as BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

What this means is Fortescue should be able to deliver profits even in an environment where iron ore prices are much lower than the current US$121 per tonne.

Secondly, an investment in Fortescue shares could be considered a hydrogen call option. What I mean by that is: if hydrogen is to become the clean, green energy source that it’s cracked up to be in the future, Fortescue could greatly benefit from this.

Not only does it have a commercial interest in hydrogen through Fortescue Future Industries, but the company’s operational costs could be drastically reduced. Currently, management is planning on eliminating fossil fuels from its operations by 2030.

Why not buy Fortescue shares?

Of course, a rose is not without its thorns… There are a couple of reasons why I’d be cautious about buying Fortescue shares this year.

Firstly, the ludicrous dividends from the Western Australia miner could take a hit in 2023. Analysts at Goldman Sachs think the passive stream will come under pressure due to the company’s spending on decarbonisation.

Another worrying sign in my eyes is the extent of turnover in the management team recently. Less than two weeks ago, Fortescue’s chief financial officer became the ninth senior executive to depart the company.

It might be coincidental… at minimum, it could create some pains in trying to manage the company until suitable replacements are found.

The post Fortescue shares: 4 reasons to buy (and not buy) in 2023 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• My ASX shares fell 15% last year. Here’s what I’m doing now
• ASX 200 mining shares: To buy or not to buy?
• Why did iron ore shares lag the ASX 200 on Monday?
• Why is the Fortescue share price being hammered on Monday?
• Why did Fortescue shares just crack a new, 52-week high?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

from The Motley Fool Australia https://ift.tt/w6n8rfg

Coles Group Ltd (ASX: COL) shares were out of form in 2022 and dropped 6.8% over the 12 months.

While this is disappointing, one positive is that it has driven the dividend yield on offer with the supermarket giant’s shares higher.

In addition, it could also mean some solid gains from its shares in the next 12 months if brokers are on the money with their predictions.

But let’s start with Coles’ dividends. What could income investors expect from the supermarket operator’s shares in the near future?

The Coles dividend

Coles understands the importance of paying dividends to its shareholders. So much so, it has a dividend policy in place that aims to pay out upwards of 90% of its underlying earnings each year.

Combined with its earnings growth, this has allowed the company to increase its dividend each year (even during COVID) since demerging from Wesfarmers Ltd (ASX: WES) in 2019.

The good news is that the team at Citi expect this trend to continue in FY 2023.

The broker is forecasting a 72 cents per share fully franked dividend, up 14% from 63 cents per share in FY 2022. Based on the current Coles share price of $17.18, this will mean a yield of 4.2% for investors.

The even better news is that Citi is forecasting another increase to the Coles dividend in FY 2024. Its analysts are expecting a 7% increase to 77 cents per share for that financial year, which equates to a fully franked 4.5% dividend yield.

Are Coles shares good value?

As I mentioned at the top, a number of brokers believe Coles shares can rise higher from here.

Citi is among this bullish group of brokers and has a buy rating and $18.90 price target on them.

This implies potential upside of 10% for investors, which stretches the total potential return to beyond 14%.

The post Coles shares: Here are the dividend forecasts for 2023 and 2024 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Are ASX 200 retail shares on sale in 2023?
• Want 17% upside plus dividend income? Broker says buy Coles shares
• How I’d invest my very first $500 in ASX shares in 2023
• Why I think these 3 ASX 200 dividend shares are top buys for retirement

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

from The Motley Fool Australia https://ift.tt/MJ9WSsn

Last year likely proved torturous for some ASX investors as shares on the index plummeted.

The S&P/ASX 200 Index (ASX: XJO) fell more than 5% in 2022 while major indices in the United States fell into bear territory.

But I believe there’s a silver lining to the downturn. It’s likely left many ASX shares trading at bargain prices, and they might well be ripe for the picking for long-term investors.

Making the most of a downturn

Like many investments, ASX shares experience volatility from time to time. When such volatility results in upwards movements, investors rejoice as their wealth compounds.

However, when the market moves lower, many investors are tempted to pull their money out.

But I think withstanding the discomfort – and even leaning into it – could ultimately help my financial position.   

As legendary investor Warren Buffett once wrote:

[B]e fearful when others are greedy and be greedy only when others are fearful.

The billionaire also noted he doesn’t track “fear and greed” (the pair assumably manifest as bull and bear markets). Instead, Buffett simply invests in companies he believes are high quality when they’re trading at a good price – a technique known as value investing.

And when he finds such a company, he buys to hold. As Buffett famously says, if you wouldn’t want to own a share for 10 years, you shouldn’t own it for 10 minutes.

Cheap ASX shares and where to find them

Fortunately, downturns tend to leave plenty of quality share trading at bargain prices. Interestingly, however, some ASX sectors were worse hit by 2022’s slump than others.

For instance, soaring oil, gas, and coal prices helped the S&P/ASX 200 Energy Index (ASX: XEJ) gain nearly 40% over the 12 months ended 31 December 2022.

Meanwhile, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) and the S&P/ASX 200 Real Estate Index (ASX: XRE) each dumped 23%, while the S&P/ASX 200 Information Technology Index (ASX: XIJ) plummeted 34%.

Tumbles of such magnitude are typically few and far between. And while they’ve likely been devastating for some, I think they’ve provided a rare wealth-building opportunity.

Because the market has historically recovered from downturns to post future gains, such embattled sectors are where I’d start hunting for cheap ASX shares I believe could help me get rich.

The post Cheap ASX shares: A rare chance to get rich? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why I’ll be buying more ASX dividend shares for my portfolio in 2023

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.

from The Motley Fool Australia https://ift.tt/LUnmJSD

Cheap ASX shares can be very effective ASX dividend shares. When businesses have low valuations, it bumps up the dividend yield on offer.

The elevated volatility last year has opened up a number of opportunities for investors to find some strong passive income.

It’s hard to say when share prices will get back to their former heights, but I believe that good businesses will be able to grow their earnings over the long term and this will encourage investors.

I don’t know how long investors will remain pessimistic – there are already signs that confidence is returning despite inflation remaining relatively high. I’d want to jump on these cheap ASX shares while they still offer great income potential.

Metcash Limited (ASX: MTS)

There are three segments to this business – food, liquor and hardware.

In food, it supplies IGAs around the country. The liquor division supplies independent liquor stores around the country, including IGA Liquor, Bottle-O, Cellarbrations, and Porters Liquor. The hardware division owns brands like Mitre 10, Home Timber & Hardware and Total Tools.

Using the numbers on Commsec, Metcash is priced at just 13 times FY23’s estimated earnings with a possible grossed-up dividend yield of 7.5%.

It grew its FY23 half-year dividend by 9.5% to 11.5 cents per share. The second half of FY23 has started strongly, with group sales up 6.2% “as consumers continue to be driven by robust underlying demand and inflation.”

The hardware division is now the division making the biggest profit. It’s expected to continue to see strong underlying demand in the second half of FY23.

This business trades on a lower price/earnings (P/E) ratio compared to Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES), which is one of the reasons why it seems like a cheap ASX share to me.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest furniture sellers in Australia – it owns both the Nick Scali and Plush businesses after an acquisition.

The Nick Scali share price has dropped by around 20% over the last year, pushing up the prospective dividend yield.

According to Commsec, it’s valued at just 10 times FY23’s estimated earnings with a potential grossed-up dividend yield of 9.8%. In FY24 it might pay a grossed-up dividend yield of 8.5%.

While there may be fewer sofas bought in 2023, the cheap ASX share could keep generating good profits in the coming years.

The cheap ASX share has a number of initiatives to grow profit over time, including a store rollout, increasing online sales and a range expansion.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less sells value apparel to families. The business has a focus on kids and women – it says it has better quality than cheap retailers and better value than specialty retailers. Baby products are the ‘entry point’ and it’s looking to grow its market share in baby, kids and womenswear. It also wants to achieve faster-than-the-market online sales growth and grow its store network.

Using the numbers on Commsec, the Best & Less share price is valued at under 7 times FY23’s estimated earnings with a possible grossed-up dividend yield of almost 15%.

This business is projected to grow its earnings and dividend in FY24 and FY25, which could make it seem like a very cheap ASX share at the current level.

The post 3 cheap ASX shares that can help me easily build a second income appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 4 best ASX dividend shares to buy right now: expert
• Here are the top 10 ASX 200 shares today
• Are ASX 200 retail shares on sale in 2023?
• Why ASX dividend shares are so ‘critical’ right now: fundie
• When it comes to ASX 200 dividend shares, is boring better?

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

from The Motley Fool Australia https://ift.tt/Kq40OjG