Monday is shaping up to be a strong session for S&P/ASX 200 Index (ASX: XJO) banks, with giant Commonwealth Bank of Australia (ASX: CBA) among the gainers.

The sector’s strong performance follows on from a similarly favourable Friday for Wall Street banks, driven by quarterly earnings from the United States’ ‘big four’.

However, the future could be less convincing for the Aussie institution, with one broker tipping CBA’s stock to tumble close to 15%.

Right now, the CBA share price is $107.36. That’s 0.81% higher than its previous close.

For comparison, the ASX 200 is up 0.66% right now while the S&P/ASX 200 Financial Index (ASX: XFJ) has gained 0.79%.

Let’s take a closer look at what’s going on with the banking giant today.

CBA share price gains despite bearish broker

The CBA share price is in the green on Monday after stock in the United States’ ‘big four banks’ surged amid their quarterly earnings on Friday.

Shares in JPMorgan Chase & Co (NYSE: JPM), Bank of America Corp (NYSE: BAC), Wells Fargo & Co (NYSE: WFC), and Citigroup Inc (NYSE: C) gained between 1.7% to 3.3% in the final session of last week.

But, unfortunately, it’s not all good news for ASX 200 banks today. The largest of the lot has reportedly been hit with a broker downgrade.

Jefferies has cut its outlook for CBA shares, slapping the stock with a $91.30 price target – a potential 14.8% downside, The Australian reports.

It comes after many of the New York-listed majors alluded to an upcoming recession in their latest earnings, putting aside extra cash to cushion the impact of a potential economic slowdown.

JPMorgan and Bank of America‘s earnings led the pack on Friday. The pair’s quarterly profits lifted 6% and 1.4% respectively year-on-year to US$11 billion and US$7.1 billion.

Meanwhile, Wells Fargo’s quarterly profit fell 50% to US$2.86 billion and that of Citigroup slumped 21% to US$2.5 billion.

Back home, the CBA share price is far from alone in the green on Monday. Here’s how the remaining Aussie big four banks are performing in late morning trade:

• Shares in National Australia Bank Ltd (ASX: NAB) are up 0.96% at $31.60
• The Westpac Banking Corp (ASX: WBC) share price is gaining 0.84% to reach $23.96
• ANZ Group Holdings Ltd (ASX: ANZ) stock is up 1.31%, trading at $24.81

The post Broker forecasts CBA share price to slide 15% appeared first on The Motley Fool Australia.

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More reading

• Bought $1,000 of IAG shares 10 years ago? Here’s how much dividend income you’ve pocketed
• Are ASX 200 retail shares on sale in 2023?
• 3 reasons why small-cap ASX shares could rocket in 2023
• 5 things to watch on the ASX 200 on Monday
• Burning hot: The outlook for ASX 200 energy shares in 2023

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Bank of America, JPMorgan Chase, and Jefferies Financial Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted ASX share with short interest of 14.1%, which is down week on week. Short sellers appear concerned by revenue margin pressures.
• Perpetual Limited (ASX: PPT) has 13.1% of its shares held short, which is up week on week once again. It appears that some investors aren’t confident that things will get easier for the fund management industry in 2023.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease slightly to 12.9%. Short sellers aren’t giving up on this betting technology company despite its shares crashing 60% over the last 12 months.
• Megaport Ltd (ASX: MP1) has seen its short interest ease to 10.6%. Concerns over this network as a service operator’s cash flow generation appears to be behind this high level of short interest.
• Sayona Mining Ltd (ASX: SYA) has 10.1% of its shares held short, which is down week on week. This may be due to fears that lithium prices have peaked and are heading sharply lower from here.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.8%, which is up since last week. Valuation concerns, production delays, and falling lithium prices could be the reason why short sellers are loading up on this lithium developer’s shares.
• Breville Group Ltd (ASX: BRG) has seen its short interest edge lower again to 7.3%. There are concerns that demand for this appliance manufacturer’s products could soften due to housing market weakness and the cost of living crisis.
• Lake Resources N.L. (ASX: LKE) has short interest of 7.1%, which is down slightly week on week. Analysts at J Capital are targeting the company due to concerns over its technology and funding.
• NextDC Ltd (ASX: NXT) has entered the top ten with short interest of 7%. This may be due to the sky high multiples the data centre operator’s shares trade on.
• Pointsbet Holdings Ltd (ASX: PBH) is back in the top ten with short interest of 6.9%. Fierce competition and its ongoing cash burn may be why short sellers are targeting this sports betting company.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• 3 ASX lithium shares forecasting maiden production in 2023
• Why Brainchip, Core Lithium, Deterra Royalties, and Mesoblast shares are falling
• Will Sayona Mining turn a profit 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 Betmakers Technology Group, Megaport, and Zip Co. The Motley Fool Australia has recommended Betmakers Technology Group, Flight Centre Travel Group, and 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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The Ioneer Ltd (ASX: INR) share price is shooting 27% higher on Monday morning. Moments after the opening bell, the ASX lithium share is fetching 58 cents apiece.

Ioneer was revealed as the recipient of a colossal funding agreement from the United States Department of Energy (DOE) Friday night.

A monumental US$700 million (A$1 billion) conditional commitment has been offered to the company by the DOE to assist in funding the development of its Rhyolite Ridge lithium-boron project in Nevada.

Shareholders of the lithium project developer will be watching intently today to see if the company can extend its 20% rally year-to-date. The benchmark-beating performance is a breath of fresh air for shareholders considering Ioneer shares were among the worst-performing ASX-listed lithium names in 2022.

Bringing new supply to the growing demand

On Friday, the Loan Programs Office of the DOE announced its latest funding proposal to help address supply for the domestic electric vehicle (EV) battery supply chain.

According to the release, the loan would finance the on-site processing of lithium carbonate which could potentially support the production of approximately 370,000 EVs annually. For context, 588,000 EVs and plug-in hybrid EVs were produced in the United States in 2021, the majority of which were made by Tesla Inc (NASDAQ: TSLA), as shown below.

The billion-dollar US government deal is the largest achieved by any Australian company. Other notable mentions include Novonix Ltd (ASX: NVX) with its US$150 million grant and Lynas Rare Earths Ltd (ASX: LYC) US$120 million department of defence contract — but Ioneer takes the cake.

In the announcement, the LPO highlights the criticality of adding in a new lithium supply, noting:

The urgency to secure critical materials for batteries is expected to rapidly increase in the coming years as demand for lithium is projected to exceed current global production by 2030. This is subsequently causing U.S. auto manufacturers to seek a robust domestic supply of critical materials to keep pace with the increased demand.

The ASX lithium share already has offtake agreements in place with Ford Motor Company (NYSE: F) and Toyota.

What’s next for this ASX lithium share?

While a billion-dollar loan is a cause for celebration, Ioneer still needs to meet some conditions before basking in glory. Before the company can commence construction of its Esmeralda County plant, it must complete engineering and feasibility studies.

If Ioneer successfully progresses to plant construction, the loan will go a long way to covering the expected US$785 million in construction costs. Furthermore, if Ioneer can get up and running, it would join Esmeralda Country neighbour, Albemarle Corporation (NYSE: ALB), which is currently the only operating lithium plant in the US.

The current Ioneer share price of 46 cents values this ASX lithium share at a market capitalisation of $955 million. In comparison, lithium giant Albemarle towers over the Aussie competition with a US$28.4 billion market cap.

The post Guess which ASX lithium share just rocketed 27% on a $1 billion US Government loan appeared first on The Motley Fool Australia.

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• These were the worst-performing ASX lithium shares of 2022

Motley Fool contributor Mitchell Lawler has positions in Albemarle, Lynas Rare Earths, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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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If you’re looking for dividend shares to buy, then the two listed below could be worth checking out.

Both have been named as buys by analysts recently and tipped to provide very attractive yields. Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

Goldman Sachs believes that this footwear and apparel retailer could be an ASX dividend share to buy right now.

The broker is a fan of the retailer due to its “diversified product exposure.” It notes that this includes a number of product categories its analysts “believe are resilient in the current cycle including youth footwear (Platypus, Hype), youth apparel (Glue, Nude Lucy), performance footwear (TAF), and a higher income consumer (Stylerunner).”

As a result, the broker expects the company to pay fully franked dividends of 10.2 cents per share in FY 2023 and 11.4 cents per share in FY 2024. Based on the current Accent share price of $1.86, this will mean yields of 5.5% and 6.1%, respectively.

Goldman has a buy rating and $2.20 price target on Accent’s shares.

Wesfarmers Ltd (ASX: WES)

Morgans is a fan of this conglomerate and believes it could be an ASX dividend share to buy.

Wesfarmers is of course the name behind a range of businesses such as Bunnings, Catch, Covalent Lithium, Kmart, Officeworks, and Priceline.

Morgans thinks Wesfarmers could be a good option in the current economic environment due to its value offering. It points out that “Kmart is well-placed to benefit with the average price of an item at around $6-7.”

In respect to dividends, the broker is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2023. Based on the current Wesfarmers share price of $48.15, this will mean yields of 3.8% and 4%, respectively.

Morgans has an add rating and $55.60 price target on Wesfarmers’ shares.

The post Experts say these top ASX dividend shares are buys right now appeared first on The Motley Fool Australia.

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More reading

• 2 passive income ideas I’d use to generate $100 a week in 2023
• Are ASX 200 retail shares on sale in 2023?
• How I’d invest my very first $500 in ASX shares in 2023
• Here are some top ASX dividend share ideas according to experts
• Dividend stocks: Why I’m buying now for supercharged and long-lasting passive income

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 Wesfarmers. 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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A number of ASX lithium shares have seen a big jump in profitability over the past 12 months as lithium prices soared. Shareholders could reap some of the benefits in 2023 if dividends flow to investors.

It has been a very volatile time for the sector, with sentiment reaching exuberance a few months ago, and then falling back over the last two months. We can see that in the share price of the first ASX lithium share, I’m going to mention.

Pilbara Minerals Ltd (ASX: PLS)

In mid-November, Pilbara Minerals announced that favourable market conditions and strong operating margins support the establishment of a capital management framework, including starting to pay dividends.

It’s going to balance investing for growth and rewarding shareholders.

The ASX lithium share intends to target a dividend payout ratio of between 20% to 30% of free cash flow. Management plan to start paying a dividend in FY23.

How big will the dividend be?

Commsec numbers suggest it could pay an annual dividend per share of 15 cents. The grossed-up dividend yield could be 5.4% as management is expecting to pay a fully franked dividend.

Mineral Resources Ltd (ASX: MIN)

Mineral Resources is both an ASX lithium share and an ASX iron ore share. The company is currently working on increasing its scale and earnings in both lithium and iron ore.

The company has said its five-year plan is to reach around 118,000 kt per annum.

While the business is investing in growth, it’s also paying dividends to investors each year.

Commsec numbers suggest it could pay a grossed-up dividend yield of 6.7%.

IGO Ltd (ASX: IGO)

This ASX lithium share is focused on discovering, developing, and delivering products critical to clean energy.

IGO says that it “owns and operates the Nova nickel-copper-cobalt operation, the Forrestania nickel operation and the Cosmos nickel operation – all in Western Australia. IGO is also invested in a lithium focused joint venture with our partner, Tianqi lithium Corporation, which comprises a 51% stake in the Greenbushes lithium mine and 100% interest in a downstream processing refinery at Kwinana producing battery grade lithium hydroxide.”

According to Commsec, it could pay an annual dividend per share of around 34 cents. That could be a grossed-up dividend yield of 3.3%.

The post Which ASX lithium shares are forecasting to pay dividends in 2023? appeared first on The Motley Fool Australia.

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More reading

• Own ASX lithium shares? Here’s the latest lithium price forecast
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Integrated Research, Macquarie, Pilbara Minerals, and South32 shares are pushing 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.

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The Insurance Australia Group Ltd (ASX: IAG) share price has outperformed the market over the last 12 months, gaining 6.9% in that time. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has slipped 1.2%.

However, zooming out, the stock’s long-term performance isn’t so strong. The IAG share price has fallen around 5.5% over the last 10 years.

If an investor were to have bought $1,000 worth of the insurance stock in January 2013, they likely would have walked away with 196 shares, paying $5.10 apiece.  

Today, that parcel would be worth $944.72. The IAG share price is currently $4.82.

For comparison, the ASX 200 has gained around 54% over the last decade.

But how has our figurative investment performed when we factor in dividends offered by IAG in that time? Let’s take a look.

How much have IAG shares paid in dividends in 10 years?

Here are all the dividends IAG shares have paid since January 2013:

IAG dividends’ pay date	Type	Dividend amount
September 2022	Final	5 cents
March 2022	Interim	6 cents
September 2021	Final	13 cents
March 2021	Interim	7 cents
March 2020	Interim	10 cents
September 2019	Final	20 cents
March 2019	Interim	12 cents
November 2018	Special	5.5 cents
September 2018	Final	20 cents
March 2018	Interim	14 cents
October 2017	Final	20 cents
March 2017	Interim	13 cents
October 2016	Final	13 cents
March 2016	Interim	13 cents
March 2016	Special	10 cents
October 2015	Final	16 cents
April 2015	Interim	13 cents
October 2014	Final	26 cents
April 2014	Interim	13 cents
October 2013	Final	25 cents
April 2013	Interim	11 cents
Total:		$2.855

As per the chart above, IAG shares have each offered investors $2.855 in dividends over the last decade.

That means our 196-share parcel would likely have paid out $559.58 in dividends – leaving our figurative investor in the green.

Indeed, factoring in both dividends and share price movements, IAG stock boasts a return on investment (ROI) of 50% over the 10 years just been.

On top of that, many of the dividends offered by the company in that time have been fully franked. Thus, they could have brought additional benefits for some shareholders at tax time.

IAG shares currently trade with a 2.28% dividend yield.

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

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More reading

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• 3 reasons why small-cap ASX shares could rocket in 2023
• 5 things to watch on the ASX 200 on Monday
• Burning hot: The outlook for ASX 200 energy shares in 2023
• 3 reasons to invest in the ASX 200 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 positions in and has recommended Insurance Australia 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 dividend shares can be a very useful way to grow an investor’s passive income.

Businesses that pay a healthy amount of their profit out each year can offer attractive dividend yields.

I think that ASX blue-chip shares can provide good stability. But, I believe smaller ASX shares have more room to grow earnings and therefore boost the dividend over time.

With that in mind, I’d utilise the below two ASX dividend shares for passive income.

Universal Store Holdings Ltd (ASX: UNI)

This is an ASX retail share that has retail businesses and wholesale businesses. Its core businesses are Universal Store and THRILLS. The business is also trialling the ‘Perfect Stranger’ brand as a standalone retail concept. Universal Store has around 80 stores.

In FY23, it could pay a grossed-up dividend yield of 7.4% according to Commsec. By FY25, it could be paying a grossed-up dividend yield of 9.7%.

Its brands are focused on on-trend apparel products for fashion-focused 16 to 35-year-olds.

FY23 has started strongly, with total group sales (excluding THRILLS) up 40.2% year over year. It opened three new stores before Christmas and it’s planning to open another four to five new Universal stores in the second half of FY23.

The end of lockdowns could lead to a good boost of profitability in FY23 and beyond for the ASX dividend share, particularly as scale helps the business hopefully achieve higher margins. This could help it grow passive income for shareholders.

According to Commsec, the Universal Store share price is valued at 13 times FY23’s estimated earnings.

Accent Group Ltd (ASX: AX1)

Accent is a shoe retailer that owns some brands and acts as the distributor for other brands. Some of those brands include The Athlete’s Foot, Glue Store, Skechers, Dr Martens, VANS, CAT, Timberland, Hoka, Kappa and Nude Lucy.

The business has started FY23 strongly. In the first 18 weeks of FY23, total sales were up 52% year over year and the gross margin had improved by 570 basis points. It’s also benefiting from the end of lockdowns. It was expecting to open around 50 stores in the first half of FY23.

With Accent’s rebound in profitability, Commsec expects it to pay a grossed-up dividend yield of 7.4% in FY23. The grossed-up dividend yield might be 9.8% by FY25.

The company could be very good value. According to Commsec, it’s priced at 15 times FY23’s estimated earnings.

$100 per week of passive dividend income

Both of these names have a grossed-up dividend yield of 7.4%. Annualised, $100 per week is $5,200 per year. Investing the same amount in each ASX dividend share would need a total of $70,270 at the current share prices.

However, with the dividend growth predicted over the next couple of years, the total dividend income could grow to $6,851, which would be an average of over $130 per week by FY25.

The post 2 passive income ideas I’d use to generate $100 a week in 2023 appeared first on The Motley Fool Australia.

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• Here are some top ASX dividend share ideas according to experts
• Top ASX dividend shares to buy in January 2023
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• Brokers name 2 ASX dividend shares to buy now
• Buy these cheap ASX dividend shares: Goldman Sachs

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 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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With China’s reopening from the pandemic expected to lead to increased demand for commodities, the mining sector looks set to be the place to be again in 2023.

But which ASX 200 mining shares should you buy? Listed below are two ASX 200 mining shares that analysts are tipped as buys by analysts. Here’s what they are saying about them:

Allkem Ltd (ASX: AKE)

Although Goldman Sachs expects lithium prices to tumble from the second half of 2023, it still believes that Allkem is an ASX 200 mining share to buy. This is because it expects Allkem’s production growth to offset the softer prices.

This could make it a top option in the lithium space. Because if China’s reopening means that lithium prices don’t weaken as Goldman expects, it would likely lead to materially better earnings from Allkem. So, investors arguably win either way. Goldman commented:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality, second only to Mineral Resources on an LCE basis when including downstream hydroxide production on an equity basis. This drives our forecast for the company’s equity LCE production growth of >4x by FY27E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

The broker currently has a buy rating and $15.20 price target on Allkem’s shares.

South32 Ltd (ASX: S32)

The team at Morgans believe that South32 is one of the best ASX 200 mining shares to buy right now.

This is because of the successful transformation of its portfolio, its exposure to copper, and its positive long term outlook. The broker expects this to support strong earnings and dividends in the near term.

Its analysts explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

Morgans has an add rating and $5.40 price target on South32’s shares.

The post 2 ASX 200 mining shares to buy as China reopens: analysts appeared first on The Motley Fool Australia.

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More reading

• Own ASX lithium shares? Here’s the latest lithium price forecast
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Brokers name 3 ASX shares to buy today
• 6 ASX mining shares just upgraded by brokers
• Broker says Allkem share price can rise 20% even if lithium prices fall

Motley Fool contributor James Mickleboro has positions in Allkem. 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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S&P/ASX 200 Index (ASX: XJO) retail shares have seen a lot of pessimism over the last 12 months. But with a number of them trading at much lower share prices, are they now bargain buys?

Take Wesfarmers Ltd (ASX: WES) shares as an example. Wesfarmers is the owner of Bunnings and Kmart. Its share price is 27% lower than it was in August 2021 and it’s down 13% compared to mid-January 2022.

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Investors need to ask themselves a few questions.

How much pain are the ASX 200 retail shares really going to report in FY23?

Have the share prices overreacted for what may only be a short-term problem?

Are they now opportunities?

I’m going to look at each of those questions.

FY23 pain?

ASX 200 retail shares may not see too much pain at all.

Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) generate most of their earnings from supermarkets, which I think means their earnings will be fairly consistent and defensive. Metcash Limited (ASX: MTS), the hardware business and supplier to IGAs, saw a strong first half of its FY23 and reported ongoing growth in the first few weeks of FY23’s second half.

Harvey Norman Holdings Limited (ASX: HVN) has started FY23 off with total sales growth in the first four months of the financial year, as did JB Hi-Fi Limited (ASX: JBH), Super Retail Group Ltd (ASX: SUL), and Premier Investments Limited (ASX: PMV) as they cycle against lockdowns in the first half of FY22 when many stores were shut.

Wesfarmers has said its retail store sales are doing well in the first few months of FY23.

Lovisa Holdings Ltd (ASX: LOV) sales and earnings are jumping higher as the company continues its global store rollout.

Breville Group Ltd (ASX: BRG) has said its business is performing to its expectations.

Despite many of them reporting impressive growth, their share prices are lower.

According to the Australian Bureau of Statistics (ABS), retail trade figures for November 2022 showed a 1.4% month-over-month rise in total Australian turnover and a 7.7% rise year over year.

Is it an overreaction?

Inflation and higher interest rates could cause a problem during 2023.

The higher repayments can take a while to flow through to mortgage holders, particularly ones that have been on, or are on, a fixed-rate mortgage. Will we see a sudden drop in retail spending growth? Perhaps even a decline?

It’s quite possible. Plus, unemployment could rise. As well, ASX bank share arrears could increase.

Investors could justifiably point to a number of factors that could mean 2023 is not a good year for ASX 200 retail shares.

But the first half seems like it’s going to be a solid report for many of the names I’ve mentioned.

Keep in mind that share prices are meant to reflect the long term, not just what’s going to happen in the next six or twelve months.

While higher interest rates are meant to push valuations lower, I think some are too low considering many of these businesses continue to grow their store count and potentially gain from scale benefits.

Are ASX 200 retail shares in the bargain basket?

They aren’t as cheap as they were a few months ago. However, I believe any negative hits to earnings will be time-limited to the next 12 to 18 months. A reduction in official interest rates in the future could mean a good boost to sentiment.

I’m very optimistic about the future of Wesfarmers, Premier Investments, Metcash, and Lovisa. So, at the current prices, they’d be the first four I’d buy in the sector.

Smaller ASX retail shares which have been hit even harder over the last year could be even more tantalising opportunistic ideas to consider at the lower share prices.

The post Are ASX 200 retail shares on sale in 2023? appeared first on The Motley Fool Australia.

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More reading

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• Buy these ASX 200 dividend shares when the market reopens: analysts

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 Harvey Norman, Lovisa, and Super Retail Group. The Motley Fool Australia has positions in and has recommended Coles Group, Harvey Norman, Super Retail Group, and Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi, Lovisa, Metcash, and Premier Investments. 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 has seen plenty of volatility over the past year. But, for investors waiting for another low, it might be time to start investing.

There isn’t a bell that rings that tell us when the bear market low has been reached. There were two moments of lows for the S&P/ASX 200 Index (ASX: XJO) in 2022 – in June and the end of September/start of October. Volatility is likely to continue but we may have already seen the bottom.

I think the market tends to hit its lowest when things are looking the most unknown. When it seems uncertain how things are going to go, I believe that’s when share prices decline the most. However, when the bad factors are known and predicted, that seems to be when investors are more comfortable with the situation and share prices start rising.

For example, interest rates are even higher in the US and Australia than a few months ago. That’s meant to put even more pressure on valuations, in theory. Yet, the ASX 200 is up by around 14% since 20 June 2022.

Why I think it’s time to invest in ASX shares

I want to buy ASX shares as cheaply as possible. But, history tells me the low prices, as we’ve seen over the past several months, are likely to stick around only for so long. The share market and earnings have risen over time and I think that can continue in the coming years.

If we can buy investments at a cheaper price then it will help long-term returns, including a better dividend yield. As well, US inflation may be starting to come down.

We don’t know what share prices are going to do in the future, but I can see a wide range of opportunities on the ASX today.

By the time economic conditions start improving, the share market could already have gone through a recovery. We’ll just have to see how large the recovery is, considering interest rates are likely to stay higher than they have been over the last few years.

We’ve already seen a number of ASX shares rebound to get close to 52-week highs such as Webjet Limited (ASX: WEB), Lovisa Holdings Ltd (ASX: LOV), and TechnologyOne Ltd (ASX: TNE).

Which ideas could still be good value?

I regularly write articles about ASX shares that could make good investments. The Motley Fool website is a great place to find ideas.

In my opinion, heavily-hit names like Xero Limited (ASX: XRO), Pinnacle Investment Management Group Ltd (ASX: PNI), and Temple & Webster Group Ltd (ASX: TPW) are still long-term opportunities.

I also like the long-term tailwinds for companies such as Adore Beauty Group Ltd (ASX: ABY) and Estia Health Ltd (ASX: EHE).

This could also be a great time to consider an investment like a leading exchange-traded fund (ETF) such as Betashares Nasdaq 100 ETF (ASX: NDQ) that has fallen heavily.

The post Waiting for ASX shares to bottom? Why you could miss out on a stock market rally appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Analysts say these ASX growth shares can generate huge returns for investors
• US inflation is cooling: I’d buy these 3 ASX shares right now
• 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 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, Lovisa, Pinnacle Investment Management Group, Temple & Webster Group, and Xero. 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 BetaShares Nasdaq 100 ETF, Pinnacle Investment Management Group, and Xero. The Motley Fool Australia has recommended Adore Beauty Group, Lovisa, Technology One, 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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