The Commonwealth Bank of Australia (ASX: CBA) share price will be on watch this morning.

This follows the release of Australia’s largest bank’s first quarter update.

CBA share price on watch following Q1 update

• Income up 9% over the second half average to ~$6.6 billion
• Expenses up 4.5% excluding remediation
• Cash net profit after tax up 2% to $2.5 billion
• Troublesome and impaired assets down 4.7% to $6.1 billion
• Loan impairments of $222 million
• CET1 ratio of 11.1%

What happened during the quarter?

For the three months ended 30 September, CBA reported a modest 2% increase in cash earnings over the second half average to $2.5 billion. This reflects a 9% jump in operating income, offset by a 4.5% increase in expenses.

CBA’s income growth was driven by higher margins and volume growth, partly offset by reduced non-interest income. Household deposits rose 8.6%, home lending grew 6.3%, and business lending increased 12.6% year over year.

Operating expenses excluding remediation were approximately ~4.5% higher than the second half average. This reflects higher staff costs driven by wage inflation, additional working days, and seasonally lower annual leave usage. It was partly offset by lower software amortisation and occupancy costs.

The bank reported net interest income growth of 16%, which was driven by higher deposit earnings, volume growth across core products, the benefit of rising rates on replicating portfolio and equity hedge balances, and 1.5 additional days in the quarter. This was partly offset by the impact of competition and rising rates on lending products.

No details were provided about the widely followed net interest margin (NIM).

How does this compare to expectations?

Unfortunately for the CBA share price today, this update appears to have fallen a touch short of expectations.

Yesterday, analysts at Citi revealed that they were expecting earnings growth of 6%, which was in line with consensus estimates.

Citi commented: “Our 1Q23 cash earnings forecast is in-line with consensus, and we forecast a quarterly NIM of 1.96%, ~9bps ahead of 2H22. At the core earnings line, we expect ~6% core earnings growth in 1Q23 vs the 2H22 average.”

Management commentary

CBA’s CEO, Matt Comyn, appeared to be happy with the quarter and remains positive on the bank’s outlook despite the cost of living crisis. He commented:

Consistent and disciplined execution of our strategy delivered strong financial and operational outcomes in the first quarter of FY23, highlighted by Cash NPAT of approximately $2.5 billion, 12% growth in operating performance and sound portfolio credit quality. In a competitive environment, we remained disciplined and achieved good volume growth in our core markets.

We recognise the concern and pressure many customers are feeling due to the higher cost of living, and increases in the cash rate. As well as providing a range of measures to help these customers, we also supported customers and communities impacted by natural disasters, particularly those affected by recent flooding.

Our strong balance sheet positions us well to continue helping customers achieve their financial goals, consistent with our purpose to build a brighter future for all. The economy has shown resilience in the face of growing cost of living and interest rate pressures and despite these near-term challenges we remain optimistic on the medium to long term outlook.

The post CBA share price on watch amid $2.5b Q1 cash profit 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

• 5 things to watch on the ASX 200 on Tuesday
• Looking to buy CBA shares? Here’s what to watch in Tuesday’s update
• Are ASX share investors getting their mojo back?
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why are CBA shares so high right now?

from The Motley Fool Australia https://ift.tt/jwPcBv1

Invest for the long-term, you hear ad nauseum.

But it’s easier said than done.

If you don’t pick the right businesses to invest, your “reward” for sticking with your ASX shares through thick and thin could be seeing your wealth shrink.

Ouch.

That’s why among all the stock tips you hear on here and everywhere, it’s worth noting the ones that the experts have marked as long-term prospects.

Those are the stocks in which you might have more confidence holding onto even when the valuation becomes volatile in the immediate future.

Here is a couple of ASX shares that are fit the bill:

‘Benefitting from a tight labour market’

Wilsons investment advisor Peter Moran is currently a fan of PeopleIn Ltd (ASX: PPE) because of Australia’s historic low unemployment rate.

“PeopleIn provides human resources outsourcing and contract staffing to a diverse range of sectors, including health and community services, early learning, government and manufacturing,” Moran told The Bull.

“PeopleIn is benefitting from a tight labour market.”

The long-term driver for the business, according to Wilson, is the nature of its clientele.

“PPE is also attractive for its positioning in defensive sectors, which are expected to experience strong growth over the long term,” he said.

“We hold an overweight rating.”

The PeopleIn share price has dropped 27% year to date, but has spiked up 24.9% since a mid-June trough.

It seems Moran’s peers are unanimously in agreement with him.

According to CMC Markets, all six analysts who currently cover PeopleIn rate it as a buy, with five of them labelling it a strong buy.

Immediate earnings downgraded, but still great balance sheet

The Allkem Ltd (ASX: AKE) share price has ridden the lithium thematic all the way home to be almost 50% up so far in 2022.

According to Ord Minnett senior investment advisor Tony Paterno, his team has recently downgraded the earnings expectations for the miner due to “lighter production”.

But it’s still a worthy long-term buy.

“The stock continues to show valuation support, based on a recent price-to-net-present-value multiple of 0.76 times,” he said.

“Anticipated growing free cash flow yields of 5% to 17% between fiscal years 2023 and 2025 also appeals. There’s no stress on the balance sheet.”

With lithium prices reaching phenomenal highs this year, experts are divided as to whether the producers have hit their peak.

Ten out of 17 analysts currently surveyed on CMC Markets are rating Allkem shares as a strong buy, but six others are convinced it’s a hold.

The post ‘No stress’: Experts name 2 ASX shares to buy for strong long-term growth 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

• Why did ASX lithium shares have a dream run on Monday?
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager
• Top brokers name 3 ASX shares to buy next week
• Top ASX dividend shares to buy in November 2022
• Analysts say these ASX growth shares are buys

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 Peoplein. The Motley Fool Australia has recommended Peoplein. 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/YNrlWjb

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, 1851 Capital portfolio manager Martin Hickson names three ASX shares investors should buy that drove strong returns for his fund.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Martin Hickson: I’m Martin Hickson, portfolio manager at 1851 Capital, a reasonably newly established business and fund. 

We launched the fund back in February 2020. Both Chris Stott, who’s my partner in the business, worked together previously at Wilson Asset Management for a decade together before setting up this business. 

Our style is we’re a long-only small and micro-cap fund manager. We’ve got restricted capacity. We soft-closed the fund at $400 million back in August last year. From the launch, that was always the plan, to soft-close the fund once we got to that level. It’s our belief that as you grow your funds under management past a certain point, it starts to inhibit performance, so that’s why we’ve restricted the capacity of the fund. 

We invest in companies ex-S&P/ASX 100 Index (ASX: XTO) industrial companies, ASX-listed only. There’s no pre-IPO or overseas companies, [no] unlisted assets. Our style is we’re looking for growth companies with attractive valuations and a catalyst that can re-rate the share price.

MF: This year’s been a tough time for smaller caps, hasn’t it? How do you see things at the moment, and where do you see them going?

MH: Yeah, it has been a volatile time. The area of the market that we invest in, the small industrials, since we launched the fund just under three years ago, our area of the market’s actually down by 15% over the first 33 months of launching the fund. [But] the fund’s done okay. As of the end of October… from memory, it’s up around 35%. 

It’s been a tough 12 months, and it’s been a very volatile almost three years for markets. Since we’ve launched the fund, we’ve been through two bear markets now, and a potential recession coming. We’ve been through the COVID pandemic, obviously a war, so there’s a lot that’s occurred in the first three years of the fund.

Hottest ASX shares

MF: What are the three best stock buys right now?

MH: The three stocks that I’ll talk about, they’re all companies that we own within the portfolio and at the smaller end of the overall market.

The first one is a company called IPD Group Ltd (ASX: IPG). A reasonably new entrant to the ASX, so listed back in December last year. It’s been a strong performer. The share price has more than doubled over the last 12 months. 

What they do is they’re an electrical equipment distributor and services company. If you go into a big apartment building or an office, you look at the electricity distribution room, and you see all the equipment in there, a lot of the equipment has likely come from a company like IPD Group. So power distribution, power monitoring, industrial control products.

It’s been a very successful position for us. Despite the strong performance in the share price, it still trades at an attractive valuation — so they’re 15 times post-earnings ratio, so quite cheap, below what the overall market’s trading at. Their earnings are growing at over 20%. So very, very strong growth, but still trading at that cheap price. 

They extended their agreement with ABB Ltd. ABB is one of the largest electrical equipment manufacturers globally, with 30% market share. [IPD is] distributing all of those products in Australia on behalf of ABB.

The other thing we like about it is that they’ve got a growing EV business. They sell the equipment to install EV chargers in both residential homes but also in EV charging stations. They’re one of the only ways to get exposure to that growing electronic vehicle thematic in the industrial space. There’s obviously lithium, but this is one of the only ways to play it on the ASX in the industrial space. 

That’s one that’s performed strongly for us, but we still think there is further upside to that company.

Thirdly, they’ve got a strong balance sheet. They’ve got $25 million of net cash on the balance sheet, and that provides flexibility to potentially deploy that cash into acquisition opportunities.

MF: Fantastic performance, isn’t it? It’s not an energy company or a mining company, but it’s more than doubled this year when everything else has flopped.

MH: Yeah, that’s right. It’s doubled in a period where the overall market’s down just over 20%, so a lot of good tailwinds for that business.

MF: Great, your next stock to buy right now?

MH: Next one’s a company called Atturra Ltd (ASX: ATA). They’re an IT services company.

Similar to IPG, really. There’s a lot of similar characteristics. They also listed around 12 months ago. We participated in the [initial public offering] IPO. It trades at a price-to-earnings ratio of 15 times, earnings rate 20% as well. And again, [a] very strong balance sheet — $30 million net cash on the balance sheet, similar to IPG. It gives them flexibility to potentially deploy that cash into accretive acquisitions. 

They’ve also given earnings guidance to the market back in August of $15 to $16 million of EBIT. We think that looks conservative. We think their earnings are growing at a very fast rate, but again, it’s still trading at quite a reasonable multiple.

MF: You would think listing at the end of last year would be absolutely terrible timing, but both those companies have done really well.

MH: Yeah. If you look at the overall list of companies that IPOed in the second half of last calendar year, in that December half, there aren’t many of them that have performed strongly. A lot of them are well underwater, but both IPD Group and Atturra have bucked the trend. They’re up significantly since their IPO. 

Even in any market, in the micro-cap and small-cap space, there are always opportunities to find these gems that grow irrespective of what’s happening in the overall economy.

MF: And your third pick, I think, is a bit more of a mature player?

MH: Yeah, the third is Capitol Health Ltd (ASX: CAJ). They’re a radiology company. There’s a couple of reasons why I like it. 

Firstly, their earnings are recovering close to COVID disruptions of the last couple of years. Their business is primarily in Victoria, so they were significantly impacted by the lockdowns there over the last few years, so they’ve seen a tailwind for their earnings this financial year. 

Justin Walter, the CEO there, who’s been CEO for three years, has changed the business a lot since he joined. He’s taken significant costs out of the business, he’s improved the culture of the organisation, and also, in August this year, they acquired one of their competitors in Victoria, a business called Future Medical Imaging Group. That was an accretive acquisition for them, and it really reinforced that dominant position in the Victorian radiology market.

The other attraction is that it trades on a low EBITDA multiple of 7.5 times. We’ve seen, over the last couple of years, there have been private transactions where companies have been taken over at EBITDA multiples of 12 to 13 times. So based on those numbers, Capitol Health is trading a lot cheaper than a lot of those private companies were taken over at. That gives it very strong valuation support.

MF: The health industry is also defensive, isn’t it, when an economic downturn is coming?

MH: Yeah, that’s right, so better earnings streams … Like you say, quite defensive, given they operate in the healthcare space.

The post 3 small-cap ASX shares that drove fund up 35% while the market plunged 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

• 5 things to watch on the ASX 200 on Tuesday
• This is how Warren Buffett defines a great business — and how you should too
• Morgans names 2 of the best ASX 200 dividend shares to buy
• Brokers rate these blue chip ASX 200 shares as buys
• Why did ASX lithium shares have a dream run on Monday?

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

from The Motley Fool Australia https://ift.tt/mp97UIf

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a subdued manner. The benchmark index edged 0.15% lower to 7,146.3 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to edge higher

The Australian share market looks set to edge higher on Tuesday following a decent start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 2 points higher. In late trade in the United States, the Dow Jones is up 0.45%, the S&P 500 is up 0.3%, and the NASDAQ has edged 0.1% higher.

CBA Q1 update

The Commonwealth Bank of Australia (ASX: CBA) share price will be in focus today when Australia’s largest bank releases its first quarter update. Analysts at Citi commented: “Our 1Q23 cash earnings forecast is in-line with consensus, and we forecast a quarterly NIM of 1.96%, ~9bps ahead of 2H22. At the core earnings line, we expect ~6% core earnings growth in 1Q23 vs the 2H22 average.”

Oil prices fall

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices dropped overnight. According to Bloomberg, the WTI crude oil price is down 3.4% to US$86.00 a barrel and the Brent crude oil price has fallen 2.75% to US$93.33 a barrel. A strong US dollar and a surge in COVID cases in China weighed on prices.

NAB goes ex-dividend

The National Australia Bank Ltd (ASX: NAB) share price is likely to trade lower today when the banking giant’s shares go ex-dividend for its final dividend. Last week, NAB released its full year results and declared a fully franked 78 cents per share fully franked final dividend. This will now be paid to eligible shareholders on 14 December.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a positive day after the gold price traded higher overnight. According to CNBC, the spot gold price is up 0.4% to US$1,776.6 an ounce. That was despite the US Federal Reserve warning that it was not softening its fight against inflation.

The post 5 things to watch on the ASX 200 on Tuesday 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

• Looking to buy CBA shares? Here’s what to watch in Tuesday’s update
• Hoping to bag the next NAB dividend? You’d better get in quick
• Are ASX share investors getting their mojo back?
• 5 things to watch on the ASX 200 on Monday
• Analysts say these high yield ASX dividend shares are buys

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

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

A strong bull market for many years may have given some investors the misimpression that everything goes up. For some period of time, that’s pretty much what happened, with some growth stocks skyrocketing in price with percent gains in the thousands. It looked easy, because it was. 

Many new investors never experienced a bear market, but many of those early gains have now been completely wiped out. It turns out that it may not be so easy to accumulate wealth overnight or over months.

One consistent voice of reason through decades of ups and downs is guru investor Warren Buffett, who has beaten the market through his value-oriented approach. It’s always worthwhile to listen to what he says, but in this kind of market it makes even more sense to make note of what he looks for in a stock. There are several factors that inform his decisions, but there’s one that stands out in how he defines a great business.

What is a moat?

Buffett says, “A truly great business must have an enduring ‘moat’ that protects excellent returns on invested capital.” The “moat” he talks about refers to a competitive advantage that makes the business unique and better than others. In a literal sense, a moat protects a castle from oncoming attacks. In the markets, a moat protects a business from challengers.

There are several parts of this formula. One is that the moat has to be enduring. If it’s not, it’s not really protective. It also has to protect excellent returns on invested capital, which means those need to be there in the first place. If a company seems differentiated but is not performing and posting excellent results, the business will fall apart despite any seeming advantages.

Some excellent examples

Buffett goes on to say:

The dynamics of capitalism guarantee that competitors will repeatedly assault any business “castle” that is earning high returns. Therefore a formidable barrier such as a company’s being the low-cost producer…or possessing a powerful worldwide brand…is essential for sustained success. 

He gives several examples. Geico (owned by Buffett’s holding company, Berkshire Hathaway) and Costco Wholesale both operate a discount model that is compellingly better than competitors. That’s a moat, because they are both hard to challenge.

As for a powerful, global brand, he cites Coca-Cola as an example. Despite years of taste-testing and debates about whether or not Coca-Cola is better than your local off-brand, Coca-Cola can demand high pricing, and loyal customers respond. Coca-Cola remains the largest beverage brand in the world by sales, and its unbeatable brand is a robust sales generator, driving excellent returns on invested capital.

Buffett also mentions American Express as having a moat in its powerful brand. It has a premium image with real perks that attract an affluent clientele. Other credit card companies that cater to a wider mix of customers do not carry the same cachet. 

Stronger moats lead to better stocks

Finding businesses with real moats can lead to higher long-term gains. Buffett made these remarks over 15 years ago, and the examples he mentions have indeed endured. Coca-Cola and American Express remain two of his top holdings, and they have been posting outstanding results in an otherwise slumpy market and volatile economy. Their brands have endured over time and look to carry their companies well into the future. Buffett sold his position in Costco in 2020, but it also remains a top stock. Although only Coca-Cola stock is showing a gain so far this year, all of these stocks are beating the market.

AXP data by YCharts

A strong moat is a mark of a great business. Building one takes an excellent business, a competitive advantage, and the ability to strengthen that advantage over the long term. Shifting your focus to investments that demonstrate these qualities, instead of looking for the next hot growth stock, can lead to more successful long-term investing.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post This is how Warren Buffett defines a great business — and how you should too 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

• Is it a Warren Buffett stock or not? 5 simple questions to ask yourself
• These 3 US stocks were Warren Buffett’s biggest winners over the past 5 years
• Warren Buffett bought $9 billion in stocks and sold more than $5 billion last quarter
• Berkshire, Buffett feel the bear’s bite
• Why I think Warren Buffett is right to always think a market crash is coming

Jennifer Saibil has positions in American Express. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Costco Wholesale. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/Jt8ex5u

The team at Morgans has been look at the best ASX 200 (ASX: XJO) shares to buy this month.

Among its best dividend ideas for the month of November are the two ASX 200 shares listed below. Here’s what the broker is saying about them:

Macquarie Group Ltd (ASX: MQG)

Morgans sees this investment bank as a top option for investors right now.

This is because the broker believes Macquarie is well-placed for the long term thanks to mortgage loan market share gains and structural drivers. It explained:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

In respect to dividends, the broker is expecting partially franked dividends of $7.05 per share in FY 2023 and $7.36 per share in FY 2024. Based on the current Macquarie share price of $177.72, this implies yields of 4% and 4.15%, respectively.

Morgans has an add rating and $214.30 price target on Macquarie’s shares.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share that the broker is very positive on is Telstra.

Its analysts believe the telco giant could be a great option following its successful turnaround. Morgans also highlights that Telstra’s recent restructure could unlock value in its assets. It explained:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] on Telstra’s legal restructure, which opens the door for value to be released.

TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

As for dividends, Morgans is expecting Telstra to continue to pay fully franked 16.5 cents per share dividends in FY 2023 and FY 2024. Based on the current Telstra share price of $3.86, this equates to yields of 4.3%.

Morgans has an add rating and $4.60 price target on the company’s shares.

The post Morgans names 2 of the best ASX 200 dividend shares to buy 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

• Why did the Telstra share price tumble 3% today?
• 3 reasons I think the Telstra share price can beat the ASX 200 in 2023
• Here are the 3 most traded ASX 200 shares on Monday
• Why Elders, Flight Centre, Perpetual, and Telstra shares are dropping
• Are ASX share investors getting their mojo back?

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 Telstra Corporation Limited. The Motley Fool Australia has recommended Macquarie Group Limited. 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/brGKdfO

Looking for blue chip shares to buy? If you are, check out the ASX 200 shares listed below that have recently been named as buys and tipped to have meaningful upside potential.

Here’s what you need to know about these ASX 200 blue chip shares:

SEEK Limited (ASX: SEK)

The first blue chip ASX 200 share that has been named as a buy is Seek. As well as being the online job listing leader in Australia, it operates an online employment classifieds platform across several countries.

The team Morgans is very positive on the company and believe it is well-placed to build on FY 2022’s strong performance. Its analysts commented:

Of the classifieds players, we continue to see SEEK as the one with the most relative upside, a view that’s based on the sustained listings growth we’ve seen over the period. The tailwinds that have driven elevated job ads (~250k currently, +35% on pcp) and strong FY22 result appear to still remain in place, i.e. subdued migration, candidate scarcity and the drive for greater employee flexibility. With businesses looking to grow headcount in the coming months and job mobility at historically high levels according to the RBA, we see these favourable operating conditions driving increased reliance on SEEK’s products.

Morgans has an add rating and $29.40 price target on its shares.

Treasury Wine Estates Ltd (ASX: TWE)

Another blue chip ASX 200 share that could be a buy is Treasury Wine. It is the wine giant behind popular brands including 19 Crimes, Penfolds, and Wolf Blass.

The last few years have been very tricky for Treasury Wine. As well as battling the COVID pandemic, the company was effectively kicked out of the massive China market and forced to find a new destination for its premium wines. The good news is that this has been successful.

So much so, the team at Goldman Sachs believe the company is back on course to deliver strong earnings growth in the coming years. It explained:

With proven redirection of Penfolds China volumes as well as refocusing Treasury Americas on premium/luxury, TWE is now re-entering a growth phase with a more diverse and defensive business. We have increased our FY23-25e sales and NPAT by 1%-5% and 5%-13% and now expect the company to deliver ~16% NPAT 2022-25e CAGR. The company is trading at a 12m forward P/E of 22.6x, vs our TP implied P/E of 26.3x.

Goldman has a buy rating and $14.70 price target on the company’s shares.

The post Brokers rate these blue chip ASX 200 shares as buys 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

• Morgans names 3 of the best ASX 200 shares to buy in November
• Here’s why brokers rate these blue chip ASX 200 shares as buys
• Top ASX shares to buy in November 2022
• 3 ASX 200 dividend shares you may have overlooked: Wilsons
• 5 ASX shares to buy for the Christmas rally: expert

Motley Fool contributor James Mickleboro has positions in SEEK Limited. 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 SEEK Limited and Treasury Wine Estates Limited. 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/DTfXuKU

The ASX lithium share sector has had a great start to the week today. Investors in the industry are getting a big boost with news out of China that could be very promising.

Firstly, let’s look at the state of play for the battery resource miners at the close of trade on Monday.

The Core Lithium Ltd (ASX: CXO) share price ripped 11.68% higher, while shares in Mineral Resources Limited (ASX: MIN) and Allkem Ltd (ASX: AKE) were up a respective 3.11% and 0.49%.

The smaller end of town also recorded strong surges, with the Liontown Resources Ltd (ASX: LTR) share price up 6.8%, Lake Resources NL (ASX: LKE) up 4.91% and Sayona Mining Ltd (ASX: SYO) closing 6.12% higher.

The exception today was the Pilbara Minerals Ltd (ASX: PLS) share price, which was down 1.49% at the close after trading 4.3% higher earlier in the day.

What’s going on with ASX lithium shares?

According to reporting by media, including Reuters, there are positive developments coming out of China.

The Asian superpower has reportedly eased some of its COVID-19 protocols – the country has been trying to keep the pandemic under control with lockdowns, which has been reducing economic growth.

Reuters reported that “the easing curbs included shortening quarantine times for close contacts of cases and inbound travellers by two days, as well as eliminating a penalty on airlines for bringing in infected passengers”.

Not only that, but Chinese regulators have reportedly told financial institutions to extend more support to property developers to help the real estate sector. This was according to two sources with “direct knowledge” of the matter.

There are 16 steps to help the industry, which include loan repayment extensions. According to reporting by Reuters, sources said that “if a loan is due to mature within six months, real estate companies can be allowed to defer repayments for one more year.”

The chief economist at Guotai Junan International, Hao Zhou, said:

The Chinese authorities provided a slew of supportive measures over the weekend to support the property sector, which is likely to improve the market sentiment towards the Chinese economy.

Weak property sales and investment suggest that a turnaround of (the) property outlook remains uncertain over the foreseeable future, which justifies the recent supportive measures from the Chinese authorities.

More economic activity in China could be a positive for ASX lithium shares because the Asian economic giant is a big consumer of lithium.

Australian and Indonesian lithium alliance

According to reporting by The Australian, Indonesia has started talking with Australia about a “plan to invest in a long-term lithium mining and processing partnership that could make the two countries the dominant global supplier of electric vehicle batteries”.

Indonesia reportedly has the world’s been  nickel reserves, a key ingredient for batteries. The country wants to ramp up the production of both electric vehicle batteries and cars.

This could further increase the demand for lithium in the future.

The post Why did ASX lithium shares have a dream run on Monday? 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
• Leading brokers name 3 ASX shares to buy today
• Here are the 3 most traded ASX 200 shares on Monday
• Why is the Liontown share price roaring 7% higher?
• Why Accent, Block, Core Lithium, and Fortescue 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.

from The Motley Fool Australia https://ift.tt/Esat4W7

The S&P/ASX 200 Index (ASX: XJO) fell 0.16% today, but three tiny ASX shares stormed far higher.

The Tambourah Metals Ltd (ASX: TMB), BBX Minerals Ltd (ASX: BBX) and Invictus Energy Ltd (ASX: IVZ) share prices all exploded today.

Let’s take a look at why these ASX shares had such a top run today.

Tambourah Metals

Tambourah Metals shares closed 29% higher today. However, in earlier trade, they soared by as much as 74%. The company discovered multiple pegmatites at the RJ 101 lithium project in Western Australia. Tambourah is also purchasing a new lithium and gold exploration project in Tambina.

Commenting on the news today, managing director Paul Araujo said:

We are planning to identify and field test newly recognised pegmatite swarms at several locations within this large project area.

Invictus Energy

Invictus Energy shares soared 40% today. This followed the company releasing positive news from the Mukuyu-1 well in the Zimbabwe Cabora Bassa Basin. The well reached 3,618 metres measured depth (mMD). Elevated mud gas peaks up to 135 times above background gas baseline were discovered during drilling.

Commenting on the news, managing director Scott Macmillan said:

We have had further encouraging signs from the Mukuyu-1 well since drilling recommenced with multiple zones encountering elevated gas shows and fluorescence in our Upper Angwa primary target. 

BBX Minerals

BBX Minerals shares closed 17% in the green today. However, shares soared 32% in the afternoon before pulling back. BBX reported results from bioleaching test work at the EcoBiome Metals facility in the United States.

Test results revealed a “significant increase” in reported precious metals following bioleaching. Follow-up testing will be conducted.

The post 3 tiny ASX shares that exploded over 30% on big news 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

• Invictus Energy share price rockets again, up almost 250% in under a week
• Guess which ASX energy share is rocketing 150% on an ‘exciting development’

Motley Fool contributor Monica O’Shea 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/JnljadI

The Qantas Airways Limited (ASX: QAN) share price closed 2.51% lower in trade on Monday.

Shares of the iconic airline closed at $5.82 after earlier making an intraday high of $5.94.

Meanwhile, the industrials sector, which Qantas is a part of, also struggled on Monday. In fact, the S&P/ASX 200 Industrials Index (ASX: XNJ) was the worst-performing sector on the market today, losing 2.28%.

Qantas rival Air New Zealand Limited (ASX: AIZ) also finished lower with a 1.35% loss.

Finally, the S&P/ASX 200 Index (ASX: XJO) finished the day almost laying flat, losing 0.16%.

So why did Qantas shares lag the market on Monday? Let’s investigate.

What went on with the Qantas share price today?

Qantas shares slipped on Monday as the airline contends with an underpayment claim being brought against it in Federal Court, The Australian Financial Review (AFR) reported on Sunday.

The claim is being initiated by Qantas engineers who state the airline breached the Fair Work Act as well as the graded wage structure in their industrial agreements. These breaches allegedly came in the form of engineers being demoted to lower positions in the pay scale and receiving lower salaries as a result, the reporting said.

It was also noted by AFR that the new lawsuit could be seen as a continuation of Qantas’ previous disputes with its engineers. This included a claim of alleged underpayment of salaries made by The Australian Licensed Aircraft Engineers Association (ALAEA) in 2019 that was later remediated by the airline.

When a Qantas spokesperson was asked by AFR for comment, they declined and instead referred to comments they had made relating to the earlier case in 2019:

Qantas is committed to paying its employees in accordance with relevant agreements. In this case, there is a complicated system that determines how our licensed engineers move between pay brackets Errors in this system could result in a combination of under and overpayments to individuals.

Qantas has already made adjustments to pay levels where required. What is at issue is the correct level of backpay, which Qantas has been working in good faith to determine, but is now engaged in needless court proceedings.

Qantas share price snapshot

The Qantas share price has gained around 16.07% year to date. That’s soundly beating the ASX 200 Index, which is down by around 4% over the same period.

The company’s market capitalisation is around $11 billion.

The post Why did the Qantas share price have such a lousy start to the week? 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

• Are ASX share investors getting their mojo back?
• How does a weak Aussie dollar impact Qantas shares?
• Macquarie tips $800m buyback for Qantas shares
• Qantas boss says ‘we’re back’, but should you buy the ASX airline share?
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now

Motley Fool contributor Matthew Farley 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/yUsmqLZ