If you haven’t already, there is a good chance you’ll make a bad investment at some point. Even the most well-considered stakes can come undone due to unforeseen circumstances. Rather than see this as a sign of a poor investor, the legendary purveyor of value investing — Warren Buffett — considers this to be part and parcel of the process.

The impartment of profound, yet simple, investing insights aligns with the publishing of an annual letter to shareholders from the Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) chair.

In true Buffett fashion, the Oracle from Omaha instilled more pertinent lessons in as little as nine pages than what can be found in entire books. Not the least of which is the ability of long-term investors to achieve incredible success in spite of several bad investment decisions.

Time can balance a portfolio

Maybe it’s preventing you from getting started, getting back on the horse, or making your next move. The potential for a money-losing investment can be paralysing. But the truth is, even the best investors are left with egg on their faces from time to time.

In his 2022 annual shareholder letter, Buffett quipped he’s no stranger to an investment gone haywire over his 58 years at the helm of Berkshire. In fact, despite being worth more than $100 billion, Buffett describes his capital-allocation decisions during his time as “no better than so-so”.

Indeed, the vehement success of Berkshire Hathaway has little to do with achieving a high ‘hit rate’ of good investments, according to Warren Buffett. Instead, the vast wealth creation has been a product of a handful of ‘truly good decisions’ — averaging out to roughly one every five years.

The other secret ingredient is: wait for it… time.

What Buffett explained in his letter is that time can be forgiving. This is because of the self-balancing that takes place in a portfolio over a long period of time. The exceptional companies grow to become a large portion, while the ‘mistakes’ dwindle into irrelevance.

This was well summarised with the 92-year-old’s lesson for investors, “The weeds wither away in significance as the flowers bloom.”

What Warren Buffett doesn’t advise

Now, it’s clear that bad investments are to be expected — and the market has a built-in mechanism for correcting those errors over time. However, that doesn’t mean in investing you’re bound to make money regardless of the decisions made.

The mistake that can not be fixed is a lesson that is never learned.

Even 100 years of compounding in a fantastic investment won’t overpower the bad decisions if they are repeated. Think of it like repeatedly watering the weeds… they will eventually overshadow the most brilliant of flowers when praised for their invasiveness.

An important tenet of investing is to always be learning and not repeat mistakes of the past. Be quick to cut the nourishment flowing to the weeds, to borrow Warren Buffett’s metaphor.

The post Why it’s ok to make bad investment decisions: Warren Buffett appeared first on The Motley Fool Australia.

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More reading

• Broker says buy ASX 200 lithium share Allkem for 34% upside
• Why did the Coles share price smash the ASX 200 in February?
• Westpac predicts 7 interest rate cuts from 2024, but…
• Why did the Vanguard Australian Shares Index ETF (VAS) get hammered in February?
• Bought $1,000 of Magellan shares in 2013? Here’s how much passive income you’ve received

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 positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. 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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Well, the shortest month of the year has just wrapped up, and the changing of the guard, so to speak, gives us investors a good chance to reflect upon the month that was. So today, let’s examine the Coles Group Ltd (ASX: COL) share price. 

February ended up being a fairly rough month for ASX 200 shares and the S&P/ASX 200 Index (ASX: XJO). Between the end of January and yesterday’s market close, the ASX 200 lost 2.9% of its value, falling from 7,476.7 points down to 7,258.4 points. 

But let’s talk about the Coles share price. So it was an entirely different story when it came to Coles shares over February. The ASX 200 supermarket blue chip started last month at $17.76 a share.

But by the end of yesterday’s trading session, Coles was going for $18.18 a share. That means that the Coles share price rose by 2.36% over February. That’s more than a 5% beat of the broader market.

So what went so right for Coles shares last month?

Up, up: Why did the Coles share price dunk the ASX 200 in February?

Well, investors can thank the well-received earnings report that Coles delivered back on 21 February for one.

As we covered at the time, these earnings, covering the six months to 31 December 2022, contained almost no bad news for investors.

Total sales revenue from continuing operations was up 3.9% to $20.8 billion. Net profit after tax (NPAT) rose by 17.1% to $643 million, while basic earnings per share (EPS) lifted by a healthy 17.2% to 48.3 cents per share.

All of this allowed Coles to jack up its interim dividend again to 36 cents per share, fully franked. That’s a 9.1% rise over 2022’s interim dividend. Coles has continued its pattern of increasing both its interim dividend and final dividend in every earnings report since it first floated in 2018.

So it seems that these earnings contributed to the company’s impressive share price performance over February.

But Coles shares have been firing on all cylinders for most of the year. As of yesterday’s close, the company is up a pleasing 10.45% in 2022 thus far:

But it’s also possible investors just see Coles as a strong, sturdy investment in these times of high inflation, rising interest rates and an uncertain economic future.

Coles is viewed by many investors as a very defensive place to park cash. Its business of providing food, drinks, household goods and other life essentials is highly inelastic and it is well placed to weather most economic conditions, as the pandemic proved in 2020 and 2021.

Thus, we can’t discount this kind of goodwill from investors either.

So no doubt Coles investors would be chuffed with the month their company has just enjoyed. Let’s now see how the Coles share price fares in March.

The post Why did the Coles share price smash the ASX 200 in February? appeared first on The Motley Fool Australia.

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• Hoping to pocket the biggest-ever Coles dividend? Here’s what you need to do
• Top brokers name 3 ASX shares to buy next week
• 7 ASX 200 shares with ex-dividend dates next week
• Is Wesfarmers looking to sell off its remaining Coles shares?
• Own Woolworths shares? Supermarket giant moves to team up with Coles on recycling blitz

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 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.

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A new month is here and that means that the next Reserve Bank of Australia meeting is just around the corner.

Next week, the central bank will have its second meeting of the year and is widely expected to increase interest rates yet again.

According to the latest 30 day interbank cash rate futures, the market is pricing in an 81% probability of a 0.25% increase in the cash rate to 3.6%.

Unfortunately for borrowers, the pain is unlikely to stop there, with the central bank expected to continue raising rates to combat inflation. Current futures contracts indicate that rates will continue to rise until they peak at 4.275% in November.

Interest rate relief on the way

The good news is that the economics team at Westpac Banking Corp (ASX: WBC) believes that rates will start to ease back in 2024.

According to its latest weekly economic report, the banking giant is now predicting a peak cash rate of 4.1% later this year and then a total of seven interest rate cuts across 2024 and 2025.

Starting from the March quarter of 2024, these cuts are forecast to bring the cash rate down by 175 basis points to a low of 2.35%.

Westpac’s chief economist, Bill Evans, commented:

At 4.1%, the cash rate will be in deeply contractionary territory and a pause will be appropriate. The decision to pause will be with a reasonable view that the tightening cycle has peaked. Westpac concurs and expects that the next move in rates beyond mid–2023 will be the beginning of an easing cycle in the March quarter 2024.

While we expect the economy to stagnate in the second half of 2023, there will not be sufficient progress in bringing inflation into line with the target before the end of 2023 to accommodate earlier rate cuts. We expect inflation in Australia to still be around 4% by end 2023, falling to 3.0% by end 2024, allowing a policy response to a stagnating economy by the first quarter of 2024.

Over the course of 2024 and 2025, we see 175bps of cuts to a low of 2.35% where the cash rate is expected to settle, with growth at trend and inflation at the top of the 2–3%yr range.

The post Westpac predicts 7 interest rate cuts from 2024, but… appeared first on The Motley Fool Australia.

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• How I would generate $50,000 of retirement income from Westpac shares
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• 2 reasons why the Westpac share price is cheap

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 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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The Vanguard Australian Shares Index ETF (ASX: VAS) didn’t have a great February 2023 – it went backwards by 2.75%. That compares to a 2.9% decline for the S&P/ASX 200 Index (ASX: XJO).

It was a similar fall for both the exchange-traded fund (ETF) and the ASX 200 because they are heavily influenced by the same businesses.

The return of the Vanguard Australian Shares Index ETF, and all ETFs, is dictated by the returns of the underlying holdings.

Some of the biggest holdings did not have a positive month in terms of their share price movements.

ASX blue chips take a dive

The BHP Group Ltd (ASX: BHP) share price declined by 8.5% last month, and at the start of the month, it made up 11% of the ETF’s portfolio.

The Commonwealth Bank of Australia (ASX: CBA) share price fell 8.5% as well, at the start of February and it was 8.2% of the portfolio.

CSL Limited (ASX: CSL) shares only dropped by 0.6% over the month, it had a 6.3% weighting of the ETF’s portfolio.

The National Australia Bank Ltd (ASX: NAB) share price went down 5.6% in February, it had a 4.4% weighting in the Vanguard Australian Shares Index ETF.

The share prices of Westpac Banking Corp (ASX: WBC) and ANZ Group Holdings Ltd (ASX: ANZ) also suffered a decline.

The Rio Tinto Limited (ASX: RIO) share price dropped by 7.8% and the Fortescue Metals Group Limited (ASX: FMG) share price went backwards by 3.8%.

In summary, the ASX’s biggest miners and banks didn’t have a good month.

What happened?

It was reporting season last month, so we got an insight into the performance of many businesses.

Banks like CBA and NAB reported an impressive jump in profitability because of their stronger lending profits amid higher interest rates. The profit rise was largely because rates went up quicker for borrowers than savers.

However, banks like CBA have talked about the strong competition for borrowers that are refinancing, with lenders offering large cash backs to borrowers that switch. The extra lending profit is being competed away and banks may not see as much profit growth as previously expected.

It’d be understandable why this changing dynamic has lowered investor excitement about the banking sector.

On the (iron ore) mining side of things for the Vanguard Australian Shares Index ETF, each of the big miners reported a decline in profits and dividends declared as the lower iron ore price hurt the comparisons to 2021.

At the end of the month, there was also news that China may be limiting some steel production amid concerns about the environment and pollution. This had an impact on the iron ore price.

What next?

There won’t be many company updates in March, but the market may be heavily focused on the Reserve Bank of Australia’s (RBA) next move with interest rates, as well as the commentary about further moves.

The post Why did the Vanguard Australian Shares Index ETF (VAS) get hammered in February? appeared first on The Motley Fool Australia.

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• Why I’m not investing in ASX index ETFs (yet)
• There’s an ETF price war on the ASX right now. Here’s what you need to know
• How I’d invest $200 in ASX 300 shares each month to target a $20,570 second income
• Banking on term deposits to retire rich? I’d buy ASX 200 dividend shares instead
• Vanguard Australian Shares Index ETF: Short-term pain for long-term gains

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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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The last 10 years have been a rollercoaster for Magellan Financial Group Ltd (ASX: MFG) shares.

They rocketed more than 800% over seven years to peak in February 2020, trading at over $70 apiece. Since then, however, the stock has crumbled, falling 88% to $8.56 at Tuesday’s close.

If one were to have invested $1,000 in Magellan shares in early March 2013, they likely would have walked away with 133 securities, paying $7.50 apiece.

 Today, that parcel would be worth $1,138.48. That marks a 14% gain over the last 10 years.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen around 43% in that time.

But what about the regular dividends offered by the embattled financial giant?

All dividends offered by Magellan shares over the last 10 years

Here are all the dividends offered by Magellan since March 2013:

Magellan dividends’ pay date	Type	Dividend amount
September 2022	Final	68.9 cents
March 2022	Interim	$1.101
September 2021	Final	$1.141
February 2021	Interim	97.1 cents
August 2020	Final	$1.22
February 2020	Interim	92.9 cents
August 2019	Final	$1.114
February 2019	Interim	73.8 cents
August 2018	Final	90 cents
February 2018	Interim	44.5 cents
August 2017	Final	47.2 cents
March 2017	Interim	38.4 cents
August 2016	Final	38 cents
March 2016	Interim	51.3 cents
August 2015	Final	37.8 cents
March 2015	Interim	37.1 cents
September 2014	Final	21.8 cents
March 2014	Interim	16.5 cents
October 2013	Final	16.5 cents
Total:		$12.294

As the above chart shows, each Magellan share has provided around $12.29 of dividends over the last 10 years.

That means our figurative investment has likely paid out around $1,635.10 of passive income over its life – more than the initial investment!

At that rate, the total return on investment (ROI) boasted by Magellan shares over the last 10 years is around 178%. Though, past performance isn’t an indication of future performance.

And that’s before we consider any potential tax benefits offered from the company’s regularly franked payouts.

The ASX 200 stock is currently trading with a 20.9% trailing dividend yield. Though, that’s largely due to the 46% tumble experienced by the Magellan share price over the last 12 months.

Additionally, the company declared its next dividend last month. It will be worth 46.9 cents per share and is set to be paid next Wednesday.

The post Bought $1,000 of Magellan shares in 2013? Here’s how much passive income you’ve received appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Why Bapcor, Magellan, Sonic Healthcare, and Telstra shares are charging higher
• Magellan share price shakes off 60% profit slump and marches higher
• Earnings preview: Here are the ASX shares reporting on Thursday
• Here are the top 10 ASX 200 shares today

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

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It was a tough month for the S&P/ASX 200 Index (ASX: XJO) in February. The benchmark index was rattled by rising interest rates and lost 2.9% of its value to end at 7,258.4 points.

While a number of ASX 200 shares dropped with the market, some recorded particularly large declines. Here’s why these were the worst performing ASX 200 shares in February:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price was easily the worst performer during the month with a disappointing 34% decline. Investors were hitting the sell button in a panic after the pizza chain operator’s recovery suddenly faltered. Domino’s has been struggling with inflationary pressures. Late last year it appeared to indicate that it had overcome these challenges, but its results showed that this isn’t the case.

St Barbara Ltd (ASX: SBM)

The St Barbara share price was out of form and sank 28% in February. A poor month for the gold price and a poor result weighed heavily on its shares. In respect to the latter, the gold miner reported a 52% decline in gross profit to $70 million and a statutory loss of $407 million. The statutory loss includes the non-cash impairment of its Atlantic and Simberi operations.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price wasn’t far behind with a 24% decline last month. The heavily shorted lithium share was sold off in February amid concerns over the price of the battery making ingredient. With spot prices continuing to soften, investors appear to be worried that Lake will miss out on the sky high prices when/if it eventually becomes a producer.

AMP Ltd (ASX: AMP)

The AMP share price was sold off in February and lost 23% of its value. This was driven by the release of financial services company’s half year results. AMP reported a 34% decline in underlying net profit after tax to $184 million. This was due to investment market volatility, strategic repricing in the wealth management businesses, and a reduction in the net interest margin.

The post These ASX 200 shares were crushed in February appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. 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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Coles Group Ltd (ASX: COL) shares could be in hot demand today as it’s the final day to grab the dividend.

Coles has been paying dividends for investors each year since it listed. It recently revealed its biggest-ever dividend payment to shareholders.

But, if investors aren’t quick they’ll miss out.

Coles dividend entitlement

The ex-dividend date for the Coles dividend is 2 March 2023. That means that buying shares on that date won’t come with the dividend entitlement. Therefore, 1 March 2023 is the last day to invest – that’s today.

If investors do own shares by the end of today’s trading, they’ll be entitled to the interim dividend of 36 cents per share. This payment represented a dividend increase of 9.1%.

This dividend is going to be fully franked, giving the investor the full tax benefit of franking credits.

In the Coles half-year result, it announced that the continuing earnings per share (EPS) had increased by 11.6% to 46.3 cents. This means that the profit grew quicker than the dividend, leading to a small decrease in the dividend payout ratio – Coles can re-invest more of its profit back into the business.

How was profit growth achieved?

Coles said that its continuing sales revenue increased by 3.9% to $20.8 billion. Some of this increase was driven by inflation, with Coles supermarkets seeing inflation of 7.4% for the half.

The reason there is a ‘continuing operations’ clarification is that Coles is selling the Coles Express business to Viva Energy Group Ltd (ASX: VEA).

Coles has been working on reducing its costs with its ‘smarter selling’ strategy. This has helped improve margins over the past 12 months.

Outlook

The Coles share price may have received a boost from the trading update for the first few weeks of the second half of FY23.

It said that Coles supermarket sales had returned to “modestly positive” volume growth from mid-January, while the liquor earnings are expected to return to growth in the second half as cycling against COVID-19 periods ends.

Coles also said that the smarter selling program will “continue to help partially offset inflationary cost pressures, headwinds in mark downs and stock loss, as a result of increasing theft.” It’s also working on large, automated warehouses to improve efficiencies in its supply chain.

Coles share price snapshot

Since the start of 2023, Coles shares have gone up by around 10%.

The post Hoping to pocket the biggest-ever Coles dividend? Here’s what you need to do appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week
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• Own Woolworths shares? Supermarket giant moves to team up with Coles on recycling blitz
• Passive income watch: 4 ASX 200 shares that announced boosted dividends this week

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 Coles 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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It was a disappointing month for the S&P/ASX 200 Index (ASX: XJO) in February. The benchmark index dropped 2.9% during the month to end the period at 7,258.4 points.

The good news is that not all shares dropped with the market. In fact, some even managed to record strong gains in February. Here’s why these were the best performing ASX 200 shares last month:

GUD Holdings Limited (ASX: GUD)

The GUD share price was the best performer on the ASX 200 in February with a 23% gain. Investors were scrambling to buy this diversified products company’s shares after it reported a 55.7% increase in half year revenue and an 88.7% jump in net profit. Management advised that this was driven by a strong core automotive result combined with full six-month contributions from APG and Vision X.

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price wasn’t far behind with a gain of 20% last month. Once again, a solid result was behind this impressive gain. Australia’s largest car sales group achieved a record underlying operating profit before tax of $405.2 million. This allowed the company to declare a final dividend of 49 cents per share, bringing its full-year dividend to a record of 71 cents per share for FY 2022.

Link Administration Holdings Ltd (ASX: LNK)

The Link share price was a strong performer and charged 19.3% higher over the period. It was a busy month for this administration services company. It released its results, announced a partnership extension with Rest, released an update on the Fund Solutions divestment, and completed the sale of its PEXA Group (ASX: PXA) shares.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price was on fire in February and charged 18.9% higher. This travel agent giant surged higher last month after it released its unaudited half-year results early to support its capital raising to fund the acquisition of luxury travel company Scott Dunn. Flight Centre revealed the more than tripling of its revenue to $1 billion thanks to a significant rebound in the travel market and a particularly strong performance from its corporate business.

The post These ASX 200 shares smashed the market in February appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How did the Flight Centre share price manage to leap almost 18% in February?
• Why did the CSL share price outperform the ASX 200 in February?

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 Link Administration. The Motley Fool Australia has recommended Flight Centre Travel 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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Reporting season is mercifully coming to an end this week.

If you’re overwhelmed by all the financial figures, Morgans analyst Andrew Tang has helpfully picked out the best buys based on the latest results announcements.

Here are four of those ASX shares to consider adding to your portfolio:

‘Positive earnings momentum is obvious’

TPG Telecom Ltd (ASX: TPG) shares have had a rough time since the company was born out of a merger between Vodafone Australia and TPG.

Since that first day on the ASX in July 2020, the stock price has dropped more than 42%.

But Tang was pleased with the latest report.

“TPG FY22 result was, pleasingly, in line with expectations,” Tang said on the Morgans blog.

“Revenue was up 1.5% year-on-year and underlying EBITDA (excluding the gain on tower sales and restructuring costs) was up ~4% year-on-year to $1,793 million.”

As well as hitting Morgans’ target for the financial year just gone, the future was also positive.

“FY23 guidance is ~3% ahead of consensus,” said Tang.

“This was the first time since merging that positive earnings momentum is obvious across the group.”

Morgans thus has an add rating on TPG shares.

This business is ‘now through the worst’

On the other hand, food and drinks producer Bega Cheese Ltd (ASX: BGA)’s fortunes were downbeat in the latest results.

“BGA’s 1H23 result was weak with net profit after tax [NPAT] down 74%,” said Tang.

“Margins (especially in the 1Q) were materially impacted by higher milk and other inflationary costs and the lag impact of implementing price rises (didn’t take effect until the 2Q).”

The 2023 financial year earnings outlook was downgraded to the lower end of the previously flagged range.

“Rising interest rates will further impact NPAT. We have made large cuts to our forecasts.”

Despite all this doom and gloom, Tang has upgraded the stock to a buy.

“While we continue to have concerns about the dairy industry, we think Bega is now through the worst of it,” Tang said.

“With low double-digit price rises, further efficiencies, synergy realisation and asset sales, BGA expects a much improved result in FY24.”

Tang’s team highly rates Bega’s new leadership team, expecting it to “deliver improved returns over the coming years”.

Bega shares are down more than 26% over the past 12 months.

Economic slowdown is a worry, but this stock is still a buy

Like many technology stocks, online task marketplace Airtasker Ltd (ASX: ART) has seen its shares devastated in recent times.

The stock price has lost a painful 62% over the past year.

Tang felt the latest results showed the business is heading in the right direction.

“Gross merchandise volume growth of +58% on prior comparable period (to ~$132 million) and revenue growth of +57% on prior comparable period (to ~$22 million) was a resilient performance from the local services marketplace, in our view.”

There was “some softness” seen on posted tasks due to the slowing economy, admitted Tang.

“We note supply side normalisation (labour) has begun and assisted completion rates and helped underpin Airtasker’s GMV growth.”

The Morgans team has thus lowered its future expectations, but still rates Airtasker as a buy.

2022 was all the hard work, now sit back for 2023

Petrol station real estate owner Waypoint REIT Ltd (ASX: WPR) reported results that met Tang’s expectations, due to its focus last year on selling “non-core assets”, capital management, and balance sheet clean-up.

“The portfolio is valued at $2.9 billion across +400 properties with metrics stable,” he said.

“Revaluations saw cap rates expand 16 basis points over 2022. Net tangible assets at $3.02.”

This compares to Waypoint’s share price closing Tuesday at $2.73.

Tang’s team sees this year as one of consolidation rather than reform.

“After two years of steady asset sales (~15% of portfolio), 2023 is expected to be less active.”

The main feature of any real estate trust, the dividend yield, is expected to remain attractive.

“CY23 distributable EPS guidance to be in line with CY22 which equates to a distribution yield of +6%.”

The post 4 ASX shares to grab now after boom results: expert appeared first on The Motley Fool Australia.

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

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With financial announcements largely finishing up this week, it’s the last chance for investors to pick up ASX shares with a bright outlook based on those numbers.

Morgans analyst Andrew Tang, who has been keeping an eye on all the action, named his last set of stocks to buy for the February reporting season:

Back in 2021 no one thought coal would become the new black

When Dalrymple Bay Infrastructure Ltd (ASX: DBI) listed on the ASX in December 2020, more than one pundit questioned how it would survive as a public company.

After all, it is the owner and operator of a coal export terminal.

But no one saw what was coming next — an energy crisis in 2022 sending any stock related to coal production soaring.

Now Dalrymple Bay shareholders are laughing, with the share price up in excess of 18.5% since the first day on the ASX, all while delivering an 8% dividend yield.

“The FY22 result delivered the substantial earnings growth we were expecting following finalisation of terminal infrastructure charge (TIC) negotiations in 2H22,” Tang said on the Morgans blog. 

“Dividend per share guidance had already been provided and was unchanged (albeit the growth outlook was not reaffirmed).”

The stock is a buy for Morgans, especially considering a “forward cash yield of mid-8% and circa 6% price growth potential”.

Reporting season ‘easily beat our expectations’

On the same theme, coal explorer and producer Stanmore Resources Ltd (ASX: SMR) is also a buy for Tang’s team, based on a sensational report to the market.

“Key CY22 financials easily beat our expectations on higher PCI [pulverised coal injection] price realisations,” said Tang.

“We now forecast Stanmore to reach a net cash position during 1H23.”

The Stanmore share price has more than tripled over the past 12 months, but incredibly still represents excellent value for those willing to buy now.

“Stanmore looks too cheap trading on a +25% free cash flow yield, with +30% capital upside and upside to tight/buoyant hard coking coal pricing,” said Tang.

“Stanmore enjoys clear M&A advantages in the Bowen Basin and we think positioning for possible acquisitions will far out-rank dividends through 2023.”

‘Growing profits gets much easier from here’

Captioning technology and services provider Ai-Media Technologies Ltd (ASX: AIM) has been on a hiding to nothing the last few years.

The stock price has sunk more than 73% over the past five years. Over the past 12 months, it has seen a 40.7% decline.

However, Tang feels like it has turned a corner after seeing its software-as-a-service (SaaS) arm contribute more than 50% of the total profit growth.

“Since it’s nearly double the margin of legacy and growing much faster, this means Ai-Media has cleared the critical [inflection] point in its transition to a SaaS business,” he said.

“Growing profits gets much easier from here.”

The business’ gross profit grew both on a year-on-year basis and half-on-half.

“The company booked revenue of $29.7 million for the year, in line with our $29.5 million forecast and 8% below consensus expectations.”

13.8% dividend yield? Yes, please

Kina Securities Ltd (ASX: KSL) is not a name often heard when financial stocks are discussed.

The Papua New Guinean bank incredibly pays out a 13.8% dividend yield.

Tang said its February report was “broadly solid”, with a lid kept on bad debts and “an impressive ~18% FY22 return on investment”.

“Kina Securities’ FY22 Underlying net profit after tax (PGK106 million) was +10% on the prior comparable period and in-line with Morgans’ expectations.”

One headwind that the bank faces is “the lingering Papua New Guinea corporate tax issue”.

But the stock is still an add for Morgans analysts, with the low share price seemingly pricing in headwinds.

“Kina Securities continues to deliver solid underlying profit growth, and trading on ~6x FY23F earnings and a >10% dividend yield, we see the stock as too cheap.”

The post 4 ASX shares to stock up on after a bright reporting season: Morgans appeared first on The Motley Fool Australia.

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More reading

• Morgans names the ASX dividend shares to buy
• Supercharge your passive income with these ASX shares: experts
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• Big yields are coming for these ASX dividend share: experts
• Morgans names 2 high yield ASX dividend shares to buy this month

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.

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