On Wednesday, the S&P/ASX 200 Index (ASX: XJO) continued its winning streak with a solid gain. The benchmark index rose 0.6% to 6,999.3 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to fall on Thursday following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 38 points or 0.55% lower this morning. In late trade in the United States, the Dow Jones is down 1.5%, the S&P 500 has fallen 1.5% and the NASDAQ has tumbled 1.9%.

Oil prices sink

Energy producers including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices sank on Wednesday night. According to Bloomberg, the WTI crude oil price is down 3.1% to US$86.18 a barrel and the Brent crude oil price is down 2.5% to US$92.99 a barrel. An increase in US crude stockpiles and Chinese demand concerns weighed on prices.

Xero half year results

The Xero Limited (ASX: XRO) share price will be on watch today when the cloud accounting platform company releases its half year results. A note out of Goldman Sachs reveals that its analysts are expecting “Revenue/GP/EBITDA +28/+30/+42% vs. PcP to NZ$648/571/143mn; driven by continued ANZ net add strength, positive ARPU tailwinds from price rises and continued platform performance offset by UK go-to-market weakness.”

NAB rated as a buy

The National Australia Bank Ltd (ASX: NAB) share price remains good value following the bank’s full year results according to Goldman Sachs. This morning the broker retained its buy rating with an improved $35.41 price target. Goldman believes that NAB provides “the best leverage to the thematic that domestic volume momentum will favour commercial over housing volumes over both the short- and medium-term.”

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a poor day after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,707.6 an ounce. The gold price fell after the US dollar strengthened.

The post 5 things to watch on the ASX 200 on Thursday 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 has the Sayona Mining share price dumped 33% in 2 months?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday
• Coles share price slips as boss says ‘best is still to come’
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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/DNaF6go

Looking for some dividend shares to add to your income portfolio? If you are, you may want to look at the two listed below that have been tipped as buys by Morgans.

Here’s what you need to know about these ASX dividend shares:

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share that Morgans has tipped as a buy is telco giant Telstra.

It has been a difficult few years for Telstra, but the company has finally returned to form and looks well placed to build on this in the coming years. This is thanks to improving trading conditions and the new T25 strategy which is aiming to deliver solid and sustainable earnings growth.

In addition, Morgans highlights that its company restructure could unlock value for shareholders. That’s because it believes the market is undervaluing some of the telco’s assets that could be sold off.

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 $3.93, this equates to yields of 4.2%.

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

Wesfarmers Ltd (ASX: WES)

Another ASX dividend share that Morgans has tipped as a buy is Wesfarmers.

It is the owner of a diverse group of businesses. These include Coregas, Covant Lithium, Kmart, Officework, Priceline, and Bunnings.

Morgans is a big fan of the company due to its “quality retail portfolio” and “highly regarded management team.” Overall, it believes the company is well-placed for the future and continues “to view WES as a core portfolio holding for long-term investors.”

As for dividends, Morgans is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2024. Based on the current Wesfarmers share price of $46.24, this will mean yields of 3.9% and 4.1%, respectively.

The broker has an add rating and $55.60 price target on its shares.

The post Morgans says these top ASX dividend shares are 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(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Telstra shares could be ‘worth substantially more’: Morgans
• A director has been buying up Wesfarmers shares. Should you?
• 3 ASX 200 directors buying up their company shares in the past week
• Why is the Telstra share price trailing the ASX 200 on Monday?
• Do Wesfarmers shares really offer 22% upside AND growing dividends?

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 and Wesfarmers 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/mMBCRiO

The Pilbara Minerals Ltd (ASX: PLS) share price finished Wednesday’s session up 1.29% to $5.50.

Just six months ago, the ASX lithium share was fetching just above $2.50. That’s right, the Pilbara Minerals share price is up an eye-watering 117% over this period. That’s just nuts.

Allow my Fool colleague Sebastian to blow your mind further. A bit over two years ago, Pilbara was a 30-cent share. So, it’s up more than 1,000% in two years.

But according to reporting in the Australian Financial Review (AFR), JPMorgan is neutral on Pilbara Minerals. And that’s an upgrade from its previous forecast.

The broker also has a 12-month share price target of $5.10 on Pilbara Minerals. Oops. Pilbara shares have already soared past that level.

So, has JPMorgan got it wrong?

Why is the Pilbara Minerals share price going gangbusters?

Well, there’s no doubt that lithium shares have got some great momentum right now. They continue to rise on the back of the surge in global electric vehicle (EV) manufacturing and there’s a long way to go.

In a recent investor presentation, Argo Investments Limited (ASX: ARG) demonstrated that global EV sales are expected to climb drastically from about six million in 2022 to 30 million in 2030.

This demand has, in turn, resulted in an astronomical increase in the lithium price, which means every company mining it has been raking in revenue like never before.

The lithium share price hit another record this month, and is up 3.49% over the past week to US$81,759 per tonne, according to Trading Economics.

What do other brokers think?

A quick canvas of recent broker commentary suggests that Pilbara Minerals is looked upon favourably as a business. No doubt, it’s benefitting enormously from the lithium price surge. The only ‘problem’ is the astronomical short-term share price gain, which has potentially made Pilbara Minerals too expensive now.

UBS and Credit Suisse have both slapped sell ratings on Pilbara Minerals shares. Their price targets imply a drop of at least 40%.

Citi has also put a sell on the stock on valuation grounds, saying the Pilbara Minerals share price has risen “too far, too fast.” Citi increased its share price target to $4.60.

Citi said: “[Pilbara Minerals] stock is up by 160% in a year, well ahead of peers; we move to Sell from Neutral on valuation.”

In a recent interview with my colleague Bernd, Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund said Pilbara Minerals “has been a longstanding favourite of ours“.

But he noted that the very strong share price gain meant “maybe some of the best returns are behind it”.

Rehder said:

The stock is up 50% this calendar year, after a 270% rise in 2021. So, maybe some of the best returns are behind it. But it continues to offer high-quality exposure to that green energy thematic, via its long-life, low-cost lithium mines in WA.

Wilsons equity strategist Rob Crookston said the team’s preference among ASX lithium shares is Allkem Ltd (ASX: AKE). They like Pilbara Minerals as well but also draw attention to the stretched valuation.

Crookston said: “While PLS screens attractively on near-term valuation multiples, the company appears to offer less valuation appeal over the medium-term.”

The post The Pilbara Minerals share price is up 117% in 6 months. So, does JPMorgan have it wrong? 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 smash the market on Tuesday?
• Why did the Pilbara Minerals share price have such a cracker day?
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most traded ASX 200 shares on Tuesday
• Here are the 3 most heavily traded ASX 200 shares on Monday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. 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/XIvkyNe

It was a great day for the All Ordinaries Index (ASX: XAO) this Wednesday. The All Ords ended up closing at 7,187.4 points, up a healthy 0.52% for the day.

But it was an even better day for quite a few All Ords shares. So let’s now go through three that have recorded new, 52-week and multi-year highs today.

3 All Ordinaries shares hitting multi-year highs today

QBE Insurance Group Ltd (ASX: QBE)

First up is QBE Insurance. QBE shares had a very strong start to the trading day, rising as high as $13.10 a share soon after market open. That was despite the QBE share price falling for most of the afternoon and finishing up at $12.92 by the end of the trading day.

That was despite no real news coming out of the insurance giant this Wednesday. $13.10 a share is QBE’s highest share price level since the pre-COVID highs of February 2020 when QBE was a $14 share.

Mader Group Ltd (ASX: MAD)

We had a rather strange day for this All Ords share. Mader Group started out strong this morning, rising to a new high of $3.85 after closing at $3.75 yesterday.

But investors seemed to have gotten cold feet over the rest of the day, with Mader Group finishing down by a meaty 3.7% at $3.61. Still, this is a new all-time record high for Mader, as well as a new 52-week high. All this despite no news out of the company whatsoever.

Mineral Resources Limited (ASX: MIN)

Last but certainly not least is All Ords mining company Mineral Resources. Mineral Resources had an exceptionally strong day. The company finished up at $82.70 a share this afternoon but rose as high as $83.07. Not only is that a new 52-week high for Mineral Resources, but another all-time record high.

Again, there is nothing out of the company itself. But lithium shares, of which Mineral Resources is often associated with, had a strong day overall as well.

The post 3 ASX All Ordinaries shares that hit multi-year highs 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

• Here are the top 10 ASX 200 shares today  
• 3 ASX All Ords shares cracking new 52-week highs on Tuesday
• Here are the top 10 ASX 200 shares today
• Why are ASX lithium shares smashing the market today?
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now

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 positions in and has recommended Mader Group Limited. The Motley Fool Australia has positions in and has recommended Mader 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/0Zb2yM5

The Zip Co Ltd (ASX: ZIP) share price finished today’s trading session in the red, down 0.78% at 64 cents. In comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) was up 0.5% to 7,187 points.

Zip shares have dropped a hefty 58% since late July, underlining what has been a year from hell for Zip shareholders.

But at last week’s annual general meeting (AGM), CEO and managing director Larry Diamond sought to reassure those still invested in the ASX buy now, pay later (BNPL) provider.

Diamond said the company’s “refreshed strategy” of pivoting from growth to profit was working, and the future was bright.

In his AGM address, Diamond said the past 12 months had made it clear that “a focused, agile business, guided by its purpose and mission, can emerge stronger from challenging times”.

Zip to become ‘a very profitable business’

Diamond went on to explain how Zip could emerge stronger from these tough economic times:

We believe Zip’s differentiated business model will prove resilient in the current operating environment, when coupled together with our innovative products, and position us well to continue to grow market share.

We have simplified the business following adjustments to strategy, underlying monthly cash burn is
improving and we are well funded, with approximately $141 million in available cash and liquidity. We are confident that we have the balance sheet to fund the company through to cash EBTDA profitability.

We have clear medium term targets we are driving the business towards as we scale. Revenue as a percentage of TTV is targeted at 7.0% to 7.5%. Cost of sales as a percentage of TTV targeted at 4.0% to 4.5% and we expect to deliver a cash transaction margin of 2.5% to 3.0%.

He said achieving these targets would deliver “a very profitable business”.

As we reported last week, Zip expects to turn cash EBTDA (earnings before taxes, depreciation and amortisation) positive as a group in the first half of FY24.

The key to that is getting Zip’s United States business cash flow positive. Diamond said at the AGM he expected this to occur by the end of FY23.

The US market is ‘critical’ to success

Diamond told shareholders that building scale in Zip’s core markets was “critical” to the business’s future success and the primary reason why he relocated to the US recently. He added:

While our near-term focus on profitability has tempered our top-line growth rate, the continued growth of the business across key metrics in the face of external challenges, reflects the incredible opportunity that exists.

In the US, the addressable market is estimated to be over US$10 trillion and BNPL penetration is still
under 2%, including just 4% of e-commerce and 1% of in-store spend. This demonstrates the sheer size, and early stage of the BNPL opportunity that we are positioned to capture.

How is Zip overcoming inflation headwinds?

Diamond outlined how the company was dealing with rising inflation and interest rates. He said Zip was “well-placed with its unique product offering and business model … to deliver results despite challenging external conditions”.

With interest rates rising we are strongly focused on how we maintain margins in this environment. Our product construct and repayment velocity mean that the US business in particular is well-placed to
mitigate interest rate rises, with any 25 basis point rise in base rate only impacting cost of funds by ~2
basis points on a per transaction basis.

At a time of heightened inflation, we believe our product offering becomes even more important to consumers who are looking to manage their monthly cashflows … It’s also a real necessity for merchants to drive conversion at the checkout and we continue to deliver value by driving new and repeat customers and increased order values.

Zip provided an investor presentation at the meeting. The Zip share price is down 85% in the year to date.

The post Down 60% since late July, can Zip shares really ’emerge stronger from challenging times’? 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

• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
• Why is the Zip share price dropping today?
• Zip share price slides despite CEO pinpointing profit timeline
• What could this proposed regulation mean for Zip shares?
• Why is the Zip share price up 5% on Tuesday?

Motley Fool contributor Bronwyn Allen has positions in ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. 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/T7GfWid

The Sayona Mining Ltd (ASX: SYA) share price has dumped 33.78% of its value after reaching a high of 37 cents per share on 13 September.

Shares of the lithium producer closed Wednesday’s trade at 24.5 cents.

The S&P/ASX 200 Materials Index (ASX: XMJ) was easily the best-performing sector indices today, finishing up 2.47%.

Let’s cover some recent developments in Sayona’s fundamentals to see if we can piece together why its shares have been sold off.

What’s going on with Sayona shares?

Most recently, Sayona made the list as one of the top 10 most-shorted ASX shares with a short interest ratio of 8.9% when the article was published.

Some good news for the company came on 27 October, which is when the company released an update for its North American Lithium (NAL) operation in Quebec, Canada.

The update contained news that production at NAL will restart for the first quarter of 2023.

And then on 16 October, the Fool covered previous developments for Sayona. These included its pre-feasibility study for its Moblan Lithium Project, which is also located in Quebec.

Also, predicted price increases for lithium hydroxide and spodumene concentrate were anticipated to take hold in 2023 before levelling off and pulling back in 2024.

So, by most accounts, there has been nothing but good news to report on for Sayona. So why are its shares down by 33% in two months?

This question has been asked before. The most plausible explanation seems to be that investors have been selling shares to take profits from their investments. My colleague James noted this profit-taking at the start of October.

Sayona Mining share price snapshot

The Sayona Mining share price is up 88% year to date. That’s beating the S&P/ASX 200 Index (ASX: XJO) by a wide margin, down 6% over the same period.

The company’s market capitalisation is around $2.03 billion.

The post Why has the Sayona Mining share price dumped 33% in 2 months? 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

• Here are the top 10 ASX 200 shares today
• Here are the 3 most traded ASX 200 shares on Wednesday
• Coles share price slips as boss says ‘best is still to come’
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing
• Whitehaven share price dives 9% as floods hit guidance

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/n4EeFru

The S&P/ASX 200 Index (ASX: XJO) surpassed a major milestone for the first time in nearly two months today. The index lifted 0.58% to close at 6,999.3 points.

However, it reached a high of 7,012.4 in intraday trade, marking the first time the ASX 200 has surpassed 7,000 points since mid-September and a fourth consecutive gain.

Its day in the green followed a decent session on Wall Street as the United States market anticipated the outcome of the nation’s midterm election.

The Dow Jones Industrial Average Index (DJX: .DJI) rose 1% overnight while the S&P 500 Index (SP: .INX) lifted 0.6% and the Nasdaq Composite Index (NASDAQ: .IXIC) gained 0.5%.

The S&P/ASX 200 Materials Index (ASX: XMJ) led the way on the Aussie bourse on Wednesday. It gained 2.5% despite falling iron ore prices.

Iron ore futures slumped 2.1% to US$85.33 a tonne while gold futures lifted 2.1% to US$1,716 an ounce.

The S&P/ASX 200 Energy Index (ASX: XEJ), meanwhile, underperformed, falling 0.1%.

The Brent crude oil price slipped 2.6% to US$95.36 a barrel overnight while the US Nymex crude oil price fell 3.1% to US$88.91 a barrel.

All in all, three of the ASX 200’s 11 sectors closed higher today. But which share outperformed all others to take out today’s crown? Keep reading to find out.

Top 10 ASX 200 shares countdown

The best-performing ASX 200 share on Wednesday was gold miner St Barbara Ltd (ASX: SBM). Its stock jumped 13% despite no news having been released by the company.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
St Barbara Ltd (ASX: SBM)	$0.565	13%
Regis Resources Limited (ASX: RRL)	$1.78	12.66%
De Grey Mining Limited (ASX: DEG)	$1.22	9.42%
Evolution Mining Ltd (ASX: EVN)	$2.35	9.3%
Perseus Mining Limited (ASX: PRU)	$2.05	9.04%
Capricorn Metals Ltd (ASX: CMM)	$4.17	8.88%
West African Resources Ltd (ASX: WAF)	$1.145	8.02%
Gold Road Resources Ltd (ASX: GOR)	$1.53	7.75%
Orica Ltd (ASX: ORI)	$15.07	6.96%
Newcrest Mining Ltd (ASX: NCM)	$19.41	6.88%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares 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

• Here are the 3 most traded ASX 200 shares on Wednesday
• Why Allkem, Newcrest, Orica, and SSR shares are rising today
• Coles share price slips as boss says ‘best is still to come’
• Why is the Newcrest share price surging 5% on Wednesday?
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing

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

from The Motley Fool Australia https://ift.tt/b9HImzT

Writing in its October monthly update, the Chester High Conviction Fund said it is “less than convinced banks offer any real downside protection should economic conditions worsen over the next 12 months.”

The comment came after the fund noted the strength in the S&P/ASX 300 Index (ASX: XKO) in October was led by the banking sector, with Bank of Queensland Limited (ASX: BOQ) reporting results that highlighted an increasing net interest margin, a key driver of profitability for banks. 

For the month of October, the Bank of Queensland share price jumped 13% higher. The Commonwealth Bank of Australia (ASX: CBA) share price soared 15% for the month, a great return for shareholders, but solidifying itself as even more expensive than when reporting results in August. 

The Chester High Conviction Fund said “banks are capturing the benefit of higher interest rates, without yet feeling the impacts of those higher rates on impaired loans.”

Yet the fund views banks as “leveraged exposure to the Australian economic cycle,” effectively sounding the alarm bells for bank shares should the economy weaken. The sharp increase in interest rates will hit many mortgage-holders from next year onwards as they transition off low fixed rate mortgages. 

Chester notes the rising pressure on commercial property pricing. Writing on Livewire Markets, Christopher Joye recently said commercial property owners and residential developers “have been the single biggest bank killers over the last 150 years,” noting “ANZ and Westpac almost went bust because of their commercial property exposures in the 1991 recession.”

Most economists are forecasting Australia will dodge a recession, but clearly economic growth is set to slow next year. Recession or not, bank shares, for so long the darlings of the S&P/ASX 200 Index (ASX: XJO), could be in for rougher days ahead.

The post Top fund manager sounds alarm bells for bank shares 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 the latest on the bank’s class action
• Are Bank of Queensland shares worth buying in November?
• Are ASX 200 bank shares a no-brainer buy in an inflationary environment?
• Experts name 2 ASX 200 dividend shares to buy next week
• Why Morgans added CBA shares to its best ideas list

Motley Fool contributor Bruce Jackson 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 Westpac Banking Corporation. 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/vbRKVMZ

The drama surrounding and following Elon Musk just doesn’t seem to dissipate. Musk is, of course, the head of several companies. There’s the publically listed Tesla. But there are also his private companies like SpaceX, Neuralink and The Boring Company.

And Twitter.

Twitter was dramatically bought out by Musk, with the final deal going through last month. The company will now be taken private at US$54.20 a share. We’ve seen the news of massive staff layoffs and the departure of Twitter’s old CEO and chief financial officer since.

But we have also just seen some fresh news regarding Musk.

According to a Securities and Exchange Commission (SEC) filing, Musk has just offloaded 19.5 million shares of Tesla, worth close to US$4 billion.

Musk has been selling down his Tesla stake for a couple of years now. But 2022 has seen the selling accelerate, with this latest tranche taking total sales this year to almost US$20 billion.

Why is Elon Musk selling his Tesla shares?

So it’s unclear why Musk has stepped on the gas when it comes to selling his Tesla shares. Uncharacteristically, he hasn’t taken to Twitter to explain his motives. But we can probably conclude that the sales have at least something to do with his Twitter deal.

It cost Musk around US$44 billion to buy out Twitter. As we covered at the time, much of this funding came from loans and significant private investors like Twitter founder Jack Dorsey.

But Musk is still on the hook for a big chunk of change for the US$44 billion deal. So it’s very possible that Musk is battening down his own financial hatches and just making sure he has plenty of liquid capital on hand in case he needs it for his Twitter deal.

Or he could just be trying to diversify his wealth. Musk still has more than 445 million Tesla shares to his name, an amount worth approximately US$85.25 billion or around 14% of the company’s total share count. Perhaps he is branching out. It can be risky to have so many eggs in one basket.

But seeing as Musk is offloading so many Tesla shares at 2022 prices (which are a lot lower than those we saw in 2021), we’d have to conclude it’s probably the former.

The post Why did Elon Musk just sell $6 billion worth of Tesla shares? 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 Tesla hit a new 52-week low today
• Why Tesla shares dropped below $200 on Monday
• Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk’s Twitter takeover
• Tesla sees a China slowdown, but this Nasdaq stock is faring much worse
• Why Tesla shares dropped Wednesday

Motley Fool contributor Sebastian Bowen has positions in 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.

from The Motley Fool Australia https://ift.tt/532fpTB

Telstra Corporation Ltd (ASX: TLS) shares could be great value at current levels.

That’s the view of analysts at Morgans, which have named the telco giant on the broker’s best ideas list for November.

Morgans’ best ideas are those that the broker believes offer the highest risk-adjusted returns over a 12-month period. They are also supported by a higher-than-average level of confidence and are its most preferred sector exposures.

What is the broker saying about Telstra shares?

According to the note, the broker is feeling positive on Telstra for a number of reasons. This includes Optus’ recent cybersecurity incident, strong earnings momentum following its turnaround, and the recent company restructure.

In respect to the latter, the broker feels that this restructure could unlock significant value for shareholders from assets sales etc. 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.

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

Based on the current Telstra share price of $3.95, this implies potential upside of 16.5% for investors over the next 12 months.

Morgans also expects a 16.5 cents per share fully franked dividend in FY 2023. This represents a dividend yield of 4.1%, stretching the total potential return to almost 21%.

The post Why Telstra shares could be ‘worth substantially more’: Morgans 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

• Why is the Telstra share price trailing the ASX 200 on Monday?
• What is the current dividend yield on Telstra shares?
• Morgans names 3 of the best ASX 200 shares to buy in November
• Here are the top 10 ASX 200 shares today
• How did the Telstra share price fare over October?

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 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/TtL9AkJ