A light appears to be peeking through at the end of the tunnel for ASX shares and the broader market this year. The potential for interest rate rises to soon slow and stop has plenty of investors eager to dive back into the ‘riskier’ end of equities.

To illustrate, the tech-focused Nasdaq Composite Index (NASDAQ: .IXIC) and S&P/ASX All Technology Index (ASX: XTX) are up 15.6% and 14.8% respectively after a little more than a month. Meanwhile, the broader Aussie benchmark index has climbed a lesser 8.6% so far this year.

However, the early widespread strength might be somewhat deceptive according to one investment analyst. Instead, Dr Justin Koonin of Allan Gray Australia suggests a murkier future ahead as the heightened cost of capital canes the corporate world.

The changing environment renews the importance of what Koonin describes as a key factor for long-term outperformance.

Have you checked your weight (across ASX shares) lately?

There is a common misconception in investing that volatility is equivalent to risk. They believe the size and frequency of share price movements are where the ‘risk‘ is for investors. But that isn’t the case… remember we are investing in businesses, not tickers.

Here’s an example case to look at to understand ‘risk’ across two scenarios:

1. Company A is a profitable business with a history of growing earnings above 10% per annum with extensive cash reserves and no debt. The company is a microcap (~$100 million market capitalisation), has minimal market liquidity, and a share price that regularly moves 10% on the ASX in a single day.
2. Company B is an unprofitable business with declining revenues and a high rate of turnover in management. The company’s cash balance is dwindling while debts are rising. Company B has a large market capitalisation (~$2 billion) and is highly liquid with the share price relatively stable at around $3.

Although Company A might have a more volatile share price, the business itself is in a less ‘risky’ position than Company B.

Dr Koonin explains this further in a press release made earlier today, stating:

Most investors tend to think about risk in terms of volatility. But there will always be volatility, that’s part and parcel of investing. We instead view risk as the potential for permanent loss of capital.

Careful stock picking can help mitigate the risk of permanent loss of capital. Outperformance over the long term does not solely depend on the stocks picked but also significantly depends on the weight of the stocks in the portfolio.

The key consideration for investors is to ensure they’re appropriately weighted across their ASX shares based on this definition of risk. Essentially, a company you believe is ~80% likely to return 20% should hold a larger weighting than a company that you believe has a 5% chance of returning 100%.

Echoing Buffett in 2023

The commentary from Koonin on allocating capital based on the risk of permanent loss of capital is reminiscent of the great Warren Buffett.

The legendary investor and CEO of Berkshire Hathaway has long been quoted on his two key rules, “Rule number 1: Never lose money; rule number 2: Never forget rule number 1.”

As ASX shares begin to pick up steam again this lesson in risk and capital allocation might be a timely one. As Dr Justin Koonin puts it, “You can outperform with a low hit rate if the upside of the outperforming investment is large.”

The post The secret sauce to outperforming with ASX shares in 2023: expert appeared first on The Motley Fool Australia.

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More reading

• 2 ASX dividend shares to buy with big yields: Morgans
• Here are the top 10 ASX 200 shares today
• This ASX ETF just hit an all-time high. Is it too late to buy?
• Should ASX 200 investors buy Flight Centre shares ahead of this month’s earnings update?
• Here’s why analysts rate these blue chip ASX 200 shares as buys

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

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After coming tantalisingly close to its all-time high on Friday, the S&P/ASX 200 Index (ASX: XJO) likely disappointed many market watchers by starting the week in the red. The index fell 0.25% today to close at 7,539 points.

Its biggest weight? The S&P/ASX 200 Real Estate Index (ASX: XRE).

The sector fell 1.95% on the eve of the Reserve Bank of Australia’s (RBA’s) February meeting where it’s expected to hike rates once more following last month’s unexpectedly stubborn inflation data.

Interestingly, however, the S&P/ASX 200 Energy Index (ASX: XEJ) was today’s best-performing sector, rising 0.9% despite lower oil prices.

The price of Brent crude dropped 2.7% on Friday to close the week 7.8% lower at US$79.94 a barrel, while US Nymex crude oil fell 3.3% on Friday, marking a 7.9% week-on-week fall that saw it end at US$73.39 a barrel.

But it wasn’t an energy stock that topped the lot today. Let’s take a look at the 10 ASX 200 shares posting the biggest gains on Monday.

Top 10 ASX 200 shares countdown

Starting the week out on the best foot was gold mining giant Newcrest Mining Ltd (ASX: NCM).

Its share price soared 9% to close at $24.53 amid a takeover offer from world leader Newmont Corporation (NYSE: NEM).

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Newcrest Mining Ltd (ASX: NCM)	$24.53	9.27%
Beach Energy Ltd (ASX: BPT)	$1.54	3.7%
Incitec Pivot Ltd (ASX: IPL)	$3.53	3.22%
Whitehaven Coal Ltd (ASX: WHC)	$8.46	2.92%
Link Administration Holdings Ltd (ASX: LNK)	$2.04	2.77%
New Hope Corporation Limited (ASX: NHC)	$5.94	2.59%
TPG Telecom Ltd (ASX: TPG)	$4.80	2.56%
Computershare Limited (ASX: CPU)	$24.59	2.42%
Coronado Global Resources Inc (ASX: CRN)	$2.12	2.42%
AUB Group Ltd (ASX: AUB)	$24.67	2.15%

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.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the ARB share price beating the ASX 200 today?
• Why Beach, Newcrest, Patriot Battery Metals, and Warrego Energy shares are rising
• Why top brokers say surge in CSL share price will continue
• Will Newmont offer more for Newcrest shares?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Link Administration. The Motley Fool Australia has recommended Aub Group and 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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It was a pretty dreary start to the trading week for ASX shares this Monday. At present, the S&P/ASX 200 Index (ASX: XJO) lost around 0.25%. This means that any exchange-traded funds (ETFs) that track the ASX 200 or ASX shares would have had a slow day as well. But one ASX ETF had a cracker.

It’s the VanEck Morningstar Wide Moat ETF (ASX: MOAT). Wide Moat ETF units have had a very pleasant day indeed. Yes, the fund finished down by 0.38% at $108.04 per unit. But earlier today, the ETF hit a high of $108.89 per unit. Not only is that a new 52-week high for this ASX ETF, but it’s also a new record high:

Yep, In their nearly eight years on the ASX, this ETF’s units have never been higher than $108.89 each. So a very happy start to the week for Wide Moat ETF investors.

But why did this ASX ETF hotting new record, all-time highs on a day when the ASX 200 is retreating? Well, put simply, this ETF doesn’t track or represent ASX shares.

Instead, this fund holds a basket of US shares. But not just any US shares. The only shares that make it into this ETF’s portfolio are those that show “sustainable competitive advantages’, or moats’, as decided by Morningstar’s research team.

What’s behind the ASX Wide Moat ETF?

A moat is a term originally coined by the legendary investor Warren Buffett. It refers to competitive advantages that a company might possess, such as a strong brand, cost advantage or switching barrier.

Apple and Coca-Cola could be described as having brand moats for instance. While the cost of changing from using Microsoft Office to another suite of productivity programs could be a switching moat for Microsoft Corporation.

So at present, the Wide Moat ETF has 49 underlying holdings within its portfolio. These include Kellogg, Adobe, NVIDIA, Microsoft, Disney and Buffett’s own Berkshire Hathaway. All arguably top-quality companies with clear ‘moats’.

The real reason this ETF is having such a strong showing is the underlying performance of these holdings, not the ASX. The recent slip of the Aussie dollar against the US dollar would also be helping.

So is it too late to buy more Wide Moat ETF units? Well, this fund does have a history of meeting and exceeding new all-time highs. Since its inception in 2015, this ETF has averaged a performance of 14.57% per annum. That’s far more than what the ASX 200 Index has delivered.

So if you have confidence that this ‘moat’ investing method is a sound one, then it’s certainly not too late to invest in the Wide Moat ETF. A new high is not a good reason not to ignore a quality investment.

After all, shares go up more than they go down. So this could be the first in many new highs for this ETF. You’ve missed out on one, but there could be another just around the corner.

The post This ASX ETF just hit an all-time high. Is it too late to buy? appeared first on The Motley Fool Australia.

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• Invest like Warren Buffett with these ASX shares
• 2 of the best ETFs for beginner investors to buy now
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• With almost no investments at 30, can ASX shares still make me rich?
• I think these two ASX ETFs are great buys as inflation cools

Motley Fool contributor Sebastian Bowen has positions in Adobe, Apple, Berkshire Hathaway, Coca-Cola, Microsoft, VanEck Morningstar Wide Moat ETF, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe, Apple, Berkshire Hathaway, Microsoft, Nvidia, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney, long January 2024 $420 calls on Adobe, long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, short January 2024 $430 calls on Adobe, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Adobe, Apple, Berkshire Hathaway, Nvidia, VanEck Morningstar Wide Moat ETF, and Walt Disney. 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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Flight Centre Travel Group Ltd (ASX: FLT) shares have started the week positively.

The travel agent’s shares beat the ASX 200 and ended the day 1.5% higher at $18.00.

This means the Flight Centre share price is now up 25% since the start of the year.

Should you buy Flight Centre shares ahead of its results?

While buying ASX 200 shares before the release of a result can be a bit risky, Flight Centre has already provided the market with an unaudited preview of its half year results.

In light of this, there’s not likely to be any surprises when the company releases its full set of results later this month.

So, should you buy shares?

Unfortunately, I’m not aware of any brokers that have a buy rating on Flight Centre shares at present. The most positive broker is arguably Morgans, which has a hold rating and $18.10 price target on its shares.

This is broadly in line with where the Flight Centre share price is currently trading, which appears to indicate that investors might be best keeping their powder dry and waiting for a better entry point.

What did the broker say?

Morgans was reasonably pleased with the company’s proposed acquisition of luxury travel company Scott Dunn. It was even more pleased with its performance during the first half. It said:

While the acquisition of Scott Dunn ticks the boxes strategically, FLT has paid a full price and it is only mildly EPS accretive based on recovery year earnings. Importantly, Flight Centre Travel’s 1H23 result has beaten guidance, led by a strong Corporate result.

One slight negative, though, is that despite the first half beat, its FY 2023 guidance has fallen short of the broker’s expectations. It explained:

FLT has provided FY23 EBITDA guidance of A$250-280m. This was below Morgans previous forecast of A$289.5m. However it was largely at the midpoint of FactSet consensus of A$266.3m. This guidance is prior to any benefits from the acquisition. The midpoint of guidance implies a 35%/65% 1H vs 2H split, which is broadly in line with FLT’s historical seasonality.

Finally, while the broker isn’t recommending Flight Centre as a buy, it is encouraging existing shareholders to take part in the company’s capital raising. It concludes:

We view the placement and SPP price as attractive (FY25 recovery PE of 11.7x) and encourage investors to take up their allocation. We maintain a Hold rating with a new $18.10 price target.

The post Should ASX 200 investors buy Flight Centre shares ahead of this month’s earnings update? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Why Argosy Minerals, Credit Corp, Flight Centre, and Mesoblast shares are racing higher
• Flight Centre share price rockets 15% as ASX 200 travel stock resumes trading
• Flight Centre share price frozen amid $211m ‘luxury’ acquisition

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 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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There are a lot of blue chip ASX 200 shares for investors to choose from on the Australian share market. Two that have recently been named as buys are listed below.

Here’s why they could be in the buy zone:

CSL Limited (ASX: CSL)

The first blue chip ASX 200 share that is highly rated is CSL.

CSL is one of the world’s leading biotechnology companies. It is the owner of the number one plasma therapies business, CSL Behring, the world’s second largest influenza vaccine business, Seqirus, and the global leader in iron deficiency and iron deficiency anaemia therapies, CSL Vifor.

But CSL never rests on its laurels. In fact, each year the company makes a material investment in research and development (R&D). This investment usually sits in the region of 11% to 12% of sales, which now means more than US$1 billion goes into these activities each year. This ensures that the company has a pipeline of potentially lucrative and life-saving therapies to support its future growth.

Supporting this will be improvements in plasma collections and the company’s new collection technology. The latter is expected to boost margins by collecting plasma more efficiently and deliver stronger yields.

Morgan Stanley is positive on CSL and currently has an overweight rating and $354.00 price target on its shares.

ResMed Inc (ASX: RMD)

Another ASX 200 blue chip share that is highly rated is ResMed.

It is a global leader in the development, manufacturing, distribution, and marketing of medical devices and cloud-based software for the diagnosis, treatment, and management of respiratory disorders.

This is a huge market to operate in. For example, 1 in 5 adults are estimated to suffer from sleep apnoea, with the vast majority of them undiagnosed.

The team at Morgans is very positive on the company. It believes ResMed is well-placed to grow its market share in the lucrative sleep treatment market and sees a big opportunity in out of hospital care thanks to its digital business.

Morgans currently has an add rating and $37.00 price target on the company’s shares.

The post Here’s why analysts rate these blue chip ASX 200 shares as buys appeared first on The Motley Fool Australia.

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More reading

• Why top brokers say surge in CSL share price will continue
• 2 ASX 200 shares trading ex-dividend this week
• Brokers name 3 ASX shares to buy now
• The CSL share price has boomed 13% in under a month. What’s going on?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $43.00 price target on this gaming technology company’s shares. Morgan Stanley has been looking at industry data and believes that the company’s Pixel United business is performing ahead of expectations. The Aristocrat share price is trading at $36.28

Insurance Australia Group Ltd (ASX: IAG)

A note out of Citi reveals that its analysts have retained their buy rating but cut their price target on this insurance giant’s shares to $5.30. This follows the release of a first half update which fell short of Citi’s expectations. While disappointed with the update, the broker believes underlying margin trends are positive, particularly given price rises and easing inflation. As a result, it believes the company’s shares are attractive following recent weakness. The IAG share price is fetching $4.59 this afternoon.

Liontown Resources Ltd (ASX: LTR)

Analysts at Macquarie have retained their outperform rating and $2.60 price target on this lithium developer’s shares. This follows news that open pit mining has started at the Kathleen Valley lithium project. And while Macquarie continues to expect production to commence in the middle of next year, it sees revenue-generating opportunities from direct shipping ore (DSO) before then. The broker also notes that this DSO is not included in its estimates, so poses upside risk to them and its valuation. The Liontown share price is trading at $1.49 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, Core Lithium, IAG, and Nick Scali shares are dropping today
• IAG share price tumbles on broker downgrade
• These are the 10 most shorted ASX shares
• Why Bega Cheese, IAG, Northern Star, and Sandfire shares are dropping
• IAG share price sinks 5% as New Zealand flood claims pour in

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.

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It’s been a bit of a rocky start to the trading week for the S&P/ASX 200 Index (ASX: XJO) so far this Monday. After a decent week last week, the ASX 200 has gone backwards over the course of this trading day. At the time time of writing, the index has shed 0.3% and is back below 7,540 points.

But rather than trying to figure all of that out, let’s instead check out the shares that are currently topping the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

Newcrest Mining Ltd (ASX: NCM)

A rare appearance from ASX 200 gold miner Newcrest marks our first share to check out this session. So far today, a notable 10.33 million Newcrest shares have traded places on the ASX boards. This isn’t a hard one to work out.

Newcrest shares are soaring today after it emerged that US-listed gold miner Newmont has put forward a takeover offer for the ASX miner. Newmont has put up an offer of 0.38 shares for every Newcrest share.

The company hasn’t come down on the offer yet, but investors sent Newcrest shares up a whopping 14.4% at one stage today with the share price hitting a high of $25.68. It’s settled at $24.59 a share, or 9.55% higher, at the time of writing. No wonder so many shares are flying around.

Core Lithium Ltd (ASX: CXO)

Our next ASX 200 share worth a look is lithium stock Core Lithium. This Monday has seen a sizeable 13.65 million Core shares exchanged so far. There’s been no dramatic takeover offer here. But Core Lithium did tell investors this morning that Doug Warden has been appointed as the company’s chief financial officer.

Investors are either indifferent or don’t seem too impressed though, seeing as Core Lithium shares are currently down by a nasty 5.13% at $1.072 each. This big drop is the likeliest explanation behind the elevated volumes we are seeing.

Sayona Mining Ltd (ASX: SYA)

Finally this Monday, we have another ASX 200 lithium share in Sayona Mining. A rather massive 34.38 million Sayona shares have changed hands as it currently stands. We haven’t seen much in the way of news or announcements out of Sayona today.

But that hasn’t stopped the lithium stock’s share price from plummeting. At present, Sayona has lost a depressing 5.77% and is back down to 24.5 cents a share. It’s almost certainly this big drop in value that is driving the high trading volumes on display here.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Why is the ARB share price beating the ASX 200 today?
• Why Brainchip, Core Lithium, IAG, and Nick Scali shares are dropping today
• Why Beach, Newcrest, Patriot Battery Metals, and Warrego Energy shares are rising
• Why top brokers say surge in CSL share price will continue
• Will Newmont offer more for Newcrest shares?

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining. 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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ASX investors looking for an exchange-traded fund (ETF) with the potential to benefit from a reported surge in cybersecurity spending may want to look into the Betashares Global Cybersecurity ETF (ASX: HACK). 

The ASX ETF offers investors exposure to 36 large-cap global cybersecurity stocks, predominantly listed in the United States.

Its top holdings are Broadcom Inc, Cisco Systems Inc, Fortinet Inc, Infosys Ltd and Palo Alto Networks Inc.  

The ASX ETF doesn’t, as yet, hold any Australian cybersecurity stocks as the market caps of these companies are still too small to be included.

At the current share price, the fund pays a trailing annual distribution yield of 8.3%, unfranked.

As you can see in the chart below, shares are up 6% over the past five trading days and down 17% over the past 12 months.

ASX ETF in the spotlight as cybersecurity spending rockets

Australia’s biggest companies are ramping up their cybersecurity spending. Company managers appear spurred into action in the wake of major hacks in 2022, including breaches impacting millions of Optus and Medibank Private Ltd (ASX: MPL) customers.

That’s according to research from Netskope, reported on by The Australian, which surveyed 300 Aussie executives.

That research found that 80% of companies employing at least 200 people will increase their cybersecurity spending in 2023. In 2022 that figure was 63%.

On the smaller end of the market, 41% of the companies said they were upping their spending to thwart hackers.

While that alone is unlikely to send this ASX ETF rocketing, the trend will surely be welcomed by global cybersecurity companies.

Commenting on the survey results, Netskope chief security officer for APAC, David Fairman said, “The data breaches that occurred last year deeply impacted the Australian community, but it seems there is some positive draw from those events.”

Fairman added:

In the last decade, attitudinal gaps between technology and business leaders regarding cybersecurity have been a key factor slowing down cybersecurity improvements, and it seems that both teams are now – at last – on the same page, ready to bolster cyber defences for their organisations and customers.

ASX investors looking to potentially profit from this rising trend may wish to look into the HACK ETF.

The post Cybersecurity spending is rocketing in 2023. Here’s why this ASX ETF might benefit appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. 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 Little Green Pharma Ltd (ASX: LGP) share price is smoking the market on Monday.

In afternoon trade, the ASX cannabis share is up 46% to 27 cents.

Why is this ASX cannabis share on fire?

Investors have been bidding the Little Green Pharma share price higher today after the company’s psychedelics focused subsidiary, Reset Mind Sciences, was given a big boost from regulators.

According to the release, the Therapeutic Goods Administration (TGA) has decided to change the classification of psilocybin and MDMA to allow prescribing by authorised psychiatrists.

This means that Australia will become the first market in the world to recognise psychedelics as medicines and paves the way for the use of psilocybin for the treatment of treatment resistant depression and MDMA for PTSD outside of a clinical trial environment from 1 July 2023.

Management believes this uniquely positions Reset Mind Sciences given both its Schedule 9 licence and its impending clinical trial. These developments now allow the company to accelerate and implement its commercialisation plans far earlier than expected.

‘Groundbreaking’

Reset Mind Sciences’ CEO, Shaun Duffy, was very pleased with the news. He commented:

The announcement by the TGA is truly groundbreaking in the field of psychedelics and I welcome their decision. There is a significant body of research emerging in Australia and globally for the use of psychedelics to treat mental health conditions and this decision allows the use of these drugs for the mental health conditions that have demonstrated the most potential in the research.

The post Why did this ASX cannabis share just rocket 46%? appeared first on The Motley Fool Australia.

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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.

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The S&P/ASX 200 Index (ASX: XJO) is having a fairly lacklustre start to the trading week so far this Monday. At the time of writing, the ASX 200 has slipped by 0.19%, which puts the index down to just above 7,540 points. But it’s a somewhat different story when it comes to the ARB Corporation Ltd (ASX: ARB) share price.

ARB shares are in the green today. The ASX 200 offroad supplies retailer has gained a comfortable 0.63% so far this session, putting ARB shares at $33.61 each.

So what’s helping ARB shares outperform the broader market by around 1% this Monday?

Well, a company update released to the markets just before open this morning is probably to thank.

This market update covers the company’s performance over the six months to 31 December 2022.

ARB share price beats the ASX 200 after bullish market update

ARB Corporation reported that over the period, it has brought in $340.9 million in sales revenue. That was a 5.1% slide compared to the previous corresponding period in 2021.

However, ARB also reported that the second quarter of the half “was slightly ahead of the same period last year, an improvement from the 10.0% decline in the first quarter reported at the 2022 AGM”.

Meanwhile, the company reported that its profit before tax will come in between $64 million and $64.6 million. That would be a decline of 29.7% against the previous corresponding period. This “reflects the lower sales and the inflationary impact on the Company’s cost base in particular”.

However, ARB also stated the following:

Pleasingly, inflationary pressure on the Company’s cost base moderated throughout 2Q FY2023 with freight and steel costs retreating towards more historical levels. Furthermore, recent sales price increases will improve margins and recruitment opportunities appear to be improving despite continuing to be challenging.

Turning to the future, ARB was more upbeat. The company stated that it “maintains a positive short term outlook based on its continuing strong customer order book, which is in line with order levels throughout 2022″.

ARB also stated that it “is focused on supporting export markets and pursuing various market opportunities whilst managing input costs and global supply chain pressures“.

The company also pointed to its new product development planned for 2023. That’s in addition to its “increased distribution and manufacturing capacity” in 2023 as signs that its fortunes were improving.

So it seems investors were buoyed by what the company had to say today. ARB Corporation will report its full half-yearly results for the first half of FY2023 on 21 February.

In the meantime, the current ARB Corporation share price gives this ASX 200 retail share a market capitalisation of $2.76 billion, with a dividend yield of 2.11%.

The post Why is the ARB share price beating the ASX 200 today? appeared first on The Motley Fool Australia.

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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 ARB Corporation. The Motley Fool Australia has recommended ARB Corporation. 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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