The Medibank Private Ltd (ASX: MPL) share price has been suspended this morning after the health insurer confirmed hackers are holding the company to ransom.

The cybercriminal is threatening to release the personal data, including medical and possibly credit card information, of the company’s customers.

The company will return to trade on the release of a further announcement or Wednesday’s open, whichever comes soonest.

Let’s take a closer look at what’s going on with the S&P/ASX 200 Index (ASX: XJO) health insurer.

Medibank shares suspended amid cyberattack fallout

The Medibank share price is back on ice amid what originally appeared to be a relatively banal “cyber incident”.

However, as the week has unfolded, the seriousness of the attack has come to light.

Medibank CEO David Koczkar has written to customers informing them a cybercriminal has been confirmed to have stolen data from the company’s ahm and international student systems.

The data includes names, addresses and phone numbers, dates of birth, Medicare numbers, and some claims data. Such claims data include codes related to a person’s diagnosis and procedures.

The company is so far unable to confirm claims the hacker has also taken information relating to credit card security.

Koczkar “unreservedly” apologised to customers for the incident, saying:

Our teams are continuing to work around the clock to understand what additional customer data has been affected, and how this will impact them. We expect the number of affected customers to grow as the incident continues.

In requesting today’s suspension, the company said:

Whilst there is currently no further information to provide to the market … Medibank is seeking voluntary suspension of its shares to enable it to manage its continuous disclosure and provide an update to the market on the status and implications of the cyber incident.

The Office of the Australian Information Commissioner (OAIC) has also confirmed it’s making inquiries with Medibank following the breach.

Australian information commissioner and privacy commissioner Angelene Falk said the attack is “of great concern, given the sensitive information that may be involved”.

Medibank shares traded for three days this week, falling 0.3% in that time to $3.51. The shares were placed in a trading halt on Wednesday afternoon before being suspended today.

The post Why have Medibank shares just been suspended from trading on the ASX? 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

• Buffett: Why a market crash can be an investor’s best friend
• 5 big ASX announcements making news this week
• 3 ASX shares that are the top buys right now: expert
• Yes, buy ASX shares now. Don’t wait like everyone else: expert
• 5 things to watch on the ASX 200 on Friday

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/uz53DBL

This has been a big week, even by recent standards…

A matter of Truss

Yes, the puns abound, but the satirists and cartoonists who’d almost perfected their version of Liz Truss are going to have to start again.

Or not, if Boris is given back the keys to Number 10 Downing Street (I’m not sure if he’s even had a chance to return his set yet, which could make things easier). In that case, they just need to hope they didn’t shred all of the old BoJo material – they might need it!

Other than the sheer tragi-comedy of the thing, markets seem satisfied that the worst has passed, with the Pound and UK bond yields (‘Gilts’ in the jargon) heading back towards normal.

The UK palaver was a mess from beginning to end, and a reminder that half-baked ideas and blatant populism (sometimes) don’t mix. Or maybe we’ve just found the point at which they stop mixing!

Either way, there are lessons for our own government(s) – politics is always going to be politics, but you can’t bend the laws of finance much more than you can bend the laws of physics: eventually something’s going to break.

When good numbers are bad

I’m loathe to mention the very funny Betoota Advocate article imagining what RBA Governor Phillip Lowe might say, in his more honest moments – not because it’s not very, very funny, but because the language is very, very, very blue. It’s not for the faint of heart, or the even-slightly offended. Seriously, please don’t even think about Googling it unless you know and like their stuff — the language will offend.

But the gist – that Lowe would really, really, like us to stop spending so much – is spot on.

And it’s why recent economic data, which has been so good, is… well… not.

GDP growth has been strong. Unemployment is low and even though it’s unchanged at 3.5%, a whole lot of Aussies were able to move from part-time to full-time work.

Those are really good things.

Except when you’re trying to slow an economy.

No, Lowe doesn’t want people added to the dole queue.

No, he doesn’t want a recession, if we can avoid it.

But almost every bit of data (the latest was strong business condition data from a National Australia Bank Ltd (ASX: NAB) survey, yesterday) shows the economy in ruddy good health.

(Remember, inflation is an output, not an input.)

I do a bit of media. Usually, I’m all smiles when I get to talk about how well the economy is performing. I still try to be positive – it is good to see people in work, and businesses succeeding – but what it really means is that rate rises have further to go. Unfortunately.

Sometimes, you gotta rant

Most of my time is spent on investing and economics. But that’s invariably intertwined with politics and general public policy.

I had a good long go at addressing the problems with the taxation of Superannuation (both the hole it leaves in the Budget and the (un)fairness of where the tax burden falls as a result. I think I have a decent solution, so if you haven’t read it, I reckon it’s worth your time.

I also did a Twitter poll (I don’t usually do them) on what my followers thought of gambling ads. 80% of people who responded thought they should be banned. Me too. I’m not a fan of rules and restrictions for the sake of it, but if we can help vulnerable adults and impressionable kids, I reckon we should take the opportunity. Don’t you?

But back on pure investing, I hope you’re doing okay with volatility. Some people took (respectful) exception to my use of the Vanguard Index chart the other day. If that’s you, I hope you’ll read my response to their critiques.

And sometimes you gotta chill

We’re in a funny time, economically. Perhaps that’s an understatement. But it’s important to remember what game you are (and aren’t) playing, to know how the news and current events impact you.

Or doesn’t.

Higher inflation absolutely impacts businesses that don’t have pricing power, squeezing margins.

Higher interest rates absolutely crimp the earnings of businesses with a lot of debt.

And higher interest rates mean assets are worth less than when rates are lower (essentially because the more you get from cash in the bank or government bonds, the less attractive it is to take a risk on other, less secure, assets).

So those things are true, and bear thinking about.

As Warren Buffett said, a couple of years ago on CNBC:

“We are sitting very, very little inflation with the Federal Reserve putting a target at 2% not that long ago. … Since money doesn’t cost anything, you can print lots of money and have full employment and no inflation. … I wouldn’t think you can have these things at these levels — long-term rates, interest rates, budget deficits — have that at a stable situation for a long period of time”

And

“The convergence of these factors would seem impossible to me. Generally if I feel something is impossible, it’s going to change over time. I don’t know in what way, but I don’t think we can continue to have these variables in this relationship.”

Not for the first time, Buffett was right.

But, here we are.

And, as hard as it is, we still have to sift through the constant fire-hose flow of noise to grab what matters, and discard what doesn’t.

Me?

I’m doing two things.

I’m trying to work out the underlying earnings power of businesses I’m interested in. That means trying to adjust for one-off (COVID) or recurring-but-cyclical factors (including, but not limited to, economic waves) to see what sort of regular (or average) profitability I can expect from a business.

Then I’m asking myself whether today’s prices are attractive, or not, relative to that future.

See what’s not in there?

I don’t need to guess what inflation will be, next year.

I don’t need a view on whether we’ll have a recession, or how long or deep it might be.

Yes, I need to make sure the company won’t go broke if there is one, but I don’t need to have a high-conviction view on its severity or length.

Which isn’t a guarantee, of course. A 10 year plunge into a Depression that makes the Great Depression look tame is always possible, I guess. But likely? No, I don’t think so.

If I thought that, I’d be stocking up on shotgun shells and baked beans, not shares. (But also, my money isn’t much good to me in that environment either… and no-one is buying your gold or Bitcoin (CRYPTO: BTC)!)

So yes, follow the news, if you want. As a responsible, concerned citizen, have a view on policy and what it means for the country and your fellow citizens. And please, be an informed voter, when the time comes, whichever way you end up casting your ballot.

But as an investor? You really have to tune out the stuff that just doesn’t matter, and is more likely to distract than assist.

Quick takes

Overblown: We’re in the lead-up to Treasurer Chalmers’ first Budget. Meaning we’re in the middle of selective, well-timed leaks to make sure the government maximises the PR benefit. Same as the last lot, and probably just one of those things we have to live with. But of all the things to pay attention to, you can ignore the “$11 billion blowout” headline for the Stage 3 tax cuts. Oh, I think they’re unaffordable in general, but the ‘blowout’ is less than a 5% increase and essentially just a recalculation on updated numbers.

Underappreciated: I saw some numbers the other day, suggesting that Berkshire Hathaway, Warren Buffett’s gargantuan investment conglomerate, has beaten the market over the last 16.5 years or so. Here at home, investment company Washington H. Soul Pattinson has also got a very strong long-term market-beating track record. I own both, for the record. I’m not saying ignore growth companies – they can be great. as I mention below. But don’t assume the ‘boring’ ones aren’t worth owning.

Fascinating: Victoria is bucking the trend of 40 years of one-way asset transfers – privatisations from the public sector – to essentially go back into the power business. I don’t have an arbitrary rule on this stuff – the work should be done by whichever sector can do it best, on a case-by-case basis – but it’s a gutsy call with some incredibly ambitious timelines, particularly on carbon reduction. Ignore the ideologues who tell you it’s never going to work, or those who say it’s the best thing since sliced bread – it’s going to be a closer race than either group thinks.

Where I’ve been looking: My Motley Fool Money podcast (shameless plug) co-host Andrew Page and I chatted small caps on the podcast episode that’s being released this afternoon (Friday), and he makes some compelling points. I’ve been digging around for growing, currently- or almost-profitable small- and medium-sized businesses, with solid balance sheets, that the market is ignoring. There’s a few I’m going to be doing more work on.

Quote: “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson

Fool on!

The post Buffett was right… again. 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

• Is Netflix stock a buy now?
• Looking to buy A2 Milk shares? Here’s what to watch at next month’s AGM
• Is the Core Lithium share price at risk following Tesla’s disappointing earnings?
• No savings at 40? I’d use the Warren Buffett method to build wealth
• Broker says Rio Tinto share price is trading at a discount

Motley Fool contributor Scott Phillips has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Bitcoin. 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/UOldnfy

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

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

Netflix‘s (NASDAQ: NFLX) stock surged 14% on Wednesday, Oct. 19, following Tuesday evening’s release of its third-quarter earnings report. The streaming video giant’s revenue rose 6% year-over-year to $7.93 billion, which beat analysts’ expectations by $90 million. Its earnings per share declined 3% to $3.10, but still cleared the consensus forecast by $0.97.

More importantly, Netflix gained 2.42 million paid subscribers sequentially, which finally ended its two-quarter streak of subscriber losses. Do those positive developments indicate it’s finally safe to buy Netflix’s stock, which remains about 60% below its all-time high from last November?

Its revenue growth is still decelerating

Back in April, Netflix rattled investors with its first sequential loss of subscribers in over a decade. It mainly blamed that slowdown on tougher competition in the streaming space, the impact of the Russo-Ukrainian war, and users sharing their passwords. It said it would crack down on those shared passwords and roll out a cheaper ad-supported tier to attract new users, but those moves also suggested it was running out of ways to gain new subscribers.

During the third quarter, Netflix’s number of paid subscribers grew again as hit shows like Stranger Things, Monster: The Jeffrey Dahmer Story, Extraordinary Attorney Woo, The Gray Man, and The Sandman drew in more viewers. It expects its number of paid subscribers to grow 2% sequentially (2.6% year-over-year) to 228 million in the fourth quarter.

Metric	Q3 2022	Q2 2022	Q1 2022	Q4 2021	Q3 2021
Paid Subscribers (Millions)	223.1	220.7	221.6	221.8	213.6
Growth (YOY)	4.5%	5.5%	6.7%	8.9%	9.4%
Revenue (Billions)	$7.93	$7.97	$7.87	$7.71	$7.48
Growth (YOY)	5.9%	8.6%	9.8%	16%	16.3%

Data source: Netflix. YOY = Year-over-year.

Netflix’s stabilizing subscriber growth is encouraging, but its revenue growth continues to cool off. It attributes that slowdown to its growing dependence on international markets, which generate lower revenue per subscriber than its slower-growth U.S./Canada market, as well as the rising dollar’s impact on its overseas revenue.

That’s why it only expects revenues to rise less than 1% year-over-year — and decline nearly 2% sequentially — to $7.78 billion in the fourth quarter. However, that amounts to a 9% year-over-year increase under constant currency terms.

To stabilize its revenue growth, Netflix will start rolling out its cheaper “Basic with Ads” tier, which costs $6.99 per month in the U.S., on Nov. 3. That tier, which costs $1 less than Disney‘s (NYSE: DIS) ad-supported Disney+ and Hulu tiers, will stream videos at up to a 720p resolution and feature about five to five minutes of commercials each hour.

During the conference call, chief operating officer and chief product officer Greg Peters predicted the cheaper ad-supported tier would “bring in a lot more members” and become a “significant incremental revenue and profit stream” over the long term. However, Netflix’s fourth-quarter revenue suggests those tailwinds won’t really kick in by the end of the year. Those currency exchange headwinds are powerful.

Its margins are still shrinking

Netflix’s operating margin of 19.3% in the third quarter beat its own forecast of 16%, but still contracted sequentially and year-over-year. It attributed most of its year-over-year decline to the appreciation of the U.S. dollar — which will likely continue as interest rates continue to rise.

Metric	Q3 2022	Q2 2022	Q1 2022	Q4 2021	Q3 2021
Operating Margin	19.3%	19.8%	25.1%	8.2%	23.5%
Free Cash Flow (Millions)	$472	$13	$802	($569)	($106)
EPS Growth (YOY)	(3%)	8%	(6%)	12%	83%

Data source: Netflix.

It expects that pressure, along with the infrastructure investments related to its new ad-supported tier, to reduce its operating margin to just 4.2% in the fourth quarter. It also expects its earnings per share to plummet 73% year-over-year.

Netflix didn’t provide an exact fourth-quarter estimate for its free cash flow (FCF), which fluctuates wildly based on its production of new content. But it expects to generate about $1 billion in FCF for the full year, which implies its FCF will likely turn negative again in the fourth quarter (since it already generated $1.3 billion of FCF in the first nine months).

Its valuations are debatable

Analysts expect Netflix’s revenue to rise 7% this year as its earnings decline 10%. Next year, they expect revenue and earnings to grow 8% and 6%, respectively, assuming it continues to gain new subscribers and expand its ad-supported tier.

Based on those estimates, Netflix trades at 21 times forward earnings — which is historically cheap but doesn’t make it a bargain compared to traditional media companies. For example, Disney trades at 18 times forward earnings, while Paramount Global (NASDAQ: PARA) has an even lower forward price-to-earnings ratio of eleven.

At its current growth rates, I believe Netflix deserves to trade closer to its legacy media counterparts — which also offer streaming video platforms — instead of higher-growth tech companies. Therefore, I still don’t think Netflix is a compelling buy after its latest earnings beat, especially as its revenue growth cools off and its operating margins continue to shrink. 

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

The post Is Netflix stock a buy now? 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 Netflix stock rocketed higher Wednesday
• Why did the Pointsbet share price surge 12% on Wednesday?
• What’s going on with Netflix and how is it impacting ASX 200 tech shares today?
• Why Netflix stock was soaring today
• Tesla and Netflix will make or break the Nasdaq this week

Leo Sun has positions in Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix 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 and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.   

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

from The Motley Fool Australia https://ift.tt/4xwceJ2

A2 Milk Company Ltd (ASX: A2M) shares have been strong performers in recent months.

Since this time in July, the infant formula company’s shares have risen 19% to $5.34.

As a comparison, the ASX 200 index has lost 1.6% of its value during the same period.

In light of this, it appears that expectations are high for the company’s first half results and investors may be anticipating a solid trading update at next month’s annual general meeting.

What is expected at the A2 Milk AGM next month?

At the end of September, A2 Milk released a trading update which revealed that it had started FY 2023 positively. It advised:

The Company has made a positive start to the year, with 1Q23 sales expected to be marginally ahead of plan primarily reflecting the benefit of favourable foreign exchange driven by depreciation of the New Zealand Dollar (NZD). Due to the currency impact on cost of sales and cost of doing business, notwithstanding the benefit to sales, 1Q23 EBITDA is expected to be in line with plan.

Investors will no doubt be hoping that the company’s trading has remained the same or even improved since this update. The latter would likely given A2 Milk’s shares a real boost.

Though, it is worth noting that the continuation of its solid performance isn’t a given. Management has warned investors that its performance could be impacted positively and negatively from a range of factors. These include:

COVID-19 impacts on supply chain, SAMR registration process timing, volume impact of price increases, foreign exchange movements, cross border trade, changes in the regulatory environment, and commodity prices.

What else?

In addition, this week the company pledged to amend its remuneration process after investor backlash. It stated:

To further align to recent practices for New Zealand and Australian executive remuneration, the Board is reviewing the Company’s remuneration practices. While the review is still ongoing, the Board is already committed to making certain changes in FY23.

While these changes won’t be relevant to next month’s annual general meeting, the fact that it is taking action could stop shareholders voting down its remuneration report this year.

Are A2 Milk shares a buy?

There aren’t many brokers out there that are bullish on A2 Milk’s shares, but one that remains positive is Bell Potter.

A note from earlier this month reveals that its analysts have a buy rating and $6.60 price target.

This implies potential upside of almost 24% for investors over the next 12 months.

The post Looking to buy A2 Milk shares? Here’s what to watch at next month’s AGM appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Is the A2 Milk share price a buy ahead of next month’s AGM?
• Top brokers name 3 ASX shares to buy today
• Broker tips A2 Milk share price to jump 20%
• What’s the outlook for A2 Milk shares in the second quarter?
• Why did the A2 Milk share price rocket 23% in the first quarter?

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 A2 Milk. 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/ckUVn2v

The Core Lithium Ltd (ASX: CXO) share price has rebounded from early morning losses and is currently up 0.2%.

Shares in the ASX lithium stock closed yesterday at $1.33. In late morning trade shares are swapping hands for $1.34.

The company has been a major beneficiary of soaring lithium prices amid a battery manufacturing boom to power the rapid growth in global EV markets.

Year to date that’s seen the Core Lithium share price rocket an eye-popping 110%. And this is in a year where the S&P/ASX 200 Index (ASX: XJO) has dropped 12%, no less.

But could Core Lithium’s dream run be at risk from the underwhelming quarterly results reported by EV giant Tesla Inc (NASDAQ: TSLA) yesterday?

Could Tesla impact the Core Lithium share price surge?

The Tesla share price closed down 6.7% yesterday after the company’s quarterly revenues came in shy of consensus expectations. The Tesla share price is now down just over 48% this calendar year.

Core Lithium, as you may recall, executed a legally binding term sheet with Tesla for the supply of lithium spodumene concentrate.

The deal, announced on 2 March this year, is for 110,000 tonnes of lithium spodumene concentrate over a four-year period, sourced from its Finniss Lithium Project, in the Northern Territory. The Core Lithium share price leapt 11% on the day of the announcement.

Commenting on the agreement at the time, managing director of Core Lithium, Stephen Biggins said, “Tesla is a world leader in electric vehicles and its investment in offtake and interest in our expansion plans for downstream processing are very encouraging.”

Indeed. Tesla is a world leader in EVs. Therefore, its disappointing quarterly earnings could be portending a slowdown in global EV markets and lithium demand, potentially throwing up some headwinds for the Core Lithium share price.

China’s slowing growth in the spotlight

According to Eliot Hastie, markets analyst at Australian digital brokerage Stake, “Some analysts believe that softening demand is the primary concern, with sales in China – Tesla’s biggest market – having slowed due to rising competition and a poor macroeconomic landscape.”

“Tesla still makes up just under a fifth of all global battery-only electric vehicles sales, so it’s a significant sentiment driver for Australian lithium stocks,” Hastie added. “The brand’s earnings could be seen as a negative sign for lithium demand in the short term by some, but the need for this commodity is still predicted to increase exponentially over the long term.”

A slowdown in China could indeed impact EV demand from the world’s most populous nation. While that could see a short-term dip in lithium prices, the longer-term outlook remains quite strong.

According to the Department of Industry Science and Resources’ latest quarterly Resources and Energy Report, “lithium exports are now forecast to rise by over 180% to $13.8 billion in 2022-23”.

Hastie notes the Core Lithium share price will be on watch next Wednesday, 26 October. That’s when the company is set to agree on the specific terms of its offtake agreement with Tesla.

The post Is the Core Lithium share price at risk following Tesla’s disappointing earnings? 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

• Up 22% in a week, will Tesla’s results slow the Liontown share price surge
• Tesla’s growth is back on track. Is it time to buy?
• Tesla stock drops on earnings release: 7 key metrics you should see
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• 3 lithium ASX shares to watch after Tesla’s results

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 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/KMfyQck

Warren Buffett, the ‘Oracle of Omaha’ and the man behind Berkshire Hathaway Inc (NYSE: BRK), is often heralded as the best investor of all time.

And if I were a few short decades from retirement with little to no cash in the bank, I’d turn to his wisdom to help grow wealth on the ASX.

The billionaire’s company offered investors an annual return of around 20% between 1965 and 2021.

That would have turned a $1,000 investment into around $28.5 million over the 56-year period – the power of compounding, folks.

So, what advice has the apparent guru offered over the years that might help an investor build up a nest egg over the age of 40 (potentially using ASX shares)? Keep reading to find out.

Buffett wisdom to help build wealth after 40

Choose wisely

A book could be ­­written on how to pick a stock to invest in – and many have been. But Buffett’s approach is a simple one.

He doesn’t rush into any and all investments, rather he takes time to evaluate and understand a business and its prospects. That’s how he finds the big winners.

Following that advice means an investor with no understanding of a particular sector or company would either need to get acquainted with it before buying in or staying clear.

Buffett is also said to have advised that someone looking to invest do so as if they could only make 20 investments in their lifetime.

Being selective about which shares he buys, and truly knowing the business behind it, is one way in which the billionaire has built his wealth.

Derisk, derisk, derisk

Buffett’s relationship with risk is a complicated one. He once famously said:

We think diversification ­­– as practiced generally – makes very little sense for anyone that knows what they’re doing.

However, to diversify a portfolio is to reduce risk. That’s because no one (or two, or three) ASX shares or sectors can be guaranteed to gain.

Buffett is also widely quoted as saying his first rule to investing is don’t lose money. His second rule? Don’t forget rule No. 1.

So, what Buffett might have meant, is to advise investors not to mindlessly build a huge portfolio purely to diversify. As noted above, the oracle advises people to invest wisely.

If I were aiming to build up my nest egg, beginning at 40, I would be deliberately and strategically (and reasonably) diversifying my ASX portfolio.

Time in the market > timing of the market

Buffett has previously said he doesn’t put much thought into what the market is doing at any particular time.

Additionally, the power of Buffett’s best friend, compounding, takes time.

Therefore, Buffett looks for businesses he believes to be winners and doesn’t attempt to pick the bottom. He once said, courtesy of CNBC:

If we’re right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do.

I believe waiting to buy into a good investment because of what the broader market is doing could delay future rewards.

The post No savings at 40? I’d use the Warren Buffett method to build wealth 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

• How bear markets can be a blessing for dividend investors
• Looking for the best stocks to buy in a bear market? Here’s Warren Buffett’s advice
• Does it matter what share class of Berkshire Hathaway stock you buy? Maybe
• 2 reasons Amazon is a Warren Buffett stock
• What can we learn from how Warren Buffett invested through sky-high inflation?

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/mZajucM

The Rio Tinto Limited (ASX: RIO) share price is on course to end the week in the red.

In morning trade, the mining giant’s shares are down almost 1% to $91.50.

This means the Rio Tinto share price is now down over 5% this week after investors responded negatively to the miner’s quarterly update.

Is the Rio Tinto share price good value?

Analysts at Morgans believe investors should take advantage of the weakness in the Rio Tinto share price.

According to a note, the broker has retained its add rating and $108.00 price target on the company’s shares.

This implies a potential 12-month return of 18% for investors before dividends and 24% including them.

What did the broker say?

Morgans was disappointed with the miner’s quarterly update and highlights that it was a reminder that that “there are no quick fixes to Rio Tinto’s productivity issues across its global operations.”

It also notes that the company has downgraded its guidance for iron ore shipments and refined copper production.

Nevertheless, this isn’t enough to change the broker’s view than Rio Tinto would be a great option in the resources sector right now. Particularly given how immaterial these downgrades are to the company’s long term outlook.

It explained:

The operational weak-points and guidance cuts are disappointing, but they alone are not material to RIO’s long-term fundamentals. Instead we remain focused on whether RIO can achieve sustainable operating changes to solve the productivity issues across its global business. We think that lasting change, especially to productivity in a business this scale, is not something that can realistically happen quickly with weak quarters like 3Q22 likely to continue to occur in the meantime.

Putting the 3Q22 result into perspective, we still see RIO boasting solid earnings quality, dividend yield, balance sheet strength and trading at a discount to our $108.00 Target Price. We maintain our Add rating.

The post Broker says Rio Tinto share price is trading at a discount 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

• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• Rio Tinto share price has 20% upside and 7% dividend yield: Goldman Sachs
• Top brokers name 3 ASX shares to buy today
• Why Adbri, Rio Tinto, St Barbara, and Whitehaven Coal shares are dropping today
• Rio Tinto share price higher despite mixed Q3 update

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

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

Plenty of eyes are on the banking space as the majors get a taste for Tyro Payments Ltd (ASX: TYR). Though, it hasn’t yet been confirmed whether the Commonwealth Bank of Australia (ASX: CBA) shares an interest in acquiring the payment terminal provider.

While CBA’s interest remains unconfirmed, it might be worthwhile exploring what Australia’s biggest bank could stand to gain if it made a beeline toward Tyro.

Let’s take a closer look.

Beefing up business banking

Rising interest rates might be boosting the net interest margin of ASX bank shares, but it also means a smaller appetite for home loans. As rates are expected to rise into next year, banks have the difficult task of determining how to increase profits as fewer loans to buy a home are signed off.

According to CBA’s 2022 annual report, around 51% of the company’s cash net profit after tax (NPAT) was derived from retail banking services. That means CBA shares hold a large exposure to the mortgage market and will likely need to look to other lending areas to maintain growth.

That’s where good ole’ business lending comes in. In FY22, business banking made up approximately 31% of CBA’s cash NPAT. No doubt, the banking giant will look to go toe-to-toe with the likes of National Australia Bank (ASX: NAB) and gain market share… enter scene Tyro Payments.

Tyro could make or break CBA’s market share

Tyro has grown to be a formidable competitor to the major incumbents over the years. According to its FY22 investor presentation, the fintech company now has 109,000 EFTPOS terminals across the country.

Importantly, the humble payment terminal is considered to be the ‘foot in the door’ for landing a business’s banking needs. Tyro proved this to be the case in FY22, growing its loan originations by a whopping 283.4% to $99.07 million.

This figure is rather paltry compared to the Commonwealth Bank’s last recorded $14.1 billion in business lending. Though, the market opportunity is what might have the major bank licking its lips.

As depicted above, CBA is currently the market leader in EFTPOS terminals in Australia. However, if Westpac Banking Corp (ASX: WBC) or NAB were to get ahold of Tyro, this would quickly change.

In the case of NAB, an additional 109,000 terminals from Tyro would take its total to 264,000 — dethroning CBA’s leading market share with 244,000.

Potential hurdles

Finally, if CBA does throw its hat in the ring for Tyro Payments, it might gain the attention of the Australian Competition and Consumer Commission (ACCC).

Despite the competitive payments landscape, with the entrance of international tech companies such as Block Inc (ASX: SQ2), the corporate watchdog may not be impressed with CBA owning a ~37% share of EFTPOS terminals in Australia.

For now, we will have to wait and see what offers arise. However, we know that it will need to be more than $1.52 — as per Mike Cannon-Brookes’ arrangement — if it is to be considered.

The CBA share price is down 4% compared to a year ago, currently residing at $99.30.

The post What could CBA shares stand to gain from a Tyro takeover? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 big ASX announcements making news this week
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert
• CBA share price smashes through $100-mark for first time in 2 months. What’s next?
• CBA shares: Buy, hold, or fold?
• Is the CBA share price a good value buy in October?

Motley Fool contributor Mitchell Lawler has positions in Block, Inc. and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and Tyro Payments. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Tyro Payments and 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/9SW2DbJ

The Novonix Ltd (ASX: NVX) share price is falling on Friday.

In morning trade, the battery materials and technology company’s shares are down 2% to $2.22.

This follows the company being quizzed by the Australian share market operator this morning.

What’s happening?

This morning Novonix responded to an ASX Aware Query or please explain request.

The stock market operator highlighted that the Novonix share price rocketed 20% higher on Tuesday from $1.79 to $2.15 despite there being no news.

And then lo and behold, big news was unveiled a couple of days later. That news was of course Novonix being selected for a $240 million government grant.

The response

Novonix admitted that it was aware of the grant selection on 14 October and that “does consider the Information to be information that a reasonable person would expect to have a material effect on the price or value of its securities.”

However, it felt that it was “an incomplete proposal or negotiation” and advised that it was “prohibited from disclosing its selection […] prior to the DOE making a public announcement about the matter.”

In fact, the company was “advised by DOE that failure to abide by this requirement could result in forfeiture of the opportunity.”

Asked why it did not request a trading halt during the interim period, management appeared to suggest that the market should have been expecting this news as “NVX was considered a logical candidate for the grant funding.”

Furthermore, it “had been monitoring information sources for any suggestion that confidentiality in the Information had been lost and watching NVX trading volumes and prices very closely.”

So, following the aforementioned 20% gain by the Novonix share price on Tuesday, it decided to act and requested a trading halt before the commencement of trade on Wednesday. It explained:

NVX noted the increase in NVX trading volume and prices over the course of 18 October 2022 and despite the fact that NVX believed confidentiality in the Information had not been lost, NVX decided that it would be prudent to go into a trading halt from 19 October 2022 in order to manage its continuous disclosure obligations until such time as it was in a position to announce the Information.

The post Novonix share price falls after ASX ‘please explain’ 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
• Why Challenger, Novonix, Piedmont Lithium, and Woodside shares are racing higher
• Novonix share price rockets 26% on $240m US Government grant news
• Why is the Novonix share price stuck on standby today?
• Here are the top 10 ASX 200 shares today

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

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

The Liontown Resources Limited (ASX: LTR) share price is up 0.5% in morning trade on Friday.

The ASX lithium stock closed yesterday trading for $1.84 and is currently trading for $1.85 per share.

The Liontown share price has leapt 22% since last Thursday’s close, and handily outperformed the All Ordinaries Index (ASX: XAO) in 2022.

That outperformance has been driven by strong demand and near-record prices for the critical battery metal lithium.

The Liontown share price got a big boost from Tesla in February

Investors were particularly keen earlier this year after Liontown announced it had entered into a binding lithium supply agreement with global electric vehicle (EV) giant, Tesla Inc (NASDAQ: TSLA).

Tesla agreed to purchase lithium spodumene concentrate from Liontown’s $473 million Kathleen Valley Lithium Project, in Western Australia.

The initial five-year agreement, expected to commence in 2024, will see Liontown supply Tesla with 100,000 dry metric tonnes (DMT) of lithium spodumene concentrate in the first year. Tesla agreed to buy 150,000 DMT in the following years.

Liontown shares surged more than 16% on 16 February, the day of the announcement.

Why might Tesla’s results impact Liontown?

Despite some strong annual growth figures, investors were less than impressed with Tesla’s quarterly results, reported yesterday.

The disappointment likely stemmed from the EV giant’s quarterly revenue figures falling slightly short of consensus expectations. Whatever the cause, the Tesla share price closed down 6.7% yesterday, bringing its 2022 losses to a painful 48.2%.

While this doesn’t look to be having any immediate impact on the Liontown share price today, the broader picture could cast a shadow over the medium-term outlook for lithium demand.

According to Eliot Hastie, markets analyst at Australian digital brokerage Stake, “Some analysts believe that softening demand is the primary concern, with sales in China – Tesla’s biggest market – having slowed due to rising competition and a poor macroeconomic landscape.”

Hastie continued:

Tesla still makes up just under a fifth of all global battery-only electric vehicles sales, so it’s a significant sentiment driver for Australian lithium stocks. The brand’s earnings could be seen as a negative sign for lithium demand in the short term by some, but the need for this commodity is still predicted to increase exponentially over the long term.

I think Hastie nails it there with the long-term outlook for lithium demand and prices.

A slowdown in China could impact Tesla and the Liontown share price in the shorter term. But analysts are broadly in agreement that the 10-year global demand outlook for lithium remains very strong as EV markets are forecast to continue growing rapidly.

The post Up 22% in a week, will Tesla’s results slow the Liontown share price surge 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

• Tesla’s growth is back on track. Is it time to buy?
• Tesla stock drops on earnings release: 7 key metrics you should see
• 3 lithium ASX shares to watch after Tesla’s results
• Why is Tesla stock falling if its business is stronger than ever?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 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/ZmiQuOk