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.

The Nasdaq Composite has plunged deep into bear market territory, dragged down by deteriorating investor sentiment in the face of high inflation and rising interest rates. In fact, the tech-heavy index is now 34% off its high, marking its steepest decline in the last decade.

On the bright side, that broad downturn has created a wealth of buying opportunities for patient investors. For instance, in spite of temporary macroeconomic headwinds, the future looks bright for Microsoft (NASDAQ: MSFT) and Arista Networks (NYSE: ANET), and both stocks are trading at discounted valuations compared to historical price-to-earnings multiples.

Microsoft: An arsenal of critical software and cloud services  

Microsoft breaks its operations into three segments, each packed with widely adopted products. The first is Productivity and Business Processes, at the heart of which is Microsoft 365, the most popular collection of enterprise applications on the planet. In addition to the well-known Office software suite, Microsoft 365 includes market-leading products like Defender and Azure Active Directory for cybersecurity, and Microsoft Teams for communications.

The second segment is Intelligent Cloud, which houses Microsoft SQL Server, the third-most-popular database. But cloud computing platform Microsoft Azure is the heart of this segment. Azure captured 21% market share in cloud infrastructure services in the second quarter, second only to Amazon Web Services. 

The final segment is More Personal Computing, which features Xbox hardware and content, the ubiquitous Windows operating system, and the Bing search engine. But the most exciting part of this segment is advertising. Last year, Microsoft acquired ad tech platform Xandr from AT&T, and Netflix recently selected Microsoft as the ad tech vendor that will power its soon-to-launch ad-supported streaming service.

Broadly speaking, Microsoft’s arsenal of critical software products and cloud services makes it resilient, and that advantage has helped the company churn out solid financial results in spite of the difficult economic environment. Over the past year, revenue rose 18% to $198 billion, while free cash flow ticked up 16% to $65 billion. But Microsoft still has room to expand, especially in cybersecurity, cloud computing, and digital advertising.

In fact, the cybersecurity market will grow 12% annually to reach $500 billion by 2030, while the cloud computing market will grow 16% annually to reach $1.5 trillion, according to Grand View Research. Meanwhile, online video advertising spend will increase 14% annually to reach $362 billion by 2027, according to Omdia. Netflix is expected to be a key player in that market, which bodes well for Microsoft.

Currently, Microsoft stock is 32% off its high, and shares trade at 23.7 times earnings, a bargain compared to its five-year average of 35.1 times earnings. That’s why investors may regret passing on this growth stock.

Arista Networks: Technology that powers the cloud

Arista has become the gold standard in high-speed data center networking. Its portfolio includes switching and routing platforms, wireless access points, and adjacent software for network automation, monitoring, and security. Those technologies allow customers to deploy a seamless network across public clouds, private clouds, and enterprise campus environments.

Arista says its principal innovation is the Extensible Operating System (EOS), the uniquely programmable software that runs across every piece of its hardware. That programmability makes Arista’s networking platforms very flexible, allowing customers to easily integrate and deploy third-party applications. Additionally, by running a single version of EOS across every switch and router, Arista makes network management less complex and costly compared to vendors like Cisco, which requires customers to run different versions of multiple operating systems across its hardware.

In short, Arista’s networking platforms offer industry-leading speed and power efficiency at a lower total cost of ownership. Those selling points have helped it win more than 8,000 customers, including cloud computing giants like Microsoft and Meta Platforms. In turn, Arista has delivered solid financial results on a relatively consistent basis. Revenue climbed 33% to $3.5 billion over the past year, and earnings soared 41% to $3.24 per diluted share.

Looking ahead, Arista is well positioned to maintain that momentum. Data centers will need faster networks to support the ongoing adoption of cloud computing, the growing number of connected devices (e.g. the Internet of Things), and the development of data-intensive applications (e.g. artificial intelligence). That should drive demand for Arista’s networking products in the coming years. In fact, management says its addressable market will grow from $23 billion in 2021 to $35 billion by 2025.

Currently, Arista stock is down 27% from its high, and shares trade at 30.8 times earnings, a slight discount to its three-year average of 33.5 times earnings. That’s why this growth stock looks like a buy right now. 

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

The post Nasdaq bear market: 2 magnificent US growth stocks you’ll regret not buying on the dip appeared first on The Motley Fool Australia.

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• Why Warren Buffett loves this US stock
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• Following this streaming strategy could pay off big for Microsoft
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• Microsoft just hiked its dividend. Who’s next?

Trevor Jennewine has positions in Amazon and Arista Networks. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Arista Networks, Cisco Systems, Meta Platforms, Inc., Microsoft, and Netflix. The Motley Fool Australia has recommended Amazon, Arista Networks, Meta Platforms, Inc., and Netflix. 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.

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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.

What happened

Shares of Tesla (NASDAQ: TSLA) were up as high as 4.8% this morning before cooling off by the afternoon. By market close, the stock had still managed to hold a 0.38% gain on the day, slightly trailing the broader market. Year to date, the stock has fallen 37%.

Wolfe Research released its findings on the potential impact of the electric vehicle incentives included in the Inflation Reduction Act. Plus, Tesla is looking to add almost 7,000 jobs, despite weakening auto sales across the industry year to date.

So what

Wolfe Research analyst Rod Lache said that the Inflation Reduction Act (IRA) could benefit the larger EV makers such as Tesla. A week ago, Goldman Sachs labeled Tesla and General Motors as its favorite picks in the auto space due to the catalysts with the IRA.

It’s also a positive indicator for Tesla’s near-term demand that it is looking to hire thousands of employees. The job listings reportedly represent a 50% jump from June. Most of the job openings are spread across its factories in the U.S., with over 200 openings listed for its China factory in Shanghai.

Now what

Tesla said that it delivered over 343,000 vehicles in the third quarter, which missed estimates and sent the stock down at the start of October. Investors initially saw the delivery miss as a sign that Tesla’s demand was plunging with the rest of the industry.  But it noted that there were cars still in transit at the end of September that skewed the delivery total downward.

Investors will get more clarity on demand when Tesla reports third-quarter results on Wednesday 19 October.

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

The post Why Tesla stock was surging at the market open today appeared first on The Motley Fool Australia.

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More reading

• Tesla and Netflix will make or break the Nasdaq this week
• Why Tesla shares started trading this week up 8%
• How does Tesla make money?
• Queensland Pacific Metals share price soars 18% on General Motors deal
• Why Tesla stock fell today

John Ballard 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 Goldman Sachs and 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.

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

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The BHP Group Ltd (ASX: BHP) share price will be one to watch on Wednesday.

This follows the release of the mining giant’s first quarter update this morning.

BHP share price on watch following Q1 update

Much like rival Rio Tinto Limited (ASX: RIO) yesterday, BHP’s production appears to have fallen short of expectations during the last quarter.

For the three months ended 30 September, BHP reported copper production of 410.1kt. This was down 11% from the June quarter and short of the consensus estimate of 429kt.

Management advised that lower volumes at Escondida were due to lower concentrator feed grade, lower ore stacked in prior months at Pampa Norte reducing cathode production, and lower volumes at Olympic Dam as a result of planned refinery maintenance.

BHP’s iron ore production for the quarter came in 1% higher at 65.1Mt. However, despite this growth, it will have been hard for the company to achieve the consensus shipments estimate of 72.3Mt for the three months.

Management advised that the strong operational performance at WAIO was partially offset by planned car dumper maintenance in the quarter.

Given the sky high prices that coal is commanding right now, the market may be disappointed to learn that significant wet weather weighed on its production during the quarter.

Metallurgical coal production was down 19% to 6.7Mt (versus consensus est. 7.6Mt) and energy coal was down 33% to 2.6Mt.

Finally, the company’s nickel production came in at 20.7Mt. While this was up 10% quarter on quarter, it was still a touch short of the consensus estimate of 21.1Mt.

Management commentary

BHP’s chief executive officer, Mike Henry, was pleased with the company’s start to the new financial year. He commented:

We have started the new financial year strongly, achieving safe and reliable operating performance. The first quarter included significant planned major maintenance in Western Australia Iron Ore (WAIO), BHP Mitsubishi Alliance (BMA), and Olympic Dam.

Copper production was up nine per cent on the same quarter last year, with strong concentrator throughput at Escondida and record quarterly anode production at Olympic Dam. WAIO continued to perform strongly, with production up by 3% relative to the same period last year, and we managed through substantial rainfall and labour constraints in our coal assets with production only down marginally year on year.

Outlook

One positive that could support the BHP share price today is that management has reaffirmed all production and cost guidance for FY 2023.

For example, iron ore production guidance remains 249Mt to 260Mt, copper production remains 1,625kt to 1,825kt, and met coal production guidance remains 58Mt to 64Mt.

Henry concludes:

We expect global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability. BHP remains well positioned, with a portfolio and balance sheet to withstand external challenges and a strategy positioned to benefit from the global mega-trends of decarbonisation and electrification.

The post BHP share price on watch amid Q1 production miss appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is it wise to buy BHP shares amid falling iron ore prices?
• Why did the BHP share price melt down on Monday?
• Opportunities across the mining sector: Expert names ASX 200 shares to buy
• Top brokers name 3 ASX shares to buy next week

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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If you’re looking to boost your income portfolio this month, then you may want to look at the shares listed below that Morgans rate as buys.

Here’s why these ASX dividend shares could be worth considering right now:

HomeCo Daily Needs REIT (ASX: HDN)

The HomeCo Daily Needs REIT could be an ASX dividend share to buy.

It is a property company that invests in convenience-based assets across the target sub-sectors of Neighbourhood Retail, Large Format Retail and Health & Services. It does this with the aim of providing shareholders with consistent and growing distributions.

The team at Morgans appears to believe it is well-placed to deliver on this due partly to its significant development pipeline. The broker highlights that this development pipeline is valued at over $500 million and should underpin solid future growth.

As for dividends, the broker is forecasting dividends per share of 8.3 cents in FY 2023 and 8.7 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.18, this will mean dividend yields of 7% and 7.4%, respectively.

Morgans has an add rating and $1.56 price target on its shares.

Macquarie Group Ltd (ASX: MQG)

Another ASX dividend share that could be in the buy zone according to Morgans is investment bank Macquarie.

Morgans likes Macquarie due to its exposure to long-term structural growth areas such as infrastructure and renewables. Its analysts also see potential for the bank to benefit from recent market volatility through its trading businesses and win market share in Australian mortgages.

In respect to dividends, Morgans is expecting partially franked dividends of $7.07 per share in FY 2023 and $7.47 per share in FY 2024. Based on the current Macquarie share price of $162.32, this will mean yields of 4.3% and 4.6%, respectively.

Morgans has an add rating and $215.00 price target on the company’s shares.

The post Broker says these ASX dividend shares are buys this month appeared first on The Motley Fool Australia.

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More reading

• Down 7% in a month, is the Macquarie share price an ASX 200 bargain buy?
• Brokers say these top ASX dividend shares are buys right now
• Here are the top 10 ASX 200 shares today
• What’s the outlook for ASX 200 bank shares in Q2?
• A mortgage ‘battleground’ is coming. UBS names ASX 200 bank shares best placed to win

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 Macquarie Group Limited. 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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Lithium, as a primary ingredient in high-powered batteries, is crucial for the world’s transition to a reduced-carbon future.

The element is valuable because it’s not easy to substitute it with something else.

“The reason for the hype is [that] lithium has unique characteristics that are difficult to replicate,” said Shaw and Partners portfolio manager James Gerrish back in June.

“It is a light metal but is able to store large amounts of energy and is an excellent conductor of electricity.”

And many experts predict that for the next few years, the increasing demand will far outstrip what mining companies can dig out of the ground.

“Demand for lithium has grown at [approximately] 20% compound annual growth rates through 2017 to 2022 and we think that will continue, while lithium deposits that are technically and economically viable to exploit are rare.”

This is why any ASX shares that have anything to do with lithium production have been in hot demand the past couple of years.

The biggest lithium producers on the ASX

But this also means there are many companies out there that are exploring for lithium and not actually producing any yet.

It takes many years to find mineral deposits then process all the paperwork and get the infrastructure set up to actually dig the stuff out of the ground.

Hence, many experts have warned investors to stay away from ASX shares that represent explorers because of the highly speculative risks involved.

The larger companies that are already producing lithium from established deposits will be more stable and reliable for shareholders.

So which ones are they?

Helpfully, Visual Capitalist this month published a top 10 league table of global lithium producers, and three S&P/ASX 200 Index (ASX: XJO) were featured.

This means that these are the biggest lithium producers you can get your hands on on the ASX at the moment.

With a market capitalisation of $13 billion, Mineral Resources Limited (ASX: MIN) came in at number five.

The Motley Fool reported last week that analysts at Citi rate Mineral Resources as a buy.

“Citi recently attended a presentation relating to Mineral Resources’ Mt Marion and Wodgina lithium operations,” wrote The Motley Fool’s James Mickleboro.

“Following the presentation, the broker remains very bullish and is expecting these lithium operations to generate over three-quarters of its earnings in FY 2023.”

Not far behind is Pilbara Minerals Ltd (ASX: PLS), coming in at sixth, and Allkem Ltd (ASX: AKE), sitting in seventh position.

According to Macquarie analysts, Allkem has the higher upside of the two.

Although they rate both as a buy, The Motley Fool reported that Allkem has a price target of $21 and Pilbara’s $5.60. This makes the former a better proposition in relation to their current stock prices.

It seems the ASX is the place to be when seeking lithium investments.

According to Visual Capitalist, Australia has the largest annual production, extracting 55,000 metric tons each year.

“Four mineral operations in Australia, two brine operations each in Argentina and Chile, and two brine and one mineral operation in China accounted for the majority of global lithium production in 2021.”

The post 3 ASX 200 companies among the top 10 lithium producers in the world appeared first on The Motley Fool Australia.

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More reading

• Is it time for ‘cashing in some gains’ on Pilbara Minerals shares?
• 5 things to watch on the ASX 200 on Wednesday
• Why was the Fortescue share price on such a rollercoaster today?
• Here are the top 10 ASX 200 shares today
• Could investors in this ASX 200 share be in for more payment windfalls?

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

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The Pilbara Minerals Ltd (ASX: PLS) share price has exploded in the past year.

Shares in the pure-play lithium company have surged 125% in the last 52 weeks to $4.80 apiece as at Tuesday’s market close.

So is now a good time to sell, or is it better to hold Pilbara Minerals shares?

Hold or sell?

Pilbara operates the Pilgangoora Project near Port Hedland in Western Australia. This is regarded as one of the biggest hard rock lithium deposits in the world.

Red Leaf Securities CEO John Athanasiou recently recommended investors “sell” Pilbara Minerals shares, citing the company’s recent gains. Commenting on The Bull, he said:

The company’s been benefiting from higher lithium prices.

In fiscal year 2022, the company generated sales revenue of $1.2 billion, a 577 per cent increase on the prior corresponding period. Investors may want to consider cashing in some gains.

Meanwhile, UBS recently rated the Pilbara share price as a sell with a $2.65 price target, my Foolish colleague Tristan reported.

On the flipside, Macquarie placed a $5.60 price target on Pilbara shares in September, as reported by my Foolish colleague James.

A recent federal government report forecasted lithium prices to rise in 2023 before easing in 2024.

In news on Tuesday, Pilbara updated investors on its latest Battery Material Exchange (BMX) auction. The company has accepted a pre-auction offer of US$7,100 per dry metric tonne (dmt) for a shipment of 5,000dmt of spodumene concentrate in mid-November.

Pilbara is also due to release a quarterly activities report next Tuesday.

Share price snapshot

Pilbara shares have soared almost 50% year to date, however, they are down 4% in the past week.

For perspective, the S&P/ASX 200 (ASX: XJO) has fallen 8% in the past year.

Pilbara has a market capitalisation of about $14.2 billion based on the current share price.

The post Is it time for ‘cashing in some gains’ on Pilbara Minerals shares? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 companies among the top 10 lithium producers in the world
• 5 things to watch on the ASX 200 on Wednesday
• Why was the Fortescue share price on such a rollercoaster today?
• Here are the top 10 ASX 200 shares today
• Could investors in this ASX 200 share be in for more payment windfalls?

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

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It’s been a rough year for investors of small-cap ASX shares.

“All types of investing require nerve and courage. But perhaps none more so than small-cap stocks,” said Ophir analysts in a memo to investors this month.

“When an economic downturn hits, small caps tend to fall first and farthest.”

In volatile and uncertain times, the value of smaller companies sinks much more dramatically than larger companies for multiple reasons.

“Small caps also tend to be more sensitive to changes in the economy. They are less able to diversify their operations and are less likely to have the large cash reserves needed to withstand difficult trading conditions.”

They can also get caught up in a liquidity spiral. In a falling market, institutional investors often sell out of smaller holdings first to avoid getting trapped in an illiquid position.

“They then also stop buying, pushing prices down further and faster on even lower levels of liquidity,” read Ophir’s investment strategy memo.

“And while small-cap managers might see even cheaper stocks, many are unwilling to enter the market so prices in small-cap stocks keep falling at a faster rate.”

But the reward for hanging onto the small fish is that, on the other side, they rally much faster than large caps.

“Historically, in the 12 months after the US small-cap index has bottomed around a recession, they have returned an incredible 70% on average – that’s 11% higher than large caps,” read the Ophir memo. 

“The small-cap rebound is also quick. Most of the additional return benefit versus large caps has happened in the first three months.”

So remembering this, here are three small-cap ASX shares that the Cyan C3G Fund is holding onto despite being absolutely hammered last month:

Rock solid investments for the inevitable small-cap recovery

The Mighty Craft Ltd (ASX: MCL) share price tumbled more than 21% in September, but the Cyan team is not worried.

“The alcohol industry globally is dominated by a handful of powerful players, but the domestic industry has been growing strongly in recent years,” read Cyan’s memo to clients.

“We think it’s a sector worth being exposed to and Mighty Craft is our preferred business model, whereby they acquire and accelerate growing beer and spirits brands through provision of capital, distribution and retail and wholesale points of presence.”

The nature of the industry means Mighty Craft could become an attractive takeover target.

“Inevitably the successful domestic businesses or alcohol brands are acquired as they obtain, or are on a clear path to obtaining, reasonable market share.”

Melbourne video games developer Playside Studios Ltd (ASX: PLY) is another small-cap Cyan analysts are backing, despite a 14.3% drop in valuation last month.

“This gaming business continues to impress with the execution of its growth strategy through a business model based on work-for-hire, original IP development and new initiatives like a third party publishing division,” read the memo from Cyan.

“In short, an exceptional team with a strong and growing business in a strong and growing industry.”

The heavy discounting in its shares means it’s another potential takeover subject.

“We believe Playside can deliver great returns to shareholders independently or as an M&A target in time (hopefully both),” said the Cyan portfolio managers. 

“We see this as a unique opportunity to get exposure to these dynamics in the ASX listed space.”

The Cyan team has been a longtime fan of hospital software maker Alcidion Group Ltd (ASX: ALC).

And that hasn’t changed despite a 12.1% drop in share price in September.

“Alcidion is building a strong position in the digitisation of hospital management systems, both administrative and clinical, in Australia and the much larger UK market.”

The business raked in $34 million in revenue for the 2022 financial year. Its June quarter revenue was 46% up year on year.

“The company has worked hard to become one of the leading providers and the timing looks perfect to scale the business significantly over the next two years as governments drive the push towards technology in healthcare in a post-COVID environment.”

The post 3 battered small-cap ASX shares we’re still backing: expert appeared first on The Motley Fool Australia.

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More reading

• Top fund manager thinks ASX could start to move decisively higher, potentially sooner than you might be expecting
• Experts say these small cap ASX shares are buys

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. 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 unloved ASX shares out there at the moment, but which ones are deserving of your investment?

The team at IML Australian Smaller Companies Fund had some ideas for a difficult time ahead.

“Rising interest rates will eventually lead to reduced consumer spending and lower demand, which will impact both business earnings and company valuations,” its memo to clients read.

“We remain focused on investing in companies with predictable recurring revenues and strong market positions, which are likely to perform better in these times.”

Here are two ASX shares that fit the bill for IML analysts at the moment:

‘Stable, predictable cash flow’

Transport services company Kelsian Group Ltd (ASX: KLS) is not a name investors hear much of, but with a $1 billion market cap, the IML team reckons it can’t be ignored.

In fact, IML has bought up Kelsian shares over the past quarter even as the stock price plunged.

“Kelsian is Australia’s largest land and marine transport and tourism provider,” the memo read.

“We remain attracted to Kelsian in a higher inflation environment as its main business comes from public bus transport which delivers stable, predictable cash flow, protected from cost pressures due to its government-backed contracts that deliver full recovery of cost increases.”

The Kelsian share price has dropped a hair-raising 38% so far this year, and 30% since late August.

According to IML analysts, the valuation plummeted even though the reporting update was positive.

“The drop was due to concerns that the company may need to raise funds if its overseas acquisition plans are successful,” read the memo.

“We took advantage of this weakness to increase our position in Kelsian after it became clear that it was not going to raise equity.”

The recent discount means that it’s now “reasonably priced on 13.5 times FY23 profit”, added IML’s notes.

Kelsian also pays out a tidy 3.6% dividend yield.

Keeping the faith in this challenger

Telecommunications provider TPG Telecom Ltd (ASX: TPG) has been frustrating to own ever since it floated in mid-2020 after its birth from the Vodafone-TPG merger. The share price has almost halved from where it started.

It’s been no picnic in recent times either, dropping more than 31% since mid-August.

“Its shares fell sharply over the quarter due to a weaker than expected first half result,” read the IML memo.

“The soft result took the market by surprise after an upbeat investor day in June, with mobile trends notably weaker than peers Telstra Corporation Ltd (ASX: TLS) and Optus in the June quarter.”

Despite all this drama, the IML team is convinced TPG will head upwards in the long term.

“We remain attracted to TPG given the defensive and recurring nature of its earnings,” read the memo.

“Going forward, earnings should benefit from increasing immigration and tourism, which will help grow the number of mobile subscribers, as well as the proposed regional network sharing agreement with Telstra, and the migration of some NBN broadband customers to TPG’s fixed wireless network.”

TPG shares currently boast a dividend yield of 3.9%.

The post 2 slaughtered ASX dividend shares now looking attractive: fund appeared first on The Motley Fool Australia.

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More reading

• Which ASX All Ords shares could perform well in a recession?
• Here are the top 10 ASX 200 shares today
• Telstra share price lower amid ACCC update on TPG agreement
• Own ASX 200 telco shares? Here’s the latest following the Optus hack
• These ASX 200 giants are unlocking new lows on Friday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a very strong day and charged notably higher. The benchmark index jumped 1.7% to 6,779.2 points.

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

ASX 200 expected to fall

The Australian share market looks set to fall on Wednesday after a volatile but positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.8% lower this morning. That’s despite in late trade on Wall Street, the Dow Jones is now up 0.9%, the S&P 500 is up 0.8%, and the Nasdaq is up 0.5%.

Oil prices sink

Energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a tough day after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 3.1% to US$82.80 a barrel and the Brent crude oil price has fallen 1.8% to US$89.97 a barrel. Global recession fears are weighing on prices.

BHP Q1 update

The BHP Group Ltd (ASX: BHP) share price will be one to watch today when the mining giant releases its first quarter update. The market is expecting the Big Australian to report copper production of 429kt, iron ore shipments of 72.3Mt, met coal production of 7.6Mt, and nickel production of 21.1Mt. All eyes will be on its cost guidance as well.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a subdued day after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.5% to US$1,655.4 an ounce. Gold fell despite a spot of weakness in the US dollar and treasury yields.

Webjet shares a strong buy

The Webjet Limited (ASX: WEB) share price could be heading a lot higher from current levels. According to a note out of Goldman Sachs, its analysts have added the online travel agent’s shares to their coveted conviction list with a price target of $6.50. It said: “WEB is a structural beneficiary of the recovery from COVID with favorable exposure to the growing online channel and, more importantly, a strong positioning and improving scale in the niche Bedbanks segment.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why was the Fortescue share price on such a rollercoaster today?
• Here are the top 10 ASX 200 shares today
• Could investors in this ASX 200 share be in for more payment windfalls?
• What could a possible Tyro takeover mean for NAB shares?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 Webjet Ltd. 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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Are you looking for some dividend options for your income portfolio this week? If you are, then take a look at the two ASX 200 dividend shares listed below.

Here’s why they have been tipped to as buys by experts:

Bapcor Ltd (ASX: BAP)

The first ASX 200 dividend share for income investors to look at is Bapcor.

Through brands such as Autobarn, Burson Auto Parts and Midas, it is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions.

The team at Citi is positive on Bapcor and has a buy rating and $7.82 price target on the company’s shares. It believes that the company’s guidance for FY 2023 is conservative.

As for dividends, its analysts are forecasting fully franked dividends of 21 cents per share in FY 2023 and then 24 cents per share in FY 2024. Based on the current Bapcor share price of $6.35, this will mean yields of 3.3% and 3.7%, respectively.

Coles Group Ltd (ASX: COL)

Another ASX 200 dividend share for income investors to consider is this supermarket giant.

Thanks to its defensive qualities and strong market position, which includes 800+ supermarkets and 900+ liquor retail stores, it has been tipped to continue growing its sales, profits, and dividends in the coming years whatever the economy throws at it.

This will be supported by the construction of its smart distribution centres, which are aiming to make its operations more efficient and cut costs.

Morgans is bullish on Coles and has an add rating and $20.00 price target on its shares.

In respect to dividends, Morgans is forecasting fully franked dividends per share of 65 cents in FY 2022 and 66 cents in FY 2023. Based on the current Coles share price of $16.57, this will mean yields of 3.9% and 4%, respectively.

The post Experts say income investors should buy these ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• Better buy: Woolworths or Coles shares?
• Which ASX All Ords shares could perform well in a recession?
• Own Coles shares? Here’s what to expect from the supermarket giant’s Q1 update
• Brokers say these are the ASX 200 dividend shares to buy now
• Are Coles shares a buy ahead of the company’s November AGM?

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 COLESGROUP DEF SET. The Motley Fool Australia has recommended Bapcor. 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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