The CSR Limited (ASX: CSR) share price has fallen 22% in 2022. That compares to a drop of 11% for the S&P/ASX 200 Index (ASX: XJO). CSR is a relatively small ASX 200 share within the index though.

There is a lot more uncertainty in the local and global economy at the moment. Inflation is rising in Australia and worldwide for a number of reasons. One of those reasons includes higher energy prices amid the Russian invasion of Ukraine.

The current situation is having an impact on the company’s valuation. But, it’s this valuation that is now attracting some professional investors to the business as a potential opportunity.

Let’s have a look at what one analyst is thinking about the business.

A building opportunity with this ASX 200 share

The investment team at Wilson Asset Management recently held an investment webinar to outline their current thoughts on some holdings and sectors.

Sam Koch, a senior analyst at Wilson Asset Management, was answering a question about whether WAM was looking at any companies in the building and construction sectors. His response:

I guess the sector has been heavily beaten up. Everyone is worried about the macro uncertainty with the housing market falling off a cliff, and the like. We’re actually seeing a number of really interesting opportunities. We’re positive on CSR Group, and Maas Group Holdings Ltd (ASX: MGH), which we’ve talked to in the past, both of which actually have significant property holdings which underpin their valuations and have strong order books as well, which will drive stable earnings over the next few years.

We’ve always looked for an attractive entry point, and there’s no better one than when everyone’s worried about the housing market. So we’re seeing a number of really interesting opportunities given the macro uncertainty.

Outlook and buyback

At the end of June 2022, CSR announced an on-market share buyback of up to $100 million. This is in addition to the company’s existing dividend policy. Keep in mind that share buybacks can be supportive of the CSR share price.

CSR CEO and managing director Julie Coates explained that the building products side of the business continues to perform well, with improved operational and customer outcomes across diversified market positions. Its investment plans are to lift capacity, improve performance and drive growth.

Coates said that its “robust balance sheet and strong operational performance” allow it to invest in growth while also increasing returns to shareholders through the buyback.

CSR Chair John Gillam said:

CSR has a strong balance sheet, which supports continued investment in the growth and performance strategy for our building products business. We are also progressing major property development projects that will deliver short and long-term earnings, alongside the hedged aluminium position. This highlights CSR’s strength and prospects for the coming years.

A few months ago, the ASX 200 share outlined the strong pipeline of detached housing projects. CSR expects this to continue in the year ahead as completion times lengthen.

In FY23, the company expects its property division earnings before interest and tax (EBIT) to be around $52 million. In aluminium, it has a significant hedge position. It indicated an earnings range for FY23 between $33 million to $49 million based on the current pricing and cost scenarios. Significant aluminium price and cost volatility are expected to impact the final result.

CSR share price snapshot

Over the last month, ASX 200 share CSR’s price has dropped around 2%.

The post Why this boring ASX 200 share is actually really ‘interesting’ right now: expert appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Top ASX dividend shares to buy in September 2022

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 OZ Minerals Limited (ASX: OZL) share price is edging higher today.

In morning trade, the copper producer’s shares are up almost 1% to $26.25.

This compares favourably to the ASX 200 index, which is down over 1% in early trade.

What’s going on with the OZ Minerals share price today?

Investors have been bidding the OZ Minerals share price higher following the release of a major announcement.

According to the release, the OZ Minerals board has given its final investment approval to develop its fourth operating asset. This will be the West Musgrave copper-nickel project in Western Australia and will come with a direct capital investment of approximately $1.7 billion.

In order to fund the investment, OZ Minerals has entered into credit-approved commitment letters with key relationship banks to provide a new $1.2 billion, 18-month syndicated term loan facility.

Management believes that the syndicated debt facility allows the company to maximise stakeholder value by commencing development of the project while optimising the final funding mix, which may come from a range of sources.

It has suggested that these could include existing debt facilities, long-term infrastructure leases, and the potential to sell a minority interest in the project to a strategic partner. The latter follows significant in-bound expressions of interest from parties with a strategic interest in modern minerals over the last ~6 months.

It certainly appears to be worth the investment. Management expects average nickel production of 35,000 tonnes per annum and average copper production of 41,000 tonnes per annum during the first five years. This is expected to underpin average post tax net cash flow of $280 million to $340 million a year.

Management commentary

OZ Minerals Chief Executive Officer, Andrew Cole, said:

Investment approval for West Musgrave unlocks one of the largest undeveloped nickel projects in the world and, with expected lowest quartile costs, it is set to generate ~$9.8 billion7 undiscounted cashflow over its 24-year operating life.

Along with the support we have received from the Ngaanyatjarra people and Western Australian government, with all key regulatory approvals now in place, a number of our relationship banks have provided credit approved commitment letters for a new $1.2 billion syndicated facility to support development of the West Musgrave Project in addition to our existing facilities.

We are also considering the option to selldown a minority interest in the Project to a strategic partner building on the significant in-bound interest we have received over the past six months.

This sentiment was echoed by OZ Minerals chair, Rebecca McGrath. She said:

The Board’s approval of West Musgrave is a fundamental step towards realising OZ Minerals’ strategy to evolve into a modern minerals producer set to supply global copper and nickel markets as the world moves into the de-carbonisation and electrification era.

The post OZ Minerals share price higher following $1.7 billion thumbs up appeared first on The Motley Fool Australia.

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• Why harpooning Oz Minerals could be ‘beneficial’ for BHP shares: fundie

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 PointsBet Holdings Ltd (ASX: PBH) share price is tumbling lower on Friday.

This is despite the release of a positive announcement by the sports betting company.

At the time of writing, the PointsBet share price is down 4.5% to $1.95.

Why is the Pointsbet share price falling?

The PointsBet share price has come under pressure on Friday after weakness in the tech sector offset the release of a positive announcement.

Investors have been selling tech shares after two very poor nights in a row for the NASDAQ index following the latest rate hike by the US Federal Reserve.

The central bank also reiterated its intention to make further aggressive hikes in an attempt to tame inflation, leading investors to believe that a recession is imminent.

At the time of writing, the S&P ASX All Technology index is down 2.6%.

What about the announcement?

Failing to boost the PointsBet share price today was news that the company has received launch authorisation from the Louisiana Gaming Control Board and has taken its first bet in the state.

This marks the 4th state launch under the partnership with Penn National Gaming announced on 1 August 2019 and represents the company’s 12th online sportsbook operation in the United States.

PointsBet is now active in New Jersey, Iowa, Indiana, Illinois, Colorado, Michigan, West Virginia, Virginia, New York, Pennsylvania, and Kansas.

PointsBet US CEO, Johnny Aitken, was pleased with the news. He said:

The PointsBet team is excited to share that we are now officially live in the Pelican state and that Louisiana is our twelfth state of online operations. The sports community of Louisiana, one that our very own brand ambassador Drew Brees is very familiar with, is unmatched with their devotion and passion for their local teams, the New Orleans Saints of the NFL, New Orleans Pelicans of the NBA and nationally recognized college football programs.

We look forward to delivering Louisiana sports fans, from Bourbon Street to the Bayou, our fast, premium sports betting products. And, with the NFL and CFB season in full swing, the timing is perfect to showcase our live betting capabilities.

The post PointsBet share price sinks despite US expansion update appeared first on The Motley Fool Australia.

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• 8 ASX 200 shares got kicked out of the index on Monday. How are they tracking?
• The ASX 200 is getting a shakeup today. Here’s the tea
• Out in the cold: How are the ASX 200 evictees faring on Monday?
• Here are the 10 most shorted ASX shares
• Pointsbet share price closes lower after a tough day on the ASX

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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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.

Apple Inc. (NASDAQ: AAPL) is in a near duopoly with Samsung in one of the world’s most addictive products: smartphones. Combined, the two account for over half the global smartphone market. In the U.S., however, the iPhone commands about 50% of the market.

Warren Buffett, one of Apple’s largest shareholders and most prominent cheerleaders, believes Apple is the best business he knows in the world. Throughout the iPhone’s upgrade cycles, Apple has consistently improved its design and functionality to meet ever-changing consumer tastes. Perhaps most importantly, the iPhone’s camera gets better with every new version. iPhone users can quickly snap the highest-quality selfies and videos of their kid’s soccer games and post them to social media in a heartbeat.

Referring to lines of iPhone loyalists who wait outside Apple stores in advance of its new releases, Buffett’s right-hand man Charlie Munger quipped: “I’ve got zillions of friends who’d almost part with their right arm before they’d part with their iPhone. That’s a hugely powerful position to be in.”

But it’s more than just the iPhone that’s keeping people entrenched in the Apple ecosystem.

Why Apple’s iPhone is a “sticky” product

Buffett has referred to the iPhone as a “sticky” product, meaning customers repeatedly return to Apple’s smartphones. Aside from the iPhone’s design appeal, users like the brand because of its add-on services. iPhone users can purchase additional iCloud storage, download music from the Apple Music app, and conduct touchless payments with Apple Pay. And if iPhone users wanted to switch to a competitor, they might have to abandon precious data stored in their iCloud or reenter their cards on a new payment platform.

The tiny fees customers gladly shell out for these widely used services may seem like small potatoes for the behemoth company, which has a market cap approaching $2.5 trillion, but the financial impact may surprise you. Because these services are digital, there is minimal additional cost when an iPhone customers add a service. That means every new dollar in revenue Apple receives from its service is more profitable than the last.

Apple generated  $32.7 billion of revenue from its services in 2017, when it first disclosed the segment’s results. The gross margin on its service revenue that year was  55%. By 2021, service revenue had doubled to  $68.4 billion, and gross margin had leaped to nearly  70%.

Apple’s services business has plenty of room to keep growing. For example, only about 75% of iPhone customers have activated Apple Pay, and many haven’t begun to use it. Yet Apple Pay has already overtaken Mastercard Incorporated (NYSE: MA) in transaction volume over the last 12 months. As users continue to adopt Apple Pay and download new music, Apple’s services segment can become a larger part of the overall business, which has grown from about 20% of overall gross margin in 2017 to over 31% last year.

Where will Apple be in five years?

Apple has a huge advantage over many companies in that its increasingly profitable service segment is also its fastest growing. After you factor in that the segment also makes iPhone users more loyal to the company, you can see why Buffett loves the company.

AAPL Shares Outstanding data by YCharts

Another reason Buffett likes Apple is its share repurchases. The company has religiously retired shares over the last 10 years, which increases the percentage of the company existing shareholders own. Similarly, repurchasing shares en masse also increases its earnings per share, all else being equal.

When you combine Apple’s business advantages over other companies with its ability to retire shares at a prodigious clip, you have a stock that has a high probability of outperforming the market over the next five years. Investors are wise to follow Buffett’s lead, considering he bought more shares in the first and second quarters of this year as the stock retreated from its 2021 highs.

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

The post Where will Apple be in 5 years? appeared first on The Motley Fool Australia.

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BJ Cook 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 Apple and Mastercard. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Mastercard. 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 Webjet Limited (ASX: WEB) share price is attractive to Wilson Asset Management senior analyst Shaun Weick. The ASX travel share was one of the names picked out as opportunities.

Webjet has been through a lot of volatility since the onset of the COVID-19 pandemic. There has been pressure on the balance sheet as the business worked to reduce its cash burn to ensure it had enough money to get through to the other side of the lockdowns and closed borders.

But, we now seem to be through that tricky period and investors like Weick are becoming confident on the company’s outlook.

Expert view on the Webjet share price

Speaking on a recent WAM investment webinar, Weick said:

Overall, we are positive on the travel and entertainment sector. I guess, despite emerging consumer pressures, we think that the revenge spending continues. Consumers continue to allocate more of their spend towards services and travel over goods.

So the key stocks we like in the space are online OTA and B2B beds distributor Webjet. We believe they’ve made significant structural improvements in that business model that will underpin market share gains, and the operating leverage will deliver earnings well in excess of pre-COVID as we move through the other side.

What was in the latest ASX travel share update?

Webjet recently said that its online travel agency (OTA) business “continues to leverage our strong brand, scalability and superior technology to increase our market leadership as the number one OTA in Australia and New Zealand and we see opportunity to expand both our domestic and international market shares.”

In what could be a positive sign for the Webjet share price, the company revealed a few weeks ago that bookings were tracking at 95% and that all three of its businesses were profitable for FY23 so far.

The company noted that for WebBeds, bookings have been ahead of pre-pandemic levels since May, July was the record for total transaction value for WebBeds and August was higher than July. During the peak seasonal months of July and August, it hit its aspirational target of an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 62.5%. WebBeds is also targeting $10 billion of TTV and it wants to grow in North America.

When will it hit pre-COVID profit?

Before COVID, it achieved EBITDA of $157.8 million. It has done a lot of work so that it will be more efficient, more profitable and with a higher market share when travel returns. It’s now seeing that strategy unfold.

Profitability could be a key factor for the Webjet share price as the recovery happens.

Management expects the business to beat pre-pandemic earnings in FY24, well ahead of when the broader travel market is expected to return to 2019 levels. Specifically, in its OTA business, it expects to return to pre-pandemic earnings levels once international airline capacity returns to 2019 levels.

The Webjet managing director John Guscic said:

We are excited for the limitless opportunities that lie ahead.

WebBeds has so much opportunity ahead of it. All the things we’ve done to transform the business means we are confident growth will continue for the remainder of FY23, despite all current well documented macro headwinds.

Webjet share price snapshot

Over the last month, Webjet shares have gone up around 6%.

The post Why this expert is picking Webjet shares to ride the reopening to new heights appeared first on The Motley Fool Australia.

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• Morgans names 2 ASX growth shares to buy
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• Broker names 2 of the best ASX shares to buy now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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The commodity trade of 2022 is continuing to go strong with companies all along the chain, from mine to metal, still catching a strong bid.

Businesses involved with energy-based commodities have been standouts, with the prices for various raw materials underpinning their operations soaring to record highs this year. And the pace of upside isn’t slowing.

As well, there are new entrants into the arena, bringing with them an entirely new subsector– electric vehicles, and renewable energy.

But who can forget the old rams in the back paddock either, the likes of iron ore, crude oil and gold?

The new age of ASX 200 mining shares

It all sounds really exciting within the mining domain right now. Buzz words like green energy, electric mobility, ‘sanctions’ and the likes are filling the airwaves on a daily basis.

In fact, it can all get a bit overwhelming.

Investing in mining stocks used to be somewhat of a concrete formula, with selective opportunities from diversified mining giants producing the world’s iron ore, all the way down to speculative wildcat’s exploring for gold, for instance.

Like just about all sectors however, we’ve got to adapt with the times. And with that, I’ve covered several ways in which investors can gain exposure to ASX 200 mining shares, backed by the analytical rigour of some of our finest mining analysts here in Australia. Read on.

Where to choose, who to pick?

Gone are the days when individual stock picking was the aim of the day. We know far too much about the benefits of diversification to portfolios.

Plus, we also live in the information age, where content is freely available at the click of a button. Finally, as we’ve seen this year, commodities and mining stocks both like trend following, and move in cycles.

It is for these reasons that investors should think in terms of a particular trend or ‘theme’ that is driving share price returns.

This opens up the floodgates of opportunity for investors by allowing a more pragmatic, diversified approach to investing, versus concentrating positions into 1 or 2 speculative bets.

As we’ve seen to date, various investment themes arise in mining based on demand/supply and prices of commodities in the market. Lithium is case in point here.

Meanwhile, diversification is important not just from a risk management perspective. It provides investors multiple sources of return as well.

Consequently, portfolio managers at Jevons Global recommend to form a “core basket”, or selection of shares, when trying to allocate capital to the mining space.

This includes those investors buying mining stocks for their chunky dividends this year.

Diversified exposure to investment ‘themes’

Using the electric vehicle (EV) theme as an example, it’s clear there are multiple entry points for investors to consider.

We have EV stocks, battery technology companies, and also the miners extracting lithium in its raw forms for example.

On first glance, one might automatically turn to lithium shares to play the EV mining space, seeing as it tends to command most of our attention.

Let’s think a little more laterally, however.

Investors can gain equally as exciting exposure to the space via ASX 200 miners and producers of rare earths, Jevons Global says.

That’s because these metals are critical in the development of EVs.

This is smart and logical investing, positioning at an integral point along the electric vehicle supply chain – versus just the main ‘ingredient’ itself [lithium].

Keeping this in mind, there’s any number of ‘themes’ that Aussie savers can lean towards.

For instance, those bullish on steelmaking, or economic growth in emerging markets such as India and Brazil (where steel consumption has risen markedly in recent years) might also consider going long nickel and iron ore companies – the two mined ingredients to make steel.

And with further support from mining analysts at JP Morgan in its 2022 Energy paper, the central point remains – investing in a basket of companies, rather than picking a single name.

Moreover, this can be easily achieved through the use of thematic ETFs, that do the heavy lifting for us as investors. With ETFs, investors can hold a diversified portfolio of companies with just 1 single instrument.

The Betashares Global Energy Companies ETF – Currency Hedged (ASX: FUEL) and Global X Battery Tech & Lithium ETF (ASX: ACDC) are 2 examples that do just this.

Bringing it together

Whilst we can go on all day on various ways to identify and invest in ASX 200 mining shares, the main points raised here are key.

Identifying investment themes (versus individual companies), selecting a basket of shares (versus just 1 or 2 stocks for diversification), and understanding the benefits of investment vehicles like ETFs are paramount.

All-in-all, the same rules and mantras regarding risk and money management still apply.

The post How do investors decide which ASX 200 mining shares to buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Energy Companies ETF – Currency Hedged. 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 A2 Milk Company Ltd (ASX: A2M) share price looked good value enough for a fund manager to jump on after the company’s FY22 result.

A2 Milk is a large infant formula and liquid milk business. It also has a sizeable presence in international markets like China and the United States.

It has gone through a difficult period during the COVID pandemic as daigou buyers stopped purchasing in the same volumes as pre-COVID times. The business also saw its profit margins drop, including the earnings before interest, tax, depreciation and amortisation (EBITDA) margin.

Vote of confidence

Wilson Asset Management likes to find undervalued growth companies where there’s a catalyst that could help drive the valuation higher.

Talking on a recent investment webinar, senior equity analyst Shaun Weick said this about A2 Milk shares:

A2 Milk is always a very topical one. Yeah, we actually have bought some shares coming out of the FY22 result. Yeah, we thought it was a very, I guess, clean set of numbers in the context of them taking their medicine around inventory, which they needed to do.

So going forward, they’ve guided to high single-digit revenue growth and a bit of operating leverage, we think that looks very achievable. And the balance sheet is very strong. They’ve got a billion dollars in net cash on the balance sheet. They’ve initiated a $150 million buyback, which starts in a couple of weeks. So that’s sort of the next catalyst we’re looking for there. And, short interest still remains reasonably elevated on this one at 4%.

So there’s still scope for incremental buying to move in. So yeah, we’re actually positive on that one from here.

What has A2 Milk guided?

The guidance can have a positive effect on the A2 Milk share price if it’s signalling growth.

In the FY22 result, A2 Milk outlined its outlook.

Management said that Chinese label infant formula sales are expected to be up in FY23 with “significant growth” in sales in the first half of FY23 year over year. English label infant formula sales are also expected to be up in FY23.

Australian liquid milk sales are expected to remain “broadly in line with FY22”, with reduced in-home consumption as lockdowns finish.

US liquid sales are expected to be up in FY23, driven by continued growth in core liquid milk. A “significant improvement” in EBITDA losses is expected as well.

Overall, the business is expecting “high single digit” revenue growth in FY23, with a lot of the growth coming in the first half. The FY23 gross profit margin is expected to be “broadly in line” with FY22. Cost of goods increases relating to increasing milk, ingredient and packaging costs will be offset by price increases, mix benefits, and cost mitigation initiatives.

A2 Milk share price snapshot

Over the past month, A2 Milk shares have risen by 16%.

The post Why this expert acquired a thirst for A2 Milk shares following the company’s latest results appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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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Fund manager Wilson Asset Management (WAM) has identified two top small-cap ASX shares in one of the portfolios it manages that could be investment ideas.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which focuses on small-cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets “the most exciting undervalued growth opportunities in the Australian microcap market”.

These are the two small-cap ASX shares the fund manager outlines in its recent monthly update.

Austin Engineering Ltd (ASX: ANG)

WAM described Austin Engineering as a business that partners with mining companies, contractors and equipment manufacturers to create engineering solutions such as truck bodies, trays and buckets. The company’s headquarters are in Perth.

Last month, the business announced it was buying Australian mining equipment manufacturer Mainetec for $19.6 million.

The fund manager believes that the acquisition will allow Austin Engineering to grow its excavator mining offering for international markets such as the United States at a reduced cost.

August also saw the business release its result during reporting season. FY22 net profit after tax (NPAT) beat the previous guidance provided. Total revenue increased to $203.3 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) was in line with the upgraded forecast of $32.5 million.

Concluding the optimistic case for the small-cap ASX share, WAM said:

With an enlarged order book, strong cash position and increasingly efficient operating base, we believe Austin Engineering is well-positioned to continue to deliver on what has been achieved during FY22.

MMA Offshore Ltd (ASX: MRM)

The other pick is a specialist in providing high-specification marine vessels. It also offers a suite of marine and subsea services to the offshore energy sector, government defence, and wider maritime industries.

In August, the company announced its FY22 result which showed a 19.5% rise in revenue to $283.8 million.

It also improved its balance sheet by reducing its net debt during the year.

The fund manager explained its positivity about this small-cap ASX share:

We remain positive on MMA Offshore as the company continues to trade at a discount to its net tangible asset value despite continuing to see positive market momentum returning to the oil, gas and renewables. Further, we believe the company is well-positioned to take advantage of the exponential growth in offshore wind power developments.

The post 2 small cap ASX shares that are ‘exciting’: fund manager appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in WAM MICRO FPO. 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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Searching for dividend shares to buy? Listed below are two that the team at Morgans has slapped buy ratings on.

Here’s what the broker is saying about them:

Dexus Industria REIT (ASX: DXI)

Morgans thinks Dexus Industria could be a dividend share to buy. This is due to its attractive valuation and exposure to industrial and logistics assets.

The broker currently has an add rating and $3.25 price target on its shares. It commented:

DXI’s portfolio is valued at $1.76bn and is weighted 79% towards industrial and logistics assets. The weighted average cap rate is 5.1%; WALE 5.9 years; and occupancy 97%. DXI is trading at a discount to NTA, offers an attractive yield with solid underlying portfolio metrics and has near/medium-term growth opportunities via the development pipeline.

Morgans is forecasting dividends per share of 16.4 cents in FY 2023 and 16.9 cents in FY 2024. Based on the latest Dexus Industria share price of $2.60, this will mean yields of 6.3% and 6.5%, respectively.

QBE Insurance Group Ltd (ASX: QBE)

Another dividend share to buy according to the broker is QBE. It feels the tide is turning for the insurance giant and the next few years could be very positive for the company and its shareholders.

Morgans has an add rating and $14.93 price target on its shares. The broker said:

With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~9.1x FY23F PE

Its analysts are expecting dividends per share of 41.8 cents in FY 2022 and then 77 cents in FY 2023. Based on the latest QBE share price of $11.92, this will mean yields of 3.5% and 6.5%, respectively.

The post Top broker names 2 ASX dividend shares to buy 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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As stock markets around the world digest the consequences of the US Federal Reserve and Bank of England meetings this week, many ASX shares remain heavily discounted.

Shaw and Partners portfolio manager James Gerrish told his Market Matters newsletter that the Australian market will rise heading into Christmas.

“We’re not expecting any major surprises from the Fed and/or BOE but we do believe another relief rally will then become a strong possibility.”

As such, buying up cheap stocks now could prove fruitful in the coming period.

Here are two ASX shares that tempt Gerrish’s team right now:

‘Value has been restored’

The Market Matters team is looking to add construction materials provider James Hardie Industries plc (ASX: JHX) to its flagship growth portfolio.

The share price has lost almost 43% since the start of the year.

“James Hardie is highly leveraged to the US housing market, which, like our own, is understandably out of favour as interest rates surge higher,” said Gerrish.

“But there’s already plenty of bad news factored into this stock and sector.”

James Hardie shares went into the Queen’s memorial holiday at $32.54 each. 

The update delivered during last month’s reporting season showed “nothing too untoward”, according to Gerrish, and that 80% of the analyst community currently rates the stock as a buy.

“We believe deep value is slowly approaching into current weakness,” he said.

“While another dip under $30 cannot be discounted in today’s hawkish environment, we believe value has been restored and the stock’s in a definite accumulation zone.”

Earnings that rise with inflation + reliable dividend

In the income portfolio, Gerrish’s team favours infrastructure owner APA Group (ASX: APA).

“The owner & operator of gas transmission and distribution assets in Australia offers two key things we like in this uncertain environment,” said Gerrish.

“Predictable earnings that rise with inflation (90% of earnings linked to CPI) and a dependable dividend that is now back up above 5% given the share price weakness.”

Indeed, the APA share price has plunged 15.9% since 8 August.

The Market Matters team has held the stock in the past, and will buy back in when the price sinks to the $10 mark.

APA shares hit the Thursday public holiday sitting at $10.24 apiece.

Gerrish evaluates APA shares compared to bond yields.

“APA generally trades at a 2.8% premium to the 10-year bond yield,” he said.

“While it is currently only 1.63% above 10-year yields, below $10 and applying a more typical payout, we’re getting closer to this number.”

The post ‘Deep value’: 2 ASX shares this expert will pounce on this dip appeared first on The Motley Fool Australia.

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More reading

• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• These are the top ASX 100 buy ideas from Macquarie
• How I’d invest $50,000 in ASX dividend shares for retirement, if I had to start from scratch
• Why is the James Hardie share price having such a stellar end to the week?
• Here are the top 10 ASX 200 shares today

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 APA 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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