The S&P/ASX 200 Index (ASX: XJO) is once again flying this Tuesday, in what is turning out to be a very pleasing week thus far for investors. At the time of writing, the ASX 200 has put on another 0.65% today, taking the index back over 7,000 points for the first time this month.

So let’s dive deeper into these pleasing market moves and check out the shares currently topping the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Incitec Pivot Ltd (ASX: IPL)

ASX 200 chemical, fertiliser and explosives manufacturer Incitec Pivot is our first share to take a look at this Tuesday. So far today, a notable 20.52 million Incitec shares have pivoted to a new owner. There’s been no news out of the company itself that could explain this volume.

However, the Incite Pivot share price has taken a heavy beating today. It’s currently down 1.8% at $3.76 a share. That comes despite some recent love from ASX brokers too. It seems this dip is responsible for the high volumes we are witnessing.

Core Lithium Ltd (ASX: CXO)

Core Lithium is our next share worth a look at today. This ASX 200 lithium share has seen a chunky 22 million shares traded on the markets so far. Again, it looks like the share price movement is the culprit for these elevated volumes, seeing as there isn’t any news out of Core Lithium either.

Continuing its recent run of gains, Core Lithium shares are up another pleasing 5.16% today at $1.67 a share. The company is up almost 20% over this month so far.

South32 Ltd (ASX: S32)

Our final and most traded share of the day is the ASX 200 diversified mining company South32. This Tuesday has seen a significant 32.26 South32 shares change hands as it currently stands. South32’s healthy share price gains could explain this volume.

The company has put on a decent 1.53% so far today to $4.32 a share. South32 has also been doing regular on-market share buybacks lately, which could also be influencing this share’s trading volume.

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

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More reading

• Are Yamaha and Toyota about to upend the ASX lithium share party?
• ASX lithium stocks are ‘the buy now, pay later of 2022’: expert
• The Core Lithium share price has soared 150% in 2022, but is the company actually producing?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• 2 ASX 200 shares named as buys by a top broker

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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Pinnacle Investment Management Group Ltd (ASX: PNI) recently held its annual Investment Summit for 2022.

At the event, a number of CIOs and portfolio managers from within Pinnacle’s network of affiliated asset managers provided insights. This includes portfolio managers from specialist small cap fund managers Spheria Asset Management and Longwave Capital.

Two small cap ASX shares that these portfolio managers rate highly right now are listed below. Here’s what they are saying about them:

Imdex Limited (ASX: IMD)

David Wanis from Longwave Capital Partners picked out mining technology company Imdex at the event. Its technology allows drilling contractors and resource companies to safely find, mine, and define orebodies with precision and at speed.

The portfolio manager highlights that Imdex is a technology business generating earnings and cash flow as well as spending big on research and development activities. Yet despite this, the company is valued materially less than some tech companies that are built largely on hope. Brainchip Holdings Ltd (ASX: BRN) with its $1.7 billion market capitalisation springs to my mind here.

Wanis commented:

Imdex is a mining technology business. It’s a real business – real revenues, real earnings, real cash flow – but it’s also a business that’s invested almost $100 million in R&D over the past five years in new products to grow their business into new markets. And if we think about how the market values a company like Imdex versus some of these ‘tech hope stocks’ in the market today, there’s a massive disconnect. There’s a big disconnect between the doers – the companies who are actually innovating and executing – versus those that are promising and are built off hype.

We think what we’ll see in the very short term is an improvement in their mining technology as a percentage of their revenue that will lead to an expansion in their EBITDA margins. But strategically longer term it’ll also potentially expand their market size by four times – doubling from existing into new exploration, and then from exploration into production.”

NZME Ltd (ASX: NZM)

Spheria’s Asset Management portfolio manager, Matthew Booker, picked out NZME (New Zealand Media and Entertainment) at the event. He highlights that NZME is going from old world to new with the growth in the digital side of their business.

Booker points out that the New Zealand market is behind Australia by a few years in respect to real estate listings. This bodes well for NZME’s OneRoof platform.

He explained:

The big kicker, we believe, is the digital aspect to the business – so they’ve got a business called OneRoof and it’s similar to Domain here. It’s the number two player in the market. It’s going from print, it’s going to digital, it’s probably 5 – 10 years behind the Aussie market. So, there is going to be a lot of money made in that space.

With OneRoof NZME have the number two platform, they’ve got the number two audience, they’ve got the number two inventory, they are going to be that number two player in that market and that’s a valuable position going forward. “NZME is a structural growth story. We think there’s lots of money to be made here. The balance sheet is gone from $100 million of debt to net cash. The risk is very low, there’s a rerate opportunity with this business.

The post Portfolio managers name 2 small cap ASX shares to watch appeared first on The Motley Fool Australia.

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More reading

• Why these 2 ASX shares rocketed 40% last month
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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 positions in and has recommended Imdex Limited. The Motley Fool Australia has positions in and has recommended Imdex 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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The ASX share market has been through a lot of volatility in 2022. Inflation and higher interest rates may have been the cause of the pain.

But, while some ASX shares have bounced back – like Pilbara Minerals Ltd (ASX: PLS) – others are still languishing at much lower prices.

It’s perhaps unsurprising that the ASX retail share segment of the market is still hurting. While for some businesses it’s only the valuation that has been hit, there are some companies that could face more difficult trading circumstances.

But, sometimes the market can become too pessimistic and this can open up opportunities. So, let’s look at two of those that have been hit heavily.

Best & Less Group Holdings Ltd (ASX: BST)

Best & Less describes itself as a leading value apparel specialty retailer with 244 stores and a fast-growing online platform. Its aim is to be the number one choice for mums and families buying baby and kids’ value apparel in Australia and New Zealand through Best & Less in Australia and Postie in New Zealand.

The Best & Less share price has dropped by around 40% since the beginning of the year.

FY22 did see some difficulties as lockdowns caused many of its stores to close. Even so, revenue only fell by 6.2% and the net profit after tax (NPAT) declined 12.6%. Compared to FY20, NPAT was 155% higher.

In FY22, the company’s online sales increased by another 15.6%, making up 11.3% of total sales.

The ASX share is experiencing cost inflation, though it has increased prices and it’s taking other measures to keep costs down.

It paid out around 80% of its net profit as a dividend, at 23 cents per share. At the current Best & Less share price that represents a grossed-up dividend yield of 13.6%.

In the first eight weeks of FY23, total sales were up 38% as it cycles against locked-down periods. Management thinks that more customers could be attracted to its value offer. It’s also planning to grow its store footprint, with 11 new stores planned (and three stores to be upsized).

I think the Best & Less share price is a longer-term buy at the current depressed level, with a large dividend that could offer strong returns during this uncertain period. It’s only priced at 8x FY22’s earnings.

Dusk Group Ltd (ASX: DSK)

Dusk is a retailer of home fragrance products that are sold exclusively in its stores and website. It sells things like candles, ultrasonic diffusers, reed diffusers and essential oils and fragrance-related homewares.

The Dusk share price has dropped 37.5% since the start of 2022. Ouch.

The retail ASX share reported a bigger hit to its profit. FY22 sales were down 6.9% to $138.4 million and pro forma earnings before interest and tax (EBIT) dropped 31.1% to $26.5 million. During the year it opened 10 new stores.

It also paid a full-year dividend of 20 cents per share. At the current Dusk share price that translates into a grossed-up dividend yield of 14.3%.

In terms of a trading update, the company said that in the first eight weeks of FY23, its total sales were up 33.2%, with trading “notably stronger” in August compared to July. The gross margin is trending “in line” and the inventory is currently “well balanced” to meet demand.

Dusk has a market capitalisation of $124 million according to the ASX. But, the ASX share has net cash of $21.3 million at the end of FY22, with no debt.

It’s planning to open five new stores in Australia before Christmas, with a three-store trial entry into New Zealand.

The ASX retail share is priced at under 7x FY22’s earnings.

I’m not sure how candle sales will go over the next year or two, but it now seems cheap enough that the balance sheet, share price and dividend make up for uncertainty.

The post Is it time to buy these 2 beaten-up ASX shares in September? appeared first on The Motley Fool Australia.

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More reading

• Why Dexus, Dusk, Macquarie, and Qantas shares are pushing higher
• Dusk share price soars 9% on resilient full-year results
• Why is the Best & Less share price crashing 15% on Wednesday?
• ASX dividend windfall continues but it’s not just Woodside and ASX 200 energy stocks splashing the big cash
• Best & Less share price surges 7% on sharp FY22 results

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 Dusk 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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The Qantas Airways Limited (ASX: QAN) share price is remaining steady following the latest ploy by its competitor, Virgin Australia.

At the time of writing, the airline operator’s shares are slightly down by 0.19% or 1 cent to $5.27 apiece.

Let’s take a closer look at what its biggest rival is up to.

Virgin announces partnership with Myer to compete with Qantas

Investors are shrugging off the latest news circling media outlets with the Qantas share price relatively flat for today.

As reported by The Age, Virgin Australia has teamed up with Australia’s largest department store operator, Myer Holdings Ltd (ASX: MYR).

Under the partnership, members of Virgin’s frequent flyer program will be able to spend their points to shop at Myer.

This comes as Virgin has been busy behind the scene in an effort to boost its partnership credentials.

In the past 18 months, the company has expanded its program benefits with Qatar Airways, 7-Eleven and Medibank.

For example, Virgin Velocity members can earn points and status credits and redeem points to over 150 destinations with Qatar Airways.

The Gulf-based carrier was recently named the world’s best airline for the second year in a row by Australian-based aviation safety and product rating agency, AirlineRatings.com.

Virgin announced the move with Myer as a “playful campaign” to give consumers more options for those wanting a change.

Commenting on the latest ploy, Virgin Velocity boss Nick Rohrlach said:

We’ve been in growth mode since coming out of COVID-19 as more people seek out rewards programs.

The Switch-A-Roo was developed in response to a number of people saying they’ve historically flown with other airlines, want to change but don’t want to lose their status.

Currently, there’s around 10.9 million Velocity members compared to Qantas’ 12 million frequent flyers.

Qantas share price snapshot

Since the start of 2022, Qantas shares have travelled on a rollercoaster to post a gain of 5%.

However, when looking at a larger time frame such as the last 12 months, its shares are relatively flat.

Based on today’s price, Qantas commands a market capitalisation of roughly $9.96 billion.

The post Qantas share price holds firm despite Virgin ‘Switch-A-Roo’ play appeared first on The Motley Fool Australia.

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More reading

• What’s boosting the Qantas share price on Monday?
• Qantas share price ends week in the red despite green update
• Qantas share price edges lower amid Alan Joyce’s $2.3 million FY22 pay packet
• Could you be holding onto ‘zombie’ ASX shares hoping for new life?
• ‘Reckless?’ Why the $400 million Qantas share buyback is dividing experts

Motley Fool contributor Aaron Teboneras 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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Flight Centre Travel Group Ltd (ASX: FLT) shares have been the most shorted on the ASX every week of this year so far.

After starting the year out at around 12.6%, short interest in its stock reached a high of 18% in April. It has since settled to come in at 14.6%, as of the latest data available earlier this week.

While that’s a definite improvement on its intra-year high, it still means a significant number of the company’s shares are being used to bet against it.

So, what might be behind Flight Centre’s notable short position? Let’s take a look.

Why are short sellers piling on Flight Centre shares?

Flight Centre shares have topped The Motley Fool Australia’s weekly short-selling breakdown every week of 2022 so far.

That means short sellers are borrowing stock in the company before selling it on the market for cash. When those stocks are due to be returned to their owner, the short seller will snap them back up on the market and return them.

Thus, any drop in the Flight Centre share price is a win for short sellers who pocket the fall as profit. Of course, it can go the other way as well. Short sellers take a financial hit from any gains posted by a stock they’ve shorted.

But short sellers targeting the Flight Centre share price have likely had a fair run so far this year.

The company’s share price has fallen nearly 9% in 2022 to date. Though, that’s only slightly worse than the broader market’s performance. The S&P/ASX 200 Index (ASX: XJO) has slumped close to 8% year to date.

So, what might be driving short sellers to target the Flight Centre share price?

Well, they assumably expect the company’s post-COVID recovery to be bumpy. If that’s the case, they’re not alone.

Indeed, as my Fool colleague reported in late August, no major brokers have buy ratings on Flight Centre shares. Though, some are tipping notable upside for its share price.

Flight Centre’s leisure and corporate businesses returned to profit in the final half of financial year 2022, buoyed by a strong final quarter. However, the company hasn’t provided guidance for financial year 2023.

Meanwhile, Morgans expects cyclical factors to weigh on the company’s bottom line while Goldman Sachs was disappointed by its United States performance, as The Motley Fool Australia reported.

The post Why have Flight Centre shares been the most shorted on the ASX every week so far in 2022? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Is now a good time to buy Flight Centre shares?
• Broker gives its verdict on the Flight Centre share price
• These are the 10 most shorted ASX shares
• Why did the Flight Centre share price beat the ASX 200 in August?

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 recommended Flight Centre Travel 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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Multiple ASX 200 consumer shares are in the green today amid new retail and business sentiment data.

The Harvey Norman Holdings Limited (ASX: HVN) share price is lifting 1.81%, while Breville Group Ltd (ASX: BRG) is rising 0.66%. Meanwhile, Lovisa Holdings Ltd (ASX: LOV) shares are jumping 0.86% and Super Retail Group Ltd (ASX: SUL) is rising 1.39%. The JB Hi-Fi Limited (ASX: JBH) share price is 0.07% in the red today. The S&P/ASX 200 Consumer Discretionary Index is rising 0.7%.

Let’s take a look at what could be impacting these ASX 200 consumer shares.

What’s happening?

The latest ANZ-Roy Morgan Consumer Confidence data shows that confidence fell 0.5% to 85.7 in the past week. Confidence in Victoria and South Australia improved, while it fell in NSW, Queensland and Western Australia.

However, ANZ Economics head David Plank noted the drop was “a relatively small decline” given the RBA raised interest rates by 50 basis points. He added:

This is the smallest decline after a 50bp increase this year. The previous three 50bp increases in June, July and August saw an average decline in confidence of about 5%.

It is possible that Lowe’s suggestion that the size of future rate increases might be smaller helped support confidence somewhat. 

Meanwhile, NAB has also released its monthly business survey for August today. Business confidence lifted 3 points while business conditions lifted 1 point. NAB noted with demand strong, companies are continuing to pass on costs to consumers.

NAB group chief economist Alan Oster said the “recent strength in business conditions” carried into August. He added:

Official data for retail sales in July confirmed spending remained robust, as suggested by the previous survey, and today’s release shows little sign that August was much different.

Conditions are strong across most industries other than construction, where profitability remains a challenge.

Finally, the Westpac Melbourne Institute Index of Consumer Sentiment lifted by 3.9% in September to 84.4. This was the first rise in the index since November last year.

However, Westpac chief economist Bill Evans noted consumer sentiment “remains near historic lows”. He said:

The improvement is a little surprising, especially given continued sharp rises in the cost of living and the RBA’s decision during the survey week to make another 50bp increase in the official cash rate.

Consumers may be a little less fearful, but confidence remains very weak. Index reads in the 80-85 range mean pessimists still greatly outnumber optimists.

The post What’s driving ASX 200 consumer shares on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• 5 ASX All Ords shares going ex-dividend on Wednesday
• 62% upside: Expert names 2 ASX shares looking beautiful right now
• Analysts say these ASX dividend shares are buys
• Leading brokers name 3 ASX shares to buy today
• 3 ASX All Ordinaries shares hitting all-time highs on Monday

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 positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has recommended JB Hi-Fi Limited and Lovisa 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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The Star Entertainment Group Ltd (ASX: SGR) share price is trading higher this afternoon despite a regulator finding the company is unfit to hold a casino licence in New South Wales.

The company’s shares came out of a trading halt just after 2pm, with the share price immediately leaping 4.14% to $2.77 at the time of writing.

Earlier today, the NSW Independent Casino Commission (NICC) released a report finding the casino operator repeatedly breached the law, misled banks, and was infiltrated by criminal activity over many years.

The NICC appointed Adam Bell SC to conduct a review into Star’s NSW casino operations in September last year.

As a result of the findings, the report said:

The NICC has issued The Star with a show cause notice and is considering its options for disciplinary action in response to Bell’s findings and recommendations

Star Entertainment issued a statement this afternoon, saying it intends to respond to the notice within 14 days. It says it is currently considering the report and the matters raised in the notice.

The NICC investigation followed allegations of criminal activity including money laundering and organised crime, as reported by Nine Entertainment Group publications.

NICC chief commissioner Philip Crawford commented on the report’s findings (as quoted by WA Today):

The report is, quite frankly, shocking. It provides evidence of an extensive compliance breakdown in key areas of The Star’s business. Not only were huge amounts of money disguised by the casino as hotel expenses, but vast sums of cash evaded anti-money laundering protocols in numerous situations, most alarmingly through Salon 95 – the secret room with a second cash cage.

Star shares were halted yesterday at $2.66 apiece amid rumours today’s report would be scathing of the company.

Meantime, a separate independent review is underway into Star’s Queensland casino operations.

Star Entertainment share price snapshot

Shares in Star Entertainment are down 28% year to date and 38% over the past 12 months.

The company’s current market capitalisation is $2.53 billion.

The post Star Entertainment share price jumps despite ‘shocking’ report appeared first on The Motley Fool Australia.

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More reading

• Star Entertainment share price halted amid licence probe
• ASX falls, eyes on the Fed and huge petrol profits. Scott Phillips on Nine’s Late News
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Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Shares of mining giant BHP Group Ltd (ASX: BHP) are rangebound today on no news.

At the time of writing, shares in the diversified miner are trading up 0.05% at $39.43 apiece after a choppy period these past few months.

Meanwhile, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is up 0.82% at the time of writing.

BHP shares set to get a boost?

There’s been a spate of merger and acquisition (M&A) activity within the mining sector over the past 2 years, resulting in a large consolidation of some enormous players.

BHP’s play for OZ Minerals Limited (ASX: OZL) is one prime example. The move has helped investors in the Perennial Value Australian Shares Trust already clip a tidy gain in the new financial year. It is up 6.2% since June 30.

In the fund’s August report, portfolio managers Stephen Bruce, Damian Cottier, and Andrew King noted the performance saw strong attributions from healthcare and “resource holdings”.

Chief to this upside was OZ Minerals, having rallied after securing the takeover bid from BHP.

It had been long speculated that BHP would make a move on OZ Minerals, with copper being a key area of growth for BHP as it reorients its portfolio towards so called “future facing” commodities, which are required for the energy transition.

Further, there will be operational benefits from combining OZ Minerals’ copper assets in South Australia with BHP’s Olympic Dam operations, consolidating BHP’s position in the region. 

Following the positive contribution from OZ Minerals, the Trust returned 1.3% net of fees in August, but it was other resource and energy players helping clip the positive return.

Energy stocks Santos and Woodside Energy both outperformed, after delivering strong results on the back of high energy prices. Woodside, in particular, was able to benefit from strong pricing…This saw average realised prices more than double from the previous period, resulting in massive cash flows.

The fund’s portfolio managers are also constructive on further M&A within the industry, and believe this could be a key growth driver for BHP looking ahead.

With Woodside, for instance, it says the company “stands to benefit from its merger with BHP’s energy assets over the medium-term”.

“We expect further M&A in the resources sector as people scramble to secure supply of critical minerals, with particular focus on those located in stable, well-regulated and geopolitically friendly regions,” the portfolio managers added.

In the meantime, BHP shares have climbed nearly 7% during the past 12 months.

The post Why harpooning Oz Minerals could be ‘beneficial’ for BHP shares: fundie appeared first on The Motley Fool Australia.

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More reading

• Why is the BHP share price booming on Monday?
• Why A2 Milk, BHP, Lovisa, and Nickel Industries shares are charging higher
• How big will the BHP dividend be in 2023?
• Are ASX copper shares worth buying right now?
• 5 things to watch on the ASX 200 on Monday

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 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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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.

After Tesla‘s (NASDAQ: TSLA) recent three-for-one stock split, you might be wondering if now is the ideal time to buy Elon Musk’s dynamic electric vehicle (EV) company.

The split has not been beneficial for the stock; its price has declined nearly 10% since it took effect.

But that decline likely has more to do with the larger market selloff since concerns around prolonged inflation continue to punish equities.

Long-term investors understand that declining stock prices create potential buying opportunities. So with the tech-heavy Nasdaq Composite also down more than 10% over the last few weeks, what is the better opportunity right now: Tesla or a Nasdaq index fund?

If you’re an investor with a strong stomach for volatility, I believe Tesla offers greater potential due to its many similarities with other once-in-a-generation stocks.

Unmatched efficiency

Many of the greatest companies today have one thing in common: They flip traditional business models on their heads.

Tesla has done this in many ways, but none are more apparent than its manufacturing efficiency. This has largely been accomplished by Musk’s first-principles approach to building his cars.

Atomic Habits author James Clear defines first principles thinking as “… the act of boiling a process down to the fundamental parts that you know are true and building up from there.”  

The average automobile consists of about 30,000 parts. By contrast, the Tesla Model 3 is made up of around 10,000 parts, and the drivetrain has only 17 to 18 individual pieces compared to a standard internal combustion engine, which has around 200 parts.

Tesla has been able to achieve this manufacturing efficiency through its Giga Press, a large-scale die-casting machine. Instead of casting thousands of individual parts and welding or gluing them together, the Giga Press can produce large portions of the car in a single cast.

For example, the entire rear section of the Model Y is cast in a single mold, which would traditionally consist of over 70 individually produced parts. This innovation alone eliminates approximately 300 robots and reduces the body shop’s space by 30%.

This manufacturing efficiency can be seen in the company’s operating margins, which significantly beat the competition.

TSLA operating margin (TTM). Data by YCharts. TTM = trailing 12 months.

Tesla is a data company

The biggest oversight many investors make when analyzing Tesla is thinking of it as simply a car manufacturer. You’ve likely seen the various articles pointing out that Tesla’s market capitalization equates to roughly all of the other major automobile manufacturers combined.

While Tesla’s leadership in the EV space certainly contributes to its lofty valuation, I believe the main justification has more to do with its data-centric business model.

Tesla vehicles are essentially computers on wheels, and just like all of the best companies today, the company is leveraging the data captured by its computers to maximize its value proposition.

This is clearly seen in its push toward autonomous driving. While Musk has been infamously overly optimistic about the release of the company’s Full Self Drive (FSD) feature, Tesla has been beta-testing it for nearly two years and recently surpassed over 100,000 vehicles on the road actively testing the software.

For reference, Alphabet‘s (NASDAQ: GOOG)‘s Waymo, a major competitor in the autonomous driving space, has an estimated 600 autonomous vehicles being tested on the road today.

FSD is built on a foundation of machine learning, so each mile driven by owners is in theory enhancing its capabilities. Tesla’s lead in testing autonomous vehicles is just one example of how it’s using its proprietary data as an advantage over its competitors.

Other examples of the company’s use of data capture can be seen in its metric-based insurance product as well as its over-the-air software updates.

While the valuation is lofty, the profits are flowing

Tesla’s valuation is without a doubt the biggest concern for buying the stock. With a price-to-earnings (P/E) ratio of over 100, there’s not much of a claim that the stock is cheap.

But while that valuation is high, consider how drastically the P/E has been reduced over the last few years:

TSLA PE ratio. Data by YCharts.

This is in part due to the pullback in the overall market, but it’s also a result of Tesla’s dramatically increasing profitability.

Tesla’s Consolidated Net Income (Loss)
2017	2018	2019	2020	2021	YTD
($2.2 billion)	($1.1 billion)	($775 million)	$862 million	$5.6 billion	$5.4 billion

Data source: Tesla. Table by author.

Tesla isn’t a value play, but a bet on optionality. Even at today’s lofty prices, I believe there is tremendous upside if the company delivers on its wide array of disruptive products (autonomous driving, robo-taxis, robotics, solar energy, and more).

Very few of the highest-valued companies today ever traded at traditionally cheap valuations. There is certainly risk baked into this investment, but the range of potential outcomes for Tesla is astronomical, and it reminds me a lot of another high-flying technology company that was critiqued for years as being massively overvalued.

It’s Amazon, whose founder, like Elon Musk, also sends rockets into space.

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

The post Better buy: Tesla stock or a Nasdaq index fund? appeared first on The Motley Fool Australia.

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More reading

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• Where does Tesla get its lithium and do any ASX shares benefit?
• Why Tesla shares dropped today
• Why Tesla stock dropped Monday morning
• Why Tesla shares rose today ahead of the stock split

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Mark Blank has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Tesla. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. 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 Treasury Wine Estates Ltd (ASX: TWE) share price has been on the up-and-up this year.

It has gained 9.04% year to date to trade at $13.63 at the time of writing.

Could the wine maker and marketer continue on its upwards trajectory? These experts see more blue skies ahead for the previously embattled S&P/ASX 200 Index (ASX: XJO) favourite.

Is the future bright for the Treasury Wine share price?

Treasury Wine shares are among the top five overweight holdings in Perennial Partners’ Perennial Value Australian Shares Trust.

The company ­– behind such beloved brands as Penfolds, Wolf Blass, and 19 Crimes – has bounced back from disastrous tariffs imposed by China in 2020 that effectively locked it out of the Chinese market.

Fortunately for long-term shareholders, the company’s journey to recover lost earnings from the region has been successful. Its latest results noted that growth in global markets and channels improved so much as to mostly offset the earnings before interest and tax dint effectively imposed by the tariffs.

Additionally, the company has continued the premiumisation of its portfolio. Indeed, 83% of its global net sales revenue came from its premium and luxury portfolios in financial year 2022.

Perennial Partners’ fund upped its holding in Treasury Wine shares last month amid the release of the company’s earnings.

But it’s the company’s future margins and built-in inflation protection that it really likes. The fund’s latest monthly report notes:

Given the long inventory cycle, wine margins are somewhat protected in inflationary environments.

Looking further ahead to [financial year 2024], earnings are expected to benefit from the lower grape costs in the 2021 and 2022 vintages.

And it’s not alone in its bullish outlook.

Broker Morgans has slapped Treasury Wine shares with an add rating and a $15.71 price target, my Fool colleague James reports.

That represents a potential 15% upside for the ASX 200 stock.

The post Up 9% this year, could Treasury Wine shares still be ripe for the picking? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX growth shares analysts rate as buys right now
• 2 fantastic ASX growth shares to buy now according to analysts
• Why is the Treasury Wine share price on the slide today?
• Hoping to crack open the next Treasury Wine dividend? Read this
• 5 ASX 200 shares turning ex-dividend on Wednesday

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 recommended Treasury Wine Estates 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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