The BrainChip Holdings Ltd (ASX: BRN) share price is crashing down to earth with an almighty thud on Friday.

In morning trade, the semiconductor company’s shares are down a massive 13% to 74 cents.

Why is the BrainChip share price crashing?

Investors have been selling off the BrainChip share price this morning after the company released its third quarter update.

That update revealed that the ~$1.5 billion company generated revenue of just $118,000 during the three months. That’s a touch over $39,000 a month!

Unsurprisingly, this means that BrainChip is operating at a loss and recorded an operating cash outflow of $3.8 million for the quarter. This brought its year to date operating cash outflow to $11.8 million and leaves it with a cash balance of $24.6 million.

Based on its current burn rate, this gives the company six more quarters of funding.

What’s happening?

Management has blamed its abject sales performance on industry headwinds. It explained:

We are seeing the greatest amount of sales activity and engagement in the Company’s history. However, the current global technology market has created economic dynamics that have extended evaluations, decreased budgets, and delayed introduction of new technology. These conditions have created a headwind for our prospective and current customers. We anticipate these conditions to eventually calm. We remain positive on future market penetration and broad adoption of Brainchip’s technology.

Looking ahead, the company intends to focus on key sales targets and converting technical evaluations into paid licenses.

In addition, it is accelerating development of next-generation Akida IP and products to extend its supposed technological lead and market opportunity. Though, judging by its quarterly sales performance, the semiconductor market doesn’t appear to have much interest in its technology.

BrainChip has been described as a meme stock in the past. At the moment, it is living up to this tag.

The post BrainChip share price crashes 13% on disastrous Q3 update appeared first on The Motley Fool Australia.

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More reading

• Why has the BrainChip share price plunged 9% in a week?
• If I’d invested $1,000 in BrainChip shares a year ago, would I be happy right now?
• Why Bapcor, BrainChip, Evolution Mining, and Redbubble shares are sinking
• Can the BrainChip share price continue its growth run this quarter?
• Warning: BrainChip shares are being targeted by short sellers

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

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It’s been a big week so far on the ASX, with some major announcements from many of the market’s biggest names.

We’ve heard of a $1.3 billion earnings hit, a big four bank’s full-year results, record iron ore shipments, strong performance from a lithium favourite, and a worsening cyberattack.

Keep reading to learn of the five ASX announcements market watchers need to know about this week.

These ASX shares released major announcements this week

Fortescue’s record first quarter

Fortescue Metals Group Limited (ASX: FMG) revealed its September quarter performance to the ASX on Thursday.

The iron ore giant shipped 47.5 million tonnes of the red mineral over the quarter – a new first-quarter record. It also reported an average revenue of US$87 per dry metric tonne and direct costs of US$17.69 per wet metric tonne.

Finally, the materials giant provided financial year 2023 guidance. It expects to ship between 187 million and 192 million tonnes of iron ore this fiscal year.

ANZ’s full-year earnings

ANZ posted its financial year 2022 earnings yesterday, detailing a 16% increase in after-tax profits and a 5% jump in cash earnings.

The bank posted a $7.1 billion profit, $6.5 billion of earnings from continuing operations, and a 74 cent per share final dividend.

Its second-half net interest margin (NIM) reached 1.68%, while its exit margin lifted to 1.8%.

Westpac’s $1.3 billion earnings hit

Speaking of bank earnings, Westpac Banking Corp (ASX: WBC) also made news with the announcement of a $1.3 billion impact on its upcoming second-half earnings.

Much of the hit was born from the sale of its life insurance business, which saw the bank recognise a $1.37 billion loss, spread across financial years 2021 and 2022.

The bank will release its full-year earnings on 7 November.

Medibank’s cyberattack worsens

Medibank Private Ltd (ASX: MPL) was the talk of the town on Wednesday after it estimated a major cyberattack will cost it between $25 million and $35 million. That’s before any potential remediation, regulatory, or litigation-related costs.

The situation worsened this week with news that all of the health insurer’s customers’ data, including certain medical data, has been accessed by a hacker. As a result, the number of impacted customers could soar.

The company also scrapped its net resident policyholder growth guidance on the back of the attack.

Pilbara Minerals’ September quarter

The final ASX announcement making news this week came from lithium share Pilbara Minerals Ltd (ASX: PLS). The company posted its quarterly update on Tuesday.

Its spodumene concentrate production lifted 16% quarter-on-quarter to 147,105 dry metric tonnes over the period. That represents an annualised production rate of 588,000 dry metric tonnes.

It shipped 138,249 dry metric tonnes for an average price of US$4,266 per tonne last quarter.

The post 5 big ASX announcements making news this week appeared first on The Motley Fool Australia.

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More reading

• Citi downgrades Medibank share price and slashes target by 25%
• 5 things to watch on the ASX 200 on Friday
• If ASX lithium shares are soaring, why is the ACDC ETF down 9% in 2022?
• Own Westpac’s shares? Here’s what Citi is saying about the bank’s pursuit of Tyro
• Batten down the hatches as RBA may hit households with ‘supersized’ interest rate hike on Melbourne Cup day

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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The second half of 2020 and most of 2021 was a great time for many ASX shares. Many share prices soared. There were several industries that got a huge bump, like technology and e-commerce. But now a lot of heat has been taken out of the market.

There are a number of winners that have turned into big losers.

I think that some of the plunges have been realistic. Higher interest rates do challenge the business models of some companies.

But, with so much damage being done to the market capitalisations of some of those former darlings, is it possible to find some great bargains?

Volatility is normal

Before getting to some specific names, I want to point out that the share market regularly goes through difficult times. Volatility is just the price of admission to this long-term wealth-building market.

It’s somewhat ironic that every past market sell-off looks like an opportunity, and all current (and future) risks look like reasons to avoid investing.

The COVID-19 crash and GFC were two periods of huge declines for investors. In hindsight, those periods were a bad time to sell and a good time to buy.

I’d guess there may be another time that the share market drops by more than 20% sometime in the next decade. Each time the market falls heavily, it’s unpredictable and seems scary, but I think of it as an opportunity to buy shares cheaply.

Where to look for investment opportunities

I certainly don’t have a crystal ball.

But, I think it’s worthwhile to consider a contrarian viewpoint.

During the COVID-19 crash, investors that went against the panic and thought the world would get through have been handsomely rewarded.

Investors that thought JB Hi-Fi Limited (ASX: JBH) could survive and thrive against Amazon entering Australia have done well.

Right now, there are a number of things that the market seems to be suggesting. Many bricks and mortar ASX retail shares have been sold off. I don’t think retail will permanently be in difficult times. Names like Wesfarmers Ltd (ASX: WES), Adairs Ltd (ASX: ADH) and Nick Scali Limited (ASX: NCK) spring to mind.

There are a number of ASX online retailers that have been hit particularly hard. Yes, some of them have individual challenges to deal with. But, I think the ones that are already leaders are worth looking at because of the long-term expectation that digital adoption of online shopping will continue.

A few names continue to invest for growth, so I think they can come out of this period in a much stronger position.

A couple of ASX share ideas

Looking specifically at COVID winners that have turned into post-pandemic losers, I think Adore Beauty Group Ltd (ASX: ABY) and Temple & Webster Group Ltd (ASX: TPW) are two names worth looking at.

In 2022, the Adore Beauty share price is down 62%, and the Temple & Webster share price is down 53%.

Adore Beauty is the leading online beauty business in Australia. While FY23 revenue growth may be volatile, I thought it was impressive that returning customers continued to climb in the first quarter of FY23, which is a good sign for repeat purchasing and for the company not needing to spend as much on marketing. Its loyalty program and mobile app are also promising.

I’m excited by the ASX share launching private label brands, while also expanding into New Zealand. It’s expecting higher profit margins over time.

The leading online homewares and furniture retailer, Temple & Webster, is doing a lot to drive future growth. I like the investment in technology like an AI interior design service, as well as augmented reality. Increased scale will also come with improved margins and efficiencies.

Both of these ASX shares have promising futures, in my opinion. I’m particularly excited by Temple & Webster with its expansion into home improvement and the company’s large overall addressable market.

The post How I’d aim to find under-the-radar ASX shares that are pandemic-era bargains appeared first on The Motley Fool Australia.

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• Which ASX All Ords shares avoided a sell-off during the last recession?
• Which ASX shares I’d buy with $5,000 right now
• Brokers name 2 ASX growth shares to buy
• Should you really be buying ASX shares in this market?
• Goldman Sachs says these small cap ASX shares are buys

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended ADAIRS FPO, Amazon, and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited, Amazon, and Temple & Webster 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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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

As the cryptocurrency market settles down from yesterday’s rally, most investors are seeing relatively flat, or slightly negative, performance in their portfolios today. That said, one standout token continues to break out: Dogecoin (CRYPTO: DOGE) has surged 14.1% over the past 24 hours, as of noon ET. 

This impressive move follows Elon Musk’s surprise arrival at Twitter (NYSE: TWTR) headquarters yesterday. Carrying a kitchen sink and subsequently prompting employees and investors to “let that sink in,” Musk appears to be taking a lighthearted approach to finalizing his deal to buy Twitter at $54.20 a share. Shares of TWTR stock are currently trading just shy of $54 per share, signaling this deal has a high likelihood of completing by Friday’s deadline.

For Dogecoin investors, questions of whether Musk would ultimately follow through on his pledge to buy Twitter at the aforementioned price of $54.20 provided a great deal of volatility to both Twitter and Dogecoin, with the latter being viewed as a beneficiary of Musk controlling Twitter.

So what

Musk’s deal to buy Twitter has been in doubt in recent months, with Musk backing down months after proposing an offer to Twitter’s board that was too good to refuse. Noting concerns around bots, spam, and fake accounts, Musk canceled his deal on July 8. This sent shares of Twitter plunging, and Dogecoin followed.

However, following some impressive legal pushback from Twitter, Musk ultimately capitulated. His reason for the acquisition, as stated in a Twitter note to advertisers, has always been to create “a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.” These goals were “important to the future of civilization,” meaning that his overpaying for Twitter may be a small price to pay to further what he believes are altruistic goals.

The exact reason why Dogecoin is rocketing higher in the fashion it is remains unclear. Yes, Elon Musk has provided Dogecoin with plenty of supportive tweets in the past. However, his explicit references to Dogecoin have died down quite a bit of late.

Now what

Perhaps holding the reins to this multibillion-dollar social media platform will allow Elon Musk to comment on his favorite subject matters in a more uninhibited fashion (as if that was a problem to begin with). For Dogecoin holders, any sort of reference or mention from Elon Musk has proven to be a catalyst that can take this token higher. Accordingly, given the speculative nature of Dogecoin, it’s clear that traders are looking to capitalize on the reality that this deal is likely to go through.

That said, we’re talking about Elon Musk here. The deal isn’t done until all the papers are signed and approval is granted. Thus, the story isn’t over yet. 

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

The post ‘Let that sink in’ — Dogecoin soars as Twitter deal seemingly set to close appeared first on The Motley Fool Australia.

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• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
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• Is Google now joining the crypto party following its latest move?
• This is the biggest concern for crypto investors heading into the new quarter

Chris MacDonald 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 Twitter. 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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If you need a break from the sea of red that has been ASX tech shares in 2022, you’ve come to the right place.

One financial technology company you’ve likely never heard of has taken its investors on a wild upwards rise over the last five years.

Indeed, its share price lifted 3,500% over that time, soaring from around 1 cent to trade at 36 cents.

Additionally, it hasn’t been caught up in 2022’s sell off. The stock has lifted around 3% since the start of this year.

Meanwhile, the S&P/ASX 200 Information Technology Index (ASX: XIJ) has dumped 34%.

So, which tiny ASX tech share may have made millionaires out of investors in just five years? Keep reading to find out.

The tiny ASX tech share that turned $30,000 into $1m

The IODM Ltd (ASX: IOD) share price has soared over the last half-decade, turning an initial $30,000 investment into $1 million today.

The $200 million ASX tech share provides technology to automate the accounts receivable process for businesses around the world.

Interestingly, it began life as a mining share before launching into the tech space with the $7 million acquisition of IODM in 2015. Six months later, the company was renamed IODM and the rest is history.

No doubt anyone who bought into the stock in 2017 and held into their investment will be glad of their conviction.

Back then, $30,000 would have bought approximately 3 million IODM shares. Today, that parcel would be worth just over $1 million.

Not to mention, at the ASX tech share’s record high of 40 cents, reached in September 2021, 3 million of its shares would be worth a whopping $1.2 million. That’s not bad for a $30,000 investment less than four years earlier!

It’s also worth noting that, despite 2022’s volatility, the broader ASX tech sector has also performed well over the last five years.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) has lifted 51% in that time while the S&P/ASX 200 Index (ASX: XJO) has gained 14.8%.

The post This tiny ASX tech share has turned a $30,000 investment into $1m in just 5 years appeared first on The Motley Fool Australia.

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More reading

• Out of all my ASX shares, this has been my best performer so far in 2022
• Here are 2 ASX All Ords shares going ex-dividend next week
• Why I’d buy and hold this ASX 200 share until 2030
• Citi downgrades Medibank share price and slashes target by 25%
• Buy this ASX share that all its directors have been snapping up: expert

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

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It has been a tough year for ASX shares in 2022. Inflation and higher interest rates have been hurting investor confidence and thoughts about valuations.

The S&P/ASX 200 Index (ASX: XJO) is down by almost 10% in 2022. Looking at one of the most popular ways to invest in US shares, the Betashares Nasdaq 100 ETF (ASX: NDQ) is down around 25% this year.

But, there have been a few places to find opportunities that have delivered a positive return. For example, oil, gas, and coal businesses have seen a strong increase in their respective resources, and this has led to good cash flow and boosted their share prices.

But, ‘fossil fuels’ are not the only commodity businesses to have outperformed the ASX 200 in 2022. One of those names has helped my portfolio offset some of the declines that have hit some of the names.

Duxton Water Ltd (ASX: D2O)

This may not be a familiar name to some, or many, investors. According to the ASX, it has a market capitalisation of $194 million. For the ASX, that makes it a small-cap ASX share.

The company says that its primary investment objective is to build a portfolio of permanent water entitlements and utilise this portfolio to provide flexible water supply solutions to Australian farming partners. We all need to eat, so Duxton Water plays an important part in the food production process.

It generates a return by offering irrigators a range of supply solutions, including long-term entitlement leases, forward allocation contracts and spot allocation supply.

In 2022, the Duxton Water share price has risen by 7%.

My latest, and highest-priced, purchase of Duxton shares came in May for an average price of $1.525. So, I’ve made around 9% in capital growth since then. That’s certainly not going to make me a millionaire any time soon, but I think it has demonstrated some defensive characteristics.

Plus, Duxton has declared a dividend of 3.3 cents per share since my latest investment, which went ex-dividend on 13 October 2022. This adds another 2% to the return.

What has helped generate returns?

It has been an interesting time for Duxton. With many commodities, one may expect there to be cycles of strong demand and then weak demand.

As many Aussies may have noticed, there has been a lot of rain this year.

The ASX water share has outlined that despite the persistent wet conditions, permanent entitlement values continue to trade at close to all-time highs. Duxton wrote:

We believe it is the long-term demand and supply drivers that underpin the entitlement markets that have caused entitlement values to remain stable during this period of extreme wet (primarily led by the expansion of permanent horticulture and irrigators seeking long-term water security).

In its quarterly update, announced yesterday, it said that permanent water pricing across the southern Murray Darling Basin increased by 0.31%, resulting in an approximate 15% increase since 30 September 2021.

Why I still like the business

I think the Duxton Water share price still represents good value.

At 30 September 2022, the company had a post-tax net asset value (NAV) of $1.93 per share. Excluding tax provisions for unrealised capital gains, it was $2.23.

The current Duxton Water share price is at a 14% discount to the post-tax NAV and over 25% to the pre-tax NAV. I don’t think that the ASX share is going to sell all of its water entitlements, so I’m paying more attention to the pre-tax NAV.

I also like the growing dividend profile. The final dividend for 2022 is guided to be 3.4 cents per share, and 3.5 cents per share for the interim dividend in 2023. That means the forward grossed-up dividend yield is guided to be almost 6%. An ongoing share buyback is also helping shareholder returns.

The post Out of all my ASX shares, this has been my best performer so far in 2022 appeared first on The Motley Fool Australia.

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More reading

• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?

Motley Fool contributor Tristan Harrison has positions in DUXTON FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. 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 we head into the last couple of months of the year, the ASX dividends declared throughout reporting season are drying up.

But there are still some stragglers in the All Ordinaries Index (ASX: XAO) with recently declared dividends on the table.

Though these dividends won’t be around for much longer. Let’s take a look at two ASX All Ords shares going ex-dividend next week.

Autosports Group Ltd (ASX: ASG)

The first cab off the rank is Autosports Group, which will be turning ex-dividend on Monday. This means that today will be the last day to lock in the company’s recently-declared final dividend of 9 cents per share, fully franked.

Investors on the company’s share register by the closing bell today can pencil in a payment date of 15 November.

Weighing in with a market capitalisation of around $410 million, Autosports operates one of Australia’s largest networks of luxury and prestige car dealerships. It represents 20 luxury and prestige brands, including the likes of Rolls-Royce, Lamborghini, Maserati, and McLaren.

Autosports delivered record profits in FY22 as normalised net profit before tax came in 23% higher than the prior year at $93 million.

New vehicle orders exceeded deliveries by 25% as demand exceeded supply. Stemming from COVID, vehicle supply has been impacted by a shortage in semiconductors and wiring looms along with transport delays.  

But demand remains elevated, with customer new vehicle orders up 66% since the end of 2021. The company noted that orders were heavily skewed to high-value new vehicles.

Across the financial year, Autosports declared total dividends of 16 cents per share, fully franked, up 76% from total dividends of 9 cents in FY21. 

The ASX All Ords share noted the increase in dividends reflected its strong financial position and the board’s confidence in Autosports’ cash flow generation and continued margin accretion.

Based on current prices, Autosports shares are turning heads with a trailing dividend yield of 7.8%. Adding in franking credits revs this yield even higher to 11.1%.

Brickworks Limited (ASX: BKW)

Hot on Autosports’ heels is fellow ASX All Ords share Brickworks, which will be going ex-dividend the following day on Tuesday.

As of Tuesday, Brickworks shares will no longer be trading with rights to the company’s latest final dividend of 41 cents per share, fully franked.

Brickworks doesn’t have a dividend reinvestment plan (DRP). So, eligible shareholders will have no choice but to receive this payment in cash on 23 November.

Brickworks handed in its FY22 results last month, revealing a 28% uplift in revenue which came in at $1.1 billion.

But the bottom line is where the company truly shined. It delivered underlying net profit after tax (NPAT) of $746 million, up a whopping 159% from the prior year.

The earnings contribution from the company’s property division was a standout. In particular, its portfolio of industrial property in Sydney and Brisbane experienced a strong uplift in valuation on the back of growing demand for logistics and warehousing space.

Despite the surge in profits, Brickworks raised its annual dividends by just 3% to 63 cents per share. 

This is because these profits were primarily driven by valuation uplifts, which are simply on paper rather than cash. In fact, Brickworks’ operating cashflows went backwards in FY22, slumping 7% to $130 million.

Nonetheless, Brickworks maintains an impeccable dividend record. The ASX 200 share has maintained or increased its annual dividends for 46 years.

At current levels, Brickworks shares are printing a trailing dividend yield of 2.9%. Including franking credits, this yield grosses up to 4.1%.

The post Here are 2 ASX All Ords shares going ex-dividend next week appeared first on The Motley Fool Australia.

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• No savings at 35? I’d buy cheap ASX shares to try and retire rich
• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?
• Here are the top 10 ASX 200 shares today
• Why Baby Bunting, Brickworks, Core Lithium, and Dreadnought Resources are pushing higher
• These 3 ASX shares hold top spot as my favourite dividend deliverers

Motley Fool contributor Cathryn Goh 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 Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. 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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I think there are a number of S&P/ASX 200 Index (ASX: XJO) shares that could be worth owning, some with the long term in mind.

In my opinion, the Xero Limited (ASX: XRO) share price is at a great level for a long-term investment.

What’s Xero? It’s one of the largest accounting software providers in the world. One of the most important things about this business is that all of its software is online only. That makes it very accessible. Anyone can use it anywhere in the world, at any time.

It has been a strong performer over the last decade. In the past 10 years, it has risen by around 1,550%.

But, the recent volatility experienced by the market caused by inflation and higher interest rates could have opened up a buying opportunity for a business that still has a long-term growth plan.

I’ll explain why I like it.

Strong revenue outlook

Xero’s revenue has grown enormously over the years. In May 2014, the business passed NZ$100 million in annualised subscription revenue, while full-year operating revenue for the year to March 2014 was NZ$70.1 million.

In FY22, being the year to March 2022, operating revenue increased by 29% to NZ$1.1 billion and annualised monthly recurring revenue (AMRR) grew by 28% to NZ$1.2 billion.

The company is able to grow revenue in two main ways.

Its total subscriber numbers continue to rise — in FY22 it went up 19% to 3.3 million. It’s expanding globally, paying particular attention to places like the UK and Canada, which are even bigger markets than Australia. It’s these regions that could be important drivers for the Xero share price.

Xero can also grow its average revenue per user (ARPU), which improved by 7% to NZ$31.36 in FY22. I think the ARPU can continue to rise considering Xero recently implemented price increases in Australia, the UK and New Zealand.

The ASX 200 tech share already has some revenue growth baked in for FY23 because new subscribers during FY22 will pay the full 12 months of subscription fees in FY23.

I think revenue growth will be a key driver for the Xero share price in the next few years.

Excellent subscriber loyalty

One of the best reasons to like a company like Xero is that the monthly subscription generates regular cash flow.

Xero’s service is appreciated by its subscribers, which can be seen by the very low churn rate. In the second half of FY22, its churn rate was reported to be 0.9%. That means it lost less than 1% of its subscribers. This is useful for building its annualised revenue and not needing to win as many subscribers to keep growing its total subscriber number.

Having loyal customers that love the service also gives Xero more scope to pass on price increases and not lose much demand.

Strong margins

I think one of the best things about Xero is its gross profit margin. It’s so high, and rising, that most of Xero’s revenue translates into profit, which can then be used to spend on improving the business, such as sales and marketing, or product design and development.

In FY19, the ASX 200 share had a gross profit margin of 83.6%. In FY21, the gross profit margin had improved to 86%. In FY22, the gross profit margin was 87.3%.

While investors aren’t seeing how strong some of its other profit margins could be yet (like the net profit after tax), I think one day we will see it.

For now, the company is investing huge amounts into growth. But, eventually, that investing will slow and the strong gross profit margin will help other profit lines such as the earnings before interest, tax, depreciation and amortisation (EBITDA) as well.

Better valuation

I think investing is about finding good investments at a decent price, then being patient and holding it.

I’ve outlined why I think that Xero is a great business. In terms of the price, the Xero share price is now a lot cheaper. It’s down close to 50% this year, so it’s a lot better value, in my opinion.

I’d be very happy to own this business until 2030. It’s still seeing lots of growth opportunities, which is why it’s investing so much to capture that growth. I think it’s a good sign that this globally focused business is still striving to become a lot bigger.

The post Why I’d buy and hold this ASX 200 share until 2030 appeared first on The Motley Fool Australia.

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More reading

• How I’d build a portfolio by investing in top ASX shares now
• 3 excellent ASX 200 growth shares experts rate as buys
• Goldman Sachs names 2 quality ASX tech shares to buy right now
• These 3 ASX shares have halved this year. I’d buy 2 of them: advisor
• The Xero share price just hit a new 52-week low. Is it time to buy?

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 positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 Medibank Private Ltd (ASX: MPL) share price has been having a tough month.

Since the start of October, the private health insurer’s shares have lost 17% of their value.

This has been driven by a “cyber incident” that has seen the data of millions of patients stolen by a hacker.

Is the Medibank share price weakness a buying opportunity?

According to analysts at Citi, investors might want to give Medibank a miss for the time being.

A note from Thursday reveals that its analysts have downgraded the company’s shares to a neutral rating and slashed the price target on them by 25% to $3.00.

Based on the current Medibank share price of $2.87, this implies potential upside of 4.5% for investors.

However, the broker doesn’t feel this upside offers a good enough risk/reward to recommend it as a buy, particularly given the uncertainty hanging over the company.

What did the broker say?

Citi notes that the impact from the cyber incident is “still very uncertain” and that “consumer sentiment hard to gauge.”

Nevertheless, it has revised its earnings estimates lower for the coming years on the belief that policyholder growth will suffer from this development.

The broker explained:

Impact still very uncertain, consumer sentiment hard to gauge. While it is clear that a very significant data breach has occurred, the full impact of the cyber-attack on Medibank still remains uncertain. Questions therefore hang over the remainder of its strategy and it is withdrawing its policyholder guidance for FY23E. Key considerations from here will be the precise nature of the impact and the reaction of consumers to it, which is hard to gauge. This could see the share price move in either direction, but the extent of the current uncertainty moves us to Neutral, lowering our target price to A$3.00. Pulling back our policyholder growth assumptions and marking to market, we lower EPS FY23E: -6%; FY24E: -10%; FY25E: -12%.

The post Citi downgrades Medibank share price and slashes target by 25% appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Is the NIB share price benefitting from Medibank’s woes?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Codan, Coles, Medibank, and Pilbara Minerals shares are sinking
• Medibank share price plunges 15% as cyberattack bites into outlook

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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Many investors will not need reminding that 2022 has been a distressing time to own technology shares.

Most have fallen so much that they will need to become multibaggers in the next market recovery for them to return to the dizzying heights of 2021 and 2020.

The trouble is, how can you tell which ones have a genuine chance of such a resurgence and which stocks are just duds?

One clue could be to see if the people who run the business are buying the shares.

Insiders like directors and executives could be selling their shares for many different reasons — buy a new house, pay for a new car, repay loans, pay the kids’ private school fees. But the theory is that there can only be one reason why they would buy. 

It’s that they think the share price will head up.

After all, why would these presumably smart people, who have access to the inside machinations of the business, risk their own money unless they thought it was headed for a bright future?

What’s doing with Aussie Broadband shares?

One investor asked Shaw and Partners portfolio manager James Gerrish what he thought about buying Aussie Broadband Ltd (ASX: ABB) shares.

The internet provider has helplessly watched its stock price plunge 60% since Easter. Is it in terminal decline or does it have prospects of a recovery?

“It has indeed been a tough period for Aussie Broadband, with a number of earnings downgrades sending the stock down,” Gerrish told a Market Matters Q&A.

But Gerrish has noticed a positive signal from its ASX disclosures.

“Following last month’s result and subsequent share price decline, it is worth highlighting that all of Aussie Broadband’s directors have bought stock in the market since — clearly a very good sign.”

Managing director Phillips Britt, chair Adrian Fitzpatrick, board members Michael Omeros and Richard Dammery have all bought more Aussie Broadband shares over the past few weeks. 

No executives or directors have sold since early March.

Gerrish’s team is bullish after the market update last week.

“On Friday they reconfirmed FY23 guidance and from speaking to management post their FY22 result, the guidance we believe could well be on the conservative side,” he said.

“Our Emerging Companies Portfolio already holds a large 8% exposure to Aussie Broadband hence we are not likely to increase this exposure, but we do still like the stock at current levels and would in all likelihood buy if we had no position.”

The post Buy this ASX share that all its directors have been snapping up: expert appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 shares could benefit from the federal budget?
• Which ASX All Ords shares could perform well in a recession?
• Aussie Broadband share price is ‘quite cheap for what it is’: expert

Motley Fool contributor Tony Yoo has positions in Aussie Broadband Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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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