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

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

The stock market had tough day on Monday, and the Nasdaq Composite (NASDAQ: .IXIC) led the way lower. At Monday’s close, the Nasdaq was down 2.55%, to 12,381. The S&P 500 Index (SP: .INX) was down 2.1% while the Dow Jones Industrial Average Index (DJX: .DJI) lost 1.9%.

Tesla (NASDAQ: TSLA) has been a strong performer in the Nasdaq over the past several years, but it didn’t help the index’s cause on Monday, closing down more than 2%. The electric vehicle pioneer announced some mixed news over the weekend, and that has investors thinking twice about the stock even as the company plans to move forward with its stock split later this week. You’ll find all the details below.

Higher prices for access to self-driving capabilities

Over the weekend, Tesla announced that it would boost the amount it charges to give auto buyers prospective access to full self-driving capability on its vehicles. Currently, customers pay $12,000 when they order a vehicle to have the ability to receive full self-driving updates. Beginning on Sept. 5, according to a tweet from CEO Elon Musk, that price will rise to $15,000. The move marks the second time this year that Tesla has raised the price of the service, which began 2022 at $10,000.

The move is consistent with Tesla’s long-term plan to raise the price of full self-driving as its features become broader. In the long run, Tesla hopes that if it can get regulatory approval for a system that will actually handle driving the car on its own without any operator supervision, it will be able to charge as much as $100,000 or more to would-be vehicle purchasers. The discounted price now reflects the fact that the system doesn’t have regulatory approval and lacks the features that would allow Tesla vehicles to drive themselves in a fully autonomous manner.

A big win from recent legislation

Tesla is also shaping up to be a big winner from the passage of the Inflation Reduction Act. The new law included many different incentives for renewable energy initiatives, but most importantly for Tesla, it essentially reset the clock for tax credits related to EV purchases. With the original tax credit provisions having set limits on the number of vehicles that could qualify, Tesla buyers were no longer eligible to receive the same credits that earlier purchasers had received under the old law.

The new law will once again give Tesla buyers the chance to get up to $7,500 as of the beginning of 2023. That could give the automaker an incremental boost, and even though demand for the vehicles has remained strong, every incentive could be valuable for Tesla in its efforts to keep its steep growth trajectory going forward.

The split is coming

Meanwhile, this week will bring the completion of the long-awaited Tesla stock split. The company’s 3-for-1 split will take effect after the close of trading on Wednesday, Aug. 24. Investors will be able to buy and sell shares on a post-split basis for the first time on the morning of Thursday, Aug. 25.

Stock splits don’t have a fundamental impact on a company’s business, but investors nevertheless often see them as a positive sign of optimism. Lower share prices can make it easier for small investors to buy whole shares, although many brokerage companies offer fractional share purchasing capabilities that have allowed those with less than $800 to $900 to buy Tesla stock in amounts less than one full share.

In the long run, the significance of business moves like full self-driving, as well as financial effects from government incentives, will have a bigger impact on Tesla stock than a split. When the split finally gets done, investors will likely turn their attention back to more important matters.

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

The post Why Tesla shares are falling ahead of its stock split appeared first on The Motley Fool Australia.

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More reading

• Why Tesla stock dropped Monday
• Why Tesla stock was up again today
• Investors should wait for these 2 signals before buying Tesla
• Why today’s jump in Tesla shares surprised investors
• Elon Musk just sold US$7 billion worth of Tesla shares. What’s going on?

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

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

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

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

What happened

Along with stocks, several cryptocurrencies fell out of the gate today as investors continue to weigh the macro outlook and look ahead to a critical Federal Reserve meeting later this week.

The price of the world’s largest cryptocurrency, Bitcoin (CRYPTO: BTC), is only slightly down over the last 24 hours but is down nearly 13% over the last week and trades at about $21,300 as of this writing.

Over the last 24 hours, the world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), had traded 3% lower at 10:46 a.m. ET today. The price of Solana (CRYPTO: SOL) traded 4.3% lower, and the price of the meme token Dogecoin (CRYPTO: DOGE) was down 3.7%.

So what

After rallying in July and part of August, stocks and cryptocurrencies have taken a breather, as investors are still in the dark when it comes to where the economy could be headed over the next six to 12 months and how aggressively the Fed will raise interest rates.

After new data showed inflation may have peaked in July, the market seemed to think that the Fed might be able to start to slow the pace of rate hikes. That sparked a rally in tech stocks and many cryptocurrencies, which have traded a lot like tech stocks this year.

But now the market thinks it may have gotten ahead of itself and the Fed could still be aggressive. The market is penciling in another 50-basis-point (0.50%) hike for the Fed’s next meeting in September, but a 75-basis-point hike is not out of the question. The market will be looking for more clues on Friday when Fed chairman Jerome Powell speaks at the Fed’s annual Jackson Hole economic symposium.

Last Friday, the crypto market declined suddenly for no obvious reason, although some analysts now believe the sell-off was caused by the bankruptcy of the Celsius Network, which may have led the network to sell thousands of Bitcoin tokens into the market last week. Most cryptocurrencies and crypto stocks trade with a heavy correlation to Bitcoin. This upcoming Friday, however, could be a chance for the Fed to reset the market’s expectations.

“Bitcoin’s outlook for the week is quite unclear and the price will likely fluctuate within a narrow range until Powell’s speech,” Yuya Hasegawa of Bitbank said in a recent research note. “The $20,000 psychological level could be a reliable support for the price and $22,000 will likely be a resistance until then.”

Now what

It’s been a tough year for the crypto market, and there is still a lot of uncertainty when it comes to the macro outlook, with traders still wondering where inflation and rates are heading, as well as what will happen with the labor market.

The Fed is also in the process of pulling liquidity out of the economy in a process known as quantitative tightening. That process is beginning to ramp up and could lead to fewer funds flowing into risky assets.

With the uncertainty, expect near-term volatility in the crypto market. I like Ethereum for the long term and think the upcoming completion of the network upgrades will be a catalyst. Solana looks interesting as well, given its technical capabilities. I’m not a fan of the meme token Dogecoin, which doesn’t seem to have any unique capabilities or use cases.

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

The post Why Ethereum, Solana, and Dogecoin are falling today appeared first on The Motley Fool Australia.

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Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. 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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It’s been another horror morning for ASX shares and the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At the time of writing, the ASX 200 has given up another 0.48% and is back to around 7,015 points. But let’s check out what the South32 Ltd (ASX: S32) share price is doing.

South32 shares have had a rather strange day of trading thus far. The diversified miner has spent time in both positive and negative territory this morning. That comes after it closed at $4.18 a share yesterday and opened at the same this morning. At present, South32 has dropped into red territory again, down 0.48% at $4.16 a share.

Coal project to wither on the vine

We did see South32 release some non-price-sensitive news this morning. The company announced that “we will not proceed with an investment in the Dendrobium Next Domain (DND) project at Illawarra Metallurgical Coal following our consideration of recently completed study work and extensive analysis of alternatives”.

Here’s some of what South32 CEO Graham Kerr said on this decision:

Our decision today follows an extensive analysis of the alternatives for Dendrobium together with the anticipated returns from the up-front capital investment which would be required. Over the past 18 months we have made significant progress actively reshaping our portfolio and this decision increases our capacity to direct capital towards other opportunities.

This includes our world class development options in North America that have the potential to underpin a significant growth profile to produce metals critical to a low carbon future, servicing strategically important supply chains.

In terms of the future of the Dendrobium project, South32 said that “we will now focus on continuing to optimise Dendrobium and the broader Illawarra Metallurgical Coal complex to extend the mine life within approved domains”.

So it’s out with coal for South32, and in with “other opportunities”, it seems.

South32 share price takes a hit on Tuesday

But apparently, this announcement isn’t enough to save South32 from the market’s bad mood this Tuesday. That stands in contrast to some other ASX mining shares. Take BHP Group Ltd (ASX: BHP). BHP shares have risen by a healthy 1.44% so far today. Fortescue Metals Group Limited (ASX: FMG) shares are also in the green. But Rio Tinto Limited (ASX: RIO) has gone the same way as South32.

But no doubt some investors are still eyeing off the miner. As my Fool colleague Tony covered this morning, Sequoia senior wealth manager Peter Day is one expert investor that is bullish on South32 right now. He stated that:

We’re expecting solid full year results to be driven by a strong performance from its coal division [when the company reports on Thursday this week]… On our forecasts, South32 is expected to generate strong cash flows in the near term, supporting additional shareholder returns and growth.

At the current South32 share price, this ASX 200 mining share has a market capitalisation of $19.39 billion. That gives the company a dividend yield of 4.01%.

The post Why is the South32 share price tanking on Tuesday? appeared first on The Motley Fool Australia.

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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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The Nanosonics Ltd (ASX: NAN) share price has rebounded from its earlier fall after the company released its full-year earnings.

The S&P/ASX 200 Index (ASX: XJO) healthcare stock opened at $4.53 this morning, marking a 4.8% tumble.

It has since recovered to trade at $4.88, 2.52% higher than its previous close.

Nanosonics share price lifts on FY22 earnings

Here are the key takeaways from the disinfection technology-focused company’s financial year 2022 (FY22) results:

• Revenue came to $120.3 million – a 17% improvement on that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 51% to $7.5 million
• Operating profit after tax fell 57% to $3.7 million
• Gross profit lifted 14% to $91.9 million
• Gross profit margin fell slightly to 76.4% – ahead of guidance – on higher freight costs
• Ended the period with $94.5 million of cash and equivalents and no debt

The company’s revenue lifted on continued growth in its new installed base, upgrades, and consumables and service.

Its operating expenses also rose to $90.5 million as the company continued to invest in its growth strategy, research and development, and its revised North American sales model, as well as geographical expansion and its capabilities and capacities.

Finally, supply chain issues saw it increasing its inventory holding by 91%.

What else happened in FY22?

The major news from the company last financial year was the decision by Nanosonic and GE Healthcare to revise the ASX 200 company’s North American sales model to one that is mostly direct. The Nanosonic share price fell 5% on the back of the news.

Under the new agreement, GE transferred all its trophon customers to Nanosonics for the provision of all consumables. In addition, Nanosonics was made responsible for the majority of capital sales while GE still has access to capital equipment as a non-stocking capital reseller.

It also established partnerships to allow it to sell directly to US federal government accounts.

What did management say?

Nanosonics CEO and president Michael Kavanagh commented on the company’s earnings, saying:

The 2022 financial year was an important year in the ongoing growth of the organisation through the successful implementation of a number of key strategic priorities.

Central to these was the successful evolution of our sales model in North America to an expanded and largely direct model. Nanosonics now manages all trophon customers directly for the ongoing provision of consumables. This largely direct sales model aims to capture the full market opportunity for trophon in North America as well as prepare for future product expansion plans.

What’s next?

Nanosonics is targeting revenue growth of between 20% and 25% in FY23.

It also believes its gross margin will come in at between 75% to 76%. That’s expected to be driven by an increase in the proportion of capital revenue resulting from growth in the sales of both new installed base units and unit upgrades, continued higher freight costs, and increased component costs.

Its operating expenses have also been tipped to grow between 15% and 18%, mostly due to market development activities and product innovation.

Nanosonics share price snapshot

This year has been tough on the Nanosonic share price.

It has fallen 26% since the start of 2022. It’s also 19% lower than it was this time last year.

For comparison, the ASX 200 has fallen around 8% year to date and 6% over the last 12 months.

The post Nanosonics share price lifts despite FY22 profit tumbling 57% appeared first on The Motley Fool Australia.

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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 positions in and has recommended Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Nanosonics 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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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

Amazon (NASDAQ: AMZN) stock pulled back overnight as a combination of reports that the company planned to make a bid for home healthcare specialist Signify Health (NYSE: SGFY) and a broader market sell-off on fears of rising interest rates weighed on the stock.

At Monday’s close, Amazon stock was down 3.6%.

So what

Over the weekend, The Wall Street Journal reported that Amazon was among the bidders angling to take over Signify Health, which said in early August that it was open to an acquisition.

That news sent shares of Signify, which provides technology to help in-home care providers, up nearly 40%, but Amazon was moving in the opposite direction.

The tech giant is up against CVS Health and UnitedHealth in what is shaping up to be a bidding war that could value the home healthcare company at more than $8 billion. Bids are due around Labor Day, according to the Journal.

Amazon’s interest in Signify comes just weeks after it acquired 1Life Healthcare, which operates the One Medical primary care practice, and its purchase of iRobot, best known for its Roomba robotic vacuum. 

Amazon has a long history of acquisitions, but a new takeover every few weeks could complicate the company’s operations, as absorbing a separate company takes time and attention.

New CEO Andy Jassy has been at the helm for only a year, and investors may be concerned that he’ll dilute the company’s strategy with too many acquisitions. Investors are also mindful that botched deals have felled past tech heavyweights.

Additionally, the stock seems to be down at least partly on broad market sentiment, as the NASDAQ was off 2% today. Among the concerns is a new survey showing it will take two years or longer for the Fed to bring inflation down to its 2% target, implying ongoing rate hikes and an increasing likelihood of a recession.

Now what

Amazon is big enough that it can afford to make a mistake with a pricey acquisition, but investors should keep an eye on the Signify takeover, as its market cap ballooned to $8.4 billion on the reports of Amazon’s interest. That could make it the company’s priciest acquisition to date after its $13.7 billion buyout of Whole Foods. Amazon also bought Hollywood studio MGM for $8.5 billion earlier this year.

Signify is profitable, making it less risky than other deals, but the move is primarily a bet on Amazon’s growth potential in the healthcare industry.

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

The post Why Amazon stock was slipping today appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Amazon and CVS Health. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon and iRobot. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended CVS Health, CVS Health Corporation and UnitedHealth Group. The Motley Fool Australia has recommended 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 4DMedical Ltd (ASX: 4DX) share price is seeing some significant swings today, from gains of 2% to losses of more than 2% in morning trading.

4DMedical shares closed yesterday at 65 cents each and are currently at 63 cents a share, down 2.3% for the day, but still up 7% for the month.

This comes following Friday’s release of the respiratory imaging technology company’s full-year results for the 12 months ending 30 June (FY22). The 4DMedical share price closed up 4.7% on the day.

Here are the highlights:

4DMedical share price in the spotlight amid FY22 results

• Total income of $13.4 million, up 132% from FY21
• Revenues from ordinary activities of $1.1 million, increased 386% year on year
• Net loss after tax of $24.6 million, a 15% increase from FY21
• Cash reserve of $51.1 million and no debt as at 30 June 2022

What else happened during the year?

While income and revenues increased, so did the company’s operating expenses, which rose 51% year on year to $37 million. 4DMedical said the increase was largely due to more spending on research and development and in support of commercialisation.

Other milestones during the year included the company signing a nationwide contract with I-MED, Australia’s largest outsourced radiology provider.

The ASX medical tech share also progressed in the United States, where scanning commenced at its first US clinical pilot at Providence St. Joseph Hospital in California.

And in an FY22 highlight, 4DMedical unveiled its XV Scanner, the world’s first dedicated lung scanner, at Prince of Wales Hospital in Sydney on 17 March. The scanner was delivered with the help of the Medical Research Future Fund (MRFF), with a $28.9 million contribution from the Australian government.

What did management say?

Commenting on the results, 4DMedical CEO Andreas Fouras said:

From a financial performance perspective, we have grown Software-as-a-Service (SaaS) revenue as well as hardware sales. While these gains have been from a low base, they clearly demonstrate that the Company is now very much in its commercialisation phase…

The 4DMedical team has been busy adding to our catalogue of pilot and clinical trial results, which are rapidly adding to the body of evidence that scans generated via 4DMedical’s XV LVAS technology are a superior way of examining patients.

What’s next?

4DMedical said it “has a significant cash runway of at least six quarters”. The company has a cash balance of $51.1 million and has yet to receive the $15 million in MRFF funds.

Looking ahead, Fouras added:

Subsequent to the end of the reporting period, the US signed into law a broad expansion of healthcare benefits for millions of veterans suffering from respiratory diseases acquired while serving their country. This will include increased testing to identify these disorders, providing a significant opportunity for 4DMedical.

4DMedical share price snapshot

Despite the strong past month, the 4DMedical share price has struggled this year, down 53% since the opening bell on 4 January. By comparison, the All Ordinaries Index (ASX: XAO) is down 8% year-to-date.

The post Why has the 4D Medical share price popped 7% in a month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Endeavour Group Ltd (ASX: EDV) share price is well into the red this morning after the company posted its earnings card for FY22.

Shares in the company opened at $7.82 before slipping to a low of $7.52 — a 9.1% loss. The Endeavour Group share price is now $7.55 at the time of writing.

Let’s go over the highlights of the report.

Endeavour share price slides on mixed FY22 report

The key metrics are as follows:

• Revenue of $11.6 billion, no change from FY21
• Earnings before interest and taxes (EBIT) up 2.8% year over year (yoy) to $924 million
• Net profit after tax (NPAT) up 11.2% yoy to $495 million
• Fully franked dividend of 7.7 cents per share (payout ratio of 73.1%).

Both retail and hotel operating segments contributed strongly in 2H FY22. Hotels contributed the most EBIT for the year, growing 20.7% to $315 million.

The company notes that it delivered growth in its top and bottom lines amid headwinds that rocked its industry. These included “ongoing impacts from COVID-19, severe weather events, team shortages, and a range of supply chain disruptions.”

Endeavour declared a final fully franked dividend of 7.7 cents per share. The total dividend payout is $138 million. The record date is 1 September and the dividend will be paid on 16 September.

What else happened in FY22?

Endeavour acquired five new hotels and 40 lease renewals in FY22. The drinks side of the business also made significant progress, adding 32 new stores and lease renewals.

Endeavour cited COVID-19 as an accelerant in the digitalisation of its business model, which included ‘order and pay later’, and facial recognition technology at some of its hotels.

Initiatives such as these and others led to record sales and record connections with new customers, the company said.

What did management say?

Endeavour managing director and CEO Steve Donohue said:

Australians are returning to socialising in hospitality settings, and the trend towards discovering new drinks is continuing. While we anticipate that the operating environment will remain challenging, I’m confident our team of exceptional people, our customer-focused strategy, and our disciplined approach to financial management will enable us to continue to deliver for our customers, partners, team members and shareholders.

What’s next?

Endeavour noted that demand for its drinks and hospitality offerings would continue to bounce back from the effect of COVID-19. This is currently reflected in the past seven weeks of trading in FY23. However, some headwinds will persist in putting pressure on the company’s results moving forward.

Its one-year growth rates are expected to be distorted as it cycles through the impacts of COVID-19 in the first half of FY23.

Moving forward, the company stated it will need to contend with “inflation, limited team availability and the potential for supply chain disruption”.

Endeavour share price snapshot

The Endeavour share price is currently up 11% year to date. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 8% over the same period.

Endeavour’s market capitalisation is roughly $14.81 billion.

The post Endeavour share price drops 9% despite $495 million profit appeared first on The Motley Fool Australia.

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• Earnings preview: Here’s which ASX shares are reporting today
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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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The Westpac Banking Corp (ASX: WBC) share price is in focus. Between 17 June 2022 and 12 August 2022 it went up 18%. After dipping lower over the past week, is the big four ASX bank share an opportunity worth buying?

On the ASX there are a number of banks including Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

While there are plenty of similarities between the banks, some investors have a preference for which banks are buys and which are not.

Expert view

A few weeks ago, Neil Margolis was speaking to Livewire Markets and was asked whether the Westpac share price was a buy, hold or a sell.

Margolis said that Westpac shares are a buy, particularly when compared to CBA.

He acknowledged the problems that the bank has had but also said that the bank has a large amount of surplus capital. Margolis said to Livewire:

Just putting it next to CBA is very stark. It’s got so many levels of surplus capital, say $8 billion to $10 billion, similar for franking. But its market value is $90 billion, and CBA is $180 billion. So it’s quite extraordinary. One of the reasons it’s a lot cheaper is because they’ve lost control of their costs. So, they do need to get their costs under control. They’ve had much more management turnover. But putting that all aside, there’s a big opportunity to take cost out, and the dividends look pretty safe to us. At a sector level, I had a look today, the four major banks spent $36 billion a year on costs, which is roughly the same as Afterpay’s valuation. And I’m not sure which number actually astounds me more.

Westpac currently has a market capitalisation of $76 billion and CBA has a market capitalisation of $168 billion according to the ASX.

Westpac’s third quarter update

Investors are able to get insights into a business’s performance from quarterly updates and this can impact the share price.

While it didn’t include any actual profit numbers, Westpac did tell investors about some of its financial numbers in the three months to 30 June 2022.

Westpac said that its common equity tier 1 (CET1) ratio was 10.75% at June 2022, down from 11.33% at March 2022. However, that reduction was down to a dividend payment and higher risk-weighted assets (RWA). RWA rose $18 billion, or 3.9% in the third quarter of FY22.

However, the ‘pro forma’ CET1 capital ratio was 11% which reflects planned divestments.

In terms of the credit quality, Westpac said that the provision cover is little changed, while credit quality improved – stressed assets to total committed exposure (TCE) reduced 4 basis points to 1.06%.

Mortgage delinquencies that were at least 90 days overdue improved. In Australia, it improved 5 basis points to 0.83% and in New Zealand, it improved 2 basis points to 0.28%.

What is the Westpac share price valuation?

Every analyst may have a different estimate for what the bank is going to report for its FY22 result.

According to numbers on CMC Markets, Westpac shares are valued at 15 times FY22’s estimated earnings and under 12 times FY23’s estimated earnings.

The big four ASX bank share is expected to pay an annual dividend of $1.23 per share in FY22 and a $1.33 annual dividend per share in FY23. That translates into grossed-up dividend yields of 8% in FY22 and 8.7% in FY23.

The post Is the Westpac share price a buy for the bank’s ‘surplus capital’? 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 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 Scentre Group (ASX: SCG) share price is scampering upwards today as investors absorb the company’s latest half-year results.

In early trade, shares in the Westfield shopping centre operator are swapping hands for $2.875 apiece — a tidy gain of 3.42%. For context, the S&P/ASX 200 Index (ASX: XJO) is spluttering lower, dropping 0.57% this morning.

Let’s check the details of the company’s report.

Scentre share price embraces earnings rebound

• Revenue up 8.8% from the prior corresponding period to $1,176.3 million
• Customer visits year-to-date up 5.1% to 277 million
• Portfolio occupancy up 30 basis points to 98.8%
• Operating profit up 17.5% to $540.5 million
• Net operating income up 6% to $883.6 million
• Distribution of 7.5 cents per share, up 7.1%

What else happened during the half?

Pleasingly, the half involved several notable operational achievements for Scentre Group.

Firstly, the property manager demonstrated some level of inflation resistance. Inflation is now above 6% compared to a year ago. However, Scentre managed to increase its average rent across the portfolio by $5 per square metre, now sitting at $827 per square metre.

Furthermore, average speciality rents increased 5.6% during the reporting period. Management highlighted that its standard lease structure for specialty leases has built-in inflation protection.

Another positive for the Scentre share price was the improvement in gross rent cash collections. This is the lifeblood of Scentre. In the first half of 2022, collections increased 18% to $1,250 million.

What did management say?

In light of the outstanding performance, Scentre Group CEO-elect Elliott Rusanow stated:

Our approach to capital management during the period has seen the Group execute new and extended bank facilities of $2.6 billion, including syndicated bank facilities of $1.4 billion. As a result, the Group has available liquidity of $4.8 billion, sufficient to cover all debt maturities until the fourth quarter of 2025.

Adding:

Our business is in a strong position to deliver long-term growth by being essential to people, their communities and the businesses that interact with them.

What’s next?

Looking forward, management kept its forecasts short and sweet. For the full year, the Scentre Group team is expecting a 14.2% increase in funds from operations to 19 cents per share security.

Likewise, income investors should be pleased to know management is expecting growth in its full-year distribution. Scentre’s distribution is expected to grow by 5.3% to 15 cents per security for FY22.

Scentre Group share price snapshot

Today’s gain is a welcomed sight given the performance of the Scentre share price this year. On a year-to-date basis, shares in the group have tumbled more than 8%. This represents an underperformance of even the broad Aussie benchmark index.

The group now offers a dividend yield of 5.3%. This compares to an industry average yield of 4.4%.

The post Scentre share price glows green as operating profits soar 18% appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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 Alumina Limited (ASX: AWC) share price is in the red today after the company announced its 2022 half-year results.

The alumina and aluminium producer’s share price jumped to $1.53 soon after market open but is currently down 0.33% at $1.50. For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 0.34% today.

Alumina has a 40% stake in Alcoa World Alumina and Chemicals (AWAC). AWAC has operations in Australia, Brazil, Spain, Saudi Arabia and Guinea, along with a 55% stake in the Portland aluminum smelter in Victoria.

Let’s take a look at what Alumina reported to the market today.

Alumina share price edges lower amid soaring profit

Highlights of Alumina’s half-year results include:

• Net profit after tax (NPAT) of 167.9 million, a 128% lift on the $73.6 million reported in H121
• Net receipts from AWAC lifted 18% to US$162 million
• Free cash flow available for dividends lifted 25% to US$122.6 million
• Net cash of 19.3 million at 30 June compared to a net debt of $5.7 million in 2021
• Interim dividend lifted 24% to US 4.2 US cents per share

What else did the company report?

Underpinning the result was a 57% increase in the alumina refining margin. The margin for alumina refineries lifted from US$60 per tonne in the prior corresponding period (pcp) to US$94 per tonne.

This was driven by higher alumina prices amid “global supply disruptions”. The average realised price of alumina lifted 37% on the pcp to US$398 per tonne.

However, cash costs of alumina production also jumped 32% to $304 million per tonne.

Total AWAC refinery production dropped in the first half to 6.1 million tonnes.

AWAC’s earnings before interest, tax, depreciation, and amortisation (EBITDA) lifted 80% on the pcp to US$836.1 million, while net profit after tax lifted 118% to US$438.9 million. AWAC reported a net cash inflow of $378.5 million, a 70% boost on the first half of 2021.

Management commentary

Speaking about the results, Alumina CEO Mike Ferraro said:

The increased margins from AWAC’s alumina refineries and the Portland smelter flowed through to net distributions from AWAC, which at $162 million were 18 per cent higher than the corresponding period last year.

As a result, Alumina has been able to increase the interim dividend to shareholders for 2022 by 24 per cent.

Alumina’s dividend yield has averaged 7.4 per cent over the last 5 years, which consistently places Alumina as one of the top performers amongst its industry peers.

What’s ahead

Alumina said global aluminum demand is predicted to grow by 1.1% in 2022.

The company is optimistic about the medium-term outlook for aluminum. Ferraro noted that aluminum will become “even more critical” as the world transitions to a low carbon economy.

He said this demand will flow through to Alumina, adding: “As a significant participant in the aluminium supply chain, AWAC and Alumina are well placed to benefit from this growth.”

Meanwhile, uncertainties remain for global alumina production in the second half of 2022. Production outside China fell 4% in the first half of 2022 amid supply disruptions in Europe and Australia. High energy costs in the second half of 2022 could continue to impact alumina production. Alumina production outside China could drop by 3% in 2022.

AWAC is forecast to produce 12.1 to 12.2 million tonnes of alumina overall in 2022, along with 160,000 tonnes of aluminum.

Alumina share price snapshot

The Alumina share price has fallen 20% in the year to date, while it has lost 10% in the past year.

However, in the past month, Alumina shares have climbed 3%.

For perspective, the benchmark ASX 200 index has lost 6% in the past year.

The post Alumina share price slides despite profit surging 128% appeared first on The Motley Fool Australia.

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

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