Experts are always on the lookout for ASX shares in the All Ordinaries Index (ASX: XAO) that could be attractively priced opportunities.

As ASX share prices and company updates constantly change, so too do brokers modify their recommendations. It largely depends on a company’s progress and if the share price is at a sizeable discount or premium to the broker’s estimated value of that business.

After some recent company announcements, brokers released their latest views on these two growing All Ords ASX shares.

Bubs Australia Ltd (ASX: BUB)

Bubs is an infant formula business that sells goat infant formula, cow milk formula, toddler snacks and adult goat milk products.

The broker Citi recently reiterated its buy rating on Bubs, with a price target of $0.77. That implies a possible rise of around 26% over the next 12 months.

Citi pointed to the company’s quarterly update, which showed progress in China and the United States markets.

In the three months to June 2022, China’s revenue increased by 523% year on year, contributing 64% of quarterly sales. Corporate daigou sales were up 1,201% year on year and cross-border e-commerce sales rose by 20%.

Bubs noted that the Alpha Group equity-linked strategic partnership and the China launch of the Bubs A2 product had proven “highly successful” and remained its most profitable channel.

In the US, the All Ords ASX share was one of the first infant formula manufacturers to apply for and receive FDA temporary approval. Within 24 days, the first air cargo shipment appeared on major US retailer shelves.

Bubs advised that around 540,000 tins had been delivered to more than 5,400 US stores, with additional shipments and retailers planned in the near term.

The company will invest money to accelerate expansion, build inventory to mitigate the current logistics environment, build its presence in the US and triple the capacity of its processing and canning facility.

Megaport Ltd (ASX: MP1)

Megaport is a tech company that enables digital infrastructure to move into the cloud.

Broker UBS likes the company’s longer-term future and rates Megaport as a buy. The broker has set a price target of $16, which implies the Megaport share price could rise by around 90% over the next 12 months.

In its quarterly update for the three months to June 2022, Megaport reported $1 million of ‘normalised’ earnings before interest, tax, depreciation and amortisation (EBITDA). This is an increase of 126% quarter on quarter. It also made $1.6 million in positive operating cash flow (up 125%).

The All Ords ASX share also reported that monthly recurring revenue (MRR) rose by 13% quarter on quarter to $10.7 million for June 2022. Customer numbers increased 4% quarter on quarter to 2,643. Total ports also rose 6% quarter on quarter to 9,545, and average revenue per port went up by 6.8% quarter on quarter to $1,120.

Megaport CEO Vincent English said about the company’s outlook:

Closing fiscal year 2022 with a solid fourth quarter performance across all operating metrics provides excellent momentum going into fiscal year 2023. We have aligned our business to reduce cash burn and have a clear runway to profitability with a proven business plan.

We have a strong cash position with more than $80 million available. With a record of successfully executing on our plans, we have a high degree of confidence in FY23 and will continue to stay out front as the leading global network as a service provider.

The post Do these 2 All Ords ASX shares offer a hefty upside? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares going great guns on Thursday
• RBA in the spotlight; and Westpac hikes fixed rates. Scott Phillips on Nine’s Late News
• Brokers says the Megaport share price can keep charging higher
• Why Iluka, JB Hi-Fi, Megaport, and Zip shares are racing higher
• 3 ASX tech shares rocketing by over 15% today

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 MEGAPORT FPO. The Motley Fool Australia has recommended BUBS AUST FPO and MEGAPORT FPO. 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 Ioneer Ltd (ASX: INR) share price is taking off this morning on news the company has entered an offtake agreement with car manufacturing monolith, Ford.

The agreement will see the ASX-listed lithium developer supplying 7,000 tonnes of lithium each year for Ford’s electric vehicles (EVs).

At the time of writing, the Ioneer share price is 53.5 cents, 8.08% higher than its previous close.

Let’s take a closer look at today’s news from the All Ordinaries Index (ASX: XAO) lithium stock.

Ioneer signs offtake agreement with Ford

The Ioneer share price is surging after the company signed an offtake agreement for lithium from its Rhyolite Ridge Project.

The project is located in Nevada, US. It’s expected to start production in the second half of 2025.

The offtake agreement will see Ford’s battery-making joint venture BlueOvalSK snapping up around 34% of the project’s expected average annual lithium output for five years.

Another 34% of the project’s output has already been promised to cathode supplier EcoPro.

Ioneer managing director Bernard Rowe commented on the news driving the company’s share price today, saying:

Simply put, this strategic relationship means Nevada lithium for American cars, and it will lead to job creation across all levels of the electric vehicle supply chain. We look forward to continuing to work with Ford and its partners to help develop a secure and reliable end-to-end US EV industry.

Lisa Drake, Ford’s vice president of EV industrialisation, said the agreement will support localised production of battery cells and help deliver EVs to millions of customers.

Ford has also signed offtake agreements with ASX lithium stocks Lake Resources NL (ASX: LKE) and Liontown Resources Limited (ASX: LTR). The former will deliver Ford 25,000 tonnes of lithium annually while the latter will provide 150,000 dry metric tonnes of spodumene concentrate.

Ioneer share price snapshot

Today’s gains haven’t been enough to boost the Ioneer share price back into the longer-term green.

It’s currently 34% lower than it was at the start of 2022. Though, it is 35% higher than it was this time last year.

The post Ioneer share price leaps 8% on Ford supply agreement appeared first on The Motley Fool Australia.

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More reading

• Here’s how this ASX lithium stock performed on its US debut

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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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

Cryptocurrencies took a breather this morning after a nice rally in recent days, as investors digest more macro news and as the electric car maker Tesla (NASDAQ: TSLA) announced that it had sold much of its Bitcoin (CRYPTO: BTC) holdings. 

Over the past 24 hours as of 9:45 a.m. ET, the price of Bitcoin had fallen more than 5%, the price of Ethereum (CRYPTO: ETH) had fallen more than 6%, and the price of the meme token Dogecoin (CRYPTO: DOGE) was down nearly 7%. 

So what

The European Central Bank (ECB) caught the market off guard this morning by announcing that it would hike its key benchmark interest rate by 50 basis points (0.5%). The ECB has kept rates negative since 2014, so the move is a big deal, but investors didn’t think the ECB would start with a half point. Riskier assets including cryptocurrencies have not fared well amid the rising interest rate environment this year, as rising interest rates make safer assets yield more, which then essentially demands more of riskier assets typically trading at larger valuations.

But another reason for crypto’s sell-off today could be due to the revelation that Tesla has sold 75% of its Bitcoin holdings, which is equivalent to $936 million. Tesla initially invested $1.5 billion in Bitcoin early in 2021.

On Tesla’s second-quarter earnings call yesterday, CEO Elon Musk attributed the sale of Bitcoin to uncertainty surrounding how COVID-19 lockdowns would play out in China, which had imposed months-long lockdowns in several major cities earlier this year.

“So it was important for us to maximize our cash position, given the uncertainty of the COVID lockdowns in China. We are certainly open to increasing our Bitcoin holdings in the future, so this should not be taken as some verdict on Bitcoin. It’s just that we were concerned about overall liquidity for the company, given COVID shutdowns in China,” said Musk.

“And we have not sold any of our Dogecoin,” Musk added.

Later in Tesla’s earnings call, Musk also essentially punted when asked by an analyst about how he views Bitcoin as a hedge against inflation, a widely debated topic, and as a long-term asset. 

“Cryptocurrency is a sideshow to the sideshow,” said Musk, adding that “cryptocurrency is not something we think about a lot” and “we’re neither here nor there on cryptocurrency.”

Now what

Musk’s explanation for selling Bitcoin seems somewhat reasonable, but there’s no doubt that the famous entrepreneur has the power to move crypto markets. After all, Tesla’s decision to purchase Bitcoin definitely helped move the token higher, and Musk played a huge role in driving up the price of Dogecoin last year with his support of the meme token on social media.

Despite the sale, I still do see strong long-term potential for Bitcoin and Ethereum, both of which I expect to be around and stay relevant, although they could definitely go lower in the near term.

Bitcoin is the pioneer of blockchain technology and cryptocurrencies and continues to gain more exposure in the mainstream financial system. Ethereum with its smart-contract technology has many real-world use cases, and the network should improve after a set of ongoing upgrades is completed.

Dogecoin was created as a joke and does not seem to have any real-world use case or technical advantage over other cryptocurrencies, which is why I have no interest in investing in the token. 

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

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

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More reading

• Tesla sells 75% of Bitcoin holdings. Here’s why Elon Musk is unloading
• Does this crypto rally have legs?
• Here’s why the Bitcoin and Dogecoin prices are rocketing
• Ethereum surges, but Ethereum classic up much more on merge anticipation
• These are the stocks making hay from the Bitcoin price upturn

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 Tesla. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. 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 Syrah Resources Ltd (ASX: SYR) share price is charging higher on Friday.

In morning trade, the graphite producer’s shares are up a sizeable 6% to $1.40.

This means the Syrah share price is now up almost 17% this week.

Why is the Syrah share price storming higher?

The catalyst for the rise in the Syrah share price today has been the announcement of an agreement with a major automaker.

According to the release, Syrah has entered into a non-binding memorandum of understanding (MOU) with Ford Motor Company and SK On.

This MOU will evaluate a strategic arrangement that includes natural graphite active anode material (AAM) supply to the BlueOval SK joint venture from Syrah’s vertically integrated Vidalia AAM facility in Louisiana, United States.

Syrah is developing the Vidalia operation as a vertically integrated natural graphite AAM supply alternative for US battery supply chains with construction of a 11.25ktpa AAM facility. It is expected to be completed in the June 2023 quarter and is aiming to commence production in the September 2023 quarter.

What is the BlueOval SK joint venture?

The BlueOval SK joint venture is developing large-scale battery manufacturing facilities in Tennessee and Kentucky in the United States. This is with the aim of supplying lithium-ion batteries for Ford’s electric vehicle programs, including for a future full-size electric vehicle pickup truck.

Under the MOU, Syrah, Ford and SK On will continue testing and qualifying Vidalia’s AAM. The parties will then use commercially reasonable efforts to finalise a binding offtake agreement no later than 31 December 2022.

This offtake agreement will be between Syrah and the BlueOval SK joint venture for AAM from an expanded production facility at Vidalia and with an offtake commencement date of no later than 2028.

The post Syrah share price charges higher on Ford agreement appeared first on The Motley Fool Australia.

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• Why this ASX graphite share is a buy: fund manager

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ASX dividend shares can be a really effective way of boosting investment income.

Interest rates may be rising in Australia, but many dividend-paying businesses still offer higher dividend yields than what someone may be able to get from a savings account.

I like that businesses also have the ability to invest for growth and can grow their dividends as earnings and/or cash flow increase.

However, it’s important to remember that dividends (and distributions) are not guaranteed. There may be years that shareholder payouts do not grow. Payouts can be reduced, or cut entirely.

But, I think these two companies have compelling futures as far as income growth and distributions are concerned.

Rural Funds Group (ASX: RFF)

Rural Funds is my favourite real estate investment trust (REIT) because of its assets and targeted distribution growth.

It owns a portfolio of farms across different sectors including cattle, almonds, vineyards, macadamias and cropping (sugar and cotton).

This ASX dividend share aims to grow its distribution by 4% per annum.

It can do this because of three factors. First, rental indexation is built into its contracts with its high-quality tenants, which are linked to a fixed increase or CPI inflation. This helps rental income grow organically each year.

Next, it is regularly investing in its farms to improve the productivity for tenants, increasing that farm’s capital value and rental potential.

Finally, it occasionally makes an acquisition to grow its portfolio.

In FY23, Rural Funds has guided that it will pay a distribution of 12.2 cents per share (including franking credits). That translates into a forward distribution yield of 4.5%.

Centuria Industrial REIT (ASX: CIP)

This ASX dividend share is another REIT, but it’s focused on industrial commercial properties in high-demand areas where there is a limited supply.

The REIT’s fund manager, Jesse Curtis, recently described the optimistic case for ongoing rental growth:

The Australian industrial real estate market remains underpinned by low vacancy and record tenant demand, which drives strong rental growth across all markets. With an active management team and high-quality industrial portfolio, Centuria Industrial REIT continues to be a beneficiary of these favourable market conditions with positive leasing activity and rental growth supporting portfolio valuations.

The portfolio was recently externally valued as at 30 June 2022, leading to a 1.3% increase in the book values compared to December 2021.

At December 2021, it had a net tangible asset (NTA) per unit of $4.21. The current Centuria Industrial REIT share price of $3.04 is at a 28% discount to this, leaving a lot of margin of safety for if/when book valuations decrease. Keep in mind that the Centuria Industrial REIT’s share price has fallen by more than 20% over the last six months.

CMC Markets has an estimated distribution from the REIT of 16.5 cents per unit in FY23, translating into a forward distribution yield of 5.4%.

The post Why I think these 2 ASX dividend shares are ideal for income investors appeared first on The Motley Fool Australia.

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More reading

• Here are top 2 ASX dividend shares with great yields
• Analysts name 2 ASX dividend shares to buy with 5%+ yields
• Analysts name 2 top ASX dividend shares with big yields to buy
• Best ASX shares to buy in July 2022
• This is the latest ASX 200 sector to be hit by downgrades

Motley Fool contributor Tristan Harrison has positions in RURALFUNDS STAPLED. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended RURALFUNDS STAPLED. 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 Accent Group Ltd (ASX: AX1) share price is on the slide on Friday morning.

At the time of writing, the footwear retailer’s shares are down 7% to $1.41.

Why is the Accent share price sinking?

Investors have been selling down the Accent share price on Friday following the release of a trading update.

According to the release, the retailer is expecting to report earnings before interest and tax (EBIT) in the range of $61 million to $63 million. This will be a significant reduction on the EBIT of $124.9 million that it reported in FY 2021.

It is also short of Bell Potter’s EBIT estimate of $70.6 million for FY 2022.

Though, it is worth noting that Accent’s FY 2022’s EBIT includes approximately $7.6 million of one-off, non-cash charges.

These charges comprise the write-down of PIVOT store fit-out costs of $5.1 million and around $2.5 million of impairment charges relating to store lease assets in a small number of stores where customer traffic levels have still not recovered.

So, when adjusting for these one-offs, Accent’s result will be broadly in line with Bell Potter’s estimate.

Reasonable start to FY 2023

The release also reveals that Accent has started FY 2023 in a reasonably positive fashion thanks to strong deliveries of new products.

However, while the company has returned to like for like sales growth for the first three weeks of FY 2023, the comparable period was disrupted by store closures and COVID restrictions. So, beating those numbers was not a challenging feat.

The company also revealed that the execution of its growth plan and key initiatives remains on track. Strong momentum is continuing in Glue and Stylerunner, and the new stores which opened across all banners are performing well, which it believes provides a growth platform for the future.

Management commentary

Accent’s CEO, Daniel Agostinelli, commented:

The disruption experienced in FY22 has been well reported. Sales across May and June continued to be subdued compared to expectations as we continued our focus on driving full price full margin sales. Pleasingly, gross margin rate was ahead of the prior year and since the back end of June we are now starting to experience more normal undisrupted trading conditions across most of the store network.

The first three weeks of FY23 have seen a return to strong deliveries of new product and a positive customer response. Like-for-like sales for this period have been positive albeit against restrictions and store closures in July last year, gross margin rate has also tracked well ahead of the prior year.

The post Why is the Accent share price sinking 7% today? appeared first on The Motley Fool Australia.

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More reading

• The Accent share price has already surged 18% in FY23. What’s next?
• Analysts name 2 ASX dividend shares to buy with 4%+ yields
• Why analysts say these excellent ASX dividend shares are buys
• 2 top ASX dividend shares that analysts rate as buys
• How much has the Accent dividend paid to shareholders in the last 5 years?

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

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In the last few weeks, I have been buying Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares for my portfolio.

The investment conglomerate is not (yet) close to being my biggest position, but it’s one that I’m regularly adding to.

For my own portfolio, I’m looking for ASX shares that can hopefully deliver long-term capital growth while also paying a good stream of dividends.

I think Soul Pattinson shares have the potential to tick both of the boxes for growth and dividend.

I like the diversification and investment strategy

Exchange-traded funds (ETFs) can be very effective investments, but I think the ASX is too heavily focused on just a few banks and resource businesses.

I believe Soul Pattinson offers effective diversification in a single investment, so it can be lower risk, and the diverse investment policy means the management team can go hunting in many places for opportunities.

It aims to (and has built) a “portfolio of assets generating reliable cash through market cycles which serves to protect downside in market corrections”. It has also “partnered with attractive companies looking to access growth capital and undertake strategic acquisitions”.

Soul Pattinson aims to invest for the long term, by being disciplined and using a value-focused approach through market cycles to deliver returns.

It has a few different parts to its portfolio – a strategic portfolio, a large cap portfolio, a private equity portfolio, an ‘emerging’ companies portfolio, a structured yield portfolio and a small property portfolio.

Strategic holdings include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Tuas Ltd (ASX: TUA), Apex Healthcare, and Pengana Capital Group Ltd (ASX: PCG). It owns sizeable stakes in these businesses

The large-cap portfolio has names including Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG) and Woolworths Group Ltd (ASX: WOW).

Private equity holdings include agriculture, Ironbark, Aquatic Achievers and Ampcontrol. Soul Pattinson recently took full control of Ampcontrol, the largest privately owned engineering company. It is accelerating its strategy to be “at the forefront of developing and supplying advanced technology as well as innovative products and services that enable a competitive advantage in a net-zero carbon environment”.

Growing dividends

One of Soul Pattinson’s main aims is to grow dividends for shareholders. It has increased its annual dividend every year since 2000. Growing operating cash flow enables higher dividend payments.

The FY22 interim dividend was increased by 11.5%.

Why I bought more Soul Pattinson shares

Aside from all the elements that I’ve already outlined, one of the simplest reasons I bought more shares was the fall in the Soul Pattinson share price. At the time of writing, it is down around 20% this year to date. Though, I did buy it at an even lower price.

Also, while coal isn’t my favourite investment, the strong coal price is helping fund large dividends to Soul Pattinson from New Hope. It can then use that money to invest in more opportunities (and fund higher dividends).

The post Here’s why I just bought more Soul Pattinson shares appeared first on The Motley Fool Australia.

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More reading

• Own Soul Patts shares? Here’s what to look out for in FY 2023
• 5 worst ASX energy shares of FY22
• The rise and fall of the Soul Pattinson share price over the past year
• Why did the Soul Pattinson share price go backwards in June?
• Own Soul Patts shares? Here’s how much of its portfolio is exposed to coal

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Macquarie Group Limited and TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Alumina Limited (ASX: AWC) share price has struggled this year, but could it have better days ahead?

This ASX 200 materials share has slid nearly 24% year to date to the current share price of $1.425. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has dropped 11% year to date.

So what could be next for Alumina in the future?

What’s the outlook for this ASX 200 materials share?

Alumina invests in alumina and bauxite via its 40% stake in Alcoa World Alumina and Chemicals (AWAC). Pennsylvania-based Alcoa Corp (NYSE: AA) holds the remaining 60% stake. AWAC is the largest alumina company in the western world.

Allan Gray portfolio managing director and chief investment officer Simon Mawhinney believes Alumina is “very attractive” at the current share price, despite energy prices.

Speaking at an investing webinar this week, Mawhinney said: “Alumina typically is effectively hedged for high energy prices… I think it’s very attractive at these prices.”

On Thursday, Alumina provided an update on Alcoa Corp’s quarterly earnings. AWAC’s cash margin leaped to $99 per tonne in the second quarter of 2022. This was up from $88 per tonne in the previous quarter. Underpinning this result, was a higher realised price for alumina.

Commenting on the results, CEO Mike Ferraro said:

Net AWAC distributions for the first half of 2022 were $162 million, a $25 million increase over the previous corresponding period.

Alumina Limited has received further net AWAC distributions of $39 million since the end of the second quarter.

Ferraro added the outlook for the alumina market is positive in the medium term, noting growth in aluminum metal consumption amid de-carbonisation is positive for the alumina industry.

However, he said many producers faced cost pressures in the first half due to Europe and China supply disruptions.

This led to higher energy and caustic soda prices. As a result of these energy prices, AWAC will cut production at the San Ciprian refinery in Spain by 15%. This is effective immediately.

Alumina share price snapshot

The Alumina share price has lost nearly 10% in the past year, while it has shed almost 7% in the past month. However, this week, the company’s shares have gained 2.5%.

This ASX 200 materials share has a market capitalisation of about $4.1 billion based on the current share price.

The post This ASX 200 materials share is ‘very attractive’ after falling 24% so far this year: expert appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares
• Here are the top 10 ASX shares today

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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The Insurance Australia Group Ltd (ASX: IAG) share price will be on watch this morning.

This follows the release of the insurance giant’s preliminary full-year results for FY 2022.

IAG share price on watch following mixed result

• Gross written premium (GWP) growth up 1.9 percentage points to 5.7%
• Reported net profit after tax of $347 million, compared to a loss of $427 million in FY21
• Reported insurance profit of $586 million
• Reported insurance profit margin misses guidance and down 6.1 percentage points to 7.4%

What happened in FY 2022?

For the 12 months ended 30 June, IAG delivered a reported net profit after tax of $347 million, which is up from a loss of $427 million a year earlier.

Management advised that this reflects the strengthening of prior period reserves, a challenging operating environment with a high incidence of natural perils, volatile investment markets, and a higher inflationary environment. There was also a $200 million pre-tax release from the business interruption provision.

And while the company’s GWP growth of 5.7% was in line with its mid-single digit growth guidance, the same could not be said for its reported insurance profit margin. It came in at 7.4%, which was well short of its 10% to 12% guidance.

Management blamed this largely on its net natural peril costs of $1,119 million, which were $354 million above the original allowance of $765 million.

Management commentary

IAG’s managing director and CEO, Nick Hawkins, acknowledged that FY 2022 was a difficult year but remains positive on the future. He said:

Our preliminary FY22 financial results reflect high natural perils and volatile investment markets. We have also strengthened our reserves following adverse experience in our commercial liability portfolio from prior accident years.

The FY22 preliminary underlying results reflect the positive momentum we’ve achieved as we build a stronger, more resilient IAG. Despite the challenges we have seen in the external environment over the year, our businesses have performed well, delivering strong GWP growth.

Our direct insurance business in Australia is growing in key segments, particularly as we roll out the NRMA Insurance brand in Western Australia and South Australia.

FY 2023 guidance

IAG is expecting “strong underlying business momentum” in FY 2023.

It is aiming for mid-to-high single digit growth. This is expected to be primarily rate driven to cover claims inflation, higher reinsurance costs and an increased natural peril allowance.

Management is also guiding to a much-improved reported insurance margin in the range of 14% to 16%.

Hawkins concluded:

As we enter FY23, our guidance demonstrates both top-line and margin improvement. We have been impacted by claims inflation in our key home and motor portfolios and have significantly increased our natural perils allowance to help ensure the business can withstand the impact of increasing frequency and severity of natural perils.

In our intermediated business, the steps we’ve taken to improve the performance are showing promising signs and positions us well to deliver the targeted insurance profit of $250 million in FY24. By creating a more focused operating model, a leadership team with deep expertise, and a clear strategy for growth we have confidence in the future.

The post IAG share price on watch following FY22 profit of $347m appeared first on The Motley Fool Australia.

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More reading

• Here’s why one analyst is ‘cautious’ of the IAG share price
• Why did the IAG share price surge 5% on Thursday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia 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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As interest rates rise, it gets harder to find the right ASX shares to buy.

This is because Australians will lock away their wallets and spend more selectively in the coming months. Less money to go around means fewer businesses will be able to continue their path of growth.

To help investors figure out what to buy in such a discriminating environment, two experts have picked out three ASX shares that they think will prove resilient even as consumers retreat:

‘Top-flight performance’ from flightless birds

Fat Prophets chief executive Angus Geddes likes the look of Collins Foods Ltd (ASX: CKF) at the moment.

“The KFC operator delivered strong revenue and net profit growth in fiscal year 2022 after successfully navigating COVID-19 lockdowns and growing inflationary pressures,” he told The Bull.

“Growth in new stores and increasing same store traffic delivered the top-flight performance.” 

Spotee Connect executive chair Elio D’Amato also picked Collins Foods shares as a buy last week.

“It grew group revenue by 11.1% on last year’s prior corresponding period. Earnings per share grew by 24.9% and its fully franked dividend was up by 17.4%.”

For Geddes, it’s not just the short-term prospect of Australians turning to fast food during an economic downturn.

“Collins Foods has the right ingredients to deliver strong performances over the longer term.”

‘A value buying opportunity’

The travel industry is dealing with such huge demand that airlines and airports are feeling the unreserved wrath of the public for lengthy queues and delays.

Considering this, Baker Young managed portfolio analyst Toby Grimm reckons the current share price for Corporate Travel Management Ltd (ASX: CTD) presents a golden entry point.

It’s fallen from $26.25 at the end of April to a Thursday closing price of $19.02.

“The business and leisure travel sector is expected to gradually recover to pre-pandemic levels,” he told The Bull.

“We believe a value buying opportunity exists, as we expect the stock to outperform in the medium term. The company is well managed.”

According to CMC Markets, seven out of 11 analysts recommend Corporate Travel shares as a buy.

A tech stock that’s gained 43% in July

Technology stocks have been on the nose all year, but Geddes has faith in Praemium Ltd (ASX: PPS).

“The board has resolved to return about $50 million to shareholders via a special dividend and on-market buyback.”

Geddes also likes Praemium’s renewed focus.

“This wealth management technology company sold its international operations for £35 million,” he said.

“Praemium will scale up in Australia in a bid to capture a bigger share of the independent advisory services market.”

It seems Geddes’ peers agree with his conviction. All five analysts surveyed on CMC Markets are rating Praemium shares as a strong buy.

The Praemium share price has lost more than half its value year-to-date, although it has gained a stunning 43% this month.

The post Food, money and travel: 3 ASX shares experts rate as buys right now appeared first on The Motley Fool Australia.

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More reading

• Why I think the Corporate Travel Management share price is too cheap to miss
• Chicken and chips: Experts name 3 ASX shares to buy right now
• Clipped wings: Why ASX 200 travel shares are having trouble getting off the ground today
• Own ASX travel shares? Here’s the outlook for FY23
• How did ASX 200 travel shares go in FY22?

Motley Fool contributor Tony Yoo has positions in Corporate Travel Management Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited and Praemium Limited. The Motley Fool Australia has recommended Collins Foods Limited, Corporate Travel Management Limited, and Praemium 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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