While the S&P/ASX 200 Index (ASX: XJO) isn’t technically in a bear market yet, for most sectors we are well and truly in one.

This is because mining and energy have carried the index upwards, so for many investors, their paper losses would be much more than the ASX 200’s 12% suffered so far this year.

Ophir Asset Management co-founders Steven Ng and Andrew Mitchell reminded investors that ASX shares bounce back the strongest after a trough.

“It is an investment truism that generally the best time to buy, and the worst time to sell, is when the market has entered bear territory,” their memo to clients read.

“This environment is throwing up opportunities and setting up stronger returns for investors.”

They analysed the historical statistics for the S&P 500 Index (INDEXSP: .INX) for the post-World War II era to prove their point.

The Ophir team found the average one-year return after a bear market is a stunning 22%, while it was 14.25% pa over three years and 13.17% over five.

It’s a scary time but investors need to act against their fears.

Small caps are out of favour, so pick them up cheap now

But which is the best buying opportunity at the moment?

Again, Mitchell and Ng suggested acting against emotions and to look forwards beyond the wisdom of the day.

“The most common strategic response to tightening financial conditions, slowing economic growth, and elevated market volatility is to shift to big cap, stable companies with robust and predictable earnings streams,” read the memo.

“But the flip side of this is that at the smaller end of the market this often creates greater mispricings that provide significant buying opportunities.”

The Ophir team, which focuses on small and mid-cap ASX shares, reckons it has witnessed “overly aggressive price falls” for such stocks.

There are now many “unusually cheap” small-cap stocks going for “a historically big discount” relative to their bigger brothers.

“We are now finding some wonderful businesses that were too expensive for us to own in the past but are now close to levels that we think provide great investment opportunities.”

Just another case of history repeating

Another expert specialising in small cap ASX shares, Cyan Investment Management portfolio manager Dean Fergie, told The Motley Fool that interest rates are still at historically low levels.

“So I’m actually pretty optimistic. I’ve been around for a long time, and I know that the market has pretty big swings,” he said.

“I’m not seeing underlying pessimism from the companies to which I’m speaking to — that gives me confidence that the underlying fundamentals are still intact. And that spells an opportunity in depressed share prices to make some good buys.”

As far as Ng and Mitchell are concerned, it’s just history repeating.

“We have seen these times before when indiscriminate and liquidity driven sell offs push down the valuations of some small cap businesses to unsustainable levels given the strength of their underlying operations,” read the memo.

“We think this bodes well for investment returns for those that fit this mould during the inevitable market recovery.”

The post ‘Unusually cheap’: ASX experts call out massive buying opportunity appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is the NAB share price in danger from a resurgent ANZ?
• Here are the top 10 ASX shares today
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Cyan Investment Management portfolio manager Dean Fergie discusses two micro-cap ASX shares he currently loves.

Hottest ASX shares

The Motley Fool: What are the two best stock buys right now?

Dean Fergie: We own shares in a listed investment company (LIC) called Touch Ventures Ltd (ASX: TVL), [which] is an Afterpay-backed investment or venture capital vehicle. 

Obviously, a huge amount of heat has come out of the buy now, pay later sector. Valuations are being crunched, and I think this has hurt this as an investment vehicle. 

MF: Even though Touch Ventures itself doesn’t have anything to do with buy now, pay later?

DF: They have a buy now, pay later operation in China, which is kind of a double whammy.

But that equates to about 5% of its value. And they have a newer buy now, pay later business in the UAE, which again maybe has some issues with respect to its ongoing valuation. They’ve got investments in a logistics business Sendle, open market data platform Basiq, and the like. 

But most importantly, this stock’s gone from a listing price of 40 cents back to, it’s currently trading at, 13 cents. They have, in net cash, 10 cents per share on their balance sheet. And it was trading at 10.5 only at the end of June. 

So you’re literally getting all their investments, which they’ve paid more than $100 million for, for almost nothing. And so we think that, as a pure value play, it’s extraordinarily cheap. It’s trading at 50% of its NAV [net asset value]. 

There might be some risk of its NAV, but you’re not going to mark down the value of cash on your balance sheet. So we think it’s a great opportunity.

MF: Did you buy in during the initial public offering (IPO), did you?

DF: We did, yes, unfortunately.

We also owned shares pre-IPO, which was at 20 cents. So we did see reasonable uplift when it IPOed, but then there’s been a lot of, I guess, value destruction on the way down.

MF: Fair enough. What’s the other stock you like at the moment?

DF: The other one we quite like, and I think it’s a bit topical, is a company called Mighty Craft Ltd (ASX: MCL). So they’re a boutique brewer and spirits company. And they’re also in a few venues. 

They bought a company called the Adelaide Hills Group just at the start of COVID, so early [2020]. And that sort of equates to its whole market cap at the moment. 

But probably most excitingly, they own 40% of a product called Better Beer, which is pretty much taking the market by storm in Australia. They just signed a distribution deal in New Zealand. They expect they’ll do next financial year something like 12 to 14 million litres of beer in this one product alone. 

So it’s just got a huge amount of growth and at a very, very tiny valuation. I think the total market cap of Mighty Craft now is about $50 million. So we think, again, it offers incredible value given their ongoing asset base and their products.

MF: The share price has about halved this year, hasn’t it?

DF: That’s about right. I think it’s gone from about 30 to 15 odd [cents].

So it’s capped out at about $50 million, which we think is tiny, given the amount of products that they’ve got under their banner.

The post ‘Extraordinarily cheap’: The ASX share where 77% of its value is cash appeared first on The Motley Fool Australia.

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More reading

• 5 small-cap ASX shares sitting on a pile of cash: experts

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled into the red. The benchmark index fell 0.55% to 6,649.6 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to jump

The Australian share market looks set to have a great day on Wednesday following a very strong night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 79 points or 1.2% higher this morning. On Wall Street, the Dow Jones rose 2.4%, the S&P 500 climbed 2.75%, and the Nasdaq jumped 3.1%. Investors are betting that the market has now bottomed.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good day after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.5% to US$104.10 a barrel and the Brent crude oil price has risen 1.1% to US$107.42 a barrel. Tight supply conditions boosted oil prices.

BHP rated as a buy

The BHP Group Ltd (ASX: BHP) share price remains good value according to analysts at Goldman Sachs. This morning the broker reiterated its buy rating with a trimmed price target of $40.80. In respect to its guidance, Goldman commented: “Released guidance for FY23 production is on average 2-3% below GSe, but importantly the largest and highest margin assets such as Pilbara iron ore & Escondida copper were in-line or above our estimates.”

Gold price flat

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a subdued day after the gold price traded flat overnight. According to CNBC, the spot gold price is unchanged at US$1,710.2 an ounce. A softer US dollar was offset by rate hike bets.

Allkem quarterly

The Allkem Ltd (ASX: AKE) share price will be on watch today when the lithium miner releases its eagerly awaited quarterly update. Investors will be keen to see the price the company is commanding for its lithium and how it has handled COVID-related labour shortages.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Is the NAB share price in danger from a resurgent ANZ?
• ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares
• Here are the top 10 ASX shares today
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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 ASX 200 index is home to a good number of blue chip shares. But which of these shares would make good additions to a portfolio this week?

Three blue chip shares that are highly rated are listed below. Here’s what experts are saying about them:

CSL Limited (ASX: CSL)

The first blue chip share to look at is CSL. It is a leading biotherapeutics company which owns the CSL Behring and Seqirus businesses. Combined, these two businesses have a portfolio of life-saving and lucrative therapies and vaccines which are generating billions of dollars in sales each year. But management isn’t resting on its laurels. Each year the company invests in the region of 10% to 11% of its sales back into research and development activities every year. This means it is on course to invest ~US$1 billion into these activities this year. This ensures that CSL has a pipeline of potentially lucrative products to support its long term growth.

Analysts at Citi are big fans of the company. The broker currently has a buy rating and $330.00 price target on its shares.

REA Group Limited (ASX: REA)

Another ASX 200 blue share to look at is REA Group. It is the dominant player in real estate listings in the Australian market. In fact, in the first half of FY 2022, during one month the company saw 13.2 million people visit its local site. This is the equivalent of 65% of Australia’s adult population. Furthermore, on average, there were 3.3x more visits than the nearest competitor each month. Thanks to this leadership position, new revenue streams, acquisitions, price increases, and its international operations, the company has been tipped to continue its solid growth in the coming years.

Goldman Sachs remains very positive on REA Group. Its analysts currently have a buy rating and $164.00 price target on its shares.

ResMed Inc. (ASX: RMD)

A final blue chip ASX 200 share to look at is ResMed. It is a medical device company with a focus on the growing sleep treatment market. Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a very strong rate over the last few years. Pleasingly, thanks to its significant market opportunity and the growing prevalence of sleep disorders, analysts are tipping the company to continue its growth for the foreseeable future.

Morgans is bullish and has an add rating and $37.95 price target on its shares.

The post 3 blue chip ASX 200 shares experts say are buys appeared first on The Motley Fool Australia.

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More reading

• Own CSL shares? Here’s a look at the biotech’s balance sheet
• Why cheap hamburgers could give beginner ASX share investors food for thought
• How much have REA shares paid in dividends in the last 5 years
• 2 top ASX 200 shares brokers rate as buys
• Here’s how much $20k invested in these ASX shares 10 years ago is worth today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended REA 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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Beaten-down battery technology company Novonix Ltd (ASX: NVX) extended its losses on Tuesday, closing 0.46% lower at $2.16 apiece.

This brings the company’s losses to more than 76% year to date, well ahead of sector indices and benchmarks.

For instance, the S&P/ASX 200 Index (ASX: XJO) is down 10.7% this year to date while the S&P/ASX All Technology Index (ASX: XTX) is 32% lower.

Where to next for the Novonix share price?

Novonix has given back all of its gains earned from 2021 to date. Its share price now trades back at January 2021 levels, having soared to a high of $12.16 in December last year.

Since then, shareholders have endured a one-way ticket south – at a pace much faster than the wider market.

As it stands, the Novonix share price now needs to gain 233% to return to its January 2022 levels.

To reach its all-time high, it needs to appreciate more than 460%, something that seems highly improbable in the current climate. The downtrend in the Novonix share price is shown on the chart below.

Clearly, the downside has been heavy for Novonix investors.

The company’s market capitalisation is currently valued at just over $1 billion. That’s a considerable drop from a market cap of $4.4 billion in December. This, too, on an asset base of $438 million.

Some market watchers are questioning how a $4 billion company — in December — delivered just $5 million in H1 FY22 revenue, a loss of $15 million in cash from operations (CFFO), and a net loss of $28 million.

For reference, Dicker Data Ltd (ASX: DDR) is another ASX tech company valued at around $2.1 billion. It delivered FY21 revenue of $2.5 billion, CFFO of $20 million, and an after-tax profit of $73 million.

‘Liquidity era’ closing

The ‘pandemic era’ of 2020-2021 was marked by tremendous amounts of cheap liquidity coursing throughout the veins of financial markets.

Investors were happy to pay a premium for the promise of growth and return, set to occur sometime in the future.

This resulted in an enormous upswing in speculative investing, whereby unprofitable companies were re-valued at exorbitant multiples. Record low interest rates and a ‘risk-on’ attitude helped fuel the sentiment.

But, fast forward, and the market has shied away from rewarding unprofitable companies in 2022. This is evident through the large wind-down in growth and tech stocks.

Morgans is neutral on Novonix shares, valuing them at $2.98 apiece after a roughly 40% slice to its previous valuation.

Hence, with the prospects for tech shares dwindling in FY23, it remains to be seen if Novonix can re-rate to the upside. It seems the price of lithium and graphite might not have a strong bearing on the company’s share price.

After all, Novonix touts itself as a “battery materials and technology company” and is rated in the tech sector by the Global Industry Classification Standard (GICS).

The post Down 76% this YTD, can the Novonix share price claw back gains? appeared first on The Motley Fool Australia.

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More reading

• Novonix shares: What does the next year hold in store?
• Why Costa, Domino’s, EML, and Novonix shares are dropping
• Novonix share price sinks 8% following ‘gun shy’ broker note
• These 3 ASX 200 lithium stocks are exploding on Friday
• Why was FY22 a rollercoaster period for the Novonix share price?

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

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AMP Ltd (ASX: AMP) has highlighted its digital advantage in a recent presentation to investors.

AMP shares fell 1.46% today to trade at $1.01. For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) finished 0.01% in the red today.

Let’s take a look at what the company’s CEO is plugging today.

What is AMP saying?

AMP CEO Alexis George has touted the company’s digital presence in an Allan Gray Live investing webinar.

Speaking to investors on Tuesday, George said AMP has a plan to “launch a digital mortgage next week”.

She said:

We will launch a digital mortgage next week. Now yes, we used to partner and that’s brave.

But we did that in less than 100 days from concept to getting the fourth customer and that is what I want our bank to be — more agile, respond to what’s going on, and be brave about putting new initiatives out there.

George highlighted the company’s digital presence, saying “we are a digital bank, you know, we don’t have branches, we are a digital bank”. She said:

Are we mignon, yeah. We’re one point something percent market share of of mortgages, but we’re digital. We have a brand we have a consumer presence. And I think they’re really important.

In recent news, Mirvac Group (ASX: MGR) has taken control of the AMP Capital Wholesale Office Fund (AWOF). Investors voted to appoint Mirvac as the trustee of the $7.7 billion office fund.

This fund is made up of 11 major assets in Sydney and Melbourne, including Collins Place, Melbourne and the Quay Quarter, Sydney.

Mirvac is expected to take over in as the investment manager and property manager of these assets in October.

AMP share price snapshot

AMP shares have lost 6% in a year, while they have jumped 3% in the past month.

For comparison, the ASX 200 Financials Index is up 28% in the past year and 29% year to date.

AMP has a market capitalisation of nearly $3.3 billion based on the current share price.

The post Own AMP shares? CEO touts its ‘digital bank’ status in competitive landscape appeared first on The Motley Fool Australia.

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More reading

• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• AMP share price in focus as Mirvac wins control of $7.7 billion office fund
• Why interest rates need to rise despite ASX carnage: economist
• Why did the AMP share price fall 13% in FY22?
• What dragged the AMP share price down 13% in June?

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 National Australia Bank Ltd (ASX: NAB) share price has been rising over the past month. But could a stronger Australia and New Zealand Banking Group Ltd (ASX: ANZ) derail its progress?

Over the past month, the NAB share price has risen by more than 12%. That’s strong progress, considering the S&P/ASX 200 Index (ASX: XJO) has only gone up by 3.3% in the last month.

In recent times, investors have been impressed by the progress that NAB’s relatively new leadership team, including CEO Ross McEwan, have made in turning the bank around.

For example, the NAB FY22 half-year result included cash earnings growth of 4.1% to $3.48 billion.

The CEO said that focused investment has been “key” to delivering strong momentum across the business.

But, banks are fighting each other for market share. There are the big four banks of NAB, ANZ, Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA). And there are other players like Macquarie Group Ltd (ASX: MQG), Bank of Queensland Limited (ASX: BOQ), and Bendigo and Adelaide Bank Ltd (ASX: BEN) that want to grow.

As such, an increase in market share for ANZ could mean a decrease in market share somewhere else. For starters, an acquisition of Suncorp’s banking operations would simply merge the market share of ANZ and Suncorp. But after that, could ANZ use its bigger size to compete more strongly with NAB and others to grow its market share?

ANZ kicks things up a notch

The ANZ CEO has said that the acquisition could mean it can “compete more effectively in Queensland”.

The Australian Financial Review also reported that CEO Shayne Elliot said:

This is a big step forward, but I don’t think moving from 13% to 15% market share somehow gives us some dominant position or some pricing power that we didn’t have before.

It’s a modest uplift, and we get to be a better competitor, with the really big players in the market who are people like CBA. Just as Suncorp probably feels dwarfed by ANZ, we feel dwarfed by CBA.

It’s worth noting that ANZ will become the third largest in terms of mortgages and retail deposits if its Suncorp deal goes ahead, jumping ahead of NAB. It will also add $47 billion of home loans for ANZ.

But, even before this deal, ANZ reported that it’s getting on a level playing field with the big four in loan processing times. Home buyers value being able to get faster loans through the system. In recent times, ANZ had seen longer processing times, a factor in its losing market share to other banks.

But in the trading update for the last quarter, released on the same day as the acquisition news, ANZ said:

Adding operational capacity and processing resilience in our Australian home loan business has helped deliver consistently faster turnaround times across all channels, and we are in line with major peers for our key customer segments. Lending volumes grew $2 billion (3% annualised) in the third quarter, with particularly strong growth in June. We remain on track to grow in line with the Australian major banks before the end of the financial year and are delivering growth with an eye to maintaining margin performance and credit quality.

A combination of a stronger national presence and better processing times could help ANZ capture more new loans, and slow down growth for NAB.

Foolish takeaway

The ANZ-Suncorp deal is not approved or done yet. There are many hurdles to pass, including the Australian Competition and Consumer Commission (ACCC) ruling on competitive impacts in the sector.

But, if ANZ is successful, it could be a little harder for NAB and others to grow their loan books as much as they have done in recent history.

The post Is the NAB share price in danger from a resurgent ANZ? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Top broker gives its verdict on ANZ’s Suncorp Bank acquisition
• What might ANZ’s Suncorp deal mean for competition among ASX 200 banks?
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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 Macquarie Group Limited and 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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Superannuation is one of the main ways that Australians save for retirement.

Employees receive superannuation guarantee contributions. Employers are now meant to contribute 10.5% of wages to an employee’s superannuation fund. Employees can also salary sacrifice more into their super fund.

Business owners can also make concessional contributions for themselves.

On top of that, people can add extra money into superannuation with non-concessional contributions.

When that money is in the superannuation fund, people can decide how they want that money to be invested such as ASX shares, international shares, cash and so on.

But, there’s a question of how much people actually need to build up their retirement nest egg to be able to retire. Is it $1 million? Maybe $500,000?

Every personal circumstance is different. Is that person renting, or do they perhaps own their home outright with no mortgage? Do they live with a spouse who also has a sizeable retirement account? And so on. This is the sort of thing that financial planners can help with.

But, personal finance expert Scott Pape (AKA the Barefoot Investor), has shared in his latest weekly newsletter what the required superannuation balances could be for retirement.

Required retirement balance

After sharing a humorous story about visiting a (wealthy) men’s group lunch and talking about retirement, Pape revealed research done by Super Consumers Australia, a partner of CHOICE, that uses Australian Bureau of Statistics (ABS) research on what retirees typically spend.

Super Consumers Australia suggest that, for a comfortable retirement, single people need $301,000 and couples need $402,000, assuming they don’t pay rent or a mortgage. These balances are based on singles spending $44,000 annually and for couples, it is based on spending of $64,000.

That’s a bit more than the median superannuation balance at retirement, according to the ABS, of $250,000 for men and $200,000 for women. But, it may be achievable for people with time.

For singles wanting to spend $55,000 a year, it was suggested they need $745,000, according to Super Consumers Australia. For couples wanting to spend $81,000 a year, they’d need around $1 million.

Pape suggests that people can get by with smaller retirement balances if they get the aged pension and do a bit of paid work.

Foolish takeaway

Of course, how much is contributed to superannuation is one part of the future retirement balance equation. There’s also a question of how much time is given to grow the balance, and the size of the returns, to build towards retirement.

Hopefully, our investment portfolios can deliver good investment returns partly thanks to the power of compounding.

The post How much superannuation do you really need in retirement? 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 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 iron ore price dropped below the benchmark of US$100 per tonne over the past week. This is the first time it has dropped this low in 2022. It was last around this mark in November 2021.

Falling commodity prices and increasing costs for labour, fuel, and mining processing inputs are set to impact the earnings of ASX mining shares in the near future, one expert predicts.

‘Tough reporting season’ next month

According to reporting in the Australian Financial Review (AFR), veteran mining analyst Dr Glyn Lawcock has recommended that investors go underweight on ASX mining shares ahead of a “tough reporting season” which commences next month.

Lawcock’s warning comes amid a four-month fall in commodity prices including aluminium, gold, silver, copper, zinc, nickel, and iron ore.

Downgrades on ASX mining shares

Lawcock and his team at Barrenjoey have downgraded their 2023 earnings estimates for various ASX mining shares.

They’ve dropped their forecasts for 29Metals Ltd (ASX: 29M) and Sandfire Resources Ltd (ASX: SFR) by more than 80%.

A similar downgrade has been applied to Alumina Limited (ASX: AWC).

The team also downgraded earnings estimates for South32 Ltd (ASX: S32) by 55%. Meantime, BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) have been downgraded by 20% and 10% respectively.

Lawcock said:

We have clearly seen the peak in this cycle, although I’d say coal and lithium are still in a boom at the moment.

We see iron ore prices lifting into the end of 2022 on China stimulus and expectations of a better 2023 given the disappointment of 2022 in China due to lockdowns.

Lawcock said this cycle was different because “we come into this downturn with low [product] inventory and not a lot of projects under construction”.

“We don’t come into this downturn with as much supply, so I don’t think we exacerbate the downside as much this time, and we are coming into a downturn with good balance sheets.”

Resources ‘stronger than ever’ after economic chaos

Regal Funds Management chief investment officer Phil King expects the US share market to bottom over the next month or two, according to another AFR article. He thinks it will finish the year higher.

King also thinks inflation has peaked, and the market is full of great buying opportunities. But he is concerned about the Chinese economy and the flow-on effect on the iron ore price.

King said:

It causes us genuine concern because it’s the Chinese property market that has been driving the Chinese economy, and the Chinese economy has been driving the world.

King thinks resources will come out on top once the economic chaos is over.

He said: ” … even though we might see a US recession and some weakness in demand, we think the resource sector will come out the other side stronger than ever.”

The companies behind the mega ASX mining shares are due to report soon.

BHP will release its full-year results on 16 August. Fortescue’s are scheduled for 29 August.

Rio reports on a different cycle and will present its half-year results on 27 July.

The post ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• What’s the outlook for the iron ore price in 2023?
• ASX 200 midday update: BHP’s Q4 update, JB Hi-Fi delivers record result
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Motley Fool contributor Bronwyn Allen has positions in Alumina Ltd. and BHP Billiton Limited. 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 year’s edition of Australia’s top 250 richest people saw a number of well-known wealthy individuals climb up the ladder.

Published by The Australian, the annual rich list tracks the fortunes of tech entrepreneurs along with mining and property magnates.

Below, we take a look at the names who’re hitting the charts and cementing their places as the country’s most wealthy businesspeople.

Who makes up Australia’s Top 5 Rich List?

The annual study, showing which Australians are making financial strides, tallied riches past the half a trillion dollar mark this year.

The average wealth of each person who made the cut stood at around $2.08 billion. The list included 131 billionaires.

Of the top 250 names, 30 were women and the average age of each individual was 65 years of age.

Here are the list’s top five:

For the third consecutive year, Gina Rinehart took the mantle with an estimated wealth of $32.64 billion. Her source of wealth came from iron ore mining alongside investments in agriculture (beef) and media. She is the founding member of Pilbara iron ore mine Roy Hill.

In second position, and not far behind, Andrew Forrest has acquired $31.77 billion through his holding in ASX-listed Fortescue Metals Group Ltd (ASX: FMG).

Furthermore, Forrest also owns cattle stations in outback Australia which supplement his income.

Moving into third spot, up from fourth last year, Anthony Pratt (and family) has $27.77 billion. Regarded as one of Australia’s most generous businessmen, Pratt made his wealth from Visy Industries – a packaging, paper, and resource recovery company that employs more than 7,000 people worldwide.

Slipping in to fourth is Mike Cannon-Brookes who is co-founder and co-CEO of United States-based software giant Atlassian. His wealth came to $26.2 billion. Cannon-Brookes is often referred to as the ‘accidental billionaire’ given how he aimed to earn a mere $48,500 per year.

And, lastly, at number five, Cannon-Brooke’s business partner Scott Farquhar is the other co-founder and co-CEO of Atlassian. His wealth is projected to be $25.99 billion.

The post Which ASX rich listers have grown their fortunes over the past year? appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for the iron ore price in 2023?
• Down 12% in a month, is the Fortescue share price a buy?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here’s why the Fortescue share price is falling 6% into the dirt today
• These ASX 200 mining shares are getting buried. What’s happening?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian. 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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