The Blackmores Ltd (ASX: BKL) share price was on a slippery slope into the red on Thursday after the company released its full-year results.

At the close of trading today, the health supplements company’s shares were down 10.07% to $73.19. Let’s take a look at the results.

Double-digit revenue growth

Blackmores delivered its FY 2022 results for the 12 months ended 30 June 2022. Here are some of the key financial highlights:

• Group revenue increased 12.8% year on year to $649.5 million
• Group underlying earnings before interest and tax (EBIT) of $56.6 million, up 19%
• Group underlying net profit after tax (NPAT) of $31.1 million, up 22.6%
• Final dividend of 32 cents per share, fully franked, bringing the full year dividend to 95 cents per share, up 33.8%
• Net cash of $82.2 million

What happened in FY 2022?

Blackmores reported a solid financial performance, with growth recorded across all three brands for the first time in four years.

Continued focus on product innovation and investment led to an increased revenue base across the international, China, and Australia/New Zealand (ANZ) segments.

In particular, the international portfolio delivered EBIT growth of 43.9% to $29.8 million. This was underpinned by cost management, disciplined pricing and a shift to higher margin channels in all major markets.

Furthermore, the China segment registered an increase in EBIT by 11.2% to $16 million. Blackmores noted that gross margin was broadly flat with price initiatives and favourable mix offsetting higher input costs challenges.

And lastly, the ANZ division experienced a lift in EBIT by 7% to $43.1 million through gross margin improvement.

Overall, the group simplified its operations and strengthened the supply chain to address the significant disruption caused by COVID-19.

In addition, it implemented initiatives to enhance manufacturing productivity as input costs increased.

What did management say?

Blackmores CEO Alastair Symington had this to say about the results:

We are pleased to deliver a strong financial result during a period which continued to be impacted by the ongoing effects of COVID-19 and significant disruption to supply chains and increased input costs.

The resilience of our business model, together with the strength of our brands and distribution channels, have enabled the group to respond to these challenges to deliver top line growth along with further margin expansion.

What’s the outlook for FY 2023?

Looking ahead to the new financial year, Blackmores advised it remained focused on executing its strategic and commercial plan.

This involves expanding its distribution footprint and investing in brand awareness across the international segment.

In the ANZ business, Blackmores will spend more on advertising and channel differentiation behind its three-brand strategy.

With China, management is trying to navigate consumer and trade headwinds caused by government-mandated COVID-19 lockdowns. However, there’s hope that when this is lifted, e-commerce platforms will regain more traffic.

Blackmores share price snapshot

In 2022, the Blackmores share price has fallen 18.5%, but is relatively flat when viewed over the last 12 months.

In comparison, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) sector is up 3.6% for the current calendar year.

Blackmores commands a market capitalisation of approximately $1.42 billion.

The post Blackmores share price has dived 10% despite revenue boost appeared first on The Motley Fool Australia.

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More reading

• Why Blackmores, Codan, Lake Resources, and Xero shares are falling today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Blackmores 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 S&P/ASX 200 Index (ASX: XJO) broke what was a three-session winning streak on Thursday with tech shares leading the downfall. The index finished today’s trade 0.21% lower at 7,112.80 points.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) was the market’s worst-performing sector, falling 2.4%, following a rough day on the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC). The Wall Street index slipped 1.25% overnight.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) also underperformed after recording a notable gain on Wednesday, while the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) lifted for a sixth consecutive session.

Also trading in the green was the S&P/ASX 200 Energy Index (ASX: XEJ). It gained 1.4% to lead the market, likely on the back of higher energy commodity prices.

European coal futures reportedly rose overnight amid increasing concerns of an energy shortage on the continent. Meanwhile, oil prices lifted off a six-month low. The Brent crude price rose 1.4% to US$93.65 a barrel and the US Nymex crude price gained 1.8% to US$88.11 a barrel.

At the end of Thursday’s session, three of the ASX 200’s 11 sectors were trading higher.

So, without further ado, let’s take a look at which share outperformed all others to be crowned today’s top performer.

Top 10 ASX 200 shares countdown

Today’s top performing ASX 200 share was IPH Ltd (ASX: IPH), and by a longshot too. There was plenty of exciting news from the intellectual property services firm today.

It announced a major acquisition and dropped its financial year 2022 results. Find out more about the company and what it’s been up to here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
IPH Ltd (ASX: IPH)	$10.21	16.02%
Treasury Wine Estates Ltd (ASX: TWE)	$13.14	4.04%
New Hope Corporation Limited (ASX: NHC)	$4.74	3.72%
Brambles Limited (ASX: BXB)	$12.84	3.55%
Coronado Global Resources Inc (ASX: CRN)	$1.755	2.33%
Santos Ltd (ASX: STO)	$7.07	2.32%
CSL Limited (ASX: CSL)	$299.20	2.29%
Viva Energy Group Ltd (ASX: VEA)	$2.72	2.26%
Whitehaven Coal Ltd (ASX: WHC)	$6.93	2.21%
Downer EDI Limited (ASX: DOW)	$5.43	2.07%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Thursday
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• Down 16% in 3 days: Why is the Lake Resources share price still sliding?

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 CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has recommended IPH Ltd and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Orora Ltd (ASX: ORA) share price closed lower today after the company announced its results for FY22. 

Shares of the global packaging manufacturer and distributor ended the day trading for $3.50 apiece, a fall of 0.85% from Wednesday’s closing price.

Let’s go over the key facts from the report.

What did Orora report?

• Revenue up 15.6% year-on-year (YoY) to $4 billion
• Net profit after tax (NPAT) up 36% YoY to $184.7 million
• Underlying NPAT of $187.1 million, up 19.4% YoY
• Underlying earnings before interest and tax (EBIT) up 14.6% YoY to $285.5 million
• Underlying earnings per share (EPS) of 21.7 cents per share (cps), up 28.2% YoY
• Operating cash flow up 10.8% YoY to $272.6 million
• A final unfranked dividend of 8.5 cents per share, representing 76.2% of the group’s NPAT

Orora’s results were stimulated by growth primarily in its North American segment. The company said it achieved this through optimising its business processes and managing the cost of its inputs amid inflation and supply chain disruptions.

The North American segment grew its revenues 14.3% YoY to $2.3 billion and its EBIT 32.6% YoY to $97.9 million.

Meanwhile, the Australasian operating segment grew revenues 9% YoY to $909.1 million, and its EBIT grew 0.2% to $150.6 million.

A final unfranked dividend of 8.5 cents was declared, to be paid to shareholders on 10 October. Orora said the dividend was unfranked due to the company’s “near-term capital investment programs and the tax benefits associated with Australia’s instant asset write-off legislation for capital expenditure, plus other timing differences”,

What else happened in FY22?

Orora bought 30.7 million shares as part of its share buyback program for a total of $109 million.

The company also said it’s on track to deliver on its environmental, social, and governance (ESG) policies, including using recycled content in its glass packaging and reducing emissions.

Orora used 38% recycled content for its glass packaging, up 31% YoY. Headway was made in reducing emissions through the use of its oxyfuel technology, reportedly the first company to do so in Australia. Orora intends to reduce 40% of its emissions by 2035.

What did management say?

Commenting on the FY22 results, Orora managing director and chief executive officer Brian Lowe said:

I am incredibly proud of the entire team’s performance — we have delivered against our corporate strategy while remaining agile in response to external challenges as they have emerged. With a strong balance sheet and operating cash flow we are making significant investments in initiatives that will continue to sustainably grow our business and deliver for shareholders in FY23.

What’s next?

Orora gave guidance for FY23, and notes that it expects to be a “challenging year of economic conditions”.

For the Australasia operating segment, EBIT is expected to be similar to the result observed for FY23. The first half of FY23 is expected to be more difficult than the last, with the company citing pressures from inflation and the recovery in prices it charges its customers.

The outlook for the North American segment is more positive, with growth in EBIT expected due to the price increases of its products due to its profit enhancement initiative.

Orora share price snapshot

The Orora share price is down by around 1% year to date and by a similar amount over the 12 months.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen by around 6% so far in 2022 and by almost 5% since this time last year.

Orora has a market capitalisation of $2.98 billion.

The post Orora share price slips despite $187 million profit appeared first on The Motley Fool Australia.

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• Nuix share price tumbles following $23m loss in FY22
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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 Nuix Ltd (ASX: NXL) share price was out of form on Thursday.

The embattled investigative analytics and intelligence software provider’s shares ended the day 3.5% lower at 68.5 cents.

This followed the announcement of a sizeable loss for FY 2022.

Nuix share price on FY 2022 results

• Annualised contract value (ACV) down 2.3% to $162 million
• Statutory revenue down 13.5% to $152.3 million
• EBITDA down 82% to $12.1 million
• Net profit after tax down 190.4% to a loss of $22.8 million

What happened during FY 2022?

For the 12 months ended 30 June, Nuix reported a 2.3% reduction in its ACV to $162 million. Management advised that this reflects a softer performance in North America and EMEA, which offset ACV growth in the Asia Pacific region.

Nuix’s statutory revenue for the period was down 13.5% to $152.3 million. This was due to the lower value of multi-year contracts sold and lower new sales. Combined with an increase in costs, this led to a much lower EBITDA outcome for FY 2022.

And while Nuix saw an increase in customer churn to 5.4% in FY 2022, management feels this is a low level and notes that strong customer relationships have been maintained.

Incredibly, the company spent over one-third of its revenue on research and development activities during the 12 months. Nuix spent $58.3 million on these activities, which is an increase of 32% on the prior year. It notes that important progress was made on critical projects, including further development on the integrated SaaS platform and Natural Language Processing (NLP) integration.

Management commentary

The company’s CEO, Jonathan Rubinsztein, appears optimistic on the future thanks to Nuix’s strategic refresh initiatives.

We’ve been clear about the need for a refresh of strategic initiatives to drive growth. Our strategy revolves around a greater focus on customer centricity and initiatives across three key horizons. The team has been working exceptionally hard behind the scenes over the last half.

Nuix is a remarkable organisation making a meaningful difference in the world. We’re putting the right people in the right roles to make sure Nuix is fit for growth. Our customer and partner relationships remain strong. Our Engine remains unparalleled and is central to our platform, underpinning our growth trajectory. And lastly, our strategy is clear and we’re acting on it, with urgency and focus. I’m excited and optimistic about our future, and as an organisation, the Nuix team is mobilising to enact the changes required to drive growth.

The Nuix share price is now down 70% in 2022

The post Nuix share price tumbles following $23m loss in FY22 appeared first on The Motley Fool Australia.

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More reading

• The Telstra share price is still trading 50% off its all-time high. Is right now a good time to buy?
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• Why did ASX mining share Conico rocket 30% today?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. 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 past two months have been rather kind to the Telstra Corporation Ltd (ASX: TLS) share price. Back on 14 June, the veteran ASX 200 telco was going for $3.75 a share.

Today, the Telstra share price closed at $4.10, having recorded a slight gain of 0.24% for the day. But the company’s shares rose as high as $4.12 earlier in this Thursday’s session.

That means that Telstra has gained a healthy 8.8% over the past two months. In fact, $4.12 a share is the highest Telstra has traded at since January.

And yet, we are still a long, long way from Telstra’s all-time highs.

It’s hard to imagine today, but there was a time when Telstra shares were priced at more than $8 each. That was way back in the late 1990s, just following the telco’s listing on the ASX following its privatisation.

Even though that was more than two decades ago, the fact remains that Telstra shares are more than 50% off these all-time highs.

It’s fairly hard to imagine that the Telstra share price is heading back to those halcyon days any time soon. But we can still see if Telstra shares are a buy today.

Is the Telstra share price a post-earnings buy?

One ASX broker who indeed thinks Telstra is a buy is Morgans. As my Fool colleague James covered this week, Morgans was pleased with Telstra’s recent FY22 results.

The broker retained an add rating on Telstra shares and lifted its 12-month price target to $4.60. If that came to pass, it would see investors enjoy an upside of 12.2% from the current levels.

Another ASX expert picking Telstra as a winner is Ord Minnett senior investment advisor Tony Paterno.

As my Fool colleague Tony covered on Tuesday, Paterno also liked what Telstra had to say in its earnings report. He lauded the dividend increase to 8.5 cents per share for one thing.

Paterno also noted the following:

Telstra may soon monetise its InfraCo fixed business once the legal separation is complete in October 2022.

Recent transactions highlight that demand for high quality telecommunication assets, with long-term contracts and predictable cash flows, remain strong.

So lots to like about the current Telstra share price, if these two experts are to be believed anyway.

At the current Telstra share price, this ASX 200 telco has a market capitalisation of $47.25 billion. It has a trailing dividend yield of 3.9%.

The post The Telstra share price is still trading 50% off its all-time high. Is right now a good time to buy? appeared first on The Motley Fool Australia.

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• ‘Strong growth’: Expert names 2 ASX shares to buy for the long run
• Own Telstra shares? How the telco is tackling inflation pressures

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation 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 positions in and has recommended Telstra Corporation 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak. At the time of writing, the benchmark index is down 0.2% to 7,113.6 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are climbing:

CSL Limited (ASX: CSL)

The CSL share price is up almost 3% to $300.48. This morning the team at Citi responded to CSL’s full year results by retaining its buy rating with a slightly trimmed price target of $340.00. While the broker believes there are “more questions than answers” with the company’s FY 2023 outlook, it has seen enough to retain its bullish view on the biotherapeutics giant.

IPH Ltd (ASX: IPH)

The IPH share price is up 14% to $10.08. This follows the release of the intellectual property services company’s full year results. IPH reported revenue growth of 6% to $385.1 million. In addition, the company announced an agreement to acquire Smart & Biggar for almost $400 million. It is a leading Canadian intellectual property firm.

Renascor Resources Ltd (ASX: RNU)

The Renascor share price is up 10% to 22 cents. Investors have been buying this graphite developer’s shares after it announced an upgrade to the Siviour mineral resource. This upgrade makes Siviour the second largest reported proven graphite reserve in the world and the largest graphite reserve outside Africa. Management expects it to support a 40-year mine life with production of graphite concentrates up to 150,000 tonne per annum.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is up 3% to $13.04. This follows the release of a full year result that came in ahead of expectations in FY 2022. The wine giant’s net profit after tax before material items and SGARA was up 4.2% to $322.6 million. This compares favourably to the market consensus estimate of $314.4 million. Stronger margins across its divisions helped drive the profit growth.

The post Why CSL, IPH, Renascor, and Treasury Wine shares are pushing higher appeared first on The Motley Fool Australia.

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More reading

• IPH share price just rocketed 17% on results and acquisition news
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• Broker gives its verdict on the CSL share price post-FY22 results
• Treasury Wine share price on watch after FY22 earnings beat
• 5 things to watch on the ASX 200 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 positions in and has recommended CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has recommended IPH Ltd and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a backwards kind of day for the S&P/ASX 200 Index (ASX: XJO) and ASX shares this Thursday. At the time of writing, the ASX 200 has slipped by 0.29% and is back down to around 7,105 points.

But rather than dwelling on that, let’s instead take a deeper dive into the shares that are currently topping the ASX 200’s share volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Telstra Corporation Ltd (ASX: TLS)

Telstra is our first ASX 200 share to take a glance at this Thursday. So far today, a sizeable 17.11 million of this telco’s shares have changed owners. There’s been no news out of the company today that might easily explain this volume.

Saying that, we have seen some string moves from the telco today. Telstra is currently up 0.12% at $4.10 a share. But the company has spent time in both positive and negative territory today and rose as high as $4.12 a share earlier this morning. It’s likely that this bouncing around has allowed the high volumes we are seeing. 

Pilbara Minerals Ltd (ASX: PLS)

From TLS to PLS! ASX 200 lithium stock Pilbara Minerals is next up today, with a hefty 17.52 million shares having swapped hands as it currently stands. There hasn’t been anything out of this company today either. 

So we can probably thank Pilbara shares’ steep losses today for this volume. Although the ASX 200 has had a challenging day, Pilbara shares have fared far worse, with the lithium producer currently nursing a 288% loss at $3.03 a share.

Lake Resources N.L. (ASX: LKE)

Our final and most traded share today is another ASX 200 lithium stock in Lake Resources. So far this Thursday, a notable 17.56 million Lake shares have found a new ASX home.

Again, it seems we have a nasty share price fall to thank for this elevated volume. At present, Lake Resources shares have lost a steep 5.52% and are trading at $1.20 each. 

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

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Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation 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 positions in and has recommended Telstra Corporation 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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One ASX tech share that’s experienced a particularly choppy 12 months is donor management company Pushpay Holdings Ltd (ASX: PPH).

Pushpay shares initially emerged as a COVID winner as churchgoers embraced digital giving and engagement.

The Pushpay share price doubled from pre-pandemic levels only to falter as investors were left wanting more.

Since then, the Pushpay share price has been seesawing, spurred by mixed results and takeover interest.

Pushpay shares have gained around 25% in the last six months, but are down by roughly the same amount over the last year.

As Pushpay shares continue to divide the market, let’s take a look at the bull case and bear case for this ASX tech share.

Bulls say

Terrific economics

At face value, Pushpay is a terrific business. The company’s software-first model is not only very sticky, but it’s also beautifully scalable. 

It doesn’t matter if Pushpay serves another 100 or 10,000 churches. The software has already been developed and it works wonderfully. As a result, revenue can grow at a much faster pace than expenses because there are minimal costs involved in servicing an extra customer.

This leads to something called operating leverage, which boosts Pushpay’s bottom line and turns the company into a free cash flow machine. 

For the year ended 31 March 2022, Pushpay generated around US$61 million of free cash flow, excluding its acquisition of Resi Media. 

That same year, the company reported underlying earnings before interest, tax, depreciation, amortisation and foreign exchange (EBITDAF) of US$62 million. 

This means nearly all of the company’s earnings translated into free cash flow. A tremendous feat that makes Pushpay one of the best cash flow converting companies on the ASX.

Cross-selling opportunities

Pushpay’s roots are in digital giving and payment processing. But the company has made two meaningful acquisitions in recent years.

At the end of 2019, Pushpay announced the US$87.5 million acquisition of Church Community Builder, a leading provider of church management software.

And in August last year, it made a US$150 million play for Resi Media, a video streaming solutions provider that specialises in the faith sector.

These complementary products provide Pushpay with an opportunity to cross-sell its suite of solutions to its existing customer base.

As it stands, only 24% of Pushpay’s customers use two products and just 4% use all three. This cross-selling potential not only presents low-hanging fruit for revenue growth but should also help with customer retention.

Catholic expansion

Pushpay has traditionally focused on the Protestant faith. But recognising an opportunity to tap into a large addressable market, it’s been busy working on a tailored product for the Catholic segment.

At the end of 31 March 2022, Pushpay had onboarded 173 Catholic customers.

With 17,000 Catholic parishes in the US, Pushpay thinks the estimated total addressable market is between US$600 million and US$700 million in annual revenue.

The company is eyeing a 25% market share of Catholic parishes in the long term, which would significantly propel Pushpay’s revenue base. 

Bears say

Now that we’ve covered the blue-sky opportunity for Pushpay, let’s turn our attention to what’s been weighing shares down.

Slowing growth

Pushpay’s acquisitions have somewhat masked a recent trend of slowing revenue and customer growth.

In FY21, Pushpay recorded 40% revenue growth while the most recent financial year saw the company generating 13% growth.

While impressive at first glance, FY21’s results include an extra eight months’ contribution from Church Community Builder. And excluding the Resi acquisition, Pushpay delivered just 6% revenue growth in FY22.

The company is guiding for revenue growth between 10% and 15% in FY23, which is much softer than what investors have become accustomed to over the years. 

After gobbling up the large church segment of the market, the business could be reaching maturity. 

It added 203 net new customers in FY21 and around 550 net new customers in FY22 excluding Resi, taking its total customer count to 14,508. The company itself admitted FY22 was a soft period, with net new customers and go-to-market performance lower than expectations.

That said, with Pushpay’s improved positioning in the market and beefed-up product suite, it’s worth looking beyond the headline customer numbers to monitor product utilisations as well.

Revolving door of senior figures

Over the years, a number of important figures have exited the Pushpay business. The first was co-founder Eliot Crowther who left in 2018 and cashed out his entire NZ$100 million stake.

Fellow co-founder and CEO Chris Heaslip followed him out the door a year later.

Last year, the company’s largest shareholder, the Huljich family, also parted ways with the business and sold down their entire stake. The Huljich family were cornerstone investors in Pushpay and long-serving board members.

Not long after, long-standing director and former interim CEO Bruce Gordon retired from the board. 

Currently leading the company is CEO Molly Matthews who was internally promoted from her role as chief customer officer. 

At the moment, she’s leading the business without a permanent CFO after Shane Sampson jumped ship to fellow Kiwi business Serko Ltd (ASX: SKO) in October last year. He’d been with the business for six years.

So what’s the verdict?

Pushpay’s business model and market positioning make for a compelling investment case. It’s how the company has become the formidable force it is today.

But the ASX tech share is now in its next phase of growth, venturing outside of its core offering while also trying to crack into the lucrative Catholic segment.

Investors must have faith that management will be able to execute.

The post Does the bull beat the bear for this ASX tech share? appeared first on The Motley Fool Australia.

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More reading

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• Here’s why one big bad bear is suggesting the stock market could crash by 50%
• 3 tiny ASX mining shares leaping over 20% on project announcements
• Why are ASX 200 coal shares having such a top run on Thursday?
• Why is the Zip share price behaving so strangely on the ASX today?

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PUSHPAY FPO NZX and Serko Ltd. The Motley Fool Australia has positions in and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Serko Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Where interest rates go, so do stock markets.

Overnight, the US Federal Reserve indicated it was prepared to keep lifting interest rates to tame inflation but was wary of overcooking it, potentially sending the US economy into recession.

“… there are signs some officials are getting a little nervous that they could end up going too hard and may need to reverse course eventually,” said James Knightley, chief international economist at ING, in a note quoted on Marketwatch.

Initially, the markets liked what they were seeing, looking ahead to the days when interest rates would be cut.

But then a dose of reality hit as traders remembered, before then, it will still take some super-sized increases in interest rates to tame inflation running at 8.5%.

The Dow Jones Industrial Average Index (DJX: .DJI) snapped a five-day winning streak, falling 170 points, or 0.5%. The NASDAQ-100 Index (NASDAQ: NDX) fell 164 points or 1.3% as traders took profits in growth stocks.

Naturally, the S&P/ASX 200 Index (ASX: XJO) followed the lead of US markets and was lower in early afternoon Thursday trade as coal and oil stocks rose, offsetting falls in tech and gold stocks. Never a straight line…

Has the market bottomed?

The big bad bears at Bank of America think markets haven’t bottomed, despite the Dow having jumped 17% higher since its June low and the ASX 200 having gained a more modest 10%.

“Only 30% of our bull market signposts [things that happen before a market bottom] have been triggered versus 80% or more in prior market bottoms,” the bank’s equity and quant strategist, Savita Subramanian, said in the AFR.

Based on his ‘Rule of 20’, the price-to-earnings (P/E) ratio should be 11 and not 20. 

At a time when earnings are falling and therefore P/E ratios are rising, the market could fall 50% from here, according to Bank of America’s rule.

A fall of that magnitude would entail some capitulation. I’ll happily take the other side of that bet and say markets won’t fall 50%.

A glass half-full perspective

I’m always a glass-half-full person when it comes to the stock market. My ‘Rule of One’ (the one being me) is if markets rise, I’m happy as my existing portfolio gains. If markets fall, I’m happy too as it allows me to buy some companies on the cheap.

Which reminds me of a quote from billionaire investor Charlie Munger…

“If you’re going to be in this game for the long pull, which is the way to do it, you better be able to handle a 50% decline without fussing too much about it.”

Take that, Bank of America!

Cheap ASX shares ahoy

Finding cheap stocks amongst the ASX 200 is no easy feat. 

Commonwealth Bank of Australia (ASX: CBA) on a P/E of 18? No thanks.

CSL Limited (ASX: CSL) on a P/E of 40? No thanks.

Mega-cap mining stocks like BHP Group (ASX:BHP) and Fortescue Metals Group (ASX:FMG) are cheap and are trading on bumper, fully-franked dividend yields, but this is the top of the cycle, historically not a great time to be buying mining companies.

That said, the Fortescue share price has hardly set the world on fire over the past 12 months, down 11%, lagging the return of the ASX 200. The market might have already priced “the top of the cycle” into the stock. 

On a trailing basis, Fortescue shares trade on a fully-franked dividend yield of more than 15%. That yield will come down once the iron ore giant reports full-year results, including its final dividend, on Monday, 29 August but is likely to still be at elevated levels.

A play on Fortescue is a play on the iron ore price, which is a play on China, which is also partly a play on the global economy. If only stock picking was easy…

Where to turn

When looking for cheap stocks, I prefer the small end of the market. Not only can you find companies that are growing quickly, but they are also often overlooked by fund managers because they are either too small to move the dial and/or too illiquid to buy and sell. All of which means small and microcap companies can trade at dirt cheap prices.

As I mentioned yesterday, one of my microcap holdings – MSL Solutions (ASX: MSL) – was announcing results today. The leading SaaS technology provider to the sports, leisure, and hospitality sectors reported bumper revenue growth of 37% and a 70% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA), both nicely above expectations. 

Frustratingly for shareholders and management, the MSL Solutions share price has hardly budged in Thursday trade, up just half a cent or 3% to 17 cents, still a long way from its 28 cent 52-week high.

Microcap investing can be a game of patience. And one that requires diversification, if nothing more than to relieve the boredom of waiting for the market to recognise what you think are results worthy of reward.

To stop me from getting bored, I’ve put plenty more irons in the fire, including one microcap that’s trading on just 2.5 times its recently upgraded EBITDA forecast. I’m hoping its results will be greeted by more than a passing yawn. 

The post Here’s why one big bad bear is suggesting the stock market could crash by 50% appeared first on The Motley Fool Australia.

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More reading

• An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward

Motley Fool contributor Bruce Jackson has positions in MSL Solutions Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s a good day to be invested in S&P/ASX 200 Index (ASX: XJO) coal shares, as those involved in the commodity defy the broader market’s downturn.

The share prices of Whitehaven Coal Ltd (ASX: WHC) and New Hope Corporation Limited (ASX: NHC) are both outperforming. Take a look:

• The Whitehaven share price is currently up 2.36%, trading at $6.94
• That of New Hope is up 3.61%, with the stock swapping hands for $4.735 apiece

That leaves the companies among the best performers on the S&P/ASX 200 Energy Index (ASX: XEJ). The sector is currently up 1.76%, making it the market’s best-performing sector.

Meanwhile, the broader ASX 200 is sliding 0.33% right now, breaking a three-session winning streak.

So, what might be driving ASX 200 coal shares higher on Thursday? Let’s take a look.

ASX 200 coal shares lift amid fears of energy shortage

ASX 200 coal shares are lifting amid reports European coal futures surged overnight on concerns an energy shortage could soon become a reality on the continent. One major cause appears to be drought.

French utility provider EDF has reduced its nuclear power plants’ capacity utilisation rates because it doesn’t have enough water to cool reactors, Oilprice.com reports.

Meanwhile, water levels on the Rhine have fallen to critical levels. That’s impacting the transport of energy commodities along the shipping corridor, reportedly leaving Germany in a particularly precarious position.

To top it off, Germany is still struggling to fill a gap in the supply of gas it used to receive from Russia.

Germany’s top regulator has warned the nation must cut its gas usage by 20% or risk a shortage this winter, according to reporting by the Financial Times, cited by Business Insider.

It reportedly cautioned that, even if all the nation’s gas tanks were full, it would only have enough gas to get it through around two and a half months.

The tension has sent both gas and coal prices higher, as some European forward curve contracts hit all-time highs overnight, Reuters reports.

However, Yancoal Australia Ltd (ASX: YAL) – which isn’t included in the ASX 200 – hasn’t joined in on coal shares’ strong performance today. The stock is currently down 1.74% at $5.375 on the back of the company’s full-year earnings.

The post Why are ASX 200 coal shares having such a top run on Thursday? appeared first on The Motley Fool Australia.

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• Why is the Zip share price behaving so strangely on the ASX today?
• Down 16% in 3 days: Why is the Lake Resources share price still sliding?
• Treasury Wine share price defies market slump. Could it be the dividend boost?
• Iress share price rallies as profit lifts 29%
• The ASX 200 share Firetrail just bought after brutal sell-off

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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