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.

Investing is tough enough in normal times. When volatility spikes, inflation is high, and the economic future looks incredibly uncertain, investing becomes substantially more difficult for most of us mere mortals. In times like these, looking to Warren Buffett — easily among the greatest of all living investors — for inspiration can be a great way to keep investing despite those challenges. 

Buffett built his fortune over decades by buying companies that generate cash — lots of cash. Buffett’s picks are not typically the fastest-growing businesses out there, but their ability to generally make money in good times and in bad make them worthy of consideration in times like these. With that in mind, there is one Warren Buffett stock that stands out as my absolute top to consider buying right now: Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B).   

What’s so special about Berkshire Hathaway?

Alone among Buffett’s stock picks, Berkshire Hathaway is the one that can count him as an employee. As CEO of the company, Buffett both directs the operations of the business and the investment of all that cash it throws off. And that makes it the hub of all Buffett-related investing activities.

With an investment in Berkshire Hathaway, you get the only Buffett pick that also gives you access to the insurance businesses that the company controls, as well as the legion of subsidiaries it owns. Your ownership stake gets you all that, plus the benefits that come from having Buffett and his designated successors controlling the investment of the excess cash those businesses generate.

You’re not just getting access to Buffett’s investments by buying shares of Berkshire Hathaway, you’re also getting them at a remarkably low cost. The company trades at just around 1.2 times its book value. In essence, that basically means that if you wanted to assemble the company yourself from its component parts, it’d cost you almost as much, and you wouldn’t get Buffett as part of that deal.

That combination of factors adds up to make Berkshire Hathaway my top Warren Buffett stock to consider buying now.

Is there a downside?

All that said, there is some risk associated with owning Berkshire Hathaway. First and foremost, the company is practically synonymous with Buffett, as he has led the company for over half a century. Buffett is over 90 years old, so his tenure as Berkshire Hathaway’s leader is closer to the end of its term than the beginning of it. There is a risk that when Buffett eventually does step down or pass away, Berkshire Hathaway’s stock could fall in fear of the unknown.

In addition, unlike many of Buffett’s investment picks, Berkshire Hathaway does not pay a dividend. As a result, the only way for shareholders to tangibly benefit from any rewards they might see from being owners is to be willing to sell at least part of their stakes. That’s a little odd for a company that’s known for being defensive and cash rich — and not among the fastest growing ones in the marketplace.

All told, it’s a great company, despite those downsides

When all is said and done, no investment is perfect, not even Berkshire Hathaway. As a result, although it is my top Warren Buffett stock to consider buying right now, it’s one that best fits within an overall intelligent asset allocation strategy. By owning it as part of that overall strategy, you can give yourself your best chance of balancing the risks and rewards of being a shareholder within the context of your overall portfolio.

Of course, a smart overall allocation strategy is one that takes time to get in place. So get started now, and get yourself in a spot where you can own a piece of this tremendous Buffett company with him at the helm. 

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

The post My top Warren Buffett stock to buy right now appeared first on The Motley Fool Australia.

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Chuck Saletta 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 Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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Experts have picked out two ASX dividend shares that could provide attractive total returns.

Businesses that pay out an attractive amount of income are appealing to many ASX investors. But growth is important too, and some ASX shares offer the best of both worlds.

Brokers are constantly looking for shares that could be good value. Sometimes they get it wrong, but these two are well-liked and could offer compelling total returns (growth and income).

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share we’ll look at is Telstra.

Telstra is the largest telecommunications business in Australia. It provides a wide range of telco services including mobile, NBN, digital health services through Telstra Health, and more.

Telstra is currently rated by a few different brokers, including Morgan Stanley.

Their price target, which is where the broker thinks the Telstra share price will be in 12 months, is $4.60. That implies a possible rise of almost 20%.

In terms of the dividend, the broker is expecting Telstra to pay an annual dividend of 16 cents per share. That equates to a grossed-up dividend yield of 5.8%.

Telstra recently announced that from 1 July, its mobile plan prices would increase in line with CPI inflation. From now on, plan pricing is going to include an annual review “and may increase annually”. That could be helpful for growing the total revenue and net profit after tax (NPAT).

But the company is doing a number of other things to try to increase its profitability, including cutting costs, providing access to its regional network to TPG Telecom Ltd (ASX: TPG) customers, and acquiring Digicel Pacific.

Telstra has said that it plans to grow its dividend over time as its profit and cash flow rise.

Universal Store Holdings Ltd (ASX: UNI)

This ASX dividend share is a specialty retailer of youth casual apparel. The business operates 78 physical stores across Australia.

The product strategy is to offer a “frequently changing and carefully curated selection of on-trend apparel products” to a target market of 16 to 35-year-olds.

One of the company’s main tactics is to open new stores. It has opened 13 stores since its initial public offering (IPO). The company thinks it can reach at least 100 stores across Australia and New Zealand. It has a plan to open another five to eight stores in the next year, predominately in Queensland and NSW.

Online sales are another area of growth. Despite a growing store network, 17.7% of its sales are online, up from 8.8% at the IPO. Universal is continuing to invest in its online capabilities and its digital marketing.

It’s also working on its IT and logistics. A new, purpose-built distribution centre and office are on track for the first half of FY23.

In a recent trading update, Universal said that in the FY22 second half, it had seen total sales growth of 6.9% year on year and online sales growth of 27.3%.

Morgans currently rates this ASX dividend share as a buy with a price target of $5.60. That’s a potential upside of about 25%.

In FY23, Morgans thinks Universal will pay a grossed-up dividend yield of 8.9%.

The post Looking to buy ASX dividend shares? Here are 2 that experts rate highly appeared first on The Motley Fool Australia.

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• ‘Don’t get too bearish’: 3 ASX shares Wilsons just added
• Could Telstra shares be set for a new ASX-listed competitor?
• ‘Just didn’t cut it’: Look out Telstra, a new high-speed start-up is coming for you!
• 2 ASX dividend shares that brokers are tipping as buys right now
• Why these top brokers are forecasting high-speed gains for the Telstra share price

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 positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended 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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Are you looking for some dividend shares to add to your income portfolio? If you are, then the two listed below could be worth considering.

These dividend shares have been rated as buys and tipped to provide investors with attractive yields. Here’s why analysts are positive on them:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share for investors to consider is the Charter Hall Social Infrastructure REIT.

It is a real estate investment trust with a focus on social infrastructure properties which have specialist use, limited competition, and low substitution risk. These properties are in great demand from end users. So much so, the company currently boasts a 100% occupancy rate.

This strong demand underpinned a $101.5 million or 5.6% increase in the valuations of its properties this week.

Goldman Sachs is very positive on the company’s future. So much so, it currently has a conviction buy rating and $4.24 price target on its shares.

It is also forecasting growing dividends per share of 17.2 cents in FY 2022 and 18.3 cents in FY 2023. Based on its current share price of $3.54, this implies yields of 4.9% and 5.2%, respectively.

Coles Group Ltd (ASX: COL)

Coles could be another ASX dividend share to buy right now.

This supermarket giant could be a top option due to its defensive qualities, strong market position, solid long term growth prospects, and positive exposure to rising inflation.

Management is also busy working hard on the company’s refreshed strategy, which is focusing on cutting costs with automation and efficiencies. This is expected to boost margins and support its earnings and dividend growth over the next decade.

Citi is very positive on the company. It currently has a buy rating and $19.30 price target on its shares. The broker is also forecasting fully franked dividends of 63 cents per share in FY 2022 and then 72 cents per share in FY 2023.

Based on the latest Coles share price of $17.92, this will mean yields of 3.5% and 4%, respectively, over the next two financial years.

The post 2 excellent ASX dividend shares that experts rate as buys this week appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price has been on a disappointing run over the past five years.

Shares in the banking giant were at a multi-year high in 2017 before gradually trending lower.

It’s worth noting that it was during COVID-19 that Westpac shares hit rock bottom to a decade-low of less than $15 in March 2020.

The shares quickly rebounded along with the broader market to about the $25 mark in the months following.

While 2022 has been eventful with strong inflationary movements and interest rate hikes, Westpac shares have again stumbled.

At yesterday’s market close, the Westpac share price was $19.92.

Let’s take a look and see how much Westpac has distributed in dividends to shareholders over the past five years.

A summary of Westpac’s dividend history

Here’s a list of all the dividends paid out by Westpac since 2017.

• July 2017 – 94 cents (interim)

• December 2017 — 94 cents (final)

• July 2018 — 94 cents (interim)

• December 2018 – 94 cents (final)

• June 2019 — 94 cents (interim)

• December 2019 — 80 cents (final)

• June 2020 — No interim dividend paid (COVID-19)

• December 2020 — 31 cents (final)

• June 2021 — 58 cents (interim)

• December 2021 — 60 cents (final)

• June 2022 — 61 cents (interim).

When adding all of the above amounts, Westpac has paid a total of $7.60 in dividends per share since 2017.

You may have noted that the board elected not to pay a dividend during the height of COVID-19 (June 2020). This is because the bank was bracing for financial headwinds due to the gloomy economic outlook.

Nonetheless, after a cautious approach in the following period, Westpac began slowly ramping up its dividend again. However, it’s still 35% off its pre-COVID levels.

At the time of writing, Westpac has a trailing dividend yield of 6.07%.

Westpac share price summary

Despite accelerating over the long term, Westpac shares have lost 23% in the past 12 months.

Year-to-date, the ASX big four bank also hasn’t fared well. Its shares are down 8% over the first six months of 2022 due to strong volatility across global markets.

Based on valuation grounds, Westpac commands a market capitalisation of approximately $69.74 billion.

The post How much has Westpac paid in dividends in the past 5 years? appeared first on The Motley Fool Australia.

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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 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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At the current Brickworks Limited (ASX: BKW) share price, the company has a grossed-up dividend yield of around 5%.

There are plenty of ASX dividend shares out there, but I think this one is too good to ignore.

It’s not easy finding businesses that have sizeable yields, while also offering growth potential.

With the Brickworks share price down by 23.5% in 2022, it could be an opportunistic time to consider this business.

Brickworks is the leading manufacturer of bricks in Australia and in the US northeast. It also has a strong position in roofing (with Bristle Roofing), masonry, and precast in Australia.

The Brickworks dividend may not offer the biggest yield around, but there are other factors to take into account.

Dividend stability

A dividend is never guaranteed. It is paid at the discretion of the company’s board of directors.

They decide what the dividend will be based on the profits the business has made.

Brickworks has one of the longest-running dividend streaks on the ASX.

Its normal dividend has been maintained or increased every year since 1976. That means it has been 46 years since normal dividends were last decreased.

The Brickworks boss says they’re “proud” of their long history of dividend growth and “the stability this provides” to shareholders.

Brickworks has increased its dividend for nine years in a row.

Growth in dividends

Ensuring the dividend is increasing is one thing, but the size of that growth is also important to know.

The Brickworks FY22 half-year result included an increase of 1 cent per share for the dividend. That may not sound like much, but it equated to a year on year increase of 5% in percentage terms.

Over many years gone by, that would have been comfortably more than inflation.

Dividend funding

Brickworks is known as a building products business, but it also has two assets helping it fund these dividend increases.

It owns a sizeable chunk of the investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which itself has a dividend growth streak going on.

Soul Pattinson owns a diversified portfolio across different asset classes and business sectors. This provides consistency and stability for Brickworks’ underlying earnings and cash flow.

Brickworks also owns a 50% share of an industrial property trust that builds large warehouses for new tenants to use. Not only is there rental growth built into the existing rental contracts, but completions help cash flow and assist in the funding of Brickworks’ dividend.

In the HY22 result, Brickworks reported that the net trust income (the rental profit) increased by 7% to $17 million.

There is enough spare land for the trust to keep building new industrial properties for at least five years.

Foolish takeaway

I think the Brickworks share price is at an attractive level. The dividend yield of close to 5% is a good shout for income. And if Brickworks keeps growing its dividend, which isn’t certain, then 5% could be just the starting point.

The post Is the Brickworks dividend yield of almost 5% too good to ignore? appeared first on The Motley Fool Australia.

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More reading

• Building up income: 2 ASX dividend shares I believe are buys
• Is it time to go bargain hunting for ASX shares?
• What is the current dividend yield on Brickworks shares?
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• 3 high-quality ASX 300 shares trading at 52-week lows today

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 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.

During the first half of 2021, meme stocks like GameStop (NYSE: GME) and AMC Entertainment (NYSE: AMC) took the financial world by storm. Individual investors piled into shares of a handful of companies — particularly beaten-down, heavily shorted stocks — quickly making huge gains. As the stock prices soared, many of these traders used social media platforms to celebrate and to urge others to continue buying.

Over the past year, though, meme stocks have lost much of their lustre. Indeed, meme stocks’ best days are probably behind them. In the long run, they simply cannot escape the underlying companies’ poor performance.

Maintaining excitement is hard

The surge in meme stocks last year was surprising, but it wasn’t unprecedented. There have been many such stock market ‘bubbles’ over time. However, these bubbles pop sooner or later.

In the early days of the meme stock craze, watching stocks like GameStop and AMC rocket higher was exciting. As the stocks rose, they gained more mainstream interest, leading to additional buying and even bigger gains.

But as time went by and meme stocks’ gains slowed, most investors began to tune out. The resulting stock price declines made meme stocks even less exciting to the average American, as they no longer seemed like a ticket to quick riches.

The need for a devoted band of followers to prop up the share price has already doomed lesser meme stocks. For example, shares of Bed Bath & Beyond, Virgin Galactic, and BlackBerry made big gains during the peak of the meme stock craze. But over the past year, all three stocks have plummeted below pre-pandemic levels.

Three-year performance of selected meme stocks, data by YCharts.

Even AMC stock has risen less than 20% over the past three years, underperforming the broader market. Only GameStop has maintained big gains compared to 2019. And despite being the most popular meme stock, GameStop shares have fallen more than 70% from the all-time high of $483 they reached in January 2021.

A stag hunt doomed to fail

The “stag hunt” scenario from game theory also helps explain why meme stocks are poised for losses over time. In a stag hunt, everyone must work together to achieve the best outcome (capturing a stag). The risk is that some people settle for a sure thing with a smaller reward (catching a hare) and allow the stag to escape.

By acting as a group to buy (and not sell) shares of GameStop, AMC, and other names, meme stock investors generated huge paper profits last year. Even today, meme stock bulls continue to urge other investors to buy and “hold on for dear life” no matter what.

Maintaining this kind of cooperation over time is hopeless, though. Eventually, some people will choose to sell, perhaps to make a big purchase or perhaps simply to take some risk off the table. That’s exactly what has happened over the past year, bringing meme stocks back to earth.

No substance to these stocks

Many years ago, investing legend Benjamin Graham aptly described the phenomenon behind meme stocks’ performance. According to his most famous student — Warren Buffett — Graham said, “In the short run, the market is a voting machine … but in the long run, the market is a weighing machine.”

In other words, at any moment, a stock can be popular or out of favour for no good reason. But over time, a company’s fundamental performance (i.e. revenue, earnings, and cash flow) is the main driver of its share price. Meme stock investors are learning this lesson the hard way.

Even at today’s levels, shares of GameStop and AMC are extremely overvalued. GameStop is deeply unprofitable and burning cash rapidly. Its main growth initiative — an NFT marketplace — seems unlikely to fix things, given that crypto giant Coinbase‘s NFT marketplace has been a bust. GameStop’s intrinsic value is probably closer to $1 billion than its current market cap of $10 billion.

Meanwhile, AMC would have trouble supporting its $5.5 billion debt load even if revenue and earnings returned to 2019 levels. And while theater attendance is improving, revenue remains well below pre-pandemic levels. That makes AMC’s $6 billion-plus market cap very hard to justify.

In short, while the past year has been rough for meme stock investors, the future could be even worse, barring an unlikely surge in profits at GameStop and AMC.

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

The post Meme stocks are doomed (in the long run) appeared first on The Motley Fool Australia.

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Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and recommends Coinbase Global, Inc. The Motley Fool recommends BlackBerry. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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ASX growth shares could be the way to go in July 2022 with how share prices have largely been pushed lower in recent times.

There are concerns about a number of areas. Inflation, interest rates, the Russian invasion, energy prices, supply chains and so on.

There’s nearly always something to worry about, though there seems to be quite a few things at the moment.

However, as Warren Buffet says, a good time to be greedy when it comes to buying shares is when people are fearful.

Not only do I believe that this is a good time to buy ASX shares in general, but there are some specific ideas that I think are buys.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is one of the ones that has suffered heavily in the sell-off.

Since the start of 2022, it has dropped by more than 60%. That’s despite the ASX growth share’s latest trading update showing ongoing double-digit growth.

For the period of 1 January 2022 to 30 April 2022, it said that revenue had increased by 23% year on year. This also represented 116% growth over a two-year period. I think that double-digit compounding growth year after year can add up.

Management is focused on ramping up the business by investing in various areas such as marketing, technology development, product range and the overall customer experience.

The business points to an ongoing rise in online shopping that can help it capture a bigger market share in furniture, homewares, home improvement and business customers.

Increased scale will help the business in various ways including cost advantages in product sourcing, logistics and marketing.

I think this ASX growth share has plenty of operational growth ahead of it, particularly with trade and commercial, and home improvement.

Bubs Australia Ltd (ASX: BUB)

Bubs is a fast-growing infant formula business. It specialises in goat milk infant formula, but it also has cow milk infant formula, toddler snacks and adult dairy products.

It’s growing revenue and scale quickly. The business recently gave an update where it said it was upgrading its FY22 guidance for gross revenue to be more than $100 million. It’s also expecting to at least double its underlying earnings before interest, tax, depreciation and amortisation (EBITDA).

Bubs has answered the call of the US government asking for help to alleviate the infant formula shortage in the company. It’s in the process of shipping 1.25 million tins to the US.

The company said that it’s seeing “strong momentum” in China and an unanticipated volume of sales in the USA.

Not only is the business doing well in the large markets of China and the USA, but it’s also achieving growth in Australian supermarkets and chemists, while also making partnerships in other Asian countries to lay the foundation for growth there.

Infant formula is a higher margin product for Bubs, so growth will help the company’s overall profit margin.

The post Where to find value in growth? Here are 2 ASX shares I’d buy in July appeared first on The Motley Fool Australia.

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More reading

• Why is the Temple and Webster share price surging 11% higher today?
• Why ANZ, Block, Bubs, and PayGroup shares are pushing higher
• Bubs share price up 4% on further US update
• Why is the Temple & Webster share price surging 11% on Monday?
• Why is the Bubs share price sinking 7% 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 Temple & Webster Group Ltd. The Motley Fool Australia has recommended BUBS AUST FPO and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Goodman Group (ASX: GMG) share price has been in a funk over the past couple of months.

Despite finishing yesterday’s session 0.96% higher to $18.86, shares in the integrated commercial and industrial property group haven’t performed since May.

In fact, from the beginning of May, the Goodman Group share price is down 22%.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen by 10% over the same time frame.

Goodman shares set to go ex-dividend

Today is the last day for ASX investors to secure Goodman’s latest dividend.

Its shares are set to trade without rights (ex-dividend) on Wednesday.

It’s worth noting though that historically when a company reaches its ex-dividend day, its shares tend to fall. This is because investors try to make a quick profit by selling their shares.

When will Goodman shareholders be paid?

For those who are eligible for the Goodman dividend, the payment of 15 cents per stapled security will be made on 25 August.

This is in line with the previous dividends that have been paid out since 2019.

The dividend is unfranked, which means shareholders won’t receive any tax credits for the upcoming financial year.

Goodman Group share price summary

Over the past 12 months, Goodman shares have fallen by 10%.

However, when looking at the year to date, its shares are deeper in the red, down by 29%.

The company’s shares reached a 52-week low of $16.80 earlier this month before slightly rebounding in the following weeks.

Goodman Group commands a market capitalisation of $34.79 billion based on yesterday’s closing share price. It has a trailing dividend yield of 1.61%.

The post Time is running out to secure the Goodman Group dividend. Here’s what you need to do appeared first on The Motley Fool Australia.

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More reading

• Here’s 3 popular ASX shares that are trading ex-dividend next week
• 5 things to watch on the ASX 200 on Wednesday
• Broker names 2 of the best ASX 200 shares to buy now
• 2 ASX shares rated as strong buys by several brokers
• Why I would invest $10,000 in these 3 ASX shares

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 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, Datt Capital principal Emanuel Datt predicts when volatility in ASX shares might calm and which sector he would stay out of.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Emanuel Datt: I would say that Datt Capital seeks to identify growth and special situation opportunities within Australian markets solely. 

I would say that we invest in a concentrated but agnostic manner typically holding less than 20 positions, with the flexibility to invest across asset classes. 

I’d also point out that the fund, since inception in 2018, has achieved an annual compound return of over 17%, which is about double what the S&P/ASX 200 Index (ASX: XJO) total return index has returned over the same period. 

I think we’ve proven our ability to perform, whether it be rain, hail, or sunshine… and looking forward to more of it.

MF: Stock markets have changed significantly since we last spoke. How are you feeling about the situation at the moment?

ED: Yeah, pretty good. I think that we’re expecting markets to stabilise a little bit over the next month or so. I think that a lot of heat has come out of the market over the last three months or so, and I think that’s all part of the natural cycle ultimately. Not everything can go up in a straight line. There’s always peaks and troughs.

MF: While inflation and interest rates were the big anxiety points in the first half of the year, the worries now seem to have moved to the prospect of a recession?

ED: Typically what we see is with higher inflationary times, there’s typically a higher probability of a recession occurring, I would say. I should also add that things always tend to trend. If we’re sitting [in] a bit of a downturn at the moment, whether that be in retail spending or whichever sort of metric you’re tracking, these conditions tend to… trend for a period of time before reversing. 

I think that it’s pretty fair, the fears of a recession blooming. I think those fears are well founded.

MF: Despite recession fears, you are expecting the markets to stabilise in about a month or so. That’s because markets are forward looking?

ED: Yeah, exactly. Markets are always priced according to what’s expected in the future, rather than present circumstances as such. 

I think that ultimately, as I pointed out before, the market has experienced a lot of selling towards the tail end of this financial year. We think that a lot of [share rises] over the next month or two will be just the stopping of tax-loss selling. 

You generally have [a] pretty positive seasonal effect in July for markets typically. I think there’s obviously plenty of money rotating into different stocks at the start of the financial year in July. 

Definitely expecting July to be positive but beyond that, it’s always hard to say, isn’t it?

MF: Plenty of bargains out there for a long-term investor, you reckon?

ED: Yeah. Well, I think the markets have changed and I think it’s just really making sure you’ve got exposure to the right sectors and opportunities.

What’s worked over the past two to three years I don’t think is going to be quite the same in the sense of the best opportunities and sectors to invest in. I think that ultimately [in] times of high inflation, it’s always better to stick to more tangible and cash generative businesses, rather than opportunities that perhaps still have time to play out or are not yet tangible.

MF: What are some sectors that you might have participated in in the past that you’re staying away from at the moment?

ED: Technology broadly, I think, is going to struggle going forward. 

I remember the past two or three years we’ve been talking about price-for-sales multiples — that was a popular metric that we’d been seeing plenty of. But I think now it’s all about just being purely focused on, “Okay, well has the company got positive earnings?” 

Because if it isn’t, then it might be a bit too risky for some investors ultimately. I think just about using metrics itself, they’ll become overused, we’ll be changing quite significantly.

The post ‘Always peaks and troughs’: Fundie names when ASX shares will stabilise appeared first on The Motley Fool Australia.

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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 Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a day to remember. The benchmark index rose 1.95% to 6,706 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to edge higher

The Australian share market appears to be running out of steam but is still expected to open slightly higher on Tuesday. According to the latest SPI futures, the ASX 200 is poised to open the day 5 points or 0.1% higher. On Wall Street, the Dow Jones slipped 0.2%, the S&P 500 fell 0.3%, and the Nasdaq dropped 0.7%.

Collins Foods results

The Collins Foods Ltd (ASX: CKF) share price will be on watch today when the KFC restaurant operator releases its full year results. No guidance was given for FY 2022, but the market will be looking for further solid growth after a positive first-half which saw Collins Foods report an 8.5% increase in revenue and a 10% jump in EBITDA.

Oil prices push higher

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a decent day after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.9% to US$109.68 a barrel and the Brent crude oil price has climbed 1.9% to US$115.27 a barrel. Talks of new sanctions on Russia boosted prices.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have another poor day after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.35% to US$1,823.6 an ounce. A rise in U.S. 10-Year Treasury yields weighed on the precious metal.

OZ Minerals rated as a buy

Goldman Sachs remains positive on the OZ Minerals Limited (ASX: OZL) share price. This is despite the copper producer downgrading FY 2022 copper production guidance by ~8% and increasing unit costs by ~25%. Goldman has retained its buy rating with a trimmed price target of $26.10. The broker believes investors should focus on its positive medium term growth outlook, which is unchanged.

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

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More reading

• What fuelled the Beach Energy share price 4% higher today?
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Evolution, Newcrest, OZ Minerals, and Zip shares are dropping today
• Liontown Resources share price rockets 9% amid broker’s positive lithium outlook

Motley Fool contributor James Mickleboro has positions in Collins Foods Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods Limited. The Motley Fool Australia has recommended Collins Foods 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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