The Flight Centre Travel Group Ltd (ASX: FLT) share price is underperforming on Thursday amid reports a new Queensland tax has worried the company’s boss.

Flight Centre CEO Graham Turner told the Australian Financial Review (AFR) a new levy on large businesses represents “a big blow” to the company.

At the time of writing, the Flight Centre share price is $17.65, 0.9% lower than its previous close.

For context, the broader market is currently in the green. The S&P/ASX 200 Index (ASX: XJO) has lifted 0.27% while the All Ordinaries Index (ASX: XAO) is up 0.1%.

Let’s take a closer look at the new tax that’s reportedly expected to drag on the ASX travel giant’s bottom line.

Flight Centre share price slips as boss slams new tax

The Flight Centre share price is in the red today. Meanwhile, the Brisbane-based company’s boss is said to have slammed a new tax on large businesses.

Turner has reportedly called the levy, designed to fund mental healthcare services in Queensland, “another financial blow”.

“The reality is we … put a lot of effort into [mental health initiatives] already and a lot of money,” Turner said, per the AFR.

The levy was announced alongside the state’s budget on Tuesday.

It will see businesses with payrolls greater than $10 million paying a 2.5 cent levy for every $10 of taxable wages they pay above that level. Businesses with payrolls of more than $100 million will pay an extra levy of 5 cents for every $10 of taxable wages they pay above that figure.

That’s expected to inject an extra $1.64 billion into the state over five years to support mental health and wellbeing and combat substance abuse. Fewer than 6,000 businesses are expected to be impacted by the levy.

Queensland treasurer Cameron Dick commented businesses eligible to pay the tax will also benefit from additional mental health services.

“The productivity gains from additional investment in mental health will dwarf the costs … and larger businesses are well-positioned to reap these productivity rewards,” Dick said, continuing:

Big businesses like large supermarkets and banks have done well out of COVID … and are well placed to chip in to address mental illness.

But Flight Centre hasn’t, in fact, benefited from the pandemic. Turner was quoted as saying:

I’ve got nothing against the coal companies but at least they are doing pretty well at the moment. For us, it’s not great news that’s for sure.

The Flight Centre share price has slipped more than 20% since the company announced its return to profitability in March.

The post Flight Centre share price stumbles amid ‘big blow’ from new tax appeared first on The Motley Fool Australia.

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More reading

• ASX 200 travel shares take off again on Tuesday. Here’s why
• Why are ASX 200 travel shares lifting off on Monday?
• These are the 10 most shorted ASX shares
• Flight Centre share price climbs amid $30m investment in staff
• How did ASX 200 travel shares perform amid today’s 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 recommended Flight Centre Travel 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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It has been another disappointing day for the BHP Group Ltd (ASX: BHP) share price.

In afternoon trade, the mining giant’s shares are down 3% to $39.80.

This means the BHP share price is now down over 6% since this time last week.

Why is the BHP share price under pressure?

Investors have been selling the Big Australian’s shares following further weakness in the iron ore price.

According to Metal Bulletin, the benchmark iron ore price fell a further 5.5% to US$109.40 a tonne during overnight trade.

This has been driven by continued softness in downstream demand in China despite the announcement of accelerated fiscal expenditure, as well as the sale of infrastructure-related government bonds.

Global recession fears may also be weighing on commodity prices. For example, other base metals also took a tumble last night. This includes aluminium falling 2.2%, copper dropping 2.5%, nickel sinking 5.8%, and tin tumbling 7.2%.

Other miners follow suit

It isn’t just the BHP share price that has dropped into the red today. Fellow mining giants Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), and South32 Ltd (ASX: S32) are also trading lower and dragging on the ASX 200 index.

This has led to the S&P/ASX 200 Resources index losing 2.7% of its value so far today.

The post Here’s why the BHP share price is in the red today appeared first on The Motley Fool Australia.

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• ASX 200 midday update: Pilbara Minerals’ lithium price update, BHP tumbles
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• Could China ‘steel’ the show for the iron ore price?
• BHP share price claws back half of Monday’s losses on Tuesday

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

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

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

On June 6, Amazon (NASDAQ: AMZN) completed a 20-to-1 stock split, bringing its share price to around $100 at the time of this writing. While this change doesn’t reduce the company’s $1.1 trillion market cap, it makes the stock more accessible to investors who might not have thousands to put into the market. 

Let’s discuss the pros and cons of investing in the stock today.

First-quarter earnings weren’t as bad as they seem

The ubiquitous online retailer has become a one-stop-shop for everything from electronics to grocery delivery through its brick-and-mortar subsidiary, Whole Foods. Like many companies, Amazon has seen its retail operations come under pressure from inflation, which increases the cost of doing business while potentially eroding consumer purchasing power. Weaker-than-expected first-quarter results have also left many investors wondering if it’s time to jump ship. 

Amazon posted a net loss of $3.8 billion in the first quarter, down from an $8.1 billion profit in the prior-year period. While this looks like a shocking deterioration, it isn’t as bad as it looks on the surface. 

Most of Amazon’s bottom line weakness comes from a pre-tax loss of $7.6 billion from its investment in electric automaker Rivian Automotive, which has fallen 66% from its IPO price of $78 per share. Investors should note that Amazon purchased Rivian before its IPO, recording an $11.8 billion noncash gain in the fourth quarter of 2021. So while the loss looks scary, it is unrelated to Amazon’s core business. 

Pivoting to new growth drivers

Amazon’s North American e-commerce segment grew revenue by 8% year over year to $69.2 billion in the first quarter. But the flagship business posted a $1.57 billion operating loss because of inflation and supply chain-related challenges. It is unclear when these headwinds will resolve, but Amazon’s massive scale and diversified business model should help it bounce back over the long term. 

Amazon’s cloud computing business, AWS, has already grown to become a dominant force in the company. Revenue in this segment increased 37% year over year to $18.4 billion, with operating income jumping 57% to $6.5 billion.

And cloud computing isn’t the only trick Amazon has up its sleeve. According to Business Insider, Amazon has become the third-biggest digital advertising company behind Alphabet and Meta Platforms‘ Facebook. The advertising business grew 23% to $7.9 billion in the first quarter. And Amazon’s user base of over 300 million shopping-motivated active users should help it maintain its healthy growth rate. 

Amazon is also pushing into direct-to-consumer streaming with its $8.5 billion acquisition of the MGM film studio. While investors probably shouldn’t expect Amazon to become the next Netflix, MGM’s intellectual property could boost Amazon Prime and help enhance customer satisfaction. Amazon’s subscription services brought in $8.4 billion in first-quarter revenue, up 11% from the prior-year period. 

Inflation is still a massive challenge

With the May inflation rate standing at 8.6% and rising interest rates increasing the cost of capital, this is a challenging time for stock market investors. But while it is difficult to time the bottom, Amazon is a stock to watch. The company’s retail operations will be hit hard by the weak macroeconomic environment, but its massive scale and diversified growth drivers could make it a great way to bet on a rebound. 

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

The post Is Amazon a buy after the stock split? appeared first on The Motley Fool Australia.

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Will Ebiefung has no position in any of the stocks mentioned. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Netflix. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Pointerra Ltd (ASX: 3DP) share price is rocketing today.

Shares in the 3D geospatial data technology company are up 18.4% at the time of writing, after earlier posting gains of more than 22%.

Below are the highlights of the latest energy contract news that looks to be piquing ASX investor interest.

What energy contract news was announced?

The Pointerra share price is surging after the company reported that United States-based Florida Power and Light (FPL) has entered into new contracts for the Pointerra3D Answers storm response solution.

FPL, an existing Pointerra customer, will employ Pointerra3D Answers to support its storm response program, commencing with the 2022 storm season. Major storm response efforts can cost utilities US$100 million per event.

FPL will be able to load pre-storm and post-storm LiDAR collection that will be fully processed by Pointerra3D.

Pointerra said the results would be available within 24 hours for pre-storm collection and six hours for post-storm collection. It stated: “These delivery times are unprecedented in the industry and are only possible through leveraging Pointerra’s proprietary and highly automated AI/ML algorithms and scalable cloud architecture.”

The Pointerra3D Answers will “guide the deployment of FPL crews and resources critical to incident response and the restoration of power to customers”.

Revenue from the new contracts will depend on the number of storm responses and how serious those storms are. Pointerra said revenue has “the potential to be material”, and will be at least US$250,000 per year.

The Pointerra share price also looks to be getting a boost from the report that FPL’s parent company, NextEra Energy, has entered into an enterprise subscription agreement to use Pointerra3D Analytics.

NextEra will employ Pointerra3D Analytics to support its multibillion-dollar greenfield development of solar energy project sites across continental US.

As with the FPL contract, Pointerra said revenue has the potential to be material and will be at least US$250,000 per year.

Pointerra share price snapshot

Despite today’s leap, the Pointerra share price remains down 44% in 2022. That compares to a year-to-date loss of 16% posted by the All Ordinaries Index (ASX: XAO).

Longer-term Pointerra shareholders will have little to complain about, however, with shares up 1,000% over the past five years.

The post Pointerra share price storms 18% higher on energy contract news appeared first on The Motley Fool Australia.

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More reading

• Is Amazon a buy after the stock split?
• Why I think these 2 ASX shares are ideal for growth investors
• Why I think better buying opportunities could still be ahead for ASX shares
• Guess which ASX software share just rocketed 150% on takeover news
• Own PointsBet shares? Here’s what the SIG investment means for shareholders

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointerra Limited. The Motley Fool Australia has recommended Pointerra 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 ASX share market is seeing a lot of volatility right now. It’s painful, but for investors wanting to put their money to work, it could be a good time to consider leading ASX growth shares.

Investors put a lot of effort into finding the right assets to buy, researching all the metrics such as profits and the health of the balance sheet. But I think buying businesses at a good price is just as important.

We are being presented with a wide range of assets at lower prices now. So, I think this is a good time to be investing. It’s impossible to say whether we’ve seen the bottom of the plunge yet, but I do believe it’s an opportune time to go looking for ASX growth shares like my own two picks below.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This is an exchange-traded fund (ETF) that gives investors exposure to many of the world’s biggest and strongest technology businesses.

Businesses like Apple, Alphabet and Microsoft are very integrated into many people’s work or home lives and I can’t see that changing any time soon. I’m not sure how a challenger would be able to dislodge Google Search, YouTube, or Microsoft Office. iPhones seem to be here to stay, too, and so on.

There is a whole range of leading businesses in this portfolio such as Amazon, Nvidia, Meta Platforms, Fortinet, Costco, Moderna, PayPal and Adobe.

As a group, I think this ETF has quality holdings and I think collectively they can keep doing well thanks to their leading market positions. To 31 May 2022, the prior five years showed an average return per annum of 18%. But bear in mind past performance isn’t necessarily a reliable indicator of future performance.

After the approximate 30% fall in value of the NDQ ETF, I think this group of businesses looks even more attractive.

Baby Bunting Group Ltd (ASX: BBN)

Baby Bunting is a leading ASX retail share that sells baby and infant products. Some of the things it sells include prams, car seats, furniture, clothes, toys, and so on.

In my opinion, this ASX growth share has plenty of growth potential. It’s already achieving some of the things I like to see from retailers.

The FY22 half-year result showed that total sales increased by 10% to $239.1 million, which was good growth. The company also displayed an improved profit margin, allowing the statutory net profit after tax (NPAT) to rise by 12.2% to $8.1 million.

I think the business can grow in a number of ways. It’s planning to expand its store network from 64 to 100 in Australia over time. It’s also planning to build a store network in New Zealand as well.

The company can continue to grow its online sales, partly thanks to its loyalty program and also expanding its product range. In the six weeks to 9 February 2022, Baby Bunting said its online sales growth was 30%, showing good ongoing progress.

Management is also assessing the $5.1 billion baby goods market for future long-term growth opportunities, relative to its current $2.5 billion addressable market.

A bonus is the (trailing) grossed-up dividend yield of 5.3%, which adds to total returns.

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

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• Is NDQ expensive or cheap compared to other ASX ETFs?
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Costco Wholesale, Microsoft, Nvidia, and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. and has recommended the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Baby Bunting, Nvidia, and PayPal Holdings. 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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An expert from Morgan Stanley has warned that the US share market could face further trouble this year. However, I believe this could mean great buying opportunities are on the way for ASX shares.

The pessimistic call about US shares comes from Mike Wilson, an expert from Morgan Stanley.

Negative expectations

Wilson thinks further declines could be ahead, despite the S&P 500 Index (INDEXSP: .INX) registering a drop of more than 20% in 2022.

According to the Australian Financial Review, Wilson said while the market is now more fairly priced, the S&P 500 is not yet pricing “the risk of a recession, in our view, which is 15% to 20% lower, or roughly 3,000″.

“The bear market will not be over until recession arrives or the risk of one is extinguished,” he said.

Part of the pessimism comes from the fact that the yield on 10-year US government bonds has gone higher than expected. It was recently 3.27%.

Wilson said:

For us, the end game remains the same; we see a pretty poor risk reward over the next three to six months with recession risk rising in the face of very stubborn inflation readings. Valuations are closer to fair at this point, but hardly a bargain if earnings are likely to come down and/or a recession is coming.

We recognise a lot of pain has already been inflicted during this bear market. Nevertheless, we can’t yet get bullish for more than just a bear market trade until we reach the 200-week moving average of 3,500. Even then, we would only expect an oversold bounce until recession risk falls materially.

Why could this mean better buying opportunities for ASX shares?

As an investor, I want to be able to buy my favourite investment ideas at a cheaper price.

Share prices don’t all move in unison. However, quite often, we see the ASX share market following on from what has happened in the US share market.

If there is going to be a decline of US shares by 15% to 20% from here, then it’s possible the ASX share market could also see falls.

I would like to see further ASX declines so that I can buy more shares at a lower price. I am many years from retirement, so getting more bang for my buck in the next few decades sounds better to me.

As Warren Buffett once said:

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

I’m looking forward to loading up on ASX share hamburgers during this period, particularly if prices go quite a lot lower. I have already been buying this month, and I plan to invest a lot more over the rest of this year.

It’s also possible to invest in iShares S&P 500 ETF (ASX: IVV) on the ASX.

The post Why I think better buying opportunities could still be ahead for ASX shares appeared first on The Motley Fool Australia.

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• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended iShares Trust – iShares Core S&P 500 ETF. 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 PayGroup Ltd (ASX: PYG) share price hit a record high of 93.5 cents during early morning trade today.

This comes as investors race to catch up on the company’s latest takeover news.

Since then, shares in the human capital management (HCM) solution company have slightly retraced to 92.5 cents, up 153.43%.

Let’s take a look below at what the company updated the market on.

Deel advances acquisition of PayGroup

In its release, PayGroup announced it has entered into a Scheme Implementation Agreement with Deel, Inc. and Deel Australia.

Established in 2019, Deel helps businesses hire independent contractors and full-time employees by using a tech-enabled self-serve process. The company has a presence in over 150 countries and services more than 8,000 customers.

By way of a scheme of arrangement, Deel is seeking to acquire 100% of the ordinary shares in PayGroup.

Under the terms of the deal, PayGroup shareholders will receive cash consideration of $1 for each PayGroup share held. This represents a 174% premium when compared to yesterday’s closing price of 36.5 cents.

The consideration implies a total value of around $119.3 million, subject to certain customary conditions.

The PayGroup Board noted that it unanimously recommends that all shareholders vote in favour of the Scheme.

If approved along with the court order, the deal is expected to be complete in October 2022.

With investors digesting the company’s latest news today, the PayGroup share price has soared into uncharted territory.

PayGroup managing director, Mark Samlal commented:

We are delighted by this proposed transaction with Deel.

The value offered is testament to the strength of the PayGroup business we have grown over the last 4 years since listing on the ASX in 2018.

We have built a high-quality business with strong, recurring revenues from blue-chip customers across Asia-Pacific and beyond.

We are immensely proud of the achievements of the PayGroup team and we look forward to continuing to build this together as part of Deel, one of the world’s fastest growing and leading global compliance and payroll solution companies.

About the PayGroup share price

Adding to today’s euphoric gains, the PayGroup share price has accelerated by 172% since the start of 2022.

When looking at the past 12 months, the company’s shares are up 101%.

Based on today’s price, PayGroup commands a market capitalisation of around $43.19 million.

The post Guess which ASX software share just rocketed 150% on takeover news 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 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 Pointsbet Holdings Ltd (ASX: PBH) share price is tracking lower today and is 6.5% in the red at $2.56.

Despite a slight gain over the past month of trade, the share is down 64% this year to date, or 80% in the past 12 months.

On Monday, the company advised that SIG Sports Investment Corp (SIG) made a strategic $94 million investment via a share placement.

Shares were expected to be quoted from today.

What to expect for PointsBet shares?

PointsBet advised that SIG received 38,750,000 shares for its investment at a price of $2.43 per share.

The investment upped SIG’s stake to 12.8%, making it the company’s largest shareholder.

SIG is a proprietary trading giant, with firms dotted around the world. It also has its hands in many adjacent markets like brokerage, capital management, and sports analytics.

As such, the move gives PointsBet exposure to other markets, and the pair seem to have made a long-term commitment based on the language of the directors.

PointsBet also signed a deal with Nellie Analytics, a subsidiary of SIG.

Under the agreement, Nellie Analytics will provide sports analytics and quantitative modelling services to build out PointsBet’s existing technology.

It remains to be seen what the long-term value the SIG is set to provide, but it will be recognised throughout PointsBet’s financial statements in periods to come.

On the market side, things are much clearer.

Despite the vote of confidence with these two deals, the market was relatively mute to the news.

After a small gain from $2.55 to $2.78, PointsBet shares have continued in their longer-term downtrend today.

By that, we mean the shares have rolled from a previous high of $13 on 24 June last year to just above $2.50 today.

The PointsBet share price hasn’t managed to break away from the selling pressure, as seen below.

The post Own PointsBet shares? Here’s what the SIG investment means for shareholders appeared first on The Motley Fool Australia.

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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 positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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 BetaShares Nasdaq 100 ETF (ASX: NDQ) is a unique exchange-traded fund (ETF) on the ASX. It is the only ASX-listed ETF that covers the NASDAQ-100 (INDEXNASDAQ: NDX) Index and NASDAQ shares exclusively.

The NASDAQ is one of the two major stock exchanges over in the United States. It tends to house the newer, tech-focused companies on it, which is why NDQ is often called a tech ETF.

Its largest holdings would be familiar to many ASX investors. They include Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL).

All of these factors have made the NDQ ETF a popular one for ASX investors. The fund now has more than $2.2 billion in assets under management. Perhaps the performance history of this ETF has also helped. NDQ has proven to be one of the ASX’s best-performing ETFs in recent years.

Even though NDQ has taken a hit of more than 36% over 2022 year to date, this ETF has still managed an average performance of 19.94% per annum over the past three years, and 18.15% per annum over the past five.

But has this performance come cheap? What kind of fee does NDQ charge?

Is the NDQ ETF cheap or expensive?

So the BetaShares Nasdaq 100 ETF charges an annual management fee of 0.48% per annum. That’s $48 a year for every $10,000 invested.

That’s objectively on the high side of what many ASX ETFs charge their investors. For example, the most popular ETF on the ASX is the Vanguard Australian Shares Index ETF (ASX: VAS). VAS charges a management fee of 0.1% per annum, or $10 for every $10,000 invested.

Another popular ETF covering US shares is the iShares S&P 500 ETF (ASX: IVV). IVV only charges a fee of 0.04% per annum, or $4 for every $10,000 invested.

But even though these ETFs are cheaper than NDQ, investors would still have been better off in the NASDAQ ETF that VAS or IVV over the past few years.

That’s because VAS has returned an average of 8.95% per annum over the past five years. IVV has averaged 13.95% per annum. That’s not quite in the same ballpark as NDQ’s 18.15% per annum.

Even so, there’s no guarantee that the NASDAQ 100 will continue to beat out the ASX and the S&P 500 going forward. If these other ETFs outshine NDQ over the next five years, its management fee might start looking expensive.

But no doubt investors in the BetaShares Nasdaq 100 ETF would be happy with the returns they have enjoyed up to this point, even with the wobbliness we’ve seen over 2022 thus far.

The post Is NDQ expensive or cheap compared to other ASX ETFs? appeared first on The Motley Fool Australia.

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• Is it time to go bargain hunting for ASX shares?
• 3 high quality ETFs for ASX investors to buy now
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• Here’s why the BetaShares Nasdaq 100 ETF could be a buy today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and iShares Trust – iShares Core S&P 500 ETF. 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.

Warren Buffett has famously advised to be fearful when others are greedy and greedy when others are fearful, and he has put his money where his mouth is as the market plunged this year. He bought 16 stocks in 2022’s first quarter as other investors were fleeing for the hills.

About half of the stocks he purchased through his holding company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), were additions to positions already owned, and the other half were new positions. Some were already disclosed, and others were surprises. Some of the more unexpected picks were Activision Blizzard (NASDAQ: ATVI), Paramount Global (NASDAQ: PARA), and Ally Financial (NYSE: ALLY). Should you consider them for your portfolio? Let’s take a look.

An easy merger arbitrage deal

Buffett already had a small stake in video game maker Activision Blizzard prior to 2022, so he obviously sees it as a worthwhile stock to own. However, his new interest in the company is in preparation for the company’s acquisition by tech titan Microsoft. The acquisition is set to go through in mid-2023, with Microsoft paying $95 per share, or about a 26% premium to the current price. This could be a risky strategy, since many things can happen between now and then. But the price is highly unlikely to go above $95, and it’s a simple way to see quick gains.

So why isn’t everyone doing this? First of all, although the merger was approved by both parties, there’s still a chance it won’t go through. It’s a riskier play for parties that aren’t backed by Buffett’s billions. The business itself is having a rough time, so individual investors shouldn’t count on a surprise beat to raise the price. In the first quarter, revenue and earnings per share (EPS) both declined. As we get closer to the acquisition date and it seems it will really happen, the price is likely to increase.  

What’s in it for Microsoft, or investors who are sticking around right now? It’s an easy way for Microsoft to enter the gaming space, for one thing. More than that, the company is still developing new games to launch. Gaming companies go through phases as they launch new products and see how well they do. For example, Activision has several launches in the second quarter that it expects to do well. In a positive sign, monthly active users (MAU) increased slightly from the 2021 fourth quarter to the 2022 first quarter.

Activision Blizzard stock has been a market beater, but for now, investors might not want to follow Buffett.

A new name in streaming

Paramount Global is the new name for what was formerly ViacomCBS. The company has jumped on the bandwagon and is investing in its streaming service, Paramount+, but it operates a number of media networks including traditional television (CBS) and cable channels such as Showtime and MTV. It’s not as big as competitors such as Disney and Netflix, but what it does have in its favor is a Buffett favorite — it looks undervalued. 

Revenue decreased 1% from 2021 in the first quarter as customers continued to cord-cut, but streaming, or the direct-to-consumer division, increased 82%. That included a 95% increase in subscription revenue as well as a 59% increase in ad revenue for its ad-supported platform, PlutoTV. Pluto also added 6.3 million new members for a total of more than 67 million MAUs.

Paramount+ added 6.8 million subscribers for a total of close to 40 million. Many of those are crossovers who view content on both platforms. The media company owns such franchises as Star Trek and Sonic the Hedgehog and has new content coming out in both of those series as well as much more. There are many growth levers here.

However, it’s competing with bigger guns, and as the field gets more crowded, Paramount Global may not have what it takes to keep adding viewers and subscribers. That’s the big question mark.

Meanwhile, the shares are down almost 20% this year despite Buffett’s big bet, and at this price they’re trading at only four times trailing 12-month earnings. That’s pitifully low for a company that grew revenue 13% year over year in 2021 and increased earnings per share (EPS) (from continuing operations) by 79%.

More bank stocks to love

Bank stocks make a strong showing in Berkshire Hathaway’s portfolio, and Buffett added a new one, Ally Financial, to the group last quarter. Ally fits right in with Buffett’s model, with cheap shares and a strong culture of giving back to shareholders.

Ally has a large auto-lending unit, which has been its core product for decades. But it also operates a consumer bank, which has been demonstrating sequential growth. It increased to 2.5 million retail banking customers in the first quarter, with $136 billion in deposits, a 6% increase year over year. One of its newer bank ventures, the Ally credit card, had 844,000 active users, up 73% year over year. Net income slightly decreased over last year as it moved money into provisions for credit losses, but revenue increased 10%. Return on common equity was a high 18%.

The company said it would issue $2 billion in share buybacks in 2022, which is a fifth of its entire market cap. It also pays a growing dividend that yields a high 3.7%. That’s partially because the share price has declined more than 30% so far this year. At the current price, the shares also trade at the dirt-cheap multiple of four times trailing 12-month earnings, and less than one times tangible book value, which means they’re trading for less than the value of its assets.

Out of these stocks, Ally looks the most like a no-brainer that individual investors should consider.

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

The post 3 stocks Warren Buffett bought hand over fist as the market plummeted appeared first on The Motley Fool Australia.

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More reading

• Representing 40% of Warren Buffett’s portfolio, here is why Apple is a great stock to own today
• My top Warren Buffett stock to buy right now
• Do you dare take on this bold challenge from Warren Buffett?
• 10 reasons Warren Buffett is such a successful investor

Ally is an advertising partner of The Ascent, a Motley Fool company. Jennifer Saibil has positions in Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Activision Blizzard, Berkshire Hathaway (B shares), Microsoft, Netflix, and Walt Disney. 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), long January 2024 $145 calls on Walt Disney, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Activision Blizzard, Berkshire Hathaway (B shares), Netflix, and Walt Disney. 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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