The Lake Resources N.L. (ASX: LKE) share price is up and away on Tuesday despite no announcements from the company.

At market open, the clean lithium developer’s shares were swapping hands for $1.125 apiece.

However, investors have been bidding up the company’s shares as confidence grows in the market.

During early afternoon trade, Lake Resources shares are fetching $1.26 apiece – up 17.21%.

Let’s take a look at what’s been driving the excitement around this company.

What’s driving the Lake Resources share price higher?

The Lake Resources share price is on the move following upbeat sentiment among the S&P/ASX 300 Metals and Mining (ASX: XMM) sector.

As such, the benchmark index, representing a number of companies that produce gold, steel, and/or precious metals, is up 0.9%.

For context, shares in peers Sayona Mining Ltd (ASX: SYA) and Core Lithium Ltd (ASX: CXO) are up 10.2% and 7.72%, respectively.

While Lake Resources’ last announcement was its quarterly report, its shares are continuing to strongly rebound. This comes after being sold off during June and July on the back of a short-seller attack.

Nonetheless, it seems that investors are closing their positions after the company was one of the most heavily shorted stocks.

Short-selling is a common trading strategy that aims to profit from the fall in the price of a security. The goal is for an investor to borrow and then sell the shares, and buy them back at a lower price for a profit.

Last week, the Australian Securities & Investments Commission (ASIC) released its short position report revealing the level of short interest within companies.

As such, Lake Resources had 10.41% of its shares being shorted by investors, an improvement of 0.39% over the week.

Lake Resources share price recap

Despite its extreme volatility of late, the Lake Resources share price has zipped 97% higher in the past 12 months.

Renewed investor sentiment within the battery industry has helped support the share price.

Based on today’s price, Lake Resources presides a market capitalisation of roughly $1.29 billion.

The post Why is the Lake Resources share price powering up 17% today? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the Lake Resources share price leaping 11% today?
• These are the 10 most shorted ASX shares
• Why did the Lake Resources share price lag the ASX 200 in July

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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ASX coal shares are in focus today amid a large steel maker issuing supply warnings.

Coal shares on the ASX include Whitehaven Coal Ltd (ASX: WHC), New Hope Corporation Limited (ASX: NHC). Others include Yancoal Australia Ltd (ASX: YAL) and Allegiance Coal Ltd (ASX: AHQ).

Let’s take a look at what is going on.

Opportunity to ‘double’ coking coal exports

Steel manufacturing giant Tata Steel is warning Indian companies may need to buy from Russia if Australia does not increase coal production.

Tata Steel Limited (NSE: TATASTEEL) CEO T.V. Narendran said in comments to The Australian:

The alternative to Australian coal is Russian coal. I know currently Russia is geopolitically not the best place to buy coal from, but going forward that is an option that Indian companies have..

He touted the “great opportunity” for the metallurgical coal industry” in Australia to invest and grow in India, adding:

Indian steel consumption or production is going to double in the next 10 years, which means there’s an opportunity for Australia to double its exports of coking coal shipments to India over the next 10 years.

Narendran will meet with the Queensland Government this week in a bid to build a deeper relationship with India and grow coal exports between Australia and India.

Metallurgical coal is going to be operating for quite some time to come, particularly in India.

I think…the conversation with the government is more about how
can we plan better for growth.

Whitehaven shares are lifting nearly 2% today, while New Hope shares are jumping nearly 3%. The Yancoal Australia share price is also rising more than 3% today, while Allegiance Coal is lifting nearly 6%.

The post ASX coal shares in the spotlight amid fresh supply warnings appeared first on The Motley Fool Australia.

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More reading

• Here’s the Whitehaven Coal dividend forecast through to 2024
• Here are 2 buy-rated ASX dividend shares with yields above 8%
• Clearly this is one of the cheapest ASX 200 stocks
• Why did the Whitehaven share price surge 28% in July?
• Here are the top 10 ASX 200 shares today

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

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

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

What happened

The key catalyst driving Flow higher is news that its blockchain technology and Dapper Wallet product will play an integral role in Meta’s (NASDAQ: META) move into the NFT space. Instagram’s photo-sharing application will now support posting of NFTs using the Flow blockchain, providing a big boost for this project that was designed from the start to revolutionize the NFT space.

Today’s rally in crypto markets has taken many investors by surprise, given the “good news is bad news” reality we’re now seeing play out. Last week’s strong jobs numbers indicated to investors that the Federal Reserve could be less likely to take its foot off the gas pedal when it comes to rate hikes. Nonetheless, equity and crypto markets have surged higher, with the crypto sector up 3.8% in aggregate over the past 24 hours, as of 10:15 a.m. ET on Monday.

However, one cryptocurrency that has not-so-quietly moved into a top-30 spot in the crypto market cap rankings is Flow (CRYPTO: FLOW). This crypto project linked to non-fungible tokens (NFTs) has surged 13.3% over the past 24 hours as of 10:15 a.m. ET this morning. Over the past week, this token’s performance is even more notable, with gains of approximately 50% over this time frame.

So what

Flow’s blockchain technology appears to have caught the attention of Meta’s upper brass, with this purpose-built NFT platform getting the nod to be used in the company’s impressive NFT rollout. Reportedly, this international NFT expansion to more than 100 countries will enable users from around the world to post their non-fungible tokens minted on the Flow blockchain. 

Dapper Labs, the company behind the Flow blockchain, is well known for its portfolio of top NFT projects. Whether it’s CryptoKitties, NBA Top Shot, or UFC Strike, NFT investors have long sought out Flow’s collectibles, given this project’s first-mover status in many sports-related collectible NFTs. Instagram appears to be partnering with Flow given its position in what could be a massive market over the long term.

Now what

How successful Instagram’s foray into the world of NFTs will be is something that will be determined over time. But the vote of confidence that Flow investors received by this integration is noteworthy. From a technological standpoint, there’s a lot investors have to cheer about with this partnership.

Key metrics investors should watch from here are NFT transaction volumes on Flow’s blockchain, as well as user growth and adoption over time. Right now, Flow is one token with some serious momentum. Accordingly, should this broad-based rally continue, this is one project with outsize potential, at least in the near term.

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

The post This NFT-linked cryptocurrency just surged into a top-30 spot appeared first on The Motley Fool Australia.

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More reading

• The 1 reason Amazon shares may not be a buy right now
• How did the BetaShares Metaverse ETF perform on its ASX debut?
• 5 tech stocks sending the Nasdaq higher on Wednesday
• How to buy ASX shares exposed to the metaverse
• Why are ASX 200 tech shares having such a lousy start to the week?

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Chris MacDonald has positions in Meta Platforms, Inc.The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. 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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When one looks at the current Fortescue Metals Group Limited (ASX: FMG) share price, one metric might immediately jump out. That would be this iron ore miner’s stupendous trailing dividend yield. Today, Fortescue shares are going for $19.17 each, up a healthy 1.11% so far this Tuesday.

At this share price, Fortescue’s trailing dividend yield comes in at an eye-catching 15.5%. If we consider that this trailing dividend yield is also fully franked, we must also consider that this yield grosses up to an even more ludicrous 22.14% if we include the value of this franking.

So is this really what investors can expect if they purchase Fortescue shares today? Does this make Fortescue a buy today for dividend income, or is this just a big dividend trap honeypot?

A dividend trap refers to a situation where an ASX share has a seemingly attractive trailing dividend yield. But when an investor buys the shares expecting big income, they are disappointed when the company turns around and cuts its dividend, essentially ‘trapping’ the investor.

So is this the case with Fortescue today?

Well, let’s see what one ASX expert reckons. Michael Maughan is head of the Tyndall Australian Share Income Fund. He recently shared his views on Fortescue with Livewire.

So Maughan acknowledges that “the miners have been the biggest part of the dividend pie over the last few years” on the ASX.

He notes that the current iron ore price is lower than it has been in 2022 today, but is still very high when compared to its long-term average pricing. As such, he stated that, “We expect the iron ore miners to be good cash flow generators and big payers going forward”.

But does this mean Fortescue’s mid-teens dividend yield is here to stay?

Are Fortescue shares a dividend trap today?

Well, not so fast, says Maughan. Here’s how he described Fortescue’s future dividend prospects:

There are two types of dividend traps. There’s the cyclical aspect and there’s the structural aspect. The cyclical aspect is you have companies that are going through cycles, the miners are a classic example. In times when the iron ore price is high, and in times when it’s lower.

If you were to value that company on last year’s earnings, when the iron ore price was US$220, that might not be the best benchmark to use upon which to value the company. And that came to bite. If you go back to a period like 2016 for the miners, that’s a classic example of that.

…Fortescue falls into that same bucket with miners. Yes, I would definitely not use last year’s yield as a way to value the company, because a yield in the high-teens is obviously too high. So if the market we’re using that yield, then the stock would be much higher.

So investors definitely shouldn’t count on Fortescue’s trailing dividend yield as a reason to go out and buy more Fortescue shares today, according to Maughan.

But that doesn’t mean Fortescue is a dud investment by any means. Chances are the miner will continue to pay out healthy dividends as long as the iron ore price remains historically elevated.

But a 15.5% yield going forward? That might be a bridge too far.

The post Are Fortescue shares a buy for income or are they a dividend trap? appeared first on The Motley Fool Australia.

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More reading

• AGL share price down amid Fortescue Future Industries hydrogen hub news
• What’s driving the Fortescue share price to an 8-week high today?
• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.
• Up 5% in a month, is the current Fortescue share price a buy or a sell?
• ‘World’s greatest concern’: Can Fortescue really help the planet AND its profit margin?

Motley Fool contributor Sebastian Bowen 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 Flight Centre Travel Group Ltd (ASX: FLT) share price has been rangebound today and are currently 0.40% in the red at $17.58.

Shares in the travel retailer have been in sideways territory for the bulk of July–August, following a sudden nosedive back on 8 June.

Are Flight Centre shares a buy?

According to brokers covering the share, opinion is split between the group. Several changes were made to ratings post Flight Centre’s FY22 earnings.

The company narrowed its net-loss projections down from $225 million to $190 million at the upper range of guidance. It also increased its FY22 guidance, prompting several analyst revisions.

Flight Centre is rated a buy from 3 out of 13 analysts, with 7 urging the clients to presently hold positions, per Refinitiv Eikon data.

There are also 4 sell ratings from this list. However, the consensus of broker price targets is $18.88 per share, suggesting sentiment is tilted bullish.

This price objective implies a return potential of more than 6% from the current market price if the brokers are correct.

One broker who’s a little more cautious is Jefferies. Analysts at the investment bank led by M. Simotas foresee wages, reduced online sales, inflation and weaker sentiment as likely to impact Flight Centre’s FY23 earnings.

Simotas and team noted that airlines have cut their global emissions targets, a move that could materially impact Flight Centre’s top-and-bottom-line.

Despite this, it lowered its FY23 EBITA forecasts to a loss of $295 million from a $305 million estimated loss.

Meanwhile, researchers at rival investment banks UBS, Macquarie and Barclay Pearce are each neutral on the share as well, with the latter revising its rating up from a sell last month.

In the last 12 months, the Flight Centre share price has clipped a 19% gain.

The post Are we flying first class with Flight Centre shares? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Why did the Flight Centre share price underperform the ASX 200 in July?
• Own Flight Centre shares? Here’s why the boss is predicting more pain for the travel sector
• When did Flight Centre shares last pay a dividend?
• These are the 10 most shorted ASX shares

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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The Mesoblast Limited (ASX: MSB) share price is sliding after resuming trade from a company-requested trading halt today.

Earlier this week we noted that Mesoblast shares were on ice as the company prepared to raise additional equity capital.

Today the company said it has completed the financing round via a private placement.

The Mesoblast share price is currently down 8.06% to 86 cents.

What did Mesoblast announce?

The company advised it has completed a $65 million equity raise today.

It did so through the issue of 86.7 million new ordinary shares via a global private placement. The placement was led by its largest shareholder, M&G Investments in the United Kingdom.

Mesoblast says the private placement was made at 75 cents per share, representing a 5% discount to the 30 trading-day volume weighted average price (VWAP). There were no associated warrants or options issued.

As a result of the capital injection, Mesoblast now has US$105 million in cash on hand. The company will use the funds partly for the launch of its lead drug candidate, remestemcel-L.

Mesoblast will also allocate money towards starting the phase 3 trial of its rexlemestrocel-L label.

The trial is investigating the drug’s efficacy in treating “chronic low back pain associated with degenerative disc disease”.

What did management say?

Speaking on the results, Mesoblast CEO, Dr Silviu Itescu said the company was “very appreciative of the ongoing strong support” from its major stakeholders.

“Our most advanced product, remestemcel-L, aims to save the lives of patients afflicted with SR-aGVHD, a condition with high mortality and in particular, an unmet need in children,” he added.

The company says it also has patent protection on its portfolio until 2041, at least, in all major markets.

The Mesoblast share price has fallen more than 55% in the past 12 months.

The post Mesoblast share price slides 8% following $65m capital injection appeared first on The Motley Fool Australia.

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More reading

• Why is the Mesoblast share price still not moving today?
• These are the 10 most shorted ASX shares
• Why is the Mesoblast share price on ice today?
• Why did the Mesoblast share price rocket 54% in July?
• 3 ASX All Ordinaries shares leaping 10% or more today

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

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The National Australia Bank Ltd (ASX: NAB) share price is underperforming those of its peers on Tuesday following the release of the bank’s quarterly trading update.

The bank’s stock has recovered slightly after opening 3.7% lower at $29.56.

The NAB share price is currently $29.69, 3.32% lower than it was at Monday’s close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.04% right now while the S&P/ASX 200 Financials Index (ASX: XFJ) has slumped 0.96%. Most of the major ASX 200 bank shares are also in the red today, slipping between 0.3% and 1.4%, aside from Macquarie Group Ltd (ASX: MQG), which is posting a 0.81% gain at the time of writing.

Let’s take a look at the news weighing on the NAB share price today.

NAB share price falls on quarterly update

The NAB share price is sliding despite the bank posting higher profits and cash earnings for the three months ended 30 June than it did in the same period of 2021.

However, as The Motley Fool Australia’s James Mickleboro reported earlier today, the bank revised its financial year 2022 cost growth guidance once again. It now expects its cost growth to come in at around 3% to 4%.

The bank also revealed its net interest margin (NIM) was “slightly lower” last quarter, driven downwards by markets and treasury. Excluding markets and treasury, it was up slightly amid higher interest rates.

UBS analyst John Story was quoted by The Australian as saying the bank’s NIM “may be a bit disappointing in the context of some banks which have already reported, but the underlying margin trend is as expected”.

Story also reportedly said the update was “very much in line with consensus with few surprises”.

NAB reported $1.85 billion of unaudited statutory profit for the quarter – a 12% increase on that of the prior corresponding period (pcp).

It also boasted $1.8 billion of cash earnings – a 6% lift – and a CET1 ratio of 11.6%.

The post NAB share price lags other ASX 200 banks following quarterly update appeared first on The Motley Fool Australia.

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More reading

• NAB share price in focus following $1.8bn Q3 cash profit and cost growth revision
• 5 things to watch on the ASX 200 on Tuesday
• Here is the RBA interest rate outlook according to ASX 200 banks
• Is the NAB share price a buy ahead of next week’s quarterly update?
• How are ASX 200 bank shares responding to the RBA rate increase?

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 Macquarie 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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The CSL Limited (ASX: CSL) share price is edging higher following the completion of the company’s latest acquisition.

In earlier trading, shares in the global biotech reached $298.49, up 0.96% on yesterday’s closing price. They have since fallen back to $295.70, up 0.02%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is hovering 0.03% down at 7,018 points.

CSL adds Vifor Pharma to its books

After receiving all the required regulatory clearances last week, CSL has effectively taken over Vifor Pharma AG.

The acquisition comes after CSL announced a lengthy delay back in May due to some antitrust issues.

However, with the deal now settled, CSL currently holds more than 97% of Vifor shares. At the same time, these shares will soon be removed as management will apply to delist them post-close.

The remaining 3% os stock is expected to be cancelled in accordance with Swiss takeover rules.

With the $16 billion deal completed, CSL has access to Vifor Pharma’s iron deficiency, dialysis, and nephrology & rare products divisions.

CSL’s upcoming results are scheduled to be released on Wednesday 17 August. Of course, they won’t include any earnings from Vifor Pharma.

However, adding a global pharmaceuticals company will undoubtedly boost CSL’s financial profile in the H1 FY23 period.

CEO of Vifor Pharma Abbas Hussain commented:

…I am full of confidence that Vifor Pharma will have a successful future as part of a larger, global organization. This will allow us to accelerate growth and to successfully drive multiple product launches as we continue to help even more patients around the world live better, healthier lives.

It’s worth noting that CSL will hold a dedicated market briefing on 17 October. Management will discuss Vifor Pharma’s growth strategy and provide insights into its product portfolio as well as its financials.

CSL share price review

Following a broader recovery on the ASX, the CSL share price climbed 2.7% in the past month.

When looking at year-to-date, CSL shares are down 0.09%.

CSL is the third-largest company on the ASX. Its market capitalisation is $142.41 billion.

The post CSL share price climbs as $16 billion Vifor acquisition becomes effective appeared first on The Motley Fool Australia.

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• ‘Excited about the pipeline’: Why Wilson says the CSL share price is in the buy zone right now
• 3 ASX 200 shares to buy for a post-COVID resurgence: experts
• Up 8% in July, is there more upside in the CSL share price this earnings season?
• Why Citi just became even more bullish on the CSL share price
• What’s going on with the CSL share price on Tuesday?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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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Is there anything more important than profit, when it comes to judging a company’s performance and prospects?

It is, at the end of the day, what’s left over for shareholders. And the higher the better, thank you very much!

Even those companies currently burning cash are aiming for a profitable future, as are their shareholders.

If money makes the world go ‘round, profits make the journey much more satisfying!

Accounting might be the language of business, but profits are its love language.

The financial statements are English, but earnings are pure French!

Aren’t they?

Of course they are.

But, what if…

What if those profits are just some selective – creative? – accounting?

You know, throw in some depreciation, a decent whack of amortisation, perhaps the reversal of some previous provisions for bad debts and capitalise some IT spending…

It reminds me of the old joke about the accountants going for the job. When asked ‘What’s two plus two?’, most answered ‘Four’. The guy who got the job replied “What do you want it to be?”

That’s a little unfair, of course. Most companies are on the level.

But there’s still a good chunk of – let’s call it ‘discretion’ – when it comes to deciding what numbers go where in the Profit & Loss Statement.

So, it’s worth being careful.

“Ah”, you say,” I already knew that. Cash is king!”

And you’re right.

Sort of.

Let’s take a company that spends up big every 10 years to replace some really expensive machinery.

In that 10th year, there’s a massive cash deficit. In the other 9, a good cash surplus.

So which number should you rely on?

Some sort of mix of both?

Then congratulations – we’ve just re-invented ‘accrual accounting’ and we’re back at the same problem I just mentioned when it comes to profits.

Why am I telling you all this?

Well, because it’s ‘earnings season’, and we’re in the middle of an onslaught of results from almost every ASX-listed company.

And because forewarned is forearmed.

See, we’re already seeing – and we’ll see a lot more – companies telling us what happened over the last 6 or 12 months.

And they’re telling us what they want us to hear.

Profit.

Underlying earnings.

Normalised earnings.

Cash profit.

And then there’s the acronyms:

EBIT, EBITDA, NPAT, NOPAT, EPS…

You’d almost be forgiven for thinking they just want us to be so bamboozled that we swallow whatever they want us to hear, huh?

Now, I’ve had some fun with it.

But I’m serious.

I’m no cynic – I’m a believer in the power of democratic capitalism, and the mechanism of the market as the best (or least worst) way for companies to raise capital, and for us all to share in the march of progress.

But I also think it pays to be sceptical.

Many CEOs and boards are on the level – telling it how it is, and treating shareholders as owners and partners.

But some… well, let’s just say the incentives and self-delusion are powerful at the pointy end of capitalism.

No CEO gets there without a very significant helping of self-confidence and self-belief.

No investor relations flack gets a bonus by telling the boss to stop spinning the results.

Few board members want to ‘fess up to bad news, preferring to tell us all about the exciting plans for the future.

And so it goes.

A tiny, tiny minority are outright crooks.

A few are suspending their own disbelief in the crusade for the holy grail.

Some are trying to get the share price up, believing that’s what shareholders want (and they’re often right!), despite the reality of their businesses.

Some are going to call it straight – telling us, in Warren Buffett’s words, what they’d want to know if our positions were reversed.

The hard part?

Think about this: The CEO gilding the lily (to one extent or another) is often more persuasive than the person telling the unvarnished truth.

Why?

Because that’s how they get the job in the first place. The board falls for the charismatic executive with a silver tongue and big plans.

And hey, it’s not a lie if you believe it, I guess…

That’s the challenge of analysing management, when it comes to investing.

It’s something that our investment team spends a lot of time thinking and talking about.

Some people love meeting management teams. It feels good to have access and to ask the hard questions. It can convince you that you’re more informed than you were before.

But, again, few CEOs are poor salespeople. And they almost all believe fervently in their mission.

So it’s a rare analyst or investor who leaves a meeting with management less impressed than when they went in.

Which doesn’t mean it’s necessarily a bad thing – just that you need to be mentally and emotionally prepared.

Most CEOs are likeable. They tell a good story. A convincing story. Usually (almost always) because they believe it themselves.

But history shows that some of the most confident company bosses still deliver terrible – or just mediocre – results.

In other words… be careful of who and what you listen to.

Weigh it appropriately. Discount it, knowing you’ll be prone to believing what you hear.

And look for a few things:

Candour with good and bad news.

Alignment with shareholders.

Track record.

That’s not a fail-safe formula. You’ll still be disappointed in the results, sometimes.

No-one is perfect, and your investment may not work out – for any number of reasons.

But remember, investing is a probabilistic pursuit.

You want to be right as often as possible, of course, but your measurement is the overall portfolio result – not an arithmetic ‘strike rate’.

After all, I’d rather be right six times out of ten, and earn 15% per annum, overall, than be right 9 times out of 10 and earn 6.5% p.a.

I hope you would too.

One of the best ways to do that? Keep the, ahem, BS filter finely tuned.

Especially during earnings season.

Fool on!

The post Don’t believe everything the CEO says appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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Could AMP Ltd (ASX: AMP) shareholders be heading for a $1 billion payday?

Maybe, according to analysts at broker Ord Minnett.

They noted that following major asset sales in FY22, AMP shareholders could benefit from buybacks after the financial services company has paid down debt.

A billion dollars in capital returns?

In April this year, AMP shares got a big lift when the company sold its funds management branch, formerly AMP Capital and rebranded to Collimate Capital.

Collimate was divested in two parts.

International digital infrastructure firm DigitalBridge acquired Collimate’s international infrastructure equity business for some $699 million.

In turn, Dexus Property Group (ASX: DXS) acquired Collimate’s real estate funds management and domestic infrastructure equity businesses.

As the Motley Fool reported at the time, the combined sales were expected to bring AMP a net capital increase of around $1.1 billion.

The company stated it intended to return most of the funds to shareholders through a capital return as well as pay down some of its debt.

Commenting on the logic behind the divestments, AMP CEO Alexis George said:

Post completion of the two sales, AMP Limited will be a more focused entity, concentrated on driving our core banking and retail wealth businesses in Australia and New Zealand, with a core objective of accelerating our strategy and increasing our competitiveness.

Analysts at Ord Minnett (as reported by The Australian) estimate that REA will use around $400 million of the $1.8 billion it garnered from asset sales to pay down its debt. That leaves the lion’s share of the funds available for capital returns through a share buyback.

Ord Minnett estimated AMP will have a net tangible asset value of $1.35 per share after the recent asset sales. It’s currently trading for $1.17 per share.

How have AMP shares been tracking?

After a difficult few years, AMP shares have outperformed the benchmark this past year.

Over the past 12 months, the AMP share price is up 9% compared to a 7% loss posted by the S&P/ASX 200 Index (ASX: XJO).

The post Are AMP shareholders heading for a $1 billion pay day? appeared first on The Motley Fool Australia.

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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 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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