A rough day on the market was turned around this afternoon as many S&P/ASX 200 Index (ASX: XJO) bank shares bounced into the green. Their U-turn came as the Reserve Bank of Australia (RBA) hiked interest rates for a third consecutive month.

Here’s how the ASX 200’s ‘big four’ banks are performing at the time of writing:

• Commonwealth Bank of Australia Ltd (ASX: CBA) – up 0.42%
• Westpac Banking Corp (ASX: WBC) – up 0.56%
• National Australia Bank Ltd (ASX: NAB) – up 0.07%
• Australia New Zealand Banking Group Ltd (ASX: ANZ) – down 0.02%

For context, the ASX 200 is currently up 0.52% while the S&P/ASX 200 Financials Index (ASX: XFJ) has lifted 0.34%.

What’s going on with ASX 200 banks on Tuesday?

ASX 200 banks are trading on Tuesday amid a third rate hike in as many months. The RBA increased the official cash rate by 0.5% to 1.35% – broadly in line with market expectations.

The move is yet another attempt to control inflation, which hit 5.1% in the March quarter.

Rising rates bring positives for banks. It allows them to change their variable loan rates, generally increasing their net interest margins (NIM).

Though, it also increases the likelihood of mortgage foreclosures. That’s particularly worrying as 23.1% of new residential mortgage loans funded during the March quarter were found to have debt-to-income ratios of at least six times.

Passing on the last three rate hikes to borrowers would see those holding a $500,000 mortgage with 25 years remaining paying $333 more in repayments each month, reports RateCity.

On top of that, rising rates can negatively impact housing prices, therefore lowering the value of some banks’ loan books.

It’s also worth noting that other ASX 200 banks are outperforming right now.

Shares in Macquarie Group Ltd (ASX: MQG), Bendigo and Adelaide Bank Ltd (ASX: BEN), and Bank of Queensland Ltd (ASX: BOQ) have gained 1.19%, 0.87%, and 1.48% respectively.

The post What’s going on with ASX 200 bank shares on Tuesday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why the ASX 200 is rallying after the RBA’s rate hike today
• Why is the Woodside Energy share price leading the ASX 200 higher on Tuesday?
• The surprising ASX shares to buy as interest rates rise: expert
• CBA share price slips as analyst warns of $2 billion Klarna scratch
• Why did the ANZ share price underperform the ASX 200 in June?

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 positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/F63hUxE

The South32 Ltd (ASX: S32) share price had a turbulent time in FY22. With the end of financial year behind us, the company now trades back in line with its September 2018 levels.

At the time of writing, South32 is rangebound and trades at $3.87 per share, down more than 3% this year to date.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) has gained 81 basis points on the day.

South32 share price faced choppy times in FY22

Shares in the diversified miner were propped up by the commodity boom in FY22. Prices for coal and aluminium in particular were very buoyant and remain so into the new financial year.

The former has remained top-heavy, whereas the price for aluminium has retraced back to its 52-week lows of US$2,464 per tonne. Returns for all 3 since March are seen below.

However, just about all of the commodity markets South32 has exposure to rallied hard in FY22.

The benefits of higher pricing were on full display in the company’s March quarter results, with the production and revenue numbers coming in strong.

In the same vein, however, full-year production costs were also forecasted to increase – a point that investors didn’t appear too pleased with at the time.

As a result of the ups and downs of FY22, the South32 share price has managed to secure a roughly 31% gain over the past 12 months to date.

It rallied as high as $5.36 on 7 March 2022 and then reached $5.17 on 8 June, but has since pared gains to its current levels.

Looking ahead, South32 now has its full-year results to be released in the coming months, along with its annual report.

Meantime, 19 analysts rate the share as a buy right now, with 2 analysts saying it’s a hold, per Bloomberg data.

The post How did the South32 share price perform in FY22? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Experts name these ASX 200 dividend shares with big yields as buys
• 3 more of Morgans’ best ASX share ideas for July
• Here are the 3 most heavily traded ASX 200 shares on Monday
• South32 crashes into bear market in June as recession fears bite
• How have ASX 200 mining shares fared over June?

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.

from The Motley Fool Australia https://ift.tt/o6jfpmY

The Electro Optic Systems Holdings Ltd (ASX: EOS) share price is up 3.06% in late trading on Tuesday amid the completion of an institutional $15 million capital raise.

The company is also offering a non-renounceable $2 million share purchase plan (SPP) for eligible existing Electro Optic Systems shareholders.

The net proceeds of the placement and SPP will be used for working capital and near-term capital requirements. Priority will be given to the core defence business.

What does Electro Optic Systems do?

Electro Optic Systems is an Australian technology company that develops and produces electro-optic technologies for the aerospace market.

Of its three reportable segments, defence is its biggest revenue raiser. The other two segments are communication and space.

What are the details of the SPP?

On 29 June, Electro Optic Systems announced a successful non-underwritten placement of 12.5 million new fully paid ordinary shares to institutional investors to raise approximately $15 million.

The placement shares were priced at $1.20 apiece and were issued today.

The company also announced the SPP, giving eligible shareholders the opportunity to purchase up to $30,000 worth of new shares at the same price.

In a letter to shareholders provided to the ASX today, Electro Optic Systems said the SPP was open to investors on the company register as of 7pm AEST on 28 June.

Shareholders can apply to buy parcels of shares in lots of $2,500, $5,000, $7,500, $10,000, $15,000, $22,500, or $30,000.

Investors must apply and pay for their new shares by 5pm AEST on 19 July.

There are no brokerage or other transaction costs involved in the SPP.

What did management say?

Electro Optic Systems chair Peter Leahy, AC, said:

We welcome the support for the Placement and the new institutional investors to the register. On behalf of the Board of Directors of EOS, I would also like to thank our existing shareholders for their ongoing support.

Market update for 1H FY22

Electro Optic Systems also provided the ASX with an update for 1H FY22.

For the six months to 30 June, the company is expecting an EBIT loss of approximately $45 million (unaudited). This includes a $15 million loss relating to SpaceLink.

Electro Optic Systems said two contract delays and the federal election’s impact on new projects affected revenue.

The company provided guidance that it expects FY22 revenue to be equal to or exceed FY21.

The post Own Electro Optic Systems shares? Here’s how the company is raising $17 million appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Electro Optic Systems share price hitting a new 52-week low?
• Here’s why the Electro Optic Systems share price collapsed 26% today
• Why Carsales, EOS, Imugene, and Tyro shares are sinking today
• Why is the Electro Optic Systems share price frozen today?

Motley Fool contributor Bronwyn Allen 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 Electro Optic Systems Holdings Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/MB6rhD9

The S&P/ASX 200 Index (ASX: XJO) bounced even as the Reserve Bank of Australia (RBA) lifted interest rates to a more than three-year high today.

The central bank increased the cash rate by 50 basis points to 1.35% as it moved to curb high inflation. Rates have not been this high since May 2019.

Higher rates are typically bad news for ASX shares, but there could be a good reason why investors see a silver lining.

Why ASX 200 shares jumped with the RBA rate hike news

For one, RBA Governor Philip Lowe seems to be sitting on the fence when it comes to the size of future rate hikes.

Many economists are predicting the RBA will follow through with at least another 50-point hike next month.

While the RBA indicated further hikes are on the way in the coming months, Lowe’s statement was more balanced than some might have thought.

Another big interest rate hike isn’t a given

If anything, our central bank said the size and timing of future hikes will be guided by incoming data. This suggests another large hike next month isn’t a given.

This could explain why the ASX 200 moved higher on the news to trade 0.6% in the black in the last hour of trade. It also explains why the Australian dollar stayed sluggish at around US68.6 cents. The Aussie would have jumped if the RBA was more hawkish.

Biggest swing factor

It appears that a key swing factor the RBA is watching is household spending. Recent economic data suggests spending remains positive although this could change. Lowe said:

Household budgets are under pressure from higher prices and higher interest rates. Housing prices have also declined in some markets over recent months after the large increases of recent years. The household saving rate remains higher than it was before the pandemic and many households have built up large financial buffers and are benefiting from stronger income growth. The Board will be paying close attention to these various influences on household spending as it assesses the appropriate setting of monetary policy.

This suggests that if we don’t want much higher rates, we should curb our spending.

Other things the RBA is watching

The other factors that the RBA will be watching are employment and the outlook for inflation. Lowe appears to be a little more confident with forecasting these remaining drivers.

He noted that the labour market looks to be strong due to the worker shortage. The unemployment rate fell to a near 50-year low of 3.9% in May, while underemployment also declined significantly. The RBA believes this trend is likely to persist in the months ahead.

Meanwhile, the RBA is forecasting inflation to peak this year before quickly falling back to its 2% to 3% comfort zone next year.

So, if households do cut back on consumption, interest rates may not need to climb as quickly or as high as the markets fear, even if employment remains low.

The post Why the ASX 200 is rallying after the RBA’s rate hike today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Woodside Energy share price leading the ASX 200 higher on Tuesday?
• The surprising ASX shares to buy as interest rates rise: expert
• Wipeout: Why did the Magellan share price sink 70% in FY22?
• ASX 200 midday update: Regis Resources jump, big four banks fall ahead of RBA meeting
• Why ASX 200 value shares are surviving the sell-off better than growth shares

Motley Fool contributor Brendon Lau 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.

from The Motley Fool Australia https://ift.tt/5n7YcHl

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is storming higher. At the time of writing, the benchmark index is up 0.7% to 6,656.4 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Ardent Leisure Group Ltd (ASX: ALG)

The Ardent Leisure share price is down a massive 64% to 51 cents. Today’s decline is due to the entertainment company’s shares trading ex-capital return this morning. Eligible shareholders can now look forward to receiving a total capital return of 95 cents per share next week. This comprises a return of capital of 46.0699 cents per share and an unfranked dividend of 48.9301 cents per share. This follows the sale of its Main Event business to Dave and Busters.

Betmakers Technology Group Ltd (ASX: BET)

The Betmakers share price is down 6% to 38.5 cents.  This is despite there being no news out of the betting technology company on Tuesday. However, it is worth noting that the company’s shares have been strong performers recently. In fact, they are still up 10% since this time last week despite today’s decline. This could mean some traders are taking a bit of profit off the table today.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down 1.5% to $10.85. This morning analysts at Morgan Stanley retained their underweight rating and $10.25 price target on this insurance giant’s shares. Its analysts believe Suncorp’s FY 2023 catastrophe budget is too low and the company could get caught short. Particularly given that the Bureau of Meteorology is predicting around a 50% chance of La Nina forming in late 2022.

Ten Sixty Four Ltd (ASX: X64)

The Ten Sixty Four share price is down 3% to 63 cents. This follows news that the gold miner, previously known as Medusa Mining, has kicked out its outgoing managing director Paul Welker. Mr Welker resigned last week and was serving a six-month notice period. However, the company has kicked Mr Welker out immediately after finding out that he had a financial interest in another company that entered into an important commercial contract with Ten Sixty Four.

The post Why Ardent Leisure, Betmakers, Suncorp, and Ten Sixty Four shares are dropping appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Ardent Leisure share price crashing 67% today?
• These are the 10 most shorted ASX shares
• ASX 200 midday update: Suncorp’s update, Magellan sinks
• June was a terrible month for ASX 200 bank shares. Here’s why
• Why is the Ardent Leisure share price jumping 9% today?

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

from The Motley Fool Australia https://ift.tt/d2xF7Ki

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

Shares in Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) declined by 13.7% in June, underperforming the benchmark S&P 500 index’s decline of 8.4%. The place to start when looking at why is by analyzing what’s in the Berkshire Hathaway portfolio. So here’s a table of all the holdings above 3% in the portfolio as of March 2022. 

Company	Sector	Portfolio Weight
Apple	Consumer electronics	42.1%
Bank of America	Bank	11.3%
American Express	Financial services	8%
Chevron	Energy	7%
Coca-Cola	Consumer staples	7%
Occidental Petroleum	Energy	3.6%
Kraft Heinz	Consumer staples	3.5%

Data source: Berkshire Hathaway SEC filings.

As you can see below, Apple’s performance in June was pretty much in line with the market, and the leading consumer staples stocks (Coca-Cola and Kraft Heinz) outperformed the market. However, the finance and energy stocks significantly underperformed. For reference, Berkshire holds a further 7% in banking and finance stocks.

Data by YCharts

The performance in June marks a reversal of fortune because, going into the month, Berkshire Hathaway was up in 2022 with a 5.2% gain compared to a 13.3% decline in the index. In addition, energy and consumer staples led outperformance to the start of June.

So what

The reversal in Berkshire Hathaway’s performance reflects the shift in the market’s mood more than any fundamental change in the long-term prospects of the companies in the portfolio. Speculators likely bought into the type of stocks seen as benefiting from inflationary trends (energy) and kept buying until the Federal Reserve acted aggressively to combat inflation by hiking rates. 

However, as the market anticipated and then digested the Federal Reserve rate hike in the middle of June, it sold off the “inflation plays” as well as the cyclical, banking, and financial stocks. The idea is that rising rates will make spending and investment more expensive, meaning end-market demand will tail off.

Now what

The market will do one thing, and Buffett will do another. Reacting to near-term market movements and trying to trade sentiment and mood changes among investors is rarely a winning strategy over the long term. Indeed, Buffett’s success as an investor lies precisely in avoiding this kind of knee-jerk trading. Instead, Buffett tends to favor buying and holding companies for their long-term fundamental earnings power. And while the market is panicking, it’s worth noting that Berkshire Hathaway is only down 1% on a year-over-year basis. Something to consider. 

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

The post Why shares in Berkshire Hathaway fell in June appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 monster Warren Buffett stock-split stocks to buy right now
• My top Warren Buffett stock to buy right now
• 3 stocks Warren Buffett bought hand over fist as the market plummeted
• 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

Lee Samaha 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.

from The Motley Fool Australia https://ift.tt/KhBGo1X

The IOUpay Ltd (ASX: IOU) share price is coming back down to Earth after rocketing 55% today.

At the time of writing, the Malaysia-based buy now, pay later (BNPL) provider’s shares are up 7.94% to 6.8 cents.

Let’s take a look at what drove the company’s shares higher before quickly retracing throughout the day.

What happened to IOUpay shares?

After surging as high as 11 cents in early morning trade, the IOUpay share price was temporarily paused.

This came as the ASX issued the company a speeding ticket.

IOUpay took the next several hours to respond to a query regarding its ASX price movement and volume.

The company’s management stated it wasn’t aware of why the company’s shares accelerated to astronomical levels.

However, it did note that its board believes shareholders may be “price-factoring” in relation to the company’s non-executive chair appointment.

It also mentioned that other previous announcements could likely be contributing to its shares rising today.

Nonetheless, the sharp uptick comes amid a backdrop of extreme market volatility on the ASX over the past couple of months.

Investors have expressed their concerns regarding the downbeat economic outlook due to rampant inflation and aggressive interest rate hikes.

IOUpay share price summary

It has been a difficult 12 months for IOUpay shares, tumbling more than 70% as investors flee the BNPL sector.

When looking year to date, the company’s shares are down roughly 56%.

Based on valuation grounds, IOUpay commands a market capitalisation of $37 million.

The post IOUpay shares issued a speeding ticket after rocketing 55% today. What happened? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why shares in Berkshire Hathaway fell in June
• Why is the Woodside Energy share price leading the ASX 200 higher on Tuesday?
• Could an ‘immense’ opportunity mean the Megaport share price is now a buy?
• How did the Macquarie share price perform in June?
• Is it safer to pull your money out of the stock market or keep investing for now?

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.

from The Motley Fool Australia https://ift.tt/8RJTfrX

The Woodside Energy Group Ltd (ASX: WDS) share price is among the top performers on the S&P/ASX 200 Index (ASX: XJO) on Tuesday.

At the time of writing, the Woodside share price is $32.52, 4.03% higher than its previous close.

For context, the ASX 200 is currently recording a 0.36% gain.

Let’s take a look at what might be bolstering the ASX 200 energy giant’s stock today.

Woodside share price outperforms on Tuesday

The Woodside share price is driving the ASX 200 and its home sector higher on Tuesday despite the company’s silence.

The S&P/ASX 200 Energy Index (ASX: XEJ) is currently the market’s top-performing segment, lifting 2.48% right now.

Its gains have likely come on the back of rising oil prices. The price of Brent crude oil increased 1.7% to US$113.50 a barrel overnight. Meanwhile, US Nymex crude oil’s value lifted 2.1% in after-hours trade to US$110.66 a barrel.

Their rises came amid supply concerns born from unrest in Libya and Ecuador, as well as sanctions against Russian oil, Reuters reported. The publication also noted a strike could see Norway’s oil production slip 8% this week.

The price of thermal coal also lifted overnight, rising 2.2% to trade at US$396.45 a tonne. On top of that, uranium futures rose 0.79% to US$51.25 a pound.

The share price of uranium producer Paladin Energy Ltd (ASX: PDN) is trading in Woodside’s shadow today, gaining 3.95% at the time of writing.

Worley Ltd (ASX: WOR) is the sector’s third-best performer right now, recording a 1.63% gain.

The post Why is the Woodside Energy share price leading the ASX 200 higher on Tuesday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The surprising ASX shares to buy as interest rates rise: expert
• Why Regis Resources, Sayona, Woodside, and Xero shares are pushing higher
• Wipeout: Why did the Magellan share price sink 70% in FY22?
• ASX 200 midday update: Regis Resources jump, big four banks fall ahead of RBA meeting
• Why ASX 200 value shares are surviving the sell-off better than growth shares

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

from The Motley Fool Australia https://ift.tt/p75gdUL

Due to the market’s sudden aversion to loss-making tech companies, you won’t be surprised to learn that the Megaport Ltd (ASX: MP1) share price has been hammered in 2022.

Since the start of the year, the leading cloud connectivity and networking solutions provider’s shares have lost a disappointing 72% of their value.

Is the Megaport share price weakness a buying opportunity?

While the decline in the Megaport share price is disappointing for shareholders, it could be a buying opportunity for others. In fact, if the team at Goldman Sachs are on the money, there could be some huge gains ahead for investors.

According to a recent note, its analysts have a buy rating and $13.10 price target on the company’s shares.

Based on the current Megaport share price of $5.41, this implies potential upside of 140% for investors over the next 12 months.

Why is Goldman bullish?

Goldman is bullish on the Megaport share price due to the company’s first-mover advantage in an industry benefiting from long term structural tailwinds. These are the adoption of public cloud (and multi-cloud usage) and the transition towards Networking as a Service (NaaS).

The broker highlights that the latter is being driven by the increased prevalence of hybrid working and cloud-based applications. These are putting strain on legacy network designs and impacting performance. All in all, the broker feels this is providing Megaport with an “immense” growth opportunity.

Goldman explained:

MP1 is benefiting from its first-mover advantage, and two structural tailwinds that accelerated through covid-19, including: (1) The adoption of public cloud & multi-cloud usage; and (2) The growth in Networking as a Service (NaaS).

The opportunity for further growth is immense (GSe A$129bn p.a. spent on fixed enterprise networking across MP1 geographies).

The post Could an ‘immense’ opportunity mean the Megaport share price is now a buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Analysts name 3 buy-rated ASX growth shares for July
• Megaport share price slumps 5% despite takeover speculation
• 5 things to watch on the ASX 200 on Wednesday
• Analysts say these ASX growth shares have huge upside potential
• Why are ASX tech shares struggling today?

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

from The Motley Fool Australia https://ift.tt/0WoHM81

The Macquarie Group Ltd (ASX: MQG) share price dropped in June, although it lost less than many other ASX bank shares during the month.

Macquarie shares slipped 11.54% between market close on 31 May and 30 June. To put this in perspective, the S&P/ASX 200 Index (ASX: XJO) slid nearly 9% during the same time frame.

So what weighed on the Macquarie share price during the month?

Bank shares suffer

Macquarie shares had a tough June, but they outperformed multiple other ASX banks. Last month, the Commonwealth Bank of Australia Ltd (ASX: CBA) descended 13.4% while Westpac Banking Corp (ASX: WBC) lost 18.3%. Meanwhile, National Australia Bank Ltd (ASX: NAB) fell 12.38% and Australia New Zealand Banking Group Ltd (ASX: ANZ) dropped 12.02%. Bendigo and Adelaide Bank Ltd (ASX: BEN) also tumbled 12.96% in June.

Interest rate rises and recession fears appeared to impact ASX bank shares, including Macquarie. Despite hikes increasing net interest margins (NIM) on home loans, they can also lower demand for new mortgage loans, as my Foolish colleague Bernd noted recently. Further, they can boost the number of bad debts held by the bank.

Looking at news from Macquarie, on 28 June, the company announced plans to raise $400 million via the offer of capital notes. These notes were issued at $100 each, with distributions to be paid quarterly in arrears, subject to conditions.

In other news last month, Macquarie offered interest rates of 1.5% per year for transaction accounts from 17 June. As my Foolish colleague Sebastian noted, this was a higher rate than most other ASX banks.

Looking ahead, some analysts are tipping an upside for the Macquarie share price. Analysts at Morgans are optimistic about its exposure to infrastructure and renewables, as my Foolish colleague James reported. Morgans added:

The company also stands to benefit from recent market volatility through its trading businesses, while the company continues to gain market share in Australian mortgages.

Morgans placed an add rating on the Macquarie share price with a $215 price target. This is a 27% upside on the current share price of $168.65 at the time of writing.

Meanwhile, Ord Minnett senior investment advisor Tony Paterno also recommended investors buy Macquarie shares in a post on 19 June. He noted the company’s plans to boost interest payments on transaction accounts, adding:

After disrupting the home loan market in recent years, this could have an impact on the deposit market if it gains traction.

Share price snapshot

Macquarie shares have shed 18% in the year to date, but they have leapt more than 7% in the past year

In contrast, the S&P/ASX 200 Index has returned about 9% in the past year.

Macquarie has a market capitalisation of just over $65 billion based on the current share price.

The post How did the Macquarie share price perform in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How did the Vanguard Australian Shares Index ETF perform in June?
• 3 more of Morgans’ best ASX share ideas for July
• June was a terrible month for ASX 200 bank shares. Here’s why
• What’s the outlook for the Macquarie share price in July?
• Broker names 2 ASX 200 financials shares to buy

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 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.

from The Motley Fool Australia https://ift.tt/cxILltp