There are some really compelling ASX growth shares that could be exciting investments for the long term at the current price.

Businesses that are planning long-term growth have the ability to produce attractive compound growth in their profit over the long term.

However, some ASX growth shares have seen a substantial decline in their share price in the last few months.

I like to think about it with a mindset of jumping on good prices while they’re available. That’s why I like these two businesses:

Australian Ethical Investment Limited (ASX: AEF)

Australian Ethical describes itself as Australia’s leading ethical investment manager. It aims to provide investors with investment management products that align with their values and provide competitive returns.

It has an ethical charter that shapes its ethical approach and underpins both its culture and its vision.

A key driver of the business is its funds under management (FUM), which helps the business generate revenue as well as net profit after tax (NPAT). The company is benefiting from consistent superannuation guarantee contributions as well as rollovers from balances from new members that joined.

The ASX growth share is seeing ongoing growth with its customer numbers, which can help the long-term FUM growth. In the FY22 third quarter, customer numbers rose to 79,909, up 4% from 31 December 2021.

Despite all of the volatility, the business reported that at 31 March 2022, its FUM movement for the financial year to date remained positive – it was up 13% since 30 June 2021 to $6.83 billion.

Of the total FUM, $4.42 billion was in superannuation, which may be stickier for Australian Ethical because of the restrictive withdrawal rules of superannuation.

The Australian Ethical share price is down around 65% this year to date.

TechnologyOne Ltd (ASX: TNE)

TechnologyOne is one of my preferred ASX tech shares because of the quality of its client base, its shift to a software as a service (SaaS) model, and its expected growth margins.

The ASX growth share has seen a large shift to its cloud offering. In the FY22 first half, the ASX growth share reported that SaaS annual recurring revenue (ARR) reached $225.1 million, up 44%. It’s expecting SaaS ARR to continue to grow strongly, up more than 40% over the full year.

TechnologyOne says in times like this, customers turn to enterprise resource planning (ERP) software to achieve greater efficiencies in their businesses – they save at least 30% when using its global SaaS ERP.

It boasts that it’s benefiting from improving margins because of the “significant economies of scale” from its solution.

The ASX growth share says it’s on track to deliver total ARR of at least $500 million by FY26. I also think other long-term guidance of the business is very attractive – it’s expecting to grow its profit before tax margin to 35%.

The company is looking to win further growth with its global software solution, increased product adoption by existing customers, new customers, and expansion globally.

The TechnologyOne share price has fallen 19% this year to date.

The post I think these excellent ASX growth shares are buys for 2022 and beyond 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

• Top ASX dividend shares to buy in June 2022
• Experts name 3 ASX growth shares to buy next week
• 2 beaten down ASX tech shares that analysts rate as buys
• 3 ASX shares to buy now (and one bonus): fund manager
• Analysts name 2 high quality ASX blue chip shares to buy right now

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 Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and TechnologyOne 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/9Md4OyU

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

Forget “crypto winter,” it’s an all-out cryptocurrency apocalypse in the market right now. Top tokens Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Solana (CRYPTO: SOL) hit their lowest levels this year. For Bitcoin and Ethereum, these were lows not seen since late 2020/early 2021. Late last night, Bitcoin, Ethereum, and Solana traded as low as $20,951, $1,095, and $26.06, respectively. 

As of 11:30 a.m. ET, Solana has bounced 10% over the past 24 hours, with Ethereum eking out a small gain of 0.7%. That said, Bitcoin is currently in the red, dropping another 2.6% over the past 24 hours, though still well above yesterday’s lows.

These incredible moves lower among top tokens many view as stores of value appear to be driven by three key factors.

The first is a deteriorating macro environment for risk assets. The Federal Reserve is set to hike interest rates again tomorrow. And following a rather dismal CPI print earlier this week, it’s now widely expected that this hike will be of the 75-basis-point variety (only 50 bps, or 0.5%, was previously priced in).

Secondly, potential systemic fallout from crypto lender Celsius (CRYPTO: CEL) continues to reverberate across the sector. On Sunday, Celsius announced it was freezing withdrawals, signaling that liquidity and solvency may be an issue for this lender, which could have broad impacts on the crypto market. Adding to this intriguing story were rumors that Celsius CEO Alex Mashinsky had been arrested by the FBI.

Finally, Binance, the world’s largest crypto exchange by volume, also announced yesterday that the exchange was freezing some Bitcoin withdrawals. This was blamed on a “stuck transaction” which caused a backlog on the network’s back end. While this problem appears to be resolved, questions are now permeating the sector around just how stable the crypto ecosystem is to price shocks.

So what

There’s a lot of news to take in right now. In many ways, this week has been one of the most eventful for crypto investors in some time. Indeed, while many investors would hope for some semblance of normalcy to take over at some point, it appears negative catalysts continue to find a way to float to the top in 2022.

There’s not much investors can do about the macro environment. Liquidity is going to be pulled from the system from some time, and this will have its effect on the crypto market for sure.

However, it’s the potential systemic risks relating to crypto lenders and exchanges that’s now worrying investors. We all saw what happened when Terra‘s (CRYPTO: LUNA) stablecoin ecosystem imploded. If lower crypto prices mean stablecoins, crypto exchanges, and lending platforms won’t work, that doesn’t make for a bullish long-term case for this sector.

Now what

To be fair, the crypto market hasn’t gone through a true “stress test” via a recession yet. And while we can debate whether we’re already in a recession, or if a recession will even materialize, it’s clear that this environment is perhaps the most unstable the crypto market has seen since its inception. 

Accordingly, 2022 is shaping up to be a volatile year for investors. While I’d like to be able to call a bottom for these top tokens, until there’s some signs of capitulation in the markets, it’s unclear we’re close to the end of the selling. I’m buckling in for what could be a very bumpy ride right now. 

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

The post 3 reasons Bitcoin, Ethereum and Solana just hit their lowest levels this year 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

• Can the upcoming merge save the Ethereum price from further destruction?
• The Ethereum price just plummeted 17%. What’s going on?
• Why is the Bitcoin price crashing 16% today?
• Could cryptos be facing an upcoming wave of institutional selling?
• What crypto winter? It’s always sunny with Solana

Chris MacDonald has positions in Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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

from The Motley Fool Australia https://ift.tt/K9wbaWu

The Rio Tinto Limited (ASX: RIO) share price is edging lower on Wednesday morning.

At the time of writing, the mining giant’s shares are down 0.3% to $110.72.

Why is the Rio Tinto share price falling?

Investors have been selling down the Rio Tinto share price today following a poor night of trade for the company’s NYSE listed shares and weaker commodity prices.

This has offset some positive news out of the mining giant this morning relating to its iron ore operations.

According to the release, Rio Tinto has delivered its first ore from the Gudai-Darri iron ore mine in the Pilbara, Western Australia. This is the company’s first greenfield mine in the region to come online in over a decade.

The first autonomous AutoHaul trains loaded with ore from Gudai-Darri’s process plant have travelled the new 166-kilometre rail line that connects to Rio Tinto’s existing rail and port infrastructure.

Management advised that production from the mine will continue to ramp up through the remainder of this year and is expected to reach full capacity during 2023. At which point, it will have an expected life of more than 40 years and an annual capacity of 43 million tonnes.

The release notes that Gudai-Darri will help underpin future production of the company’s flagship Pilbara Blend product. Rio Tinto’s Pilbara Blend products are the world’s most recognised brand of iron ore and are known for their high-grade quality and consistency. These products make up approximately 70% of the company’s iron ore product portfolio at present.

‘A new standard’

Rio Tinto’s Iron Ore chief executive, Simon Trott, commented “The commissioning of Gudai-Darri represents the successful delivery of our first greenfield mine in over a decade, helping to support increased output of Pilbara Blend, our flagship product. It sets a new standard for Rio Tinto mine developments through its deployment of technology and innovation to enhance productivity and improve safety.”

The post Rio Tinto share price lower despite Gudai-Darri update 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 Rio Tinto share price tumbling 6% today?
• 2 ASX dividend shares to buy this month: experts
• 5 things to watch on the ASX 200 on Tuesday
• Rio Tinto share price lifts amid ‘important’ renewable energy step
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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/09SqAcE

The Syrah Resources Ltd (ASX: SYR) share price is edging higher at last on Wednesday.

In morning trade, the graphite producer’s shares are up slightly to $1.25.

Though, they remain down a sizeable 26% since this time last month.

Why is the Syrah share price falling this month?

There have been a number of catalysts for the weakness in the Syrah share price in recent weeks.

These include the broad market weakness, concerns over an insurgent attack on a nearby mine in Mali, and the sell down of a large shareholder.

In respect to the latter, Copper Strike Limited (ASX: CSE) recently decided to cash in almost a third of its Syrah shares.

According to the release, the mineral exploration company sold 2,642,866 shares (or 28.91% of its holding) in Syrah for an average of approximately $1.75 per share. This resulted in gross proceeds of approximately $4.6 million.

This certainly was great timing. Based on the current Syrah share price, those shares are now worth just under $3.3 million. That’s ~$1.3 million less than what Copper Strike received from its sale.

Though, Copper Strike stressed that it believes “the share price of Syrah continues to have considerable long-term potential upside given the accelerating worldwide uptake of electric vehicles and battery storage.”

So, why is it selling?

Copper Strike revealed its reasoning for the sizeable sale. It explained:

The Company considered it appropriate to reduce some of the Company’s exposure in Syrah given current global market volatility, macro-economic conditions, recent interest rate policy changes in Australia, and the future outlook on global markets by various commentators.

At the same time, Copper Strike is continuing its current strategy in actively seeking project acquisition opportunities, and the Board notes that the proceeds from the partial sale of the Syrah investment is a form of non-dilutive funding that will assist the Company in having the required capital to progress any potential project acquisition opportunities, and also provide funding for general working capital purposes.

The post ‘Considerable long-term potential upside’: So why is this key investor selling down Syrah shares? 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 Appen, Cleanaway, Syrah, and Westpac shares are dropping
• Why is the Syrah share price crashing 14% today?
• Mineral Monday: What you need to know about vanadium and which ASX shares are cashing in on it
• 2 sold-off ASX shares essential for electric cars

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.

from The Motley Fool Australia https://ift.tt/DC2xbEQ

The National Australia Bank Ltd (ASX: NAB) share price has come under pressure this month following a market selloff.

Since the start of June, the banking giant’s shares have tumbled 14%.

While this decline is disappointing, it has made its dividend yield even more attractive for income investors.

In light of this, let’s take a look to see what analysts are expecting from NAB’s dividends in the coming years.

Where are NAB’s dividends heading?

According to a note out of Goldman Sachs, its analysts are expecting consistent dividend growth from NAB through to FY 2024.

In FY 2021, NAB rewarded its shareholders with a fully franked $1.27 per share dividend. Goldman expects this to be increased to $1.50 per share in FY 2022. Based on the current NAB share price of $26.87, this implies a 5.6% dividend yield.

The broker is then forecasting a 15 cents per share increase to a fully franked $1.65 in FY 2023. This will mean an attractive yield of 6.15%.

Finally, in FY 2024, the broker is expecting NAB’s dividend to increase to $1.72 per share. This equates to a fully franked 6.4% yield.

Are its shares in the buy zone?

The good news for investors is that as well as predicting some juicy yields, Goldman sees plenty of upside for the NAB share price from current levels.

The note reveals that its analysts currently have a conviction buy rating and $34.17 price target on the bank’s shares. This suggests that there is potential upside of 27% for investors.

All in all, according to Goldman Sachs, the total potential return on offer with NAB’s shares over the next 12 months is a sizeable ~33%.

The post Here’s the NAB dividend forecast through to 2024 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

• ASX 200 bank shares tumble: Citi says time to buy
• Top brokers name 3 ASX shares to buy next week
• The NAB share price is down 10% this week: Macquarie says it’s a buy
• Why are ASX 200 bank shares rebounding on Friday?
• What exactly is going on with ASX 200 bank shares and the RBA rate rise?

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.

from The Motley Fool Australia https://ift.tt/2Wlsamo

The large falls being seen across the ASX share market could be opening up some big opportunities for some of these businesses to rebound, according to experts.

It’s important to note that just because something has fallen doesn’t mean it’s definitely going to go back up to the price it was at before the fall. There’s also no telling when investors will regain optimistic sentiment about the ASX share market.

However, experts come up with price targets – that’s where they think the share price will be in 12 months.

With that in mind, here are two ASX shares that are rated as buys with a possible upside of more than 100% if brokers’ price targets end up being accurate.

Step One Clothing Ltd (ASX: STP)

Step One describes itself as a direct-to-consumer online retailer of innerwear. The ASX share says it offers a range of “quality, organically grown and certified, sustainable and ethically manufactured innerwear that suits a broad range of body types”. It operates in Australia, the US, and the UK.

While there is the ongoing market focus on inflation and interest rates, the company recently gave a trading update which included a reduction of guidance because of “difficult trading conditions”. The Step One share price plunged after this announcement.

Revenue is now expected to grow by between 15% to 20%, down from guidance of 21% to 25% growth. Projected pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between $7 million to $8 million, down from $15 million.

The company pointed to lower growth than expected in the USA and UK, though Australia continued to produce a “strong contribution margin”, underpinning revenue growth. Profitability is being hurt by higher marketing costs, as well as higher factory and logistics costs.

The broker Morgans thinks that Step One is a buy, with a price target of $0.60. This suggests an upside of around 160%.

However, the broker acknowledged the difficulties the ASX share revealed in its trading update. But, Morgans is optimistic Step One will keep generating cash flow and making a profit during this period.

The company says it will keep focusing on growth by expanding its product lines and trying to grow its USA and UK businesses.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is a leading online retailer of homewares and furniture.

It’s currently rated as a buy by the broker Credit Suisse, with a price target of $9.59. That implies a possible rise of around 170%.

The broker noted the trading update that the business released in early May 2022. Temple & Webster said revenue for the period 1 January 2022 to 30 April 2022 was up 23% year on year and up 116% over two years.

The business is investing in various areas of its operations to improve the company. These include data, personalisation, augmented reality, artificial intelligence, and logistics, as well as its private label offering. Management said the business is also open to making acquisitions.

At the current time, Temple & Webster is investing in a new website called ‘The Build’ which sells home improvement products.

Credit Suisse also thinks the company can grow its market share over time with its investments.

The post Experts think these 2 ASX shares have more than 100% upside after the plunge 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

• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• Analysts are tipping these ASX growth shares as buys
• Why did the Temple & Webster share price plunge 10% today?
• Do experts think the Temple & Webster share price is a massive opportunity?
• Expert reveals what to do with 4 ASX shares in trouble

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

from The Motley Fool Australia https://ift.tt/LY1pDZT

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 

Tesla‘s (NASDAQ: TSLA) stock was moving higher today, likely as investors processed an analyst’s recent upgrade for the electric vehicle stock and after Cathie Wood-led Ark Investment Management added more Tesla shares to its portfolio yesterday. 

The EV stock was up by 2.5% as of 2:55 p.m. ET Tuesday. 

So what 

Yesterday, RBC Capital analyst Joseph Spak upgraded Tesla’s stock to outperform from sector perform and put a price target on the company’s shares of $1,100.  

Spak thinks that Tesla has a competitive advantage over its peers because of its supply chain and vertical integration. He said in the investor note that “The company’s early focus on vertical integration (not just batteries/raw materials but also motors, semis, software) is likely to pay off.” 

Spak also thinks that Tesla’s automotive margins could be higher than 30% in the second half of the year as the average selling price for its vehicles increases and the company’s Shanghai, Berlin, and Texas plants boost vehicle production. 

In addition to the analyst’s positive comments, investors may be reacting to the fact that Ark Investment once again bought up more shares of Tesla. Ark Invest bought 2,800 Tesla shares yesterday, worth about $1.8 million, which marked the fifth time this month that the fund has added more Tesla shares to its portfolio.

Now what 

Investors are worried about rising inflation, supply chain issues, and the potential for an economic slowdown in the U.S., all of which has sent Tesla’s share price on a wild ride over the past year. 

But today’s gains show that despite all of the volatility in the market, many investors still have a long-term perspective on the EV maker. 

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

The post Why Tesla shares were rising 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(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Tesla Looks to Reinforce Its Battery Supply Chain: Why That Matters
• More likely to 5x first: Tesla vs. Ford?
• Why Tesla stock enjoyed a rally today
• Why Tesla stock bounced today
• Twitter stock: The 1 huge challenge Elon Musk faces

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

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

from The Motley Fool Australia https://ift.tt/b5xAGiF

The heavy declines of the ASX share market are having a big impact on share prices. Not only is this making S&P/ASX 200 Index (ASX: XJO) shares cheaper, but it’s also boosting the potential dividend yield from ASX dividend shares.

Investors have been hitting the sell button as inflation soars and worries heighten about how central banks will respond to bring this under control.

But, with the heightened fears come potential buying opportunities. These two ASX 200 dividend shares look really good to me at these lower prices.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of the most diverse businesses in the ASX 200, in my opinion.

Not only does it have its retail operations of Bunnings, Kmart, Officeworks, Target, and Catch, but it also has businesses in other sectors, including industrial, chemicals, energy, fertiliser, lithium, healthcare, and stakes in other businesses.

There is a potential danger that inflation and other impacts could hurt Wesfarmers’ retail earnings in the short term. Management said it wants to be a price leader for customers amid this inflation, which may indicate lower margins in the shorter term.

However, I think this economic situation will eventually pass, just like other bumpy economic periods in the past.

Governor Philip Lowe said last night the Reserve Bank of Australia is expecting inflation to peak at the end of 2022, with inflation “clearly dropping” into the second half of next year, with a lower rate of inflation in the first quarter. With that in mind, I think the lower Wesfarmers share price represents good value – it’s down 30% in 2022.

Bunnings is a high-quality business, in my opinion. It generated around 70% of Wesfarmers’ FY22 first-half underlying earnings before tax (EBT). It also made a return of capital of 79%, meaning that it makes a lot of profit for the amount of money invested in Bunnings.

Wesfarmers could go hunting for potential acquisition opportunities during this period by using its balance sheet flexibility and boost its long-term prospects further. The company generated $1.6 billion of operating cash flow in HY22, allowing it to pay dividends and invest substantially into the business for more growth.

Using estimates from CMC, the Wesfarmers share price is valued at 20x FY23’s estimated earnings with a projected grossed-up dividend yield of 6.1%.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Soul Pattinson is one of my favourite ASX dividend shares and I recently bought more shares for my portfolio because I thought it looked more attractive after the decline — it’s down 23% this year to date.

It operates as an investment house. The business owns a large portfolio of ASX shares including TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Commonwealth Bank of Australia (ASX: CBA), Macquarie Group Ltd (ASX: MQG), Pengana Capital Group Ltd (ASX: PCG), and Tuas Ltd (ASX: TUA). These are just some of the biggest positions in the portfolio, but there are many more holdings.

The ASX 200 dividend share also has a growing portfolio of private business investments. Examples of those private businesses include electrical parts business Ampcontrol, swimming school business Aquatic Achievers, an agriculture portfolio, and financial service businesses.

Soul Pattinson’s diversified portfolio lowers the risk of the overall business, in my opinion. It also gives management a broad range of target areas to look for investment opportunities.

The company has tried to build a defensive portfolio that can continue generating attractive cash flow during downturns, which can also fund dividends.

Soul Pattinson has grown its annual ordinary dividend to shareholders every year since 2000.

With the last 12 months of dividends totalling 65 cents per share, the ASX 200 dividend share has a trailing grossed-up dividend yield of 3.9%.

The post Why I think these 2 ASX 200 dividend shares offer great buying right now 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

• 2 ASX companies busted for sneaky facial recognition on customers
• Warning: 1970s inflation is returning. Expert reveals what to do
• 5 things to watch on the ASX 200 on Wednesday
• Top ASX dividend shares to buy in June 2022
• The ASX 200 share that just got upgraded to buy amid the market carnage

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and TPG Telecom 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/m7tQ14O

The St Barbara Ltd (ASX: SBM) share price tanked to a 52-week low of $1.0775 yesterday.

This is a sharp contrast to when the gold miner’s shares reached a year-to-date high of $1.64 on 14 March.

However, after heavy falls on the ASX on Tuesday, St Barbara shares closed 1.30% lower to $1.135.

What happened to St Barbara shares?

The general market sentiment remains negative amid sky-high inflation and possible bigger rate hikes.

St Barbara shares have been caught up in the whirlwind along with other gold resource companies.

As such, Northern Star Resources Ltd (ASX: NST) shares touched a multi-year low of $7.69 yesterday.

On the other hand, shares in Australia’s largest gold miner Newcrest Mining Ltd (ASX: NCM) are down almost 5% in a week.

In addition, the price of gold has tumbled 3.5% from last Friday to US$1,810 per ounce at the time of writing. This is because investors are shifting their assets from gold to government bonds as the yields become more attractive.

Nonetheless, this could weigh on St Barbara’s margins as gold losses its value.

Can St Barbara shares make a comeback?

According to ANZ Share Investing, one broker gave its take on the St Barbara share price in early May.

Following the company’s third-quarter results, Macquarie slashed its price target by 6% to $1.70 per share. This represents an upside of close to 50% based on the current share price.

The broker believes the St Barbara share price is significantly undervalued at this point in time.

About the St Barbara share price

Over the past 12 months, the St Barbara share price has dropped by 39%.

Year to date, its shares are down 22%.

St Barbara has a price-to-earnings (P/E) ratio of 8.76 and commands a market capitalisation of roughly $925.86 million.

The post Can the St Barbara share price recover its losses in 2022? 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

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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/L5CZfS6

The Dicker Data Ltd (ASX: DDR) share price tumbled to a year-to-date low of $10.87 yesterday before climbing back up.

Widespread turmoil across the ASX on the back of Monday’s heavy losses on Wall Street sent investors packing.

Shares in the hardware, software and cloud distributor defied the sell-off to finish 0.61% higher to $11.57. However, when factoring in the past month, its shares have fallen 8%.

For context, the S&P/ASX 200 Index ended the day down 3.55% to 6,686 points.

Let’s take a look at what’s weighing on Dicker Data shares in recent memory.

What’s driving Dicker Data shares lower?

A number of factors outside the company’s control have led the Dicker Data share price to sink since 24 March.

Russia’s attack on Ukraine continued to spook international markets as sanctions were handed down on the Kremlin.

Subsequently, oil and gas prices rose and global markets began to tank as this would stall worldwide economic growth.

While this didn’t have anything to do with Dicker Data directly, its shares weren’t spared, falling to $12.11 on 9 May.

Furthermore, the latest inflation figures and potentially aggressive rate hikes in 2022 are having a detrimental effect on international markets.

The S&P/ASX All Technology Index (ASX: XTX) is down 7% in a month, and 36% for the current calendar year.

While Dicker Data reported strong growth in its first-quarter update on 11 May, this hasn’t been enough to stem the bloodshed.

If the ASX plunges further, it’s most likely that the IT distributor’s shares will follow suit.

Dicker Data share price summary

In 2022, Dicker Data shares have lost around 22% due to a severe downturn across global markets.

Although, when looking over the past 12 months, its shares are up 11% in that time frame.

Dicker Data commands a market capitalisation of roughly $1.99 billion and has a trailing dividend yield of 4%.

The post The Dicker Data share price is trading at YTD lows. Here’s why 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

• Buying the dip: 3 ASX All Ord shares insiders are loading up on
• The Dicker Data dividend is being paid today. Here’s what you need to know
• ‘High quality’ ASX company that has all of Sydney as customers
• Why I think these are the best ASX dividend shares to buy right now
• Analysts rate these ASX growth shares as buys this month

Motley Fool contributor Aaron Teboneras has positions in Dicker Data Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data 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/BlIuwUP