The Insurance Australia Group Ltd (ASX: IAG) dividend fell at its most recent earnings season which disappointed investor expectations.

After reaching a high of $4.93 on 24 February, the insurance giant’s shares have tumbled almost 15% over the following month.

Since then, its shares have moved in circles following the company’s update on the widespread flooding affecting Australia’s east coast.

At Monday’s market close, IAG finished 2.47% lower at $4.34.

The IAG dividend in a nutshell

Based on the company’s cash earnings of $176 million, the IAG Board declared an unfranked interim dividend of 6 cents per share. The latest dividend represents a 14.2% decline from the 7 cents declared in the prior comparable period.

Management noted that the latest dividend equates to a payout ratio of 84% of cash earnings. This is in line with the company’s dividend policy to distribute 60%-80% of cash earnings in any full financial year.

IAG has a current trailing dividend yield of 4.38%, which is higher than the sector average of 3.8%.

So, how does this stack up against QBE?

When compared with its peer, the QBE board elected to pay a final dividend of 19 cents per share. This brought the FY21 dividend to 30 cents per share, up from 4 cents per share in 2020.

The dividend reflects a payout of 41% of QBE’s adjusted cash profit.

While recognising the improving profitability, the board revised the group’s dividend policy to 40-60% of annual adjusted cash profit. Previously, this was from “up to 65% of adjusted cash profit”.

QBE stated it wants to retain capital to support growth ambitions and facilitate normalisation of its investment asset risk profile.

On a trailing dividend yield basis, QBE stands at 2.51%.

As you can see, IAG is more generous to its shareholders with a bigger dividend yield compared to QBE.

However, it’s worth noting that the latter’s share price has risen almost 5% in a month while IAG shares have fallen by 3%.

Are IAG shares a buy?

A number of brokers weighed in after the company released its half year results in mid-February.

Analysts at Morgans slapped a hold rating on the IAG share price, cutting its price target by 3.8% to $5.12.

On the other hand, Citi and JP Morgan raised their price targets by 2.7% to $5.75, and 0.9% to $5.50 respectively. Based on the current share price, this implies an upside 32% and 26% respectively on both brokers’ assessments.

IAG commands a market capitalisation of roughly $10.97 billion.

The post How does the IAG dividend compare to QBE? appeared first on The Motley Fool Australia.

More reading

• The IAG share price has lost 10% since February. Is it an opportunity?
• How did the IAG share price compare to its sector in the March quarter?
• How did the IAG share price stack up in the March quarter?
• The IAG share price has dumped 5% in 2 weeks. What’s happening?
• Why did the IAG share price underperform the ASX 200 by 11% in March?

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 owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was a rough day to be an ASX All Ordinaries Index (ASX: XAO) share. The index finished the day down 2.11%, marking today as its worst since February.

But, ironically, some of its most besieged constituents finished in the green.

Let’s take a look at which struggling ASX All Ordinaries shares enjoyed a day in the sun.

Three embattled All Ordinaries shares trading higher

Appen Ltd (ASX: APX)

It’s been struggling over the last 20 months but the Appen share price dodged much of today’s carnage.

Shares in the artificial intelligence provider have tumbled 83% since their peak in August 2020.

But today, the ASX All Ordinaries tech share closed 1.51% higher at $6.73.

Meanwhile, many of its peers on the S&P/ASX All Technology Index (ASX: XTX) suffered losses today. The index closed 1.52% lower.

Ansell Limited (ASX: ANN)

The Ansell share price also closed in the green on Tuesday. The medical gloves manufacturer finished 0.88% higher today at $26.38 after hitting $26.80 in intraday trade.

There’s been no news from the COVID-19 winner today. However, reports have emerged claiming Ansell is planning to shut down its Russian glove-making factory in June, just in time for its first birthday.

The company’s decision to stop production at the plant follows Russia’s invasion of Ukraine.

Ansell is getting ready to suspend operations at the factory indefinitely, according to the Australian Financial Review.

The ASX All Ordinaries stock has tumbled 31% over the last 12 months, seemingly driven by its results for financial year 2021.

The company’s stock dropped 9% on the release of its full-year results. It hasn’t managed to claw its way out of the dip yet.

While the Ansell share price kept its head above water, the company’s home sector, the S&P/ASX 200 Health Care Index (ASX: XHJ), wasn’t so lucky. It closed down 0.75%.

Block Inc (ASX: SQ2)

The Block share price also finished in the green today despite its recent struggles. It closed 1.96% higher at $148.86.

The ASX All Ordinaries share is also listed in New York where its day in the green might have been born. The Block Inc (NYSE: SQ) share price launched 4.5% during Monday’s session overseas, reaching US$107.38.

Additionally, the company hit headlines over the weekend after its CEO and chair Jack Dorsey officially changed his title to Block head.

The interesting amendment – which doesn’t signal any change in responsibilities – was disclosed in an SEC filing on Friday.

And that’s not the only reason Dorsey’s name has popped up in the news today. Of course, he is the co-founder and former CEO of Twitter Inc (NYSE: TWTR).

The social media company has been purchased by Tesla Inc (NASDAQ: TSLA) CEO and the world’s richest person Elon Musk.

Musk is planning to remove Twitter from investors’ portfolios, taking the company private. Commenting on Musk’s takeover, Dorsey tweeted:

In principle, I don’t believe anyone should own or run Twitter. It wants to be a public good at a protocol level, not a company. Solving for the problem of it being a company however, Elon is the singular solution I trust. I trust his mission to extend the light of consciousness.

— jack (@jack) April 26, 2022

https://platform.twitter.com/widgets.js

The All Ordinaries share has slumped 15% since it hit the ASX in January following the company’s takeover of Afterpay.

The post 3 beaten-up ASX All Ordinaries shares that surged higher today appeared first on The Motley Fool Australia.

More reading

• Have ASX tech shares finally reached the bottom?
• Appen shares may be at a 5-year low, but their dividend yield has never been higher
• 2 top ASX dividend shares to think about
• Own ASX BNPL shares? These were the best performers of the March quarter
• Why did the Appen share price rise by a strong 5% today?

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. owns and has recommended Appen Ltd, Block, Inc., Tesla, and Twitter. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool Australia has recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) continues to be the most shorted ASX share with short interest of 18%. Despite travel markets beginning to improve, short sellers aren’t willing to give up on this one.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 12.6%. Short sellers will have been disappointed to see this betting technology company’s shares surge higher last week after revealing a major sports betting agreement.
• Nanosonics Ltd (ASX: NAN) has short interest of 12%, which is up strongly week on week. A major and potentially disruptive change to this infection prevention medical device company’s sales model in the United States has created significant uncertainty.
• Webjet Limited (ASX: WEB) has short interest of 10.4%, which is up sharply week on week. Short sellers aren’t giving up on this online travel company. They may believe the market is too bullish on its recovery.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise to 9.2%. Although this medical device company released a promising trading update earlier this month, short sellers haven’t been scared off. They may believe its recovery is temporary.
• EML Payments Ltd (ASX: EML) has seen its short interest rise remain flat at 9.5%. Short sellers will have been celebrating today when a profit guidance update sent this payments company’s shares crashing lower by over a third.
• Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 9.2%. Short sellers will have been pleased to see this buy now pay later provider’s shares crash to a new multi-year low last week following its update.
• Kogan.com Ltd (ASX: KGN) has seen its short interest bounce back to 9.1%. Concerns over its lack of organic sales growth, rising marketing costs, and inventory issues have been weighing on this online retailer’s shares.
• AMA Group Ltd (ASX: AMA) has 8.4% of its shares held short, which is up sharply week on week. Short sellers have been building up their positions since the crash repair company disappointed the market with a half year loss of $46.3 million.
• Mesoblast limited (ASX: MSB) has seen its short interest edge higher to 7.9%. Disappointing trial results and significant cash burn have been weighing on this biotech’s shares.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Why Chalice Mining, EML Payments, Mineral Resources, and South32 shares are tumbling
• Is the Zip share price set to sink below the $1 mark for the first time since 2018?
• Have ASX tech shares finally reached the bottom?
• ASX 200 stocks dive 2.4% in worst trading day since Ukraine crisis hit
• EML share price crashes 35% amid guidance cuts

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. owns and has recommended Betmakers Technology Group Ltd, EML Payments, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended EML Payments, Kogan.com ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Megaport Ltd (ASX: MP1) share price has just had a week to forget.

Last week, the network-as-a-service (NaaS) provider’s shares lost 28% of their value.

This was driven by the release of Megaport’s latest quarterly update, which revealed much softer than expected growth.

Is the Megaport share price good value now?

While the team at Goldman Sachs was disappointed with Megaport’s quarterly update, it remains positive on the company’s long term future and thinks investors should consider buying the dip.

According to the note, the broker has retained its buy rating but has taken an axe to its valuation. The latter is now $13.10, which is down 34% from its previous price target of $19.90.

Nevertheless, based on the current Megaport share price of $8.94, this new price target implies potential upside of 46% for investors over the next 12 months.

What did the broker say?

Goldman appeared surprised by the company’s performance during the third quarter, but remains confident that things will improve at its rapid growth will soon resume. It said:

“Alongside FX headwinds, we believe the lower-than-expected growth in 3Q22 was driven by operational impacts from shifting to the partner channel go-to-market, which was reported to have (1) taken more time in training, integration and support to onboard partners (delaying partner/MVE growth); with this (2) also having an impact on direct sales teams which are currently being required to handle nearly all indirect transactions (delaying core business sales).

While impacting near term efficiency, once this is resolved, both direct and indirect channels should be able to deliver a re-acceleration in growth.”

Why is it still bullish?

While Goldman has downgraded its revenue estimates, and therefore its price target on the Megaport share price, its analysts remain bullish due to the company’s significant long term growth potential.

The broker explained:

“These revenue downgrades reflect a misstep in partner channel execution, alongside FX. However the long term opportunity for MP1 is unchanged, given (1) the growth in cloud/multi-cloud demand; (2) efficiency benefits from network ‘softwarisation’; and (3) MP1’s product lead (noting competitor Console Connect announced their Cloud Router product last week, c.4 years after Megaport). Hence, with MP1 shares -29% post 3Q22 results (vs. ASX200 -1%) we believe this misstep is now priced in. We re-iterate our Buy on MP1 into the expected improved 4Q22 performance. “

The post Top broker tips Megaport share price to rebound 45% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Brokers name 2 ASX shares to buy after the tech selloff
• These were the worst performing ASX 200 shares last week
• The Megaport share price just tumbled another 10%. Is it now a super bargain?
• Brokers name 3 ASX shares to buy 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. owns 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) was out of form on Tuesday. The benchmark index started the week with a disappointing 2.1% to 7,318 points.

Four ASX shares that have managed to avoid the selloff today are listed below. Here’s why they are pushed higher:

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo share price climbed 3% to $18.27. This morning the lottery ticket seller presented at the Goldman Sachs Emerging Leaders Conference. At the conference, management spoke about its ~$70 billion market opportunity across lottery retailing, software as a service, and managed services.

Nufarm Ltd (ASX: NUF)

The Nufarm share price rose 2% to $6.89. Investors were buying this agricultural chemicals company’s shares after it provided guidance for the first half. Due to strong demand for its crop protection and seed products, Nufarm expects to report half year underling EBITDA of $320 million to $340 million. This is up from $233.6 million during the prior corresponding period, which itself was up 118% from the prior year.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price surged 23% higher to $1.18. This morning the donation technology company released an announcement revealing that it has received takeover interest from unnamed third parties. Pushpay neglected to go into any further details, so it remains unclear how serious the offers are and how much has been tabled.

Vulcan Steel Ltd (ASX: VSL)

The Vulcan Steel share price charged 4% higher to $9.50. This morning the steel company revealed that its revenue for the nine months ended 31 March was up 34% year on year to NZ$700 million. In light of this strong form, Vulcan Steel has increased its EBITDA guidance to NZ$212 million to NZ$218 million. It was previously guiding to EBITDA of NZ$150 million and NZ$160 million.

The post Why Jumbo, Nufarm, Pushpay, and Vulcan Steel charged higher appeared first on The Motley Fool Australia.

More reading

• Food anxiety: experts pick 2 ASX shares riding the agriculture boom
• In a sea of red, this ASX All Ordinaries share is surging 5%. Here’s why
• Pushpay share price soars 23% following takeover approach
• Are these 2 ASX tech shares buys in April?
• Top ASX dividend shares to buy in April 2022

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. owns and has recommended Jumbo Interactive Limited and PUSHPAY FPO NZX. The Motley Fool Australia owns and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Jumbo Interactive Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australian Stock Exchange has a number of high-quality S&P/ASX 200 Index (ASX: XJO) shares within its ranks. Experts have named some of them as buys.

ASX 200 shares are large enough that some of them are the biggest in their sector in Australia.

These two ASX 200 blue-chip shares are liked by leading brokers:

Goodman Group (ASX: GMG)

Goodman describes itself as an integrated property group – it owns, develops and manages property.

The business has a global portfolio of industrial properties and projects. Its total assets under management (AUM) was $68.2 billion at 31 December 2021.

Looking at the rental side of the business, the portfolio occupancy was “high” at 98.4% and like for like net property income growth was 3.4% in the FY22 half-year result.

It also has a large amount of development work in progress (WIP). In HY22, the WIP was $12.7 billion across 81 projects with a forecast yield on cost of 6.7%.

Goodman says that its strategy of providing essential infrastructure for the digital economy is “delivering” and it’s performing “strongly” across all segments. The ASX 200 blue-chip share says that the operating outlook for the business is “strong”.

Due to the level of the performance, Goodman recently upgraded its market guidance for FY22 with operating earnings per security (EPS) growth projected to be 20%.

It’s currently rated as a buy by the broker Morgan Stanley, with a price target of $27.88. That implies a potential upside of almost 20% over the next year.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diverse ASX 200 blue-chip share, though most of its earnings come from its retail operations. The retail businesses it owns include Bunnings, Kmart, Target, Officeworks and Catch.

In the six months to December 2021, over two thirds of Wesfarmers’ earnings before tax (excluding significant items) came from Bunnings. However, there are multiple businesses within the Bunnings division that can help longer-term earnings including Tool Kit Depot and Beaumont Tiles.

At the moment, growth has slowed for the retail businesses after the COVID boom. However, the ASX 200 blue-chip share is looking to other industries to expand and diversify the business.

Management said with Wesfarmers’ FY22 half-year result that it is delivering good progress on the construction of the Mt Holland lithium project. It has also acquired the Australian Pharmaceutical Industries business which will be the start of a health, wellbeing and beauty segment.

Wesfarmers has told investors of the difficulties that its supply chain is facing, but the company’s retail businesses will continue to focus on price leadership for customers.

It’s currently rated as a buy by the broker Morgans. The price target is $58.50, suggesting potential upside of almost 20% over the next year. Morgans’ projections suggest that the Wesfarmers share price is valued at 23’s estimated earnings.

The post 2 high-quality ASX 200 shares experts rate as buys appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Is the Zip share price set to sink below the $1 mark for the first time since 2018?
• 5 things to watch on the ASX 200 on Tuesday
• Analysts name 2 of the best blue chip ASX 200 shares to buy now
• These were the best performing ASX 200 shares last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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An analyst has expressed concern about mortgage applications lodged with Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ shares closed at $27.63 on Tuesday, a 0.54% fall. For perspective, the S&P/ASX 200 Financials Index (ASX: XFJ) finished 0.91% lower. The S&P/ASX 200 Index (ASX: XJO) also ended the session down 1.93%.

Let’s take a look at what this analyst had to say about ANZ.

Mortgage application concerns

A UBS mortgage survey found more than 50% of people applying for a new mortgage with the ANZ had inaccuracies on their applications, The Australian reported.

UBS analyst John Storey said:

We think this is particularly concerning, given ANZ’s persistent declines in mortgage market share, and the fact that 81 per cent of the 93 respondents who misrepresented their ANZ originated loan claim they were advised to do so by their banker.

However, an ANZ spokesman defended the company’s loan verification process, the Australian Financial Review reported. He said:

After several years of similar external reports about the quality of applications, our delinquency numbers have gone down, not up.

Our numbers are as good as, if not better, than our peers which provides a strong indicator of ANZ’s capacity to accurately verify loan applications

Citi analysts have recently rated ANZ shares as a buy with a price target of $30.75. This is 11% more than the current share price.

ANZ share price summary

The ANZ share price has slipped nearly 4% over the past 12 months, while it is 0.51% in the green year to date.

In the past month, ANZ shares have climbed 0.14% while they are up 0.84% in a week.

The bank has a market capitalisation of $77 billion based on the current share price.

The post Own ANZ shares? Here’s what this top broker finds ‘particularly concerning’ appeared first on The Motley Fool Australia.

More reading

• What predictions are being made for the ANZ share price in April?
• Is the ANZ share price too cheap to ignore?
• Own ANZ shares? Here’s why this broker is predicting ‘revenue headwinds’
• Do CBA shares offer the highest big bank dividend yield?
• Is the ANZ share price a smart idea for dividend income?

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 Bruce Jackson.

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There are a wide range of exchange-traded funds (ETFs) available to Aussie investors.

Today we look at an ASX ETF that tracks a specific industry, namely healthcare. And we look at why two financial pros list it as a ‘buy’.

A defensive ASX ETF

In an ageing world with the global pandemic still very much in circulation, healthcare shares have received plenty of attention these past two years.

Aussie investors looking for exposure to international healthcare stocks with a single investment may wish to look into the BetaShares Global Healthcare ETF (ASX: DRUG).

This ASX ETF is invested in a wide range of international healthcare companies. Some 45% of them are involved in pharmaceuticals, with 19% focused on healthcare equipment, and 11% in the biotechnology space.

DRUG’s top four holdings are UnitedHealth Group Inc (NYSE: UNH), Johnson & Johnson (NYSE: JNJ), AbbVie Inc (NYSE:ABBV) and Pfizer Inc (NYSE: PFE).

Year-to-date, this ASX ETF is down 2.4%. That compares to a 3.9% loss posted by the All Ordinaries Index (ASX: XAO) so far in 2022.

Why these two fundies list DRUG as a buy

Speaking with Livewire, Felicity Thomas from Shaw and Partners said DRUG was an ASX ETF to buy.

According to Thomas:

If you think we’re going into a recessionary environment, you want to tilt your portfolio to be a little bit more defensive. Healthcare is defensive and we’ve got an ageing population globally, so I think it’s a really good long-term play

Now we’re not looking at an imminent recession here in Australia just yet. But a growing cohort of economists is beginning to predict that the United States could be heading down that road sooner than later. And where the world’s biggest economy goes, most others tend to follow.

Steering clear of potential recessions, Ben Nash from Pivot Wealth also listed this ASX ETF as a buy, citing the immense expenditures going into healthcare globally.

Nash said:

I think that we’re seeing huge amounts of money being spent on healthcare in Australia and globally. The US is one of the biggest global markets and healthcare costs are pretty staggering over there. I think that plus the secondary exposure to the property market makes this one a solid performer for the medium to long term.

Investors looking for an ASX ETF to add to their portfolios for the longer term may want to run their slide rule across DRUG.

The post A defensive ASX ETF for a recessionary environment: experts appeared first on The Motley Fool Australia.

More reading

• Why Chalice Mining, EML Payments, Mineral Resources, and South32 shares are tumbling
• Is the IGO share price cheap after dropping 9% in a week?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• What’s happening to ASX nickel shares today?
• 3 ASX 300 shares defying the carnage to reach new 52-week highs

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson. 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 Bruce Jackson.

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In late trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a sizeable decline. At the time of writing, the benchmark index is down 2% to 7,323.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are tumbling:

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is down 10% to $6.37. Investors have been selling this mineral exploration company’s shares amid broad weakness in the resources sector due to softening commodity prices and the release of its quarterly update. The latter spoke about delays to the commencement of off-track drilling in the Julimar State Forest.

EML Payments Ltd (ASX: EML)

The EML Payments share price is down a massive 38% to $1.67. This follows the release of a trading update this morning which revealed that the payments company has downgraded its earnings guidance. This followed a tough third quarter, which saw EML report a 22% decline in underlying net profit after tax and amortisation.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price is down 9.5% to $54.94. As well as the aforementioned weakness in the resources sector, this morning Mineral Resources announced plans to raise US$1 billion. The mining and mining services company will raise the funds via a senior unsecured notes offering. Mineral Resources intends to use the cash proceeds from the offering for general corporate purposes, including for capital expenditures.

South32 Ltd (ASX: S32)

The South32 share price has sunk 7.5% to $4.47. This follows the release of the mining giant’s quarterly update, which appears to have fallen short of expectations. South32 also revealed an increase to its operating unit cost guidance for FY 2022 due partly to inflated input costs.

The post Why Chalice Mining, EML Payments, Mineral Resources, and South32 shares are tumbling appeared first on The Motley Fool Australia.

More reading

• South32 share price sinks 8% amid rising cost guidance
• Why is the Mineral Resources share price sinking 9% today?
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• EML share price crashes 35% amid guidance cuts
• 5 things to watch on the ASX 200 on Tuesday

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

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The IGO Ltd (ASX: IGO) share price has slipped 6% in Tuesday’s session and is $12.755 at the time of writing.

After climbing amid a global resources boom in 2022, the IGO share price has fallen from a high of $14.17 just five days ago.

Joining IGO is the S&P/ASX 300 Metals & Mining Index (ASX: XMM). It’s also slipped 5.35% in today’s session and 11% this past week. IGO is down 9% over the same period

Is the IGO share price cheap?

The rally in commodities, plus IGO’s recent bid to secure Western Areas Ltd (ASX: WSA), has seen some volatility in the IGO share price in recent weeks.

After the miner sweetened its takeover offer to $3.87 a share, up from an earlier $3.36, analysts at RBC Capital Markets noted they saw “strategic rationale” in the decision.

In a recent note, RBC Capital analyst Kaan Peker noted “there is strategic rationale with consolidating Western Australia nickel sulphide producers”.

Peker reckons the offer – that values Western Areas at nine times next year’s earnings before interest, tax and amortisation (EBITDA) projections – could be accretive for IGO’s own pre-tax earnings as early as FY22.

Meanwhile, analysts at JP Morgan recently retained their overweight rating on IGO and value the company at $17.40 per share.

“IGO [is] a one-stop stock for EV raw materials,” the broker mentioned in a recent note. “Our overweight rating reflects the upside relative to our DCF valuation, high earnings growth and growing FCF yield.”

Earlier, the broker had mentioned IGO was well-positioned to take on the Western Areas acquisition, finishing 1H FY22 with $570 million in cash on its balance sheet.

JP Morgan also took note of IGO’s latest earnings that showed capital expenditures (capex) guidance for FY22 is high at $250-$300 million. That’s more than three times what the broker was budgeting.

“Management called out a number of projects to enable further expansions, but the spend is not on the CGP3/4/5 expansions themselves,” the broker wrote on IGO’s capex guidance.

“[The Greenbushes mine] costs of $388/tonne included royalties of $146/tonne, which when backed out showed costs were steady [quarter-on-quarter].”

The consensus of analyst estimates values IGO at $13.25 a share, according to Bloomberg data. Judging from that valuation, and depending on one’s own valuation, IGO could be cheap with the pullback.

From the list of broker coverage, 53% rate it a buy whereas 30% say it’s a hold right now. Together, that’s 83% saying to either buy or hold onto IGO shares at present.

IGO share price snapshot

In the last 12 months, the IGO share price has climbed 77% and is up 11% for the year, even with this most recent pullback.

The company has a market capitalisation of $9.6 billion at the current share price.

The post Is the IGO share price cheap after dropping 9% in a week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 Bruce Jackson.

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