• Should you buy Metaverse real estate?

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

    a group of five people lie on the floor with their heads touching, each wearing hi tech goggles over their eyes as if in a metaverse workplace collaboration.

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

    It seems like talk of the metaverse is everywhere these days, with news of novel and exciting planned additions to this collection of virtual 3D worlds cropping up constantly. It’s a wild time to be an investor, to be sure. Based on the hype, investing in metaverse spaces seems like the next big thing for anyone with a few spare dollars lying around.

    Although it’s easy to buy metaverse real estate, it’s not the right choice for just anyone. Not only is it a very risky investment, there are still a lot of unknowns. Even so, there are some reasons to jump into this space as an investor, including those outlined below.

    You have a brand or business to promote

    If you have a company or brand that appeals to Generation Z (those people between 10 and 25 years of age), the metaverse could be a great place to connect with them. A lot of the members of this generation are already in the workforce, and they’re familiar with digital spaces that look and behave like popular metaverse platforms, including Decentraland and The Sandbox. Gen Z already has an estimated collective buying power of about $150 billion.

    Because these people are largely less interested in older social media platforms, they tend to find themselves interacting with each other on platforms that inhabit the metaverse, or those that are metaverse-like. This is a version of the internet that Gen Z knows well and is comfortable with, and a good advertiser takes their business where their customers are. After all, Gen Z is the future of the internet, and what they imagine it to be will necessarily become reality as they come of age.

    You want to help other companies find a foothold in the metaverse

    If you already have a pretty good idea of how the metaverse will work and what kinds of projects will make sense in the space, then it might be a great idea to invest in metaverse real estate with the intention of becoming either a developer or a landlord.

    Many companies are trying to find a way to get into the metaverse, but don’t really know what to do first. Metaverse developers can help them take a project from the idea phase through execution, often with many partners that help add expertise along the way. They may advise on where projects should be built, or when they should launch (such as during Fashion Week in Decentraland), and they often acquire property to develop before reselling it.

    Metaverse landlords, on the other hand, know what they want to build and to whom they want to lease those spaces. They seek out businesses and brands that want a metaverse presence, but aren’t sure they’re ready to commit fully to purchasing virtual land. Metaverse landlords stand to generate long-term rental income if they design appealing structures in great locations.

    You want to build something for yourself

    One type of metaverse real estate investor that we rarely discuss is the kind who is curious about this bold new world and also very tech-forward. They probably are already dabbling in cryptocurrencies, and likely have been playing around in metaverse spaces, but haven’t yet set down roots. For individuals of this type, buying a piece of digital land could be more an act of self-expression than an act of investment.

    However, simply by holding that virtual property — even if it is, for now, just an empty lot or an art installation — they become investors, too. According to a Citi GPS report, by the end of this decade, the metaverse can be expected to expand to as many as 5 billion users and a total addressable market of up to $13 trillion. The likely end result of such expansion is that many parcels of digital land will grow in value even if they’ve only been used for their owners’ enjoyment. As long as the platform you choose has a healthy community and is driven by a sense of collaboration, people will continue to make it their digital home.

    The metaverse isn’t for every investor, but many belong there

    Although investing in metaverse real estate can seem like a pretty dodgy experiment, there is mounting evidence that this alternate reality is here to stay. With a limited supply of building lots and a potentially unlimited number of users, the value of real estate on any metaverse platform will be driven, in part, by its popularity. It’s the same for physical land in any neighborhood in any city or town.

    This early in the growth of what is expected to become the metaverse, there’s no way to really know which metaverse platforms will hit and which will shrink into obscurity, but if you’re the betting type, or you have a business plan in mind that would benefit from a metaverse presence, you definitely should give it a try. Patience is key, because it will take time (and effort) for these platforms to mature. But there’s only so much downside versus enormous upside to being an early adopter of technology that has the potential to become a whole new way of connecting people around the globe.

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

    The post Should you buy Metaverse real estate? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    Citigroup is an advertising partner of The Ascent, a Motley Fool company. . Kristi Waterworth owns Decentraland. 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.

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

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  • Here are 2 excellent ASX tech ETFs to buy

    A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights

    A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights

    If you’re wanting to invest in the tech sector after recent weakness but aren’t sure which shares to buy, then these exchange traded funds (ETFs) could be worth considering.

    The two ETFs below provide investors with easy access to a number of high quality shares in the tech sector. Here’s what you need to know about them:

    BetaShares Global Cybersecurity ETF (ASX: HACK)

    The first tech ETF to consider is the BetaShares Global Cybersecurity ETF. This fund gives investors access to the leading companies in the growing global cybersecurity sector.

    This is a sector that has been tipped to grow strongly over the next decade due to the rampant rise of cyber crime and the structural shift to the cloud.

    Among the companies you’ll be investing in with this ETF are Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.

    VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

    Another side of the sector that is booming is the gaming industry. In light of this, the VanEck Vectors Video Gaming and eSports ETF could be a top option for investors.

    As its name suggests, this ETF gives investors access to a portfolio of the largest companies involved in the video game industry. These are video game developers and hardware providers.

    VanEck highlights that these companies are in a position to benefit from the increasing popularity of video games and eSports.

    Among the ETFs major holdings are graphics processing units giant Nvidia and games developers Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Roblox.

    The post Here are 2 excellent ASX tech ETFs to buy appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    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 BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. 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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  • Analysts name 2 ASX dividend shares to buy next week

    Rolled up notes of Australia dollars from $5 to $100 notes

    Rolled up notes of Australia dollars from $5 to $100 notes

    If you’re wanting to boost your income with some dividend shares next week, then you might want to consider the two listed below.

    Here’s what you need to know about these dividend shares:

    Adairs Ltd (ASX: ADH)

    The first ASX dividend share for investors to look at is leading furniture and homewares retailer, Adairs.

    While it is having a tough time in FY 2022, the retailer has been tipped by Morgans to bounce back strongly in FY 2023. This is thanks to the newly acquired Focus on Furniture business bedding down and starting to improve its store economics while expanding its footprint.

    The company’s new distribution centre is also expected to be a boost to its performance and support its margins. All in all, Morgans believes “[t]hese factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple.”

    Morgans has an add rating and $3.50 price target on the company’s shares. As for dividends, the broker is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.85, this will mean yields of 6.7% and 9.1%, respectively, over the next couple of years.

    Elders Ltd (ASX: ELD)

    Another dividend share to look at is Elders. It is an agribusiness company that provides a range of services to rural and regional customers across the Australia/New Zealand region.

    After a very difficult period during the 2010s, Elders has returned to form in the 2020s. This follows a highly successful transformation plan and the equally transformational acquisition of Australian Independent Rural Retailers.

    Goldman Sachs is very positive on the company and its outlook. It currently has a conviction buy rating and a $17.65 price target on Elders shares.

    As for dividends, the broker expects dividends per share of 45 cents in FY2022 and 47 cents in FY2023. Based on the current Elders share price of $14.19, this implies yields of 3.2% and 3.3%, respectively.

    The post Analysts name 2 ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    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 ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS 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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  • These were the worst performing ASX 200 shares last week

    a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the IAG share price continue to fall

    a man clasps his hand to his forehead as he looks down at his phone and grimaces with a pained expression on his face as he watches the IAG share price continue to fall

    It was a short week, but a good one for the S&P/ASX 200 Index (ASX: XJO) last week. Over the four days, the benchmark index rose 0.6% to 7,523.4 points.

    Unfortunately, not all shares were able to climb with the market. Here’s why these were the worst performers on the ASX 200 last week:

    Zip Co Ltd (ASX: Z1P)

    The Zip share price was the worst performer on the ASX 200 last week with a 13.4% decline. This may have been driven by news that rival Afterpay, now owned by Block Inc (ASX: SQ2), reported a big first half loss. In addition, analysts at Macquarie Group Ltd (ASX: MQG) spoke negatively about the BNPL industry. According to the note, the broker’s data shows that BNPL web traffic declined during March. It feels this is a “red flag for the BNPL industry.”

    Pilbara Minerals Ltd (ASX: PLS)

    The Pilbara Minerals share price was out of form and dropped 7.5% over the period. This appears to have been driven by profit taking after some strong gains in recent months. One broker that sees this pullback as a buying opportunity is Citi. Last week the broker upgraded the company’s shares to a buy rating with a $3.60 price target.

    City Chic Collective Ltd (ASX: CCX)

    The City Chic share price wasn’t far behind with a decline of 7.2%. This was despite there being no news out of the plus sized fashion retailer last week. Though, it is worth noting that a disappointing half year result in February has hit investor sentiment hard. So much so, the City Chic share price is now down 46% since the start of the year.

    A2 Milk Company Ltd (ASX: A2M)

    The A2 Milk share price was a poor performer once again and dropped 7.1% over the four days. Investors were selling the embattled infant formula company’s shares after it was recently hit by two broker downgrades. Analysts are concerned over lockdowns in China and weakening reseller prices on Chinese ecommerce platforms. The A2 Milk share price hit a new multi-year low last week.

    The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    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 Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. The Motley Fool Australia has recommended A2 Milk. 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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  • These were the best performing ASX 200 shares last week

    A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.

    A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.

    The S&P/ASX 200 Index (ASX: XJO) was on form last week and recorded a decent gain over the shortened week. The benchmark index rose 0.6% over the four days to 7,523.4 points.

    While a good number of shares rose with the market, some climbed more than most. Here’s why these were the best performers on the ASX 200 last week:

    Regis Resources Limited (ASX: RRL)

    The Regis Resources share price was the best performer on the ASX 200 last week with a 17.1% gain. There were a couple of catalysts for this strong gain. One was a bullish note out of Credit Suisse, which saw the broker retain its outperform rating and lift its price target to $2.60. The other was a solid rise in the gold price. The latter led to a number of other ASX 200 gold shares recording double digit gains last week such as Northern Star Resources Ltd (ASX: NST).

    Webjet Limited (ASX: WEB)

    The Webjet share price was a positive performer and rose 8.5% over the four days. This strong gain was driven by a broker note out of Citi and a big improvement in investor sentiment in the travel sector. The former saw Citi upgrade Webjet’s shares to a buy rating with a $6.50 price target. Whereas the latter was driven by bullish comments out of Delta Airlines in the US, which helped drive fellow ASX 200 travel shares Flight Centre Travel Group Ltd (ASX: FLT) and Qantas Airways Limited (ASX: QAN) notably higher as well.

    Elders Ltd (ASX: ELD)

    The Elders share price wasn’t far behind with an 8.4% gain last week. This was despite there being no news out of the agribusiness company. However, Elders’ shares have been on a roll since the release of its results last month. So much so, they hit a multi-year high last week.

    Paladin Energy Ltd (ASX: PDN)

    The Paladin Energy share price was on form and charged 6.6% higher over the period. Its shares were given a boost last week from rising uranium prices. As Russia is a key supplier of the chemical element, sanctions have sparked supply fears. This comes at a time when the UK has recently revealed plans to build eight nuclear reactors by 2030.

    The post These were the best performing ASX 200 shares last week appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    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 recommended Elders Limited, 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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  • Here are the ASX retail share winners and losers of the last quarter

    Three happy shoppers.

    Three happy shoppers.

    Due to their visible presence in our economy, ASX retail shares are amongst the most well-known ASX shares on the market. As such, many ASX investors like to keep an eye on the shares of their favourite retailers, and perhaps even invest in them.

    So let’s check out how some of the largest ASX retail shares performed over the three months ending 31 March 2022.

    It wasn’t a particularly successful quarter for many ASX retail shares. Many recorded large losses for the period, even though the S&P/ASX 200 Index (ASX: XJO) managed to eke out a small gain.

    One of the worst performers in this sector was ARB Corporation Limited (ASX: ARB). ARB is the company behind many of the most popular four-wheel drive accessories on the market. It sells equipment such as winches, luggage racks, snorkels and towbars for off-road vehicles.

    But ARB shares were shunned over the quarter, going from $52.51 at the start of the year to finishing up at $41.54 by the end of March. That’s a plunge of 20.9%.

    Super Retail Group Ltd (ASX: SUL) was another uninspiring performer in the quarter that was. Super Retail may not be a household name. But the stores it runs probably are for most Australians. These include Rebel, BCF and Super Cheap Auto.

    Super Retail shares started the quarter at $12.46 but ended up at the back end of March at $10.32 – a drop of 17.17%.

    ASX retail shares give investors a mixed bag

    Two other ASX retail shares that delivered some disappointing share price numbers over the three months to 31 March were Wesfarmers Ltd (ASX: WES) and Premier Investments Limited (ASX: PMV). Wesfarmers is not technically a retail share. But the conglomerate does own some of the largest and most well-known retailers in the country. These include Kmart, OfficeWorks and of course Bunnings. But Wesfarmers shares ended up giving back around 15% of their value over 2022’s first quarter.

    The Premier Investments share price did a little better, but not by much. Premier owns Smiggle, Peter Alexander and Jay Jays, amongst some others. But its shares spent the quarter falling from $30.31 to $27.50, a slide of 9.3%.

    Enough negativity, let’s look at some positive ASX retail share performers now.

    One famous ASX retailer that fared rather well over the first three months of 2022 was Harvey Norman Holdings Limited (ASX: HVN). This electronics and furniture retailer started 2022 at $4.94 a share but finished up in March at $5.35. That was a solid gain of 8.3%.

    But perhaps the best performing ASX retailer for the March quarter was none other than JB Hi-Fi Limited (ASX: JBH). JB Hi-Fi, which, despite its name, sells more computers, phones and household appliances these days than hi-fi equipment, had a corker. JB shares rose from $48.22 in January to $54.22 by the end of March. That’s worth a gain of 12.21%.

    So all in all a bit of a mixed bag for ASX retail shares over the March quarter. It will be interesting to see what the current quarter ending 30 June brings. 

    The post Here are the ASX retail share winners and losers of the last quarter appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended ARB Corporation Limited and Premier Investments 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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  • Is it time to buy these 2 quality ASX shares?

    Young Female investor gazes out window at cityscape

    Young Female investor gazes out window at cityscape

    Quality ASX shares could be the way to see through all of the market’s volatility right now.

    It has been a tough year for shareholders of some the ASX’s most well-known growth names, such as Zip Co Ltd (ASX: Z1P) and Xero Limited (ASX: XRO). They have seen hefty declines since the start of the year.

    Share prices moving up and down is meant to happen on the ASX share market. But a lower price could open up opportunities for investors.

    These two are quality candidates:

    VanEck Morningstar Wide Moat ETF (ASX: MOAT)

    This exchange-traded fund (ETF) is based on companies deemed to have strong competitive advantages that are expected to endure for many years to come.

    Economic moats, or competitive advantages, can come in many different forms including brand power, intellectual property, or a superior cost base.

    According to Morningstar analysts, the businesses in this ASX share’s portfolio have competitive advantages which are expected to last at least a decade — and more likely than not to two decades.

    For one of those quality businesses to make it into the MOAT ETF’s portfolio, it must be trading at a good value compared to Morningstar’s fair value estimate.

    Some of the names in the portfolio include Compass Minerals, Merck & Co, Constellation Brands, Medtronic, Kellogg, Campbell Soup, Western Union and Mercado Libre.

    This ETF has an annual management cost of 0.49%. At 31 March 2022, the MOAT ETF had produced an average return per annum of 16.5% over the prior five years.

    Brickworks Limited (ASX: BKW)

    Brickworks is a building products company that also owns other assets.

    In Australia, it produces a wide array of products, including bricks, paving, masonry, precast and roofing. In the United States, it is a major brickmaker in the northeast of the country.

    Brickworks owns a chunk of Washington H. Soul Pattinson and Co Ltd (ASX: SOL) shares. Soul Pattinson is an experienced investment conglomerate with investments across different sectors like resources, telecommunications and agriculture. Its total shareholder return has outperformed the ASX share market over the long term.

    Brickworks also owns a 50% share of a joint venture industrial property trust with Goodman Group (ASX: GMG). This trust continues to grow its net rental income – in the first six months of FY22, it saw 7% net trust income growth to $17 million.

    The property trust owns several high-quality industrial properties that are leased to major tenants. For example, it recently completed a state-of-the-art facility for Amazon.

    After including borrowings of $974 million, the total net asset value of the trust was over $2.5 billion, with the ASX share’s holding worth almost $1.3 billion – up by 38% over the period.

    Brickworks said the trust had already secured 221,100sq m of lease pre-commitments, and another 176,400sq m was available for development at the existing estates.

    Based on current demand, Brickworks estimated those estates would be fully built out within three years, resulting in additional gross rent of around $60 million and additional leased asset value of $1.5 billion, taking total leased assets to around $4.5 billion.

    The post Is it time to buy these 2 quality ASX shares? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Brickworks and Xero. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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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  • Should you buy Alphabet before the stock split?

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

    A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares

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

    During Alphabet‘s (NASDAQ: GOOG) (NASDAQ: GOOGL) fourth-quarter and full-year 2021 earnings call on Feb. 1, the company announced that its board of directors approved a 20-for-1 stock split, effective on July 15. Alphabet is just one of many big tech companies to announce stock splits in recent years. In 2020, FAANG leader Apple (NASDAQ: AAPL) completed a stock split, as did Tesla (NASDAQ: TSLA). In 2021, semiconductor pioneer Nvidia (NASDAQ: NVDA) completed a stock split, and recently both Amazon and Shopify announced stock splits for later this year.

    If you are one of the many investors considering buying into Alphabet stock right now, the announced split raises the question of when to make the purchase. Let’s take a look and see if Alphabet is worth an investment now, before the split, or if waiting until after the split occurs better fits your investment profile. 

    It might help to take a look at big tech counterparts

    Stock splits are generally not meant to change the market value of a company. Rather, when a stock split occurs, the number of outstanding shares increases by a pre-determined multiple. Subsequently, the share price drops in proportion to this ratio such that the overall value of the company doesn’t change.

    But while the intrinsic value doesn’t change, sometimes emotion can outweigh logic in the capital markets, causing stock prices to rise before a stock split occurs. Some investors will choose to buy a stock before the split occurs, hoping that after the split goes into effect and the shares appear less expensive, more investors will buy the stock, thereby boosting the stock price in a short period of time. In essence, these investors are riding the momentum in an effort to generate a short-term profit. Although there is merit to this trading strategy for some types of investors, let’s dig into a few examples of why buying before a split, and holding throughout the split event, may be more profitable in the long term.  

    As Mark Twain is rumored to have said, “history doesn’t repeat itself, but it often rhymes.” When it comes to recent stock splits, more often than not investors have experienced similar paradigms in trading activity.  

    Apple completed a stock split on Aug. 31, 2020. On a split-adjusted basis, Apple stock closed at roughly $129 per share following the split. Roughly one month later, the stock price had declined by 10%, closing around $116. However, had an investor held the stock, they would have appreciated a 28% return, as Apple’s current stock price is around $166 per share.

    Similarly, Tesla completed a stock split on the same day as Apple in 2020. On a split-adjusted basis, Tesla stock closed around $498 per share following the split. Approximately one month later, Tesla’s stock had decreased by 14%, closing around $429 per share. Just like with Apple, had investors held Tesla stock throughout the short-term volatility and momentum trading, they would have earned a 96% return, as Tesla now trades at roughly $975 per share.

    Then there’s Nvidia, which completed a stock split in July 2021. On a split-adjusted basis, the company’s stock closed at $186 per share following the split. Roughly one month later Nvidia stock had increased by 12%, to $208 per share. But had you held onto the stock until today, you would have an 18% return, as the stock currently trades for $219 per share.  

    The overarching theme in all of these examples is that the stock price has typically increased in the long term, and shown resilience even with short-term momentum traders buying and selling in and out of the stock during these pivotal events. 

    Impressive profitable growth 

    For the fiscal year ended Dec. 31, 2021, Alphabet generated $257.6 billion in revenue, up 41% from 2020. The company reported impressive growth across all of its business segments, in both revenue and operating profits. Alphabet’s total operating income was $78.7 billion in 2021, up a staggering 91%. These operating profits have had a direct impact on the company’s cash flow, and Alphabet has wasted no time deploying these profits into future growth drivers.

    So far in 2022, Alphabet has announced two meaningful acquisitions, both in the cloud cybersecurity space. Most recently, the company announced its proposed takeover of Mandiant for $5.4 billion. This deal is particularly interesting because the company stated that Mandiant’s products and services will be layered into Alphabet’s existing cloud offering, Google Cloud Platform. In 2021, Google Cloud generated $19.2 billion of revenue, but it remains unprofitable as this division lost nearly $3.1 billion. 

    Investors should be encouraged that Alphabet’s leadership has identified and is actively pursuing future growth catalysts that can be integrated into existing business segments. As investments in digital transformation, and the cloud market more broadly, begin to take shape, Alphabet is well-positioned to benefit from these tailwinds and grow an already impressive business to even bigger heights. 

    Identify your investment profile

    It is important to remember the time spent in the market is more important than trying to specifically time the market. When it comes to stock splits, there are many different strategies that can result in lucrative profits depending on how you invest. We can see that investors who owned stock in Alphabet’s big tech cohorts typically performed better in the long run when compared to investors with short holding time frames.

    Between impressive top-line growth, expanding profit margins, and strategic investments in future growth catalyst, Alphabet has given investors several reasons to buy the stock now, before the split, as opposed to waiting until after when the shares appear less expensive but are basically the same. 

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

    The post Should you buy Alphabet before the stock split? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Alphabet right now?

    Before you consider Alphabet , you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Alphabet wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of January 13th 2022

    More reading

    Adam Spatacco owns Alphabet (A shares), Amazon, Apple, Nvidia, and Tesla. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Amazon, Apple, Nvidia, Shopify, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and has recommended the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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  • Brokers name 3 ASX shares to buy today

    ASX 200 shares to buy A clockface with the word 'Time to Buy'

    ASX 200 shares to buy A clockface with the word 'Time to Buy'

    It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

    Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

    Bank of Queensland Limited (ASX: BOQ)

    According to a note out of Goldman Sachs, its analysts have reiterated their buy rating but trimmed their price target on this regional bank’s shares to $9.34. This follows the release of the bank’s half year results, which revealed cash earnings 17% ahead of the broker’s estimates. This was driven by a better-than-expected performance on bad and doubtful debts. And while Goldman has trimmed its longer term earnings estimate to reflect lower interest earning assets and net interest margin assumptions, it remains positive on its outlook and sees plenty of value in its shares. The Bank of Queensland share price ended the week at $7.99.

    Domino’s Pizza Enterprises Ltd (ASX: DMP)

    A note out of Morgans reveals that its analysts have retained their add rating but trimmed their price target on this pizza chain operator’s shares to $100. The broker has updated its model to take account of recent inflationary pressures and a more cautious view on near-term sales growth in Japan. This has led to a reduction in its earnings estimates for FY 2022. However, it still expects Domino’s to outperform the consensus estimate and continues to see a lot of value in its shares. The Domino’s share price was fetching $81.13 at Thursday’s close.

    Pilbara Minerals Ltd (ASX: PLS)

    Analysts at Citi have upgraded this lithium miner’s shares to a buy rating with an improved price target of $3.60. According to the note, the broker made the move largely on valuation grounds due to a recent pullback in its share price. In addition, Citi has bumped its lithium price forecasts higher on the belief that it could be a couple of years until the lithium market balances. The Pilbara Minerals share price ended the week at $2.96.

    The post Brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

    *Returns as of January 12th 2022

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    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 recommended Dominos Pizza Enterprises 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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  • 3 reasons Robinhood’s addition of Shiba Inu doesn’t matter

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

    a group of smart looking kids, wearing formal clothes and all with spectacles, sit in a line and smile charmingly.

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

    Crypto fans were loading up on Shiba Inu (CRYPTO: SHIB) after Robinhood Markets (NASDAQ: HOOD) announced trading availability on Monday morning. The token initially soared as much as 30% on the news, and 12 hours later Shiba Inu was still trading a healthy 17% above where it was when the news broke.

    It’s obviously not bad news for Shuba Inu to find its way onto a new exchange. It also helps that Robinhood only had seven digital currencies available before adding four new denominations, including Shiba Inu, on Tuesday.

    I’m still not convinced that the initial rally will stick. Let’s go over some of the reasons availability on Robinhood isn’t a game-changer for Shiba Inu fans.

    1. Robinhood isn’t as relevant as you might think

    There’s no denying that Robinhood Markets shook up the brokerage industry a couple of years ago. Would most of the leading platforms be offering commission-free trading otherwise? The problem now is that the platform has lost its grip on its young trading base.

    Robinhood lost traction as 2021 played out. There’s no shortage of metrics that prove it.

    • The number of monthly transacting users slipped from 21.3 million in the second quarter to 18.9 million in the third quarter, and then 17.3 million in the fourth quarter.
    • Average revenue per user has fallen in three consecutive quarters. Robinhood has gone from generating $137 per user during the first quarter to $64 in the fourth quarter.
    • Assets under custody were lower by the end of the year than where they were at the midpoint of 2021.

    The pressure points are everywhere. Fewer people are trading, and people are trading less. That’s a bad look for a trading platform, and we haven’t even gotten to the most problematic metric.

    Robinhood isn’t just about crypto. It’s also a hotbed for options and stock trading. Stock and options trading has held fairly steady through the final three quarters of 2021, but the same can’t be said for crypto. Robinhood reported transactions-based crypto revenue of $233 million in the second quarter, followed by $51 million in the third and $48 million in the fourth quarter. Put another way, Crypto transactions revenue went from 52% of Robinhood’s business in the second quarter to just 18% by the end of the year.

    2. Every spike is different

    If being added to Robinhood’s select number of crypto choices is so praiseworthy, shouldn’t all of the digital currencies added to Robinhood experience the same pop? In the same 12 hours of Shiba Inu’s 17% ascent, two of the three other cryptocurrencies rose less than 4%. One has a higher market cap than Shiba Inu, and the other one is lower.

    Is there any reason for Shiba Inu to be the one to surge higher? Is it just because Shiba Inu’s a meme coin? There is a bullish case to be made for Shiba Inu; I’m just pointing out that Tuesday’s pop is more based on hype than on the sustainable merits accorded to a crypto that’s been added to Robinhood. You might also want to check in on the uninspiring returns from some of the seven cryptocurrencies that have been trading on the platform for longer.

    3. It’s too late for Robinhood to be taken seriously in crypto

    Robinhood is trying to make up for the lost time it squandered. It’s finally rolling out a crypto wallet to make its digital currencies easier to move away from the platform, but as we’ve seen in recent quarters, crypto traders have already cleared out.

    Investors are smart enough to see through the “free” crypto trading that Robinhood offers, and the folks sticking around the once trailblazing platform tend to be small players these days. Having Shiba Inu coin now available is not detrimental to the crypto, but it’s also not going to matter beyond Tuesday’s initial buzz.

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

    The post 3 reasons Robinhood’s addition of Shiba Inu doesn’t matter appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Shiba Inu right now?

    Before you consider Shiba Inu, you’ll want to hear this.

    Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Shiba Inu wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

    *Returns as of January 13th 2022

    More reading

    Rick Munarriz 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.

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

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