ASX 200 banks have thwarted heavy losses in 2022 and surged more than 9% in the past month of trade.

The S&P/ASX 200 Financials Index (ASX: XFJ) has headed north after testing the 6,090 mark three times this year to date, now trading around three-month highs.

Yet, its been a mixed performance within the banking basket as some names have flourished whilst others have been left in the vault.

Banks bounce back in March

Aussie banks powered back home last month and secured strong gains as a group. Within the banking majors, Macquarie Group Ltd (ASX: MQG) has led the way, most notably due to its diversified portfolio that includes heavy exposure to commodities and financial markets.

Meanwhile, Commonwealth Bank of Australia (ASX: CBA) has popped 9.5% in the past month, followed by National Australia Bank Ltd (ASX: NAB).

At the other end, Suncorp Group Ltd (ASX: SUN) trembled in March and eventually began to stumble downwards to close out the month.

Banks, in particular, have been impacted by mounting inflationary pressures, saturation in the mortgage market, insurance cost blowouts, and a profitless interest rate regime that now looks set to change – hard and fast.

But that hasn’t stopped ASX 200 banks posting record earnings, beefed-up dividends, and authorising juicy buyback programs for the coming periods.

Bloomberg Intelligence analyst Matt Ingram noted that Aussie banks might extend gains on the back of these capital management initiatives.

“Bank payout targets of 65-80% remain below the 10-year average, with lenders preferring buybacks to reduce excess capital,” he wrote in a recent note.

“Longer-term DPS [dividend per share] growth could get a boost from lower share counts through buybacks,” he added.

The shift in interest rates appears to be the bedrock of the latest surge, spurring a similar shift in mortgage lending and banking to businesses, according to analysts at JP Morgan.

“We are upbeat on future growth and return prospects for Australian SME [small-medium enterprise] banking driven by: 1) strong credit growth/likely resilience to rate hikes; 2) stable near-term NIM [net interest margin] outlook; 3) favourable capital rule changes; and 4) attractive ROE [return on equity] and industry structure,” the broker said in a note.

“We view SME Banking industry structure very favourably. Scale is very difficult to build in SME and barriers to entry are high,” it added.

Whilst competition in the segment is dense, “it is still much less so than in retail banking”, analysts said. They noted that newer entrants – such as Judo Bank – are “niche players” that charge higher interest rates compared to the larger names.

What are the projections?

Analysts are bullish on the space and CBA gets a mention from several experts when analysing the data. Ingram noted that CBA’s “18x P/E [price to earnings] ratio – atop its peer group – perhaps reflects its leading ESG rank among Australian and Asian financials”.

Not only that, but the sector could extend gains if the push in returning capital to shareholders continues in 2022 and beyond.

“Australian banks’ stock rallies may continue due to buybacks, which added 2-3 percentage points to their forward yields, lifting spreads above the risk-free rate to 5-8%,” Ingram added.

That’s “well above the past decade’s average”.

Westpac Banking Corporation (ASX: WBC)’s $3.5 billion buyback, for example, “puts it top of the list by this metric with a near 10% yield, while the sector as a whole is on average 40% cheaper than the 2012-22 mean.”

Meanwhile, NAB is the “largest SME bank by some distance”, according to JP Morgan analysts.

“SME business loans account for 24% of NAB’s lending book (versus 15-17% for the other majors)…Business Banking divisions account for approximately 15% to 41% of group NPAT [net profit after tax],” they say.

Elsewhere, CBA’s loan growth in business banking divisions was around 10% annualised in the last half, in line with NAB’s.

These trends are set to continue with CBA joining NAB as a likely performer in JP Morgan’s eyes.

“We see these trends persisting in the near term, with a virtuous cycle driven by investment prioritisation in these divisions, superior scale, and less distraction,” the broker said.

NAB is JP Morgan’s “top rank in [its] coverage”, with the broker retaining its buy rating on a $33.50 price target.

Meanwhile, CBA is JP Morgan’s “bottom pick on valuation grounds”.

The post ASX 200 banks bounce bank in March. Here are the April forecasts from analysts appeared first on The Motley Fool Australia.

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• Is the Westpac share price the best value of the big four banks?
• Considering Macquarie shares? Here’s why this expert is predicting a ‘cracker result’
• Top brokers name 3 ASX shares to sell next week
• How big will the CBA dividend be in 2022?
• The NAB share price almost doubled the ASX 200’s return in March

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price is in the green today amid plans to grow the company.

Xero shares are currently trading at $107.56, a 4.06% gain. In contrast, the S&P/ASX 200 Index (ASX: XJO) is up 0.46%.

Let’s take a look at what Xero announced today.

New executive

Xero has appointed Chris O’Neill to the position of chief growth officer. This is a newly created role and part of the global executive team.

O’Neill will lead the growth of Xero’s small business platform and strategic development of Xero in the Americas.

Xero is a technology company that provides cloud-based accounting software for small businesses. Also possibly boosting the Xero share price today is positive sentiment across the tech sector. The S&P/ASX All Technology Index (ASX: XTX) is up 2.08% today, while the NASDAQ-100 Technology Sector Index (NASDAQ: NDXT) climbed 2.33% in the United States overnight.

O’Neill has served as a senior executive, board member and investor for global technology companies such as Google and Evernote.

He will be based in San Francisco and will lead the direction and performance within the company’s new applications and services division.

Commenting on the announcement, CEO Steve Vamos said:

The global cloud-based small business applications software market is still in a relatively early stage of development and represents a huge opportunity. Chris brings extensive experience to help further develop and grow a number of exciting business areas within Xero.

I look forward to Chris helping us further scale Xero’s business in the US and Canada, building on our go to market and product efforts to date; through partnerships, acquisitions, and further development of our product capabilities to meet the needs of customers and partners.

Xero share price snapshot

The Xero share price has fallen around 18% in a year and almost 25% this year to date.

The company’s shares have soared 9% in the past month, while they are up almost 8% in the past week alone.

For perspective, the benchmark ASX index has returned about 10% over the past year.

The company has a market capitalisation of about $15 billion based on the current share price.

The post Xero share price leaps amid new growth push appeared first on The Motley Fool Australia.

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• Why Xero can become ‘one of the big tech companies’: ASX expert
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• Why is the Xero share price sliding 4% lower today?
• ASX 200 (ASX:XJO) midday update: Tabcorp demerger update, BHP higher, Block tumbles

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. 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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Talk of a higher takeover offer did not stop the Pendal Group Ltd (ASX: PDL) share price from slipping lower this morning.

The listed fund manager got a non-binding $2.4 billion bid from rival Perpetual Limited (ASX: PPT) yesterday, which UBS called “opportunistic”.

This leaves room for Pendal to get a better offer price as recent transactions have shown that the first offer is not the last.

Looming bidding war for Pendal?

Remember the takeover tussle for Uniti Group Ltd (ASX: UWL) and Australian Pharmaceutical Industries Ltd (ASX: API)?

Despite the prospect of a higher offer, the Pendal share price dropped 1.5% to $5.21 in early trade. In contrast, the S&P/ASX 200 Index (ASX: XJO) gained 0.3%.

But given the 18% surge in the Pendal share price on Monday after the takeover offer was announced, the pullback won’t worry shareholders.

Room for a higher takeover bid

There’s no guarantee that the takeover will proceed. But UBS reckons Pendal is worth more than the $6.23 a share price that Perpetual is putting on the table.

Importantly, Perpetual’s takeover offer is below UBS’ 12-month price target of $7.20 a share for Pendal.

The offer also comes at a time when the Pendal share price is trading at a 38% discount (pre-bid) to its historical price-earnings multiple of 14.1 times.

“The bid appears opportunistic, noting the broader sell-off in asset managers and the widening PE gap between pure-plays (PDL 8.7x) versus diversified names (PPT 12.6x)”, said the broker.

“We believe the bid undervalues PDL, with some scope for the offer to move higher and remain accretive to PPT.”

Why the Pendal share price has been derated

There are a few reasons behind the underperformance of the Pendal share price that led to the takeover bid. Fund outflows and patchy investment performance are two factors. Pendal is also in the process of bedding down its US acquisition of TSW.

The acquisition won’t put off Perpetual as UBS believes TSW’s business is well understood by Perpetual.

Perpetual’s merger with Pendal will also help the former diversify away from non-asset management businesses.

How much more can Perpetual offer for Pendal?

“With the offer valuing PDL at ~12.8x, below its long[1]term average of 14.1x we think the PDL board is unlikely to accept the current offer, but we see room for the offer price to move higher,” said UBS.

“On our analysis, the deal becomes EPS neutral at a scrip ratio to 1PPT:6.5PDL implying ~$7/shr.”

One also can’t discount another bidder entering the arena given that M&A interest remains strong. The takeover offer for Pendal also validates UBS’ view that the sector is too oversold.

The post Pendal (ASX:PDL) share price in the spotlight as analysts tip higher takeover bid appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Uniti 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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The Block Inc (ASX: SQ2) share price is racing higher on Tuesday.

In morning trade, the payments giant’s shares are up over 6% to $191.39.

What’s going on with the Block share price today?

Investors have been bidding the Block share price today after a rebound in the tech sector offset a potentially damaging data breach.

It isn’t just the Afterpay owner’s shares that are rising today. The S&P/ASX All Technology Index is up a solid 2% at the time of writing, which mirrors a 1.9% gain by the tech focused Nasdaq index on Wall Street overnight.

Investors unfazed by data breach

The Block share price is storming higher today despite the company revealing that a former employee downloaded certain reports of its subsidiary Cash App Investing on 10 December. These reports included some U.S. customer information.

The release notes that while this employee had regular access to the reports as part of their past job responsibilities, the downloading of these reports occurred without permission after their employment ended.

Block advises that the information in the reports included full name and brokerage account number, and for some customers also included brokerage portfolio value, brokerage portfolio holdings and/or stock trading activity for one trading day.

Importantly, the reports did not include usernames or passwords, Social Security numbers, date of birth, payment card information, addresses, bank account information, or any other personally identifiable information. Nor did they include any security code, access code, or password used to access Cash App accounts.

Other services, such as Afterpay, were not impacted, nor were customers outside of the United States.

What now?

Block is contacting approximately 8.2 million current and former customers to provide them with information about this incident and sharing resources with them to answer their questions.

It is also notifying the applicable regulatory authorities and law enforcement, and continues to review and strengthen administrative and technical safeguards to protect the information of its customers.

And while management says that future costs associated with this incident are difficult to predict, it does not currently believe the incident will have a material impact on its business, operations, or financial results.

The post Block (ASX:SQ2) share price jumps 6% despite reporting a data breach appeared first on The Motley Fool Australia.

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• These were the best and worst performing ASX sectors in March
• Why Bank of Queensland, Block, Premier Investments, and REA shares are dropping
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• Why Block, Lake Resources, Nearmap, and Telix shares are racing higher

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. The Motley Fool Australia owns and has recommended Block, Inc. 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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Woolworths Group Ltd (ASX: WOW) is a company very familiar to most Australians. That’s largely thanks to its status as the largest supermarket chain in the country. But not only is Woolworths a popular business, it’s also a popular blue-chip share on the S&P/ASX 200 Index (ASX: XJO). Part of the appeal of Woolworths shares for many investors is arguably their reputation as a defensive investment.

Woolworths is a consumer staples company. That means its business is providing products that are ‘needs’ and not ‘wants’. That makes sense — we all need to eat, drink and buy household essentials after all. And Woolies is a popular choice in fulfilling these needs.

That in turn lends the company stability. We saw Woolworths’ revenues rise sharply during the first year of the pandemic in 2020 – a year that saw many other ASX shares suffer due to the effects of lockdowns. This defensiveness extends to other aspects of an investment in Woolworths, such as the company’s dividend.

But does that really make this company a good investment?

Are Woolworths shares a defensive buy today?

One ASX expert investor who thinks so is WaveStone Capital’s Raaz Bhuyan. Bhuyan recently spoke to Livewire on why he likes Woolies. Here’s some of what he had to say:

It’s a buy for us. Obviously, food inflation’s coming through, and Woolworths has got pricing power, so it’s good for inflation. But the other big thing that we like is Brad Banducci, who’s the CEO, has invested quite heavily on the online side. And now, their online business is twice the size of its nearest competitor. And our view is in five years’ time, they’ll be even bigger because that part of the business is growing faster. So, it is a buy for us.

So that’s pretty emphatic. The inflation point is an interesting one to note specifically. Inflation, long a dormant issue, has raised its head once more this year. So when investors are looking for ‘defensive’ qualities, inflation is arguably now a factor, in addition to the traditional ‘recession-proof’ qualities defensive investors usually look for.

But consumer staples businesses such as Woolworths can be inherently inflation resistant to a certain extent as well. It all comes down to that needs-based business model. No one likes paying more for food and household essentials. But that doesn’t stop most customers at the end of the day, especially if Woolies’ competitors are also raising prices.

So that’s why this ASX investing expert likes Woolworths shares today. It will be interesting to see if Bhuyan’s predictions turn out to be accurate.

At the time of writing, the Woolworths share price is up 0.46% at $37.08. This ASX 200 blue chip has a market capitalisation of $44.73 billion, with a dividend yield of 2.53%.

The post Are Woolworths shares worth buying for their defensive properties? appeared first on The Motley Fool Australia.

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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. 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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The Santos Ltd (ASX: STO) share price finished March up 6.6% for the month.

At the closing bell on 28 February, Santos shares were trading for $7.26 and by the close on 31 March they were worth $7.74.

Here’s what helped propel the S&P/ASX 200 Index (ASX: XJO) energy giant higher.

Oil prices up and new oil zone discovered

With the bulk of its revenue coming from oil and gas, the Santos share price has benefited from rising energy prices.

As some of the biggest economies in the world embargoed Russian oil and gas imports following its invasion of Ukraine, Brent crude oil topped US$128 per barrel on 8 March. That was up from US$78 per barrel on 1 January.

Brent slipped from those highs to finish the month at US$108 per barrel, up 6.6% from the US$105 per barrel it was worth on 1 March, according to data from Bloomberg. That 6.6% gain, as you may have noticed, is in line with the Santos share price gain over the month.

The ASX 200 energy stock also released positive news over the month.

On 21 March, Santos reported a 17% increase to prior flow rate estimates from its Tanumbirini 2H and 3H horizontal gas wells in the Beetaloo Basin located in the Northern Territory. Santos operates the project as a joint venture with Tamboran Resources Ltd (ASX: TBN).

Two days later, on 23 March, the Santos share price slipped amid sliding oil prices despite the company reporting a significant oil discovery at its Pavo-1 exploration well in the Bedout sub-basin, offshore Western Australia.

Commenting on that oil discovery, Santos CEO Kevin Gallagher said: “The Pavo-1 success is expected to support a potential low-cost tie-back to the first phase of the proposed Dorado development, with Pavo north having an estimated breakeven cost of less than US$10 per barrel.”

Santos share price snapshot

The Santos share price is up 21.3% in 2022, compared to a year-to-date loss of 0.6% posted by the ASX 200.

Santos shares are up 1.96% in early morning trade today, at $8.075 per share.

The post Here’s what drove the Santos share price 6% higher in March appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares to buy in the hottest sector right now: experts
• What sent ASX mining shares flaming higher in March?
• 5 things to watch on the ASX 200 on Tuesday
• The Santos share price has gained 26% this year. Is it too late to buy?
• 5 things to watch on the ASX 200 on Monday

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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The team at Morgans has been running the rule over a number of ASX 200 shares once again.

Among its best ideas for April are the shares listed below. Here’s why they broker rates these ASX 200 shares highly:

QBE Insurance Group Ltd (ASX: QBE)

Morgans is feeling bullish about this insurance giant’s shares and believes they could be in the buy zone. This is due to premium increases, its positive cost cutting outlook, and attractive valuation. The broker currently has an add rating and $13.50 price target on its shares.

It said: “With strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come, we expect QBE’s earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~14x FY22F PE.”

ResMed Inc (ASX: RMD)

Another ASX 200 share that Morgans has on its best ideas listed is ResMed. The broker is very positive on the sleep treatment focused medical device company due to its long term growth outlook. Morgans has an add rating and $40.46 price target on the company’s shares.

Its analysts commented: “While we believe the next few quarters will likely be volatile, as Covid-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

Seek Limited (ASX: SEK)

A final ASX 200 share on the broker’s best ideas list is Seek. Although Morgans only has a hold rating, its price target of $32.33 offers enough potential upside to warrant its inclusion. The broker feels Seek is well-placed to benefit from strong ad volumes.

Morgans said: “Of the classifieds players, we continue to see SEK as the one with the most relative upside, a view that’s based on the sustained listings growth we’ve seen over the period. The tailwinds that have driven elevated job ads (~250k currently, +35% on pcp) and updated guidance (FY22 EBITDA updated ~16% at the midpoint to A$490m-A$515m) appear to still remain in place, i.e. subdued migration, candidate scarcity and the drive for greater employee flexibility.”

The post Broker names 3 of the best ASX 200 shares to buy in April appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. and SEEK 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 Allkem Ltd (ASX: AKE) share price is charging higher again on Tuesday.

In morning trade, the lithium miner’s shares are up 6.5% to a record high of $14.20.

Why is the Allkem share price rising today?

Investors have been bidding the Allkem share price higher today in response to announcements relating to its Olaroz and Sal de Vida operations in Argentina.

In respect to the former, Allkem has substantially expanded its resource in the Olaroz basin from 6.4 million tonnes of lithium carbonate equivalent (LCE) to 16.2 million tonnes of LCE. This comprises 5.1 million tonnes of measured resource and 4.6 million tonnes of indicated resource, with the remainder in inferred resource status.

This is expected to support a 25,000 tonnes per annum (tpa) expansion in capacity of the Olaroz Lithium Facility to a total 42,500 tpa.

What else?

In respect to Sal de Vida, the company has increased the total planned capacity to 45,000 tpa. This comprises stage one production of 15,000 tpa, which is up 40% on previous estimates, and the consolidation of stage two and three production into a single 30,000 tpa expansion.

The release also notes that management has revised its resource estimate to 6.85 million tonnes of LCE, which is a 10% increase from the previous estimate in 2021.

What’s next at Sal de Vida?

Sal de Vida stage one construction has already begun and management is now targeting its first production during the second half of 2023. In the meantime, stage two construction will commence upon the completion of stage one construction, with production expected approximately 24 months thereafter.

The total initial project development capital expenditure is estimated to be US$271 million for stage one. This estimate includes wellfields to ponds, the lithium carbonate plant, non-process infrastructure, and various indirect costs.

Operating expenditure is estimated to be US$3,612 per tonne LCE for stage one. This is predominately made up of reagents and also includes labour, energy and transport costs.

And with management expecting LCE prices to gradually decline to around US$15,000 per tonne by the mid-2020s as new supply reaches the market before climbing to US$19,000 per tonne over the long term, Sal de Vida looks set to be a very profitable operation.

All in all, stage one has a pre-tax net present value (NPV) of US$1.23 billion at a 10% discount rate and pre-tax internal rate of return (IRR) of 50%. Whereas stage two has a pre-tax NPV of US$1.81 billion and pre-tax IRR of 38% on a standalone basis.

The Allkem share price is now up 184% since this time last year.

The post Allkem (ASX:AKE) share price hits record high on Olaroz and Sal de Vida lithium updates appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Allkem 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 Bruce Jackson.

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There is no doubt one sector has ruled ASX shares in 2022.

While the S&P/ASX 200 Index (ASX: XJO) is now lower than where it started the year, the S&P/ASX 300 Metals & Mining (ASX: XMM) index is up a stunning 18%.

And many professional investors are forecasting the mining sector’s outperformance to continue.

“A commodity trading house may struggle to obtain the requisite insurance and finance to cover the purchase and transport of a shipment of Russian-origin commodities,” said Datt Capital chief investment officer Emanuel Datt last month.

“As such, almost overnight, we have seen an enormous uplift in demand for commodities of non-Russian origin to fill this sudden supply gap.”

This week a couple of experts picked out 3 ASX shares in the resources sector that still seem like great value at the moment:

Diversified miner enjoying strong demand

Marcus Today portfolio manager Thomas Wegner likes the look of South32 Ltd (ASX: S32) shares.

“The diversified miner achieved a record operating margin and a significant improvement in its underlying 2022 half-year result, despite lingering cost pressures,” he told The Bull.

The South32 share price is already up more than 31% this year, but Wegner still rates it as a “buy”. 

“Global infrastructure investment is expected to lift demand for the metals critical for a low carbon future, which will assist South32’s earnings,” he said.

“Aluminium, nickel, zinc, lead and silver contribute more than 44% to underlying earnings.”

It seems Wegner is not the only fan of South32.

According to CMC Markets, 15 out of 20 analysts rate the stock as a “strong buy”. The remaining five say “hold”.

Share price has hit the bottom

Fairmont Equities boss Michael Gable currently favours Pilbara Minerals Ltd (ASX: PLS) among the resources stocks.

“Growing demand for lithium is translating to rising share prices for lithium miners,” he said.

“Pilbara Minerals is one of Australia’s biggest producers.”

Pilbara shares have underperformed compared to the company’s mining peers, rising only 2.84% between market close on 4 January and their current price.

But Gable, as a technical analyst, feels the stock has turned a corner.

“Pilbara has reversed the downtrend from earlier this year and we expect the share price to move higher from here,” he said.

“The shares have risen from $2.57 on March 15 to trade at $3.215 on March 31.”

The Pilbara share price finished Monday at $3.62. In early trade on Tuesday, Pilbara shares are going for $3.74 apiece.

When you literally strike oil

The share price for Santos Ltd (ASX: STO) has popped more than 25% for the year.

But Wegner still likes the upside.

“Australia’s leading supplier of natural gas recently announced a significant oil discovery off the Western Australian coast.”

Even before that discovery, the business was performing well.

“Santos posted an underlying profit of US$946 million in fiscal year 2021 — a 230% increase on the prior corresponding period,” said Wegner.

“Santos is benefiting from global energy demand and rising crude oil and LNG prices.”

The analyst community very much agrees with Wegner.

According to CMC Markets, 14 out of 17 analysts rate the stock as a “buy”, while just three are remaining neutral with a “hold” rating.

The post 3 ASX shares to buy in the hottest sector right now: experts appeared first on The Motley Fool Australia.

More reading

• What sent ASX mining shares flaming higher in March?
• 5 things to watch on the ASX 200 on Tuesday
• The Pilbara (ASX:PLS) share price soared 18% in March. Here’s why
• Here are the 3 most heavily traded ASX 200 shares on Monday
• ASX lithium shares set to deliver next positive surprise to investors

Motley Fool contributor Tony Yoo 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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The world’s richest person and CEO of Tesla Inc (NASDAQ: TSLA) has managed to put a rocket under the share price of another US-listed company overnight. Specifically, the Twitter Inc (NYSE: TWTR) share price took flight after it was revealed that Elon Musk had taken a sizeable position.

Shares in the social media company had ascended more than 27% by the closing bell on Tuesday morning. Remarkably, the excitement resulted in an extra US$8.5 billion being added to Twitter’s market capitalisation during the session.

Let’s take a closer look at the details.

What’s behind Elon’s move into social media?

According to a securities filing, the billionaire has acquired approximately 73.5 million shares in Twitter. This significant investment places Musk’s stake at 9.2%, making him the largest shareholder in the company.

For those playing along at home, the electric vehicle visionary’s stake is worth around US$3.68 billion (A$4.88 billion). While Musk’s indication of skin in the game of the 16-year-old social networking site was embraced by Twitter investors, to others the move might raise eyebrows.

Musk has a track record of entrepreneurial success going all the way back to the early days of PayPal Holdings Inc (NASDAQ: PYPL). Since then, he has gone on to create some of the most defining companies of the modern era with Tesla and SpaceX. However, a social media company is a far cry from electric vehicles and reusable rockets.

However, prior to the news behind the Twitter share price unfolding, the technology futurist had shown an interest in the social media industry.

On 25 March, Musk kicked off a conversation on the blue-bird emblemed platform. Posing a question to his more than 80 million followers, Elon asked:

Free speech is essential to a functioning democracy.

Do you believe Twitter rigorously adheres to this principle?

— Elon Musk (@elonmusk) March 25, 2022

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

Following this, Musk toyed with various options for how to address the perceived free speech flaw of the platform. In doing so, the Tesla founder considered whether a new platform is needed while revealing he had given serious thought to starting his own.

What it all means for the Twitter share price?

Notably, some analysts have not ruled out the possibility of a buyout. Keep in mind that Elon Musk holds a net worth of approximately US$270 billion. Meanwhile, based on the Twitter share price, the social media company has a market cap of US$40 billion. This means the billionaire has the financial capability to make such a move.

For now, Musk sits atop the Twitter shareholder register with his 9.2% stake. The holding is more than quadruple that of the Twitter founder, Jack Dorsey.

Despite the leap upwards, the Twitter share price is still down 22% over the past year.

The post Birds are singing as the Twitter share price soars 27% on Elon Musk’s investment appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended PayPal Holdings, Tesla, and Twitter. The Motley Fool Australia has recommended PayPal Holdings. 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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