Merry Christmas!

Oh, I know it’s not actually Christmas.

It’s better – it’s Federal Budget day!

No, I’m not even being facetious.

You can send sympathy cards to my wife, if you feel the need, but I really, really like Budget day.

For a few reasons.

First, I’m an economics nerd. And it doesn’t get more economically nerdy than our country’s profit and loss statement being announced live on television.

Second, I’m a politics nerd. It’s frustrating as hell most of the time, but I love the workings of democracy.

And lastly – and perhaps most importantly – it’s the combination of the two. Despite my regular exasperation at the way politics is played, we are bloody lucky to live in a country where the democratic processes of government are not only followed, but are played out (largely) in front of us.

It is the embodiment of a lot of what our system is, and means, and while I don’t expect everyone to love it as much as I do, I hope most people at least appreciate that many people around the world aren’t this fortunate.

It is something to be acknowledged and treasured, I think, even if not actually celebrated.

Now, back to Christm… I mean the Budget.

There’s no point in me writing a wishlist. I’m not naive enough to think Treasurer Josh Frydenberg is waiting with bated breath to find out what I think he should put in the budget! And, of course, the ink is dry on the budget papers anyway.

But I’m going to have a stab at what the Budget perhaps should look like. Here are some things I’d like to see in tonight’s announcement.

First, I want to see a plan from the government on how we get the budget back into structural balance. Not actual balance, every year, but ‘structural balance’. See, it’s important that the government borrows money when the economy is stuttering, to provide a backstop and to stoke demand. Doing so means recessions should be shorter and less severe than otherwise might be the case.

But ‘structural balance’ means that in the really good times, the government has a surplus, taking some heat out of the economy, and offsetting previous deficits with surpluses. These two sides of the same coin mean a less volatile economy and society, with less extreme economic shocks.

We are – and I know this won’t come as a shock – a loooong way from a structural budget balance.

Frankly, I don’t think that will get addressed tonight, despite the rhetoric. And that’s a shame. I really don’t want to leave a messed-up national balance sheet to our kids.

Secondly, I’d love to see a focus on economic growth, including wages growth and unemployment. Even as a finance guy, I know GDP isn’t the only (or even the most important) indicator of national prosperity. But in a financial budget, it’s the headline number. I’d like to see our governments actually turning their hands to creating the right conditions for that prosperity.

And the wages growth and employment have to come with it, otherwise the ‘prosperity’ is concentrated in too few hands, and too many of the profits might actually end up overseas. I have no issue with foreign ownership (that’s a whole other debate) but it’s reasonable to want prosperity to make it into the hands of all of us, not just some.

Third, I’d like to see governments really tackle infrastructure. But not in a ‘lots of bridges and tunnels’ kinda way. It’s easy to throw billions around (and hard to resist the temptation to direct those billions into politically sensitive seats), but the money needs to be invested thoughtfully, in projects that actually remove blockages in the most efficient way possible. (I read a tweet yesterday suggesting you could put water tanks on every house in one rural town for a fraction of the cost of upgrading the local dam. Sure, the machinery would be smaller and the photo opportunities would be fewer, but that sounds like smarter spending to me!)

Next, I’d like to see the government properly fund action on climate change. It’s true that Australia can’t offset the rest of the world’s emissions, but the least we can do – in our own interest – is be responsible for our own mess, and then use that example to cajole other countries into doing their bit. And frankly, depending on who you listen to, it might actually be a positive economic return on investment. At the very least, we can feel good about the country we’re leaving to our kids!

You’ll notice nothing about taxes in the summary above. Of course, we all want to pay less tax – it’s just natural. But I don’t think we, as a country, need to collect less tax.

How’s that for controversial?

The problem is that we see every single dollar of tax taken out of our pay packets, but we don’t value the services we get for that money in the same way.

We expect the roads to be sealed and smooth. We want to know that the coppers, fireys and ambos will come when we call them. We want to know the schools, unis, hospitals and national parks are there when we want to use them. And that pensions will be paid, in full and on time.

But we don’t see the value in the same way, dollar for dollar, as we do our taxes that come out of our pay.

That doesn’t make those things any less important. It just means we need to consciously remember them.

Not only that, but with the budget deep in the red, it would be irresponsible to cut taxes right now.

(Yes, I know they’ll probably throw cash at us, tonight. And probably cut fuel excise. Both wrong and irresponsible, in my view. How’s that for an unpopular view?)

In fact, the one tax I would increase is on the extraction and sale of Australia’s national resources. A former government levied a ‘super profits tax’ on miners, but I think that was the wrong way to think about the target. They relied on people thinking ‘hey, they make too much money’, but Australians have never really worried about that, per se. What we have always focussed on is fairness. Which is where my take is different.

Resources companies dig or drill for resources that have been formed over millions of years, and that were the property of our forebears and their forebears. If a company is going to take them out of the ground, forever, then sell them, it strikes me that fairness suggests the country should be very well compensated for their sale. Not because the miner is making a ‘super profit’, but because if you’re going to dig up and sell off part of our country, the country should get a fair price for that asset.

So, I wouldn’t levy an extra or higher tax on profits. I’d charge more, per tonne, ounce and barrel, for those assets themselves. I’d also put the proceeds into a sovereign wealth fund, or similar, so those natural resources can have a perpetual benefit, rather than being simply taxed and spent once. Taking an ounce of gold that’s been in the ground for millennia and spending the tax proceeds in one year, leaving nothing for future generations seems, to me, the epitome of (unintended) selfishness.

I do think, by the way, that our federal government (and it’s been the same under the administration of both major parties) collects way too little tax from the wealthy and the major corporations, particularly the multinationals (Australian-based, as well as foreign).

These groups can afford the best accountants and lawyers, and the poor old taxpayer is being played for a mug. For all of the effort that goes into cracking down on ‘welfare cheats’, for precious little result (and hot tip: $5 says the government announces a program to do just that, tonight), bugger all effort, in any relative sense, is being spent on either improving legislation and/or enforcement of collection from the big end of town.

And I’m no anti-capitalist. I think our system of democratic capitalism, though inevitably flawed, is one of the best around. The profit motive is one of the primary drivers of growth and progress.

But it needs to be well-managed and appropriately legislated.

I haven’t done the numbers, but I dare say if the law was improved to actually ensure the government captures the tax revenue those laws were originally intended to collect, we might be able to fund much or all of my wishlist, above. And maybe get the budget closer to structural balance.

I’ve joked on Twitter that I’d only need 12 months as Treasurer to significantly fix our system — tax collection in particular. And then? Well, let’s just say I would annoy enough people that any chance of re-election would be out of the question.

Which probably means I’ve got it just about right.

It also probably means I’ve offended or upset a small minority of my readers, today. I would simply ask one thing: rather than being upset or offended, please be motivated to add your voice – even in stark opposition to mine, if you are so motivated – to the national debate.

Politics is at its best when it’s a contest of ideas among engaged, informed citizens. It’s at its worst when people simply don’t bother forming or expressing a view.

So here’s to our very Australian form of representative democracy.

And Merry Budget!

The post Merry Federal Budget! appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Twitter. 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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If you’re building an income portfolio, then you may want to look at the ASX shares listed below.

Both these ASX dividend shares offer attractive yields and have been named as buys by analysts.

Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that could be in the buy zone is Accent. It is the owner of a growing portfolio of footwear focused store brands including HYPEDC, Pivot, Platypus, Sneaker Lab, and Stylerunner.

Unfortunately, it has been hit hard this year by lockdowns, which led to the release of a very disappointing half year result last month. This has weighed heavily on the Accent share price, much to the dismay of shareholders.

The team at UBS appears to see this as a buying opportunity and are forecasting a big rebound in Accent’s profits and dividends in FY 2023. The broker currently has a buy rating and $2.50 price target on the company’s shares.

UBS has pencilled in a fully franked dividend of 7 cents per share in FY 2022 and then 13 cents per share in FY 2023. Based on the current Accent share price of $1.64, this will mean yields of 4.3% and 7.9%, respectively.

Centuria Industrial Reit (ASX: CIP)

Another ASX dividend share to look at is Centuria Industrial. It is a property company with a focus on high quality industrial assets.

Centuria Industrial has been on form again in FY 2022 thanks to strong demand for industrial space. This is particularly the case from ecommerce-related tenant customers, which resulted in the company reporting strong rental income growth and a 26% increase in funds from operations (FFO) during the first half.

Macquarie was pleased with its performance and appears confident the strong form will continue. Last month it put an outperform rating and $4.27 price target on the company’s shares.

As for dividends, the broker is forecasting dividends per share of 17.3 cents in FY 2022 and then 17.8 cents in FY 2023. Based on the current Centuria Industrial REIT share price of $3.90, this will mean yields of 4.4% and 4.55%, respectively.

The post Analysts name 2 ASX dividend shares to buy with +4% yields appeared first on The Motley Fool Australia.

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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 Accent Group. 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 Flight Centre Tavel Group Ltd (ASX: FLT) share price has certainly had a bumpy ascent lately. Flight Centre shares are actually performing rather well though. Over the year to date, this ASX travel company has gained around 9%.

That compares well against the S&P/ASX 200 Index (ASX: XJO), which remains down around 0.5% over the same period. Flight Centre is also up by 3.5% over the past 12 months. However, that comes in under the ASX 200’s 9% gain. But in addition to some healthy growth, Flight Centre used to also be known as an ASX dividend share.

2019 saw the travel share pay out its highest dividends on record, showering investors with $3.07 in cash per share over the year. That came after 8 years of consistent dividend payments. So, many investors might be wondering if Flight Centre shares still pay dividends. Well, let’s take a look.

Flight Centre dividends remain grounded

Unfortunately, all has been quiet on the Flight Centre dividend front for a few years now. The company’s last dividend was paid in early 2020. That was a payment of 40 cents per share, fully franked. But that was the last cash dividend investors have received from Flight Centre to date.

It goes without saying the pandemic has hit Flight Centre hard. The company has been struggling with waves of travel restrictions and uncertainties for more than two years now. During Flight Centre’s latest earnings report delivered back in February, the company reported a 98.1% increase in revenue to $315.7 million, with a $1.5 billion strong balance sheet. However, the company also reported an underlying loss after tax of $188 million.

Since a company typically pays out dividends from profits, it doesn’t look like Flight Centre will be in a position to resume dividend payments soon. Or at least until its books are back in the black. We see similar trends amongst other ASX travel shares such as Qantas Airways Ltd (ASX: QAN) and Corporate Travel Management Ltd (ASX: CTD).

So it looks as though FLight Centre investors will have to wait at least a little longer to see their dividends return.

At the current Flight Centre share price, this ASX travel share has a market capitalisation of $3.82 billion.

The post Do Flight Centre shares pay dividends? 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 recommended Corporate Travel Management Limited and Flight Centre Travel 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 certainly hasn’t been a fun time for the Zip Co Ltd (ASX: Z1P) share price in 2022 so far. Zip shares closed at $1.47 today, down a nasty 3.3% for the day’s trading. That puts this buy now, pay later (BNPL) company rather close to its 52-week low of $1.40 a share. 

Over 2022 so far, Zip is now down just over 66%. Over the past 12 months, those losses currently sit at a painful 80%. 

So it’s not like Zip shares haven’t seen volatility before. It was only a little over a year ago that this BNPL share was asking over $14 a share. But most of Zip’s losses have occurred since October last year. What is striking though is to see how much investors have marked Zip down.

Remember the 2020 COVID-induced crash? That saw many ASX shares briefly descend to levels that would seem ridiculous today. Zip was one. It saw a low of $1.18 on 19 March 2020. 

So the pricing we see today puts Zip at only 29 cents above those COVID lows of 2020. Striking stuff indeed.

What’s behind the Zip share price’s woes?

Several things seem to have played a role here. For one, investors have lost a lot of faith in growth-y, tech shares like Zip over the past few months. Most of the shares that could be categorised as growth shares have seen big losses in recent months. That includes Block Inc (ASX: SQ2), Xero Limited (ASX: XRO) and Brainchip Holdings Ltd (ASX: BRN). 

But investors have responded negatively to some of the company’s specific news as well. The most dramatic was the announcement that Zip intends to acquire its fellow ASX BNPL share Sezzle Inc (ASX: SZL). Late last month Zip gazetted the potential tie up, outlining Sezzle’s acceptance of what was then a $491 million all-scrip deal. Investors will receive 0.98 Zip shares for every Sezzle share owned under the arrangement. 

But things have changed dramatically since that news came out. Investors seem to have given these plans a stamp of disapproval, judging by how the Zip share price has now fallen by more than 33% since the announcement. 

So Zip shares have certainly had a year to forget. No doubt investors will be hoping it can’t get any worse from here. 

The post Guess how many cents now separate the Zip share price from its market-crash low 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. owns and has recommended Block, Inc., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Block, Inc. and 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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It is no secret now that growth, and especially technology, stocks have had the guts ripped out of them the past few months.

It’s bad enough that the S&P/ASX All Technology Index (ASX: XTX) has lost almost 20% for the year. Many of the smaller players now have market capitalisations that are just half of what they used to be.

With such heavy discounting, it’s no wonder some experts are calling on investors to get back into tech shares.

If you pick sound businesses, they are bound to head back up in the long run, they say.

Here are a couple of examples picked out this week:

Get your half-price bargain here

There’s no getting around it. The Nitro Software Ltd (ASX: NTO) share price has made investors go grey.

The stock has lost an eye-watering 66% since mid-November. This year alone it has plummeted more than 45%.

Yikes.

But for BW Equities equity salesperson Tom Bleakley, this just means the ASX share now “offers top value”.

“The company has guided to continuing growth this year,” he told The Bull.

“The company has enjoyed strong demand for its products, with revenue increasing 27% to US$51 million in fiscal year 2021.”

He’s not the only one thinking Nitro is a bargain right now.

According to CMC Markets, all 8 analysts surveyed rate the stock for the PDF handler as a “buy”, with everyone but one marking it as a “strong buy”. 

Customers ‘stick with the product’

Medallion Financial Group private client advisor Stuart Bromley’s pick at the moment is accounting software maker Xero Limited (ASX: XRO).

“This accounting software provider has continued to build momentum, with more than 3 million subscribers,” he said.

“Users tend to stick with the product.”

Xero shares have not quite been hammered as much as Nitro, but nevertheless have lost almost 32% this year so far.

But Bromley notes the business is “capital light and scalable”.

“The price discount is attractive,” he said.

“Annualised monthly recurring revenues have exceeded NZ$1 billion ($920 million). Management is focused on expansion – organically and via acquisitions of complementary offerings, which should increase average spend per customer.”

Xero shares are more polarising among analysts, with 6 of 11 surveyed on CMC Markets rating it as a “buy”. Three say hold, while 2 are advising clients to strongly sell.

The post 2 ASX tech shares to buy now for DIRT CHEAP: experts appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns Nitro Software Limited and Xero. 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 Australia has recommended Nitro Software 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 first three months of 2022 has not been kind to some ASX growth shares. But this could be opening up some opportunities, according to leading analysts.

While the ASX may not be known for having many global leaders, there are a few small caps that are quickly expanding their international footprint.

The experts reckon these two companies — after significant price declines year-to-date — could now be opportunities:

BWX Limited (ASX: BWX)

BWX is a natural beauty business with “market-leading” brands including Sukin, the number one natural skincare brand in Australian pharmacies, according to the company.

BWX also claims top pole positions on the US natural channel for Andalou Naturals, the number one facial skincare brand; and Mineral Fusion, the number one cosmetics brand. In addition, the company said Flora & Fauna was Australia’s largest eco store and one of Australia’s first B Corp businesses.

BWX recently acquired a 50.1% stake in Go-To Skincare for $89 million. In FY21, this business generated $36.8 million of revenue and $11.6 million of earnings before interest, tax, depreciation and amortisation (EBITDA). Go-To Skincare is expected to add to FY21 pro forma earnings per share (EPS) in the double digits when including $3 million of potential synergies.

The ASX share thinks that the Go-To acquisition is financially compelling and allows BWX to collaborate with one of Australia’s leading skincare entrepreneurs and support its ongoing growth.

BWX continues to report overall growth. In the first six months of FY22, underlying revenue went up 26.5% to $106.9 million, while underlying net profit after tax (NPAT) rose 22.1% to $4.7 million.

It’s currently rated as a buy by at least three brokers, including Citi, which has a lofty price target of $4.90. The broker thinks that the outlook is still promising for BWX.

City Chic Collective Ltd (ASX: CCX)

City Chic is a rapidly-growing retailer of clothing, footwear and accessories for plus-size women. It has different operations in different countries. City Chic is focused on Australia and New Zealand but has a growing presence globally. International operations include Evans, a UK-based company; Avenue, based in the United States; and Navabi, which is an EU-based company. It’s expanding in several regions.

The ASX share is experiencing a lot of growth. In the first half of FY22, sales increased by 49.8% to $178.3 million. The company said revenue growth was supported by a strategic investment in inventory to proactively manage risks associated with global supply chain volatility and deliver continued growth.

It has launched new marketplace partnerships and expanded its brands and ranges across all geographies as part of its “world of curves” growth strategies.

In the first eight weeks of the second half of FY22, City Chic said it had continued to deliver revenue growth in the US, with UK and EU operations showing signs of recovery and getting closer to pre-acquisition levels.

In addition, the partner businesses across multiple geographies have continued to show growth. The company said it would launch new programs and new ranges with existing partners, as well as new partnerships over the rest of 2022.

City Chic is currently rated as a buy by at least five brokers, including UBS, which has a price target of $5. UBS thinks the ASX share can keep capturing more of the market.

The post 2 ASX shares experts say ‘buy’ appeared first on The Motley Fool Australia.

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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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BWX 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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ASX dividend shares could be good targets to pursue in April 2022.

Investment income can be very valuable during a time when interest rates remain very low.

Businesses that are expected to grow their shareholder payouts in the coming years may be attractive to some investors. Here are two quality examples:

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

Soul Pattinson may be one of the more well-known ASX dividend shares. It has a market capitalisation of close to $10 billion, according to the ASX.

It’s an investment conglomerate with a portfolio of a number of different ASX shares and private businesses. Some examples of those holdings include TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Pengana International Equities Ltd (ASX: PIA), Pengana Capital Group Ltd (ASX: PCG), and Tuas Ltd (ASX: TUA).

Private investments include electrical engineering company Ampcontrol, swimming schools, Round Oak Minerals, financial services, and agriculture.

It has grown its dividend every year since 2000, which is the longest-running growth streak on the ASX. The ASX dividend share has also paid a dividend every year since it was listed in 1903.

The business continues to look for opportunities that can provide growth and reliable cash flow.

In its recent FY22 half-year result, the company reported that cash flow per share increased by 42%, while the dividend increased by 11.5% to 29 cents per share.

Sonic Healthcare Ltd (ASX: SHL)

Sonic is one of the larger healthcare businesses on the ASX.

Its primary operations relate to pathology in Australia, the USA, Germany, and several other countries. Sonic also has a growing imaging division.

The ASX dividend share has carried out significant COVID-19 PCR testing over the past two years in the countries where Sonic operates. This led to a significant rise in revenue and operating leverage, helping the bottom line.

In the recent FY22 half-year result, Sonic Healthcare announced that revenue increased another 7% to $4.76 billion, while net profit after tax (NPAT) grew by 22% to $828 million.

The company has been using its increased cash flow to make acquisitions, such as the Dallas-based ProPath and the Australian-based Canberra Imaging Group.

Sonic Healthcare is working on a pathology AI joint venture, which it thinks will be a powerful force in developing best-in-class AI diagnostic tools for pathology.

The ASX dividend share decided to increase its interim dividend by 11% to 40 cents per share. It says that it has a progressive dividend strategy.

While COVID-19 testing rules have changed, Sonic expects a sustainable level of COVID testing into the future, including routine COVID testing, screening programs, variant testing, whole genome sequencing, and antibody tests.

The post Are these 2 ASX dividend shares top buys for income in April? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Sonic Healthcare Limited and TPG Telecom 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Marcus Today portfolio manager Ben O’Leary reveals the two ASX shares investors can lean on during chaotic times.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Ben O’Leary: My name’s Ben O’Leary, I’m a fund manager here at Marcus Today. I’ve been in the role for about 12 months. Started with the income fund, and then I’ve taken over our growth fund as well, in combination with Chris Conway, who’s the co-manager here. I’ve been at the company for around four years now. 

We’ve got two SMA [separately managed account] funds. They’re essentially a managed fund, except the clients hold the ownership of the shares. We’ve got a growth and an income [product] — they’re both active with a top-down investment style. The growth has a focus on companies with growing operations and revenues, and we use a proprietary factor model that we’ve developed to narrow our focus there and the stocks that we’re looking at. Looking to beat the broader market, inclusive of dividends over a three- to five-year period on that one. In the income [product], we’ve got a primary focus of building a portfolio of reliable dividend payers with a yield above the market average.

MF: In terms of this interview, are we talking more the growth or the income product?

BO: The growth [product] is the main event. It’s got the larger amount of funds, and it’s also probably a little bit more exciting to talk about than income. Income is income. It’s got many of the same names that you hear about, so growth is what I’ll refer to.

Biggest convictions

MF: What are your two biggest holdings?

BO: It’s nothing too exotic here because we’re all retail money — we are servicing mostly super money. 

Appropriately, we’ve got holdings in the big end of the market. So the two biggest holdings we have are BHP Group Ltd (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), which are the two biggest stocks in the market. And they’ve held us in pretty good stead over the last six to 12 months. It’s been a good time to be in materials and financials with the kind of macro environment that we’ve seen.

MF: Do you foresee those two sectors leading the way for the rest of the year as well?

BO: Yeah. The market is ultimately pushed around by inflation, GDP numbers, and interest rates. And interest rate is the big focal point at the moment. We know they’re going higher, it’s just a matter of how fast. But we know materials and financials are both areas that do benefit from higher rates, so we’ve got no real concerns around being in those two. 

Obviously there’s some little things that can come along with the specifics of the companies — the iron ore price and CBA has results coming up in a couple months. But I would foresee that we would continue to have some pretty large holdings in those two.

MF: With the current uncertain times, one camp of experts reckon the bull market will resume and by the end of this year, we’ll end up higher than where we started. And then there’s the other camp who says this year is a bit of a write-off. 

How do you feel?

BO: I feel cautiously optimistic. I think we’re still in an environment where, even with the interest rates moving up, which obviously puts pressure on equities, we’re still talking about a cash rate that’s below 2% or a tiny bit above zero, which means that there is a lot of money in the world that needs to find a return greater than that. And equities is the main place to do that. 

It’s a lot more accessible than going and buying property and trying to get yield from rental or whatnot. So I think there’s going to continue to be money in there. You’re going to have to be careful where you play — but I’m cautiously optimistic.

The post 2 ASX shares to guide you through a turbulent 2022: expert appeared first on The Motley Fool Australia.

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• What is the outlook for ASX 200 mining shares in April?
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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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a subdued but positive fashion. The benchmark index rose 0.1% to 7,412.4 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise today despite a mixed night in the US. According to the latest SPI futures, the ASX 200 is poised to open the day 25 points or 0.35% higher. In late trade on Wall Street, the Dow Jones is down 0.15%, the S&P 500 is up 0.3%, and the Nasdaq is up 0.9%.

Oil prices smashed

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a bad day after oil prices sank overnight. According to Bloomberg, the WTI crude oil price is down 7.9% to US$104.89 a barrel and the Brent crude oil price has fallen 7.9% to US$111.10 a barrel. Lockdowns in Shanghai sparked demand fears.

Premier Investments rated as a sell

The Premier Investments Limited (ASX: PMV) share price could be overvalued according to Goldman Sachs. This morning the broker responded to the Peter Alexander and Smiggle owner’s half year results by reiterating its sell rating with a $24.30 price target. It said: “PMV continues to trade at elevated 1-year forward P/E on an associates adjusted basis (17.4x vs. peer group median of 9.4x).”

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a tough day after the gold price dropped overnight. According to CNBC, the spot gold price is down 1.4% to US$1,925.90 an ounce. A strong US dollar and higher bond yields put pressure on the safe haven asset..

Dividends being paid

A number of ASX 200 shares will be paying their latest dividends to shareholders this week. On Tuesday, this will include steel manufacturer BlueScope Steel Limited (ASX: BSL) and gold mining giant Northern Star Resources Ltd (ASX: NST).

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• These 3 ASX 200 shares are topping the volume charts on Monday
• Why Evolution, Fisher & Paykel Healthcare, St Barbara, and Zip shares are falling
• What is the current dividend yield on ANZ shares?
• Here’s why Macquarie just upgraded the Santos (ASX:STO) share price

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 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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If you’re looking to add some ASX 200 shares to your portfolio, then it could be worth checking out the two listed below.

Both have been rated as buys by the team at Morgans and tipped to climb materially higher from current levels. Here’s what you need to know:

QBE Insurance Group Ltd (ASX: QBE)

The first ASX 200 share to look at is QBE. Morgans believes the insurance giant’s shares are trading at a very attractive level, particularly given its improving outlook.

The broker currently has an add rating and $13.50 price target on the company’s shares.

Morgans explained: “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 ~12x FY22F PE.”

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX 200 share that could be in the buy zone right now according to Morgans is Treasury Wine. The broker likes the wine giant due to the quality of its Penfolds business, favourable tailwinds, and its highly regarded management team.

Its analysts have an add rating and $13.93 price target on the company’s shares.

The broker commented: “TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The company recently reported an impressive 1H22 result despite facing a number of material headwinds. The foundations are now in place for TWE to deliver strong double digit growth from the 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.”

The post Broker names 2 ASX 200 shares to buy with almost 20% upside appeared first on The Motley Fool Australia.

More reading

• Look out Treasury Wine (ASX:TWE), there’s a new shiraz on the block
• Here’s why the Treasury Wine (ASX:TWE) share price is tipped to outperform
• Lucky 13? The QBE Insurance share price is now up 13% in 2 weeks
• Top brokers name 3 ASX shares to buy next week
• 5 ASX shares to ride out the 2022 volatility: expert

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 Treasury Wine Estates 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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