The Janus Henderson Group PLC (ASX: JHG) share price is in the red today.

Shares in the global fund manager closed at $47.62 yesterday and are currently trading for $45.89.

That puts the Janus Henderson share price down 3.6% in morning trade.

This comes as the company revealed who will be replacing Dick Weil as the new chief executive officer. Weil will be retiring from that position on 31 March.

Who will be taking over as CEO?

This morning, Janus Henderson reported that Ali Dibadj will take the reins as the new CEO, commencing no later than 27 June.

The Harvard educated 46-year-old previously served as chief financial officer and head of strategy at global asset manager, AllianceBernstein Holding.

Commenting on the appointment, Janus Henderson chairman Richard Gillingwater said:

As part of our CEO transition planning, we conducted an extensive internal and external search to identify an executive who both understands our business and has the necessary strategic expertise to help drive the firm’s next phase of growth for the benefit of our clients and shareholders. The Board is confident that Ali is the ideal choice to lead this great company into its next phase of growth and value creation.

Saying he was delighted with the appointment, Dibadj added:

I have long admired Janus Henderson’s commitment to deliver for its clients with investment and servicing excellence. The executive team, the Board, and I look forward to identifying, expediting, and capturing growth and innovation that creates value for our clients, employees, shareholders, communities, and all stakeholders.

Roger Thompson, Janus Henderson’s CFO, will step in as Interim CEO until Dibadj commences.

The company expects that Dibadj will also join the Board.

Janus Henderson share price snapshot

The Janus Henderson share price has struggled this year, down 21.2% since the opening bell on 4 January.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 3% year-to-date.

The post Janus Henderson (ASX:JHG) share price falls following new CEO appointment appeared first on The Motley Fool Australia.

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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 Incannex Healthcare Ltd (ASX: IHL) share price is having a tough time this morning. It sunk 7% from the open before recovering most of its losses and is now 0.71% in the red at 69.5 cents.

Investors are pushing Incannex shares lower after the company announced an acquisition deal.

Despite its shares taking a hit today, the medicinal cannabis company is still in the green across all major time frames, having climbed more than 235% in the past year.

What’s impacting the Incannex share price?

The Incannex share price is slipping after the company advised it had executed a term sheet to wholly acquire APIRx Pharmaceutical USA, LLC on a proposed all-scrip transaction price of US$93.3 million.

Incannex says APIRx is “an innovative biotechnology company focused on research, development, and production of prescription pharmaceutical cannabinoid medicines”.

It has 22 active clinical and preclinical research and development projects utilising its own proprietary technologies, the company added.

For Incannex, the acquisition is set to diversify its portfolio and give the company exposure to a wider array of markets, from pain to dementia to addiction disorders, just to name a few.

As a result, the company claims it now has an expanded total addressable market (TAM) of more than US$400 billion annually.

APIRx can also vote to have one board member designated to Incannex’s board after the transaction is completed.

Speaking on the proposed acquisition that might be affecting the Incannex share price today, CEO Joel Latham said:

We believe that bringing together Incannex and APIRx will bolster our position as a leader in the medicinal cannabinoid sector and will further set IHL apart from other players in the industry.

With sizeable addressable markets and intellectual property spanning a multitude of unmet medical needs, we’re positioning Incannex to be a significant player in the pharmaceutical sectors of the future. I’m excited by this acquisition opportunity on multiple fronts and look forward to working with the APIRx team to deliver on our vision of providing treatments which will make genuine differences to the lives of millions of people.

What’s next?

All the necessary steps are underway to get the transaction underway, but shareholder approval is needed first.

The company will hold an extraordinary general meeting to discuss the transaction and attempt to garner shareholder support.

Incannex will update the market on when this meeting will take place. It also provided some high-level cost estimates.

“Incannex anticipates budgeting approximately A$5.0 million of expenditure on the APIRx product suite in the first 12 months,” it said.

“However, the budget may be re-assessed to up to A$10 million following the conclusion, in April, of the Loyalty Option Offer, that could raise up to approximately A$28 million in development capital for the company.”

The Incannex share price is up 19% in the past month of trade and has climbed 9% this year to date.

The post Incannex (ASX:IHL) share price slips on acquisition news appeared first on The Motley Fool Australia.

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The author has no positions 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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Shares in BlueScope Steel Ltd (ASX: BSL) are performing well lately and have charged 5% into the green over the past month.

On the last check, the Bluscope share price was fetching $20.56 apiece, having finished less than 1% in the red on Thursday.

As commodity baskets soared to record highs in 2021, Aussie miners have been returning cash to shareholders in droves by way of dividends and/or share buybacks.

Analysts at JP Morgan are constructive on Bluescope and reckon FY22 could be a year that sees considerable total shareholder return for those patient enough to stick with the company.

Still generating mammoth free cash flow

JP Morgan analysts note that steel prices have begun to catch up to input costs, with coking coal up around 60% at the time of its report whilst pig iron and iron ore were up 33% and 10% respectively.

The impulse caught up to steel prices in the US and Europe after a delayed response, with steel rebar climbing around 5% in the past month and over 18% since November.

This gain should feed cash down through Bluescope’s P&L, JP Morgan says, resulting in huge amounts of free cash flow (FCF) generation that could be redistributed back to shareholders.

“Despite declining from recent highs, spot spreads are still generating a strong 18% FCF yield for BSL from FY23 onwards, and spot earnings are still within the BBG consensus range,” it said.

“This highlights that despite strong cost inflation, BSL remainshighly FCF generative”.

FCF yield is a ratio that highlights a company’s ability to meet its financial obligations, but also its ability to support dividend growth, and other capital budgeting decisions.

The higher the yield, the greater prospect for Bluescope to reward its shareholders with a consistent stream of income via dividends.

In fact, that’s one thing JP Morgan likes in Bluescope’s investment debate – the fact it has “a shareholder return focus” in its mantra.

The steel giant is one of the broker’s favourite picks in FY22, backed by robust fundamentals and high prospects for outsized return.

“We continue to rate BSL as one of our preferred stocks under coverage, based on its valuation support, growth outlook, ongoing capital management, balance sheet strength, and backdrop of strong demand conditions,” it mentioned.

“Over time, we expect the company to grow domestic volumes in Australia, which should improve margins, while the North Star expansion also offers potential growth”.

With the prospects of a FCF yield in the high teens for FY22, JP Morgan projects Bluescope to deliver a dividend of 50 cents per share, followed by another 50 cent payment in FY23 and then again in FY24.

It also values the company at $25 per share whilst urging its clients to buy up shares at the current prices. Currently, the Bluescope share price is trading below the consensus valuation of $23.50, a spread of roughly $3 per share at the time of writing.

Bluescope share price snapshot

In the last 12 months, the Bluescope share price has climbed 10%, but it has slipped into the red since trading restarted in January.

During the previous month of trade, shares have picked back up and are now trading 5% in the green.

The post Is a 50c dividend on the cards for Bluescope (ASX:BSL) in FY22? appeared first on The Motley Fool Australia.

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

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The Zip Co Ltd (ASX: Z1P) share price is suffering this year, falling more than its fellow ASX-listed buy now, pay later (BNPL) peers.

And the past 30 days have seen that gap widen. Australia’s biggest BNPL stock has seen its value tumble by around 24% since this time last month. The Zip share price is currently down 3.95% today at $1.58.

For context, the second worst-performing ASX BNPL share is Sezzle Inc (ASX: SZL). Its stock has slipped around 7% over the last month.

Let’s take a look at what might be dragging on the Zip share price lately.

What’s behind the ZIP share price’s recent tumble?

Zip’s stock has tumbled 64% since the start of 2022.

That sees it taking the rear among its BNPL peers, of which Humm Group Ltd (ASX: HUM) has come out as one of the best performers. It has fallen just 12.5% in 2022.

However, the Zip share price has really underperformed over the last month, despite the announcement of a major acquisition.

As most market watchers will be aware, Zip and Sezzle are planning to come together in an all-scrip acquisition by the September quarter, subject to approvals.

Brokers’ mixed opinions regarding the transaction might have weighed on the BNPL provider’s stock lately.

Additionally, Zip’s recent $148.7 million capital raise and the release of its half-year results might have further dampened market enthusiasm for the company’s share price.

Zip officially released its half-year results late last month, detailing an 89% increase in revenue and a 92% increase in transaction volumes.

However, rising costs (the company’s cost of sales increased 192.5% last half) pushed Zip’s gross profits 23.2% lower.

Zip also offered 78.3 million new shares for $1.90 apiece as part of its recent institutional placement. At the time, the offer price represented a 14% discount to Zip’s stock’s previous closing price.

Finally, Zip is currently undergoing a share purchase plan, offering eligible shareholders the option to buy up to $30,000 worth of shares.

Under the plan, each new share will cost participating investors either $1.90 or a 2% discount on the Zip share price’s five-day volume-weighted average price for the period ending 1 April, whichever is lesser.

All that is likely weighing on the BNPL giant’s stock and might be causing it to underperform its peers.

The post Why is the Zip share price getting smashed so much more than other BNPL stocks in 2022? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended Humm 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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Telstra Corporation Ltd (ASX: TLS) is taking a novel approach at meeting its carbon reduction emissions. One that includes plans for a fleet of tree tending drones.

If you own Telstra shares, you’ll own part of that fleet.

So, what exactly is the S&P/ASX 200 Index (ASX: XJO) telecom giant planning?

How is the telco planning to create carbon credits?

As reported by The Australian Financial Review, Telstra intends to plant 158,000 indigenous trees and shrubs across 240,000 hectares of land in northern New South Wales.

The project will employ drones to plant the seeds and monitor tree health. It’s estimated that the trees will pull some 160,000 tonnes of CO2 from the air over the next 25 years.

The land in question, according to Telstra, isn’t agricultural. Rather it’s land that needs repair and will be returned to its natural state.

As for the reasoning behind the company’s plans, Telstra’s CEO, Andrew Penn said that the price of carbon credits “is quite volatile” and they’re “increasingly difficult to come by”.

According to Penn:

Rather than just shop around, what I said to the team is: ‘Well, why is that the case? Why is that a problem?’ And, of course, part of the problem is we don’t have enough carbon farming projects to, basically, create those carbon credits.

And the telco’s futuristic project isn’t limited to seed planting drones.

“Other technologies we intend to explore include the use of robotics and artificial intelligence to improve pest and weed management,” Penn said. “And drones and sensors to monitor tree health and calculate the carbon stored in trees.”

Penn said Telstra’s networks, which support Australia’s booming digital economy, require a lot of electricity to run.

According to Penn (quoted by the AFR):

That’s driving more and more consumption, which then requires energy to run. So this is part of that overall mix of how we support development of carbon credits but also reduce our absolute [emissions] output at the same time.

How have Telstra shares been tracking?

Telstra shares, up 0.1% in early trade today, have been trailing the benchmark in 2022.

Year-to-date Telstra shares are down 7.5%, compared to a loss of 3% posted by the ASX 200.

The post Own Telstra shares? Here’s how the telco plans to use drones to create carbon credits appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation 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 National Australia Bank Ltd (ASX: NAB) share price is falling on Thursday.

In morning trade, the banking giant’s shares are down 0.75% to $31.49 amid broad weakness in the sector.

This is despite NAB making a positive announcement prior to the market open.

What did NAB announce?

This morning NAB announced that it has now completed its $2.5 billion on-market buy-back, which resulted in a total of 86,925,469 ordinary shares being bought back by the banking giant.

However, it is not settling for that. Thanks to its strong capital position, the bank plans to launch another new on-market buy-back.

According to the release, NAB intends to commence a further on-market buy-back of up to $2.5 billion, bringing the total potential combined size to $5 billion. Subject to market conditions, NAB expects to commence the further buy-back following its half year results release on 5 May 2022.

The release notes that the new buy-back will allow NAB to continue managing its Common Equity Tier 1 (CET1) capital ratio towards its target range of 10.75% to 11.25% over time.

NAB’s Group Chief Executive Officer, Ross McEwan, explained: “Our capital management strategy reflects the importance of maintaining a strong balance sheet through the cycle while allowing us to continue to support growth and deliver improved shareholder returns. The further $2.5 billion on-market buy-back announced today supports our ambition to reduce share count and increase sustainable ROE benefits for our shareholders.”

What impact will this have on its capital position?

NAB advised that it continues to operate well above APRA’s Unquestionably Strong benchmark of 10.50%, with a reported CET1 capital ratio of 12.4% as of 31 December 2021.

The further $2.5 billion on-market buy-back will reduce its CET1 capital ratio by approximately 58 basis points. Combined with other adjustments such as the Citi acquisition, on a pro forma basis, NAB’s CET1 capital ratio would be 11.3%.

This remains comfortably ahead of APRA’s benchmark, which potentially provides scope for even more shareholder returns in the future.

The post NAB share price lower despite new $2.5bn buyback 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 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 Cochlear Limited (ASX: COH) share price has recovered most of its lost ground over the past couple of years. It’s almost back to where it was before the COVID-19 pandemic hit the world.

Cochlear describes itself as a leader in implantable hearing devices that help to restore hearing and connect people to a world of sound.

Is the Cochlear share price going to keep rising?

No one has a crystal ball that can say exactly what share prices are going to do next.

However, analysts can estimate what they think a business is worth and the direction a share price is headed.

Citi is one of the latest brokers to give an updated opinion on the business.

The broker has a buy rating on Cochlear shares with a price target of $235. That implies a possible upside of around 5% over the next 12 months.

Citi has noticed the recent ASX share market volatility. The prospect of interest rates going up as well as the Russian invasion of Ukraine has caused a pullback on the Cochlear share price.

However, the reason for optimism about the ASX healthcare share is COVID-19 impacts subsiding could mean a boost for Cochlear.

Analysts at Morgans also expect the company’s positive performance over the last 12 months to continue in coming years. Morgans has an add rating and a $233.20 target on the Cochlear share price.

Cochlear’s recent growth and outlook

In the recent FY22 half-year result, the company reported that Cochlear implant units increased by 7% to 18,598 with sales revenue growing 10% to $815.3 million. Cochlear said there was strong demand for sound processor upgrades and new acoustic implant products.

However, Cochlear implant revenue continued to experience variability in performance across countries with intermittent COVID-related restrictions reducing operating theatre capacity.

Developed market volumes were ahead of pre-COVID levels despite a modest decline in the half, and its market share position remained “strong”.

Cochlear reported that underlying net profit after tax (NPAT) grew by 26% to $157.5 million.

In terms of the outlook, the company said the underlying net profit guidance range was still $265 million to $285 million, which would represent an increase of between 13% and 22% on FY21. That guidance now includes cloud computing expenses and anticipates continuing COVID-19 impacts for the rest of the financial year.

The second-half trading was tracking in line with the first half. Elective surgery restrictions are hampering some activity. Operating theatre capacity is also being affected by hospital staffing shortages. It’s expecting a lower rate of growth for Cochlear implants for the financial year than originally forecast.

However, despite the ongoing disruption to surgeries caused by COVID, Cochlear continues “to be confident of the resilience” of its business over the longer term.

Long-term opportunity

The Cochlear share price could be influenced by the company’s ability to capture the market opportunity ahead.

The World Health Organisation estimates there are more than 60 million people worldwide who have severe or higher hearing loss. Cochlear says there is a significant, unmet, and addressable clinical need for implantable hearing solutions, with less than 5% market penetration.

It benefits from a growing annuity income stream from the servicing of the expanding recipient base.

Cochlear share price snapshot

The Cochlear share price is down 1.68% at $219.56 in early trading today. However, it is up around 5% over the past year and more than 3% this year to date.

It is now trading at similar levels to what it was before the COVID-19 pandemic took hold in March 2020.

The post The Cochlear (ASX:COH) share price has bounced back from the pandemic. Are there more gains to come? 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. owns and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

A little over two weeks after it announced receipt of “conditional approval” to open its $5.5 billion gigafactory in the town of Grünheide near Berlin, Tesla (NASDAQ: TSLA) officially announced the factory’s opening on Tuesday. Reports say that CEO Elon Musk literally danced in joy at the opening.  

Investors are pretty happy, too, because today, Tesla stock is up 3.3% as of 11:05 a.m. ET. 

So what

Why is this such a big deal for Tesla? As The Wall Street Journal explained yesterday, Tesla plans to grow its Berlin gigafactory to the point where it will be able to produce 500,000 cars per year — but that’s just one part of the good news.  

By building cars in Europe, Tesla will be able to avoid both the cost of shipping cars to Europe from plants in the U.S. and China as well as import tariffs — two factors that should lower the price of its cars, encourage more sales in Europe, and make Tesla better able to compete with local car rivals such as BMW and Volkswagen. As Musk said in a statement, “[It] makes a huge difference to capital efficiency to localize production within a continent.”

Additionally, the plant’s location in Germany will make it easier for Tesla “to tailor vehicles to local tastes,” notes the Journal, which should also help with sales.

Now what

Not that Tesla necessarily needs help. As the Journal points out, sales of electric vehicles (EVs) and plug-in hybrids in Europe nearly doubled as a percentage of overall sales last year, to 18%. Tesla’s biggest challenge at this point will be ramping up production to satisfy all the demand for EVs in Europe.

Granted, as the CEO pointed out last night, “The start of production is nice, but volume production is the hard part.” But with Tesla targeting 5,000 to 10,000 cars per week produced by the end of this year, it seems the new German plant will be at least 50% operational — and potentially even fully operational — in just eight more months, maxing out its 500,000 car-per-year capacity.  

Simply put: Tesla’s off to the races in Germany. No wonder investors are excited. 

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

The post Why Tesla stock went up again appeared first on The Motley Fool Australia.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BMW. 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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The JB Hi-Fi Limited (ASX: JBH) share price is charging higher on Thursday morning.

At the time of writing, the retail giant’s shares are up 4% to $52.76.

Why is the JB Hi-Fi share price charging higher?

Investors have been bidding the JB Hi-Fi share price higher today after the retailer released an update on its sales performance during the second half.

According to the release, for the period 1 January to 23 March 2022, the company continued to see heightened customer demand and strong sales growth.

The JB Hi-Fi Australia business was the star of the show, with comparable store sales up 10.5% during the period. This led to total JB Hi-Fi Australia sales growing 11.3% quarter to date. This means that total JB Hi-Fi Australia sales year to date are now up 1.5%.

It was a similar story for The Good Guys business, which reported a 5.1% increase in comparable store sales and a 5.7% lift in total sales. This has taken its year to date sales growth to 1%.

Another positive was the improving performance of the JB Hi-Fi New Zealand business. After posting sales declines during the first half, it has bounced back and has delivered a 2.9% lift in comparable store sales and total sales so far in the third quarter. As a result, the JB Hi-Fi New Zealand business’ sales are now down 2.5% year to date.

What about profits?

While JB Hi-Fi hasn’t provided any earnings estimates for the period, it has revealed that operating leverage has been achieved.

Management commented: “This sales growth, combined with disciplined cost control, and stock availability and sales mix benefits in gross margins, particularly in The Good Guys, drove strong operating leverage across the Group.”

But with trading conditions remaining hard to predict, management won’t be providing any guidance at this point.

It advised: “Whilst the Group is pleased with the start to the second half, in view of the ongoing disruption arising from Covid-19 and other local and global uncertainties, the Group does not currently consider it appropriate to provide FY22 sales and earnings guidance.”

The post JB Hi-Fi (ASX:JBH) share price charges higher on strong Q3 sales growth 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 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 Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price is in the spotlight this morning after it posted an increase in interim profit and dividend in its financial results for the first-half of FY22.

The diversified investment firm reported a 281% uplift in adjusted profit after tax to $343.7 million and lifted its dividend by 11% to 29 cents a share.

Write-down drags Soul Pattinson to statutory first half loss

However, statutory net profit after tax (NPAT) swung dramatically to a loss of $643 million in the six months to end January 2022 from a gain of $68.9 million in 1HFY21.

The loss was largely due to a one-off write-down of goodwill associated with its acquisition of Milton Corporation.

Operational highlights

• Net cash flow from investments on a like-for-like basis (excluding the acquisition of Milton) was up 81% (compared with first half FY21).
• Pre-tax net asset value per share up 3.4% for the period (outperformance of 8.6% against market).
• After tax net asset value per share up 17.7% over first half (outperformance of 22.9% against market).
• Milton successfully integrated and providing greater diversification and liquidity to pursue new investments across a range of asset classes.

Exposure to materials lifts Soul Pattinson’s first half profits

But shareholders still have many reasons to cheer. The sharp increase in Soul Pattinson’s “regular” NPAT is driven by several factors.

It’s exposure to resources and material is one factor. The group owns a large stake in coal miner New Hope Corporation Limited (ASX: NHC) and copper and zinc miner Round Oak Metals.

Its holdings in Brickworks Limited (ASX: BKW) is no doubt a boon too. This is especially after the building materials and property group also delivered a large increase in profits.

Commenting on the results, group managing director Todd Barlow said:

We are particularly pleased with the strong performances from New Hope, Brickworks and Round Oak Metals which all saw significant increases in profitability.

Our focus is on investing in, and supporting, businesses with strong prospects over the long term and backing good people to manage those investments. Resilient businesses which are low-cost and generate solid cashflows should continue to perform in all parts of the cycle.

Rising markets and merger benefits

Another driver for Soul Pattinson’s strong profit results is the strong returns generated by the S&P/ASX 200 Index (Index:^AXJO) during the reporting period.

Management also credits the higher dividends it collected from its large cap share portfolio for the profit surge.

Then there is its acquisition of Milton, which contributed positively to its earnings report card. The merger helped pushy net cash flow from investments by 42% per share.

Further, it improved liquidity in Soul Pattinson’s shares and lifted net asset value per share by 17.7% over the first half. This represents an outperformance of 22.9% against its market benchmark.

Positive outlook could bolster Soul Pattinson’s shares

Management has painted a rosy outlook for the group. Barlow said that operational performance across the group’s portfolio “continues to be robust”. This is despite COVID-19, devastating floods and geopolitical tensions.

What’s more, Soul Pattinson hinted that it has sufficient firepower to buy the market dip. It was a net seller of assets during the reporting period when valuations were higher.

It noted that valuations have dropped to more reasonable levels and it sees strong opportunities in private equity and structured credit.

The post Soul Pattinson (ASX:SOL) share price on watch after 281% surge in net profit 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. 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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