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

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

Big news is about to hit the stock market, and you don’t want to be caught off guard when it happens. The Federal Open Market Committee (FOMC) is meeting this week to discuss monetary policy and interest rates, and there’s a strong chance that stocks will react sharply to new information that comes out of that meeting. Make sure that your investment portfolio is set up to handle one of the biggest events in the financial calendar.

Why the FOMC is important

The stock market has been heavily influenced by interest rates over the past two years, and the Federal Reserve is the driving force behind interest rate changes.

Interest rates are often associated with relatively low-risk assets, such as Treasury notes and investment-grade corporate bonds. When interest rates are high, investors can generate decent rates of return without taking on much risk. However, periods with especially low interest rates force investors to look elsewhere for better returns.

That exact process has been happening over the past few months. Low rates tend to increase demand for stocks, especially high-growth stocks with more speculative valuations. That was important fuel for the COVID-19 bull market.

The Fed controls interest rates by buying and selling securities (usually Treasuries) on the open market. When the central bank purchases bonds, it increases demand for these securities and injects cash into the economy. This drives down interest rates and stimulates economic growth, so it’s considered expansionary monetary policy.

Expansionary policy also tends to push inflation higher by stimulating demand for goods, services, and labor. The Fed sells securities and reduces the money supply if they want to raise rates.

The FOMC is the arm of the central bank that implements these strategies. The committee convenes every other month to discuss those actions, and the meetings are followed by a data release and a press conference. There’s an FOMC meeting this week, giving investors rare insight into one of the largest economic forces as it changes.

If any of the information from this week’s FOMC meeting differs from expectations, there’s a good chance that the market shifts once again. The market’s been shaky and the CBOE Volatility Index has been high, so any surprises from the Fed are likely to result in a big move up or down.

What to expect

There’s no way to know exactly what the Fed will do, so any forecasts are speculation and guesswork. Still, we can make some educated guesses and prepare for a range of outcomes.

The Fed’s core responsibility is balancing inflation and economic growth. Not everyone agrees with modern monetary policy, but there’s plenty of evidence to suggest that central bank activities can reduce the severity of recessions or put a cap on irresponsible economic expansion. The idea is that a smoothly growing, more predictable economy is better for everyone in the long run.

The basic playbook is to cut interest rates when unemployment is high and to raise rates when inflation is too high. February’s employment report smashed expectations, with nearly 300,000 more jobs added than anticipated. Unemployment dipped to a low of 3.8%, and there was also meaningful improvement among people who are underemployed due to economic reasons. We are closing in on pre-pandemic employment levels, which were very high.

Meanwhile, the latest inflation data indicates the largest consumer price increases in decades. Food and energy prices spiked due to supply shocks, adding to an already high inflation environment.

Since the FOMC last met in January, inflation has been higher than expected, while unemployment has been better than expected. That would indicate that the Fed will either maintain or accelerate its rate hike timeline.

Some people think that the Fed’s hesitation to take any action has caused the stock market to dip. It’s naive to think that the Fed doesn’t consider stock investors at all, but the monetary authorities have previously taken actions that resulted in a stock sell-off. Inflation is a threat to economic stability right now if it’s left unchecked, and the economy overall looks strong enough to absorb higher rates. Therefore, the monetary policy response seems pretty predictable.

Don’t be surprised if the market reacts negatively as the Fed takes a more aggressive stance against inflation. Prepare yourself mentally and emotionally for volatility so that you don’t panic if there’s bad news. Make sure that your investment portfolio has the proper balance of growth and volatility so that you’ll enjoy optimal results whether economic news is good or bad.

Remember: All of this is just a temporary disruption to long-term growth in the economy and stock market. You have to manage your way through this short-term stuff.

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

The post How will the Fed’s big announcement impact your investment portfolio? appeared first on The Motley Fool Australia.

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• Brokers name 2 excellent ASX dividend shares with big yields to buy

Ryan Downie has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 

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

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The Magellan Financial Group Ltd (ASX: MFG) share price sank to a new multi-year low on Tuesday.

Investors have been selling down the struggling fund manager’s shares this week after it revealed that its funds under management continue to dwindle.

However, pleasingly for its disappointed shareholders, the Magellan share price will be on watch today for a positive reason.

Why is the Magellan share price on watch?

As foreshadowed with the recent release of its half year results, this morning Magellan revealed that it is undertaking an on-market share buyback.

With the Magellan share price down 35% in 2022 and 70% over the last 12 months, it appears as though management believes now is an opportune time to put its cash balance to use and reward its long-suffering shareholders.

According to the release, Magellan intends to buy back up to 10 million ordinary fully paid shares, which represents up to 5.4% of its shares on issue.

Magellan’s Chairman, Hamish McLennan, commented: “We believe the on-market buy-back announced today represents an effective way to enhance value for shareholders. The buy-back is consistent with our aim to deliver capital efficiency, solid dividends and attractive returns for shareholders with a focus on our core funds management business.”

The release explains that the buyback will be funded from Magellan’s existing cash and financial assets. It will also be within the “10/12 limit” permitted under the Corporations Act. This means that the company may buy back up to 10% of issued capital in any 12-month period without shareholder approval.

Though, it warns that the timing and actual number of shares purchased will depend on the prevailing Magellan share price, market conditions, and other relevant factors. It also reserves the right to vary, suspend or terminate the buyback at any time.

The post Magellan (ASX:MFG) share price on watch after announcing share buyback appeared first on The Motley Fool Australia.

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The mining sector has been a great place to invest this year. Thanks to rising commodity prices, mining shares have been pushing higher while the rest of the market seemingly crumbles.

The good news is that it may not be too late to invest in the sector. For example, the three ASX mining shares listed below have been tipped as buys recently. Here’s what you need to know about them:

Lake Resources N.L. (ASX: LKE)

If you’re interested in gaining exposure to lithium, then Lake Resources could be worth a look. Analysts at Bell Potter are positive on the lithium developer and have put a speculative buy rating and $1.82 price target on its shares.

The broker said: “LKE’s key project is the 50ktpa lithium carbonate Kachi Lithium Brine Project in Argentina. This project is expected to employ direction lithium extraction technology which has enormous ESG benefits compared with incumbent brine and hard rock lithium production methods. With this development project, uncommitted product offtake and an independent share register, LKE has strategic appeal.”

Rio Tinto Limited (ASX: RIO)

The team at Goldman Sachs is bullish on this mining giant. Its analysts currently have a buy rating and $131.50 price target on its shares. Goldman likes Rio Tinto due to its valuation, strong free cash flow, positive iron ore price outlook, and its return to production growth in 2022. In addition, the broker highlights the miner’s compelling low emission aluminium exposure.

It commented: “In addition to copper production growth, Rio has one of the highest margin, lowest carbon emission aluminium businesses in the world, with over 2.2Mt of Ali production powered by hydro, and we think ELYSIS inert anode technology could be worth billions of $. Aluminium will contribute 20% of RIO’s group EBITDA and generate US$3bn of FCF in 2022 on our estimates.”

South32 Ltd (ASX: S32)

Goldman is also a fan of this diversified miner. The broker currently has a conviction buy rating and $5.90 price target on South32’s shares. Its analysts like the company due to its attractive valuation and strong free cash flow generation.

It explained: “The stock is trading at c. 0.9x NAV (A$5.34/sh) including the completion of the acquisition of a 45% stake in the Sierra Gorda copper mine in Chile.:

“We forecast a FCF yield of c. 20% in FY23 (over 25% at spot), driven mostly by exposure to base metal price momentum, met coal, a c. 30% or c. 280ktpa increase in aluminium production over the next 18 months from the Alumar restart & c. 17% increase in Mozal stake, creep in nickel from Cerro Matoso and lead/zinc/silver from Cannington, and uplift from the Sierra Gorda acquisition,” it added.

The post Brokers name 3 ASX mining shares to buy today 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 last time The Motley Fool spoke to Balmoral Asset Management director Angus Crennan, he was busy looking for underappreciated shares all around the world.

But what a difference just one year makes.

He shut down that fund in October. And now he’s started a digital assets fund, which will provide clients exposure to investments like cryptocurrency, blockchain, tokens, and decentralised finance.

Crennan told The Motley Fool that there was client demand for digital investments.

“There was a lot of conversation… could we put crypto into the traditional fund?” he said.

“[But] the version 1 fund… was designed in 2016 for friends and family’s capital.”

Why he closed the shares fund

In the second half of last year, Crennan felt like the old fund had achieved all it could.

“In traditional asset classes, the financial repression of the major central banks resulted in really low expected returns,” he said.

“And then the other side of that is that the valuations were so high, that the risks were really elevated.”

As it happens, he timed the exit almost perfectly. The S&P/ASX 200 Index (ASX: XJO) is down about 4.5% since late October.

His clients dodged January’s interest rate anxiety and now the war in Ukraine.

“We got the best of the old market conditions. And we saved our investors a lot of volatility,” said Crennan.

“It was only a matter of time for when a bull market like that hits a hiccup and there’s no room for any sort of disappointment or risk.”

He admitted some clients were upset that he wound up the old fund.

“We got to the point where we doubted whether we could continue to achieve the investor objectives. So it made sense to give everyone back their capital and say, ‘Look, this structure is not right for the times.’”

We’re ‘all-in’ on crypto and digital assets 

Crennan told The Motley Fool his team is now “all in on digital assets”.

“There’s 300 million digital assets users now. We fully expect that to be a billion by 2026,” he said.

“This is like double the speed of the uptake of the internet.”

To smooth out the ride for his clients and save them some of the volatility seen in cryptocurrencies, Crennan employs what he called a “delta neutral” approach.

“That means we’re not just buying cryptocurrencies with the expectation or the outlook that they are going to increase in value,” he said.

“We use the term digital to respect that holistic view of the entire space… The digital ecosystem, particularly decentralised finance [DeFi], now, is a huge part of digital assets.”

So with an asset base diversified from just crypto, Balmoral is aiming to “generate really strong returns without any market risk”. 

“For us, that’s like the real secret source… Here we’re able to completely divest all market and currency risk, and yet still generate double-digit returns,” said Crennan.

“It really is an incredible opportunity. And so we are really excited about it.”

His old clients shared Crennan’s enthusiasm and some have jumped right in.

“Many of them are excited by the proposition. Many of them are witnessing the growth, but they don’t really understand how big the growth has been.”

The post Why I closed my ASX shares fund then launched a digital assets fund appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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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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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, Investors Mutual Limited senior portfolio manager Simon Conn reveals 2 hot ASX shares to buy for years to come.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Simon Conn: Pact Group Holdings Ltd (ASX: PGH) and TPG Telecom Ltd (ASX: TPG), which are both top-5 holdings in the fund. Both look cheap with good management, and I think are really well-positioned for the next 3 to 5 years.

MF: If the market closed tomorrow for 4 years, which stock would you want to hold?

SC: I think both those stocks are ones that you’d be happy to own for the next 4 years. I think they’re both fundamentally very solid businesses, and well-managed, and have got really good businesses that are well-positioned to continue to grow and pay good income over the few years. 

I think the long-term structural trends for both industries, telco and packaging, are strong.

MF: They’re both sectors that don’t really go out of fashion, are they? There’s always a demand for them.

SC: Well, that’s the thing. We’re seeing a lot of disruption in the economy, [with] startup companies. There’s a lot of money around for startups or for new competitors, private equity-backed startups, so it’s a very competitive market. So you need to have a really strong competitive advantage, and also an ability to fend off competition.

Pact has really positioned themselves well at the centre of this circular economy trend, which is a big megatrend. We’re seeing a lot of consumer goods companies, such as Nestlé SA (SWX: NESN), Bega Cheese Ltd (ASX: BGA) and the like, moving to more sustainable practices, and that means using more recycled resin in their manufacturing. 

With Pact’s recent result, they announced a couple of contracts that they’ve won using recycled resin in their manufacturing process. Actually, today, they’re opening the Albury facility, which is their first reuse facility in the country, and that’s a real strong theme, I think, which will play through.

They’re the largest rigid plastic manufacturer in the country. That’s a very defensive business, so they’re effectively making the packaging. They just make sure that this enables fluids and liquid products to move from factory to the consumer or through industry. So whether it’s milk bottles, yoghurt tubs, margarine containers, the like. 

Because of the nature of the product, it has very resilient demand, very consistent cash flows. The volatility obviously comes from the resin price, because obviously, they buy a lot of resin. If they can lock in more reused resin, that’ll mitigate that cost, and because they’ve got the technology and the scale, they’re the natural go-to partner for a lot of these companies looking for a partner in terms of that circular economy solution.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

SC: Jeez, that’s a hard one. This game, every day is a battle. 

The COVID sell-off was a massive period of dislocation in the market, but I suppose not buying enough of these good-quality businesses, enough at the bottom. The share prices rallied very consistently off that, had a very sharp correction, and then they rallied very significantly. 

I suppose we should have bought more of the stocks we liked, because they all rallied significantly over the intervening 2 years.

MF: Did you have much cash in hand at the time?

SC: Yeah, look, what we did was we took the cash up to a reasonably high level, but there were numerous capital raisings, as you’re aware, in 2019, and we’d used that to participate in a lot of the capital raisings, which was a good performance for the fund. 

We did use the cash quite significantly, but the consumer discretionary sector is obviously one that rallied significantly. I suppose in hindsight we could have had more exposure to that… I suppose we were surprised at how quickly the economy took off, to be honest.

MF: I think everyone’s very keen to see, for the rest of this year, whether the same fast recovery happens or whether it’s more of a traditional long recovery.

SC: I think the last few years have been very volatile, and the reality in the world is, I don’t think that’s changing, mate. 

We haven’t seen a conflict like the scale of the one in Ukraine for many years, so many investors today have really no recollection of what this creates, and it’s a long time since we’ve seen this sort of escalation of commodity prices, so I think that creates a new paradigm for investors. 

The other thing that’s really compounding is that central banks around the world continue to hold rates at very low levels, where inflation is significant. Australia’s not as bad as the US, but you’ve got virtually zero cash rate in the US, and yet you’ve got inflation [at] 5%, 7%. It’s very negative real rates, and yet inflation is becoming more entrenched with the oil price at these sort of levels. 

It’s a very tricky environment for many investors, and I think the markets remain volatile. So in that environment, I think you’ve just got to stick to good-quality companies that are making cash flow today. 

There’s been a lot of companies in the market that have been bid up successfully, like concept [stocks], the PointsBet Holdings Ltd (ASX: PBH), or be it some of the more speculative tech stocks that don’t make money, and never made money, and people have been thinking that they’ll generate enough market presence to generate good cash or get taken over, effectively. But I think the market’s appetite to keep funding these things is becoming less certain, and so I think there’d be more discipline around making money, being profitable. 

A great sign of having a profitable company is paying a dividend, so I think those companies will come back into vogue. I think that’s definitely what we’ve seen over the last few months, the tech sector coming off and a lot of good-quality companies rerating.

The post 2 ASX shares that are on the right side of history: fund manager appeared first on The Motley Fool Australia.

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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. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd 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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If you’re looking for some ASX dividend shares to add to your income portfolio, then you might want to look at the ones listed below.

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

Adairs Ltd (ASX: ADH)

It has been a difficult start to the year for this leading furniture and homewares retailer’s shares. Since the beginning of 2022, the Adairs share price has lost almost a third of its value due to COVID headwinds impacting its performance.

While this is disappointing for shareholders, it could be a buying opportunity for non-shareholders. That’s the view of the team at Morgans, which believes the market is undervaluing its shares and overlooking its positive outlook.

It recently commented: “In FY23, we expect Focus [on Furniture] to have bedded down and to have started a strategy of improving store economics while expanding its footprint. We expect the NDC [national distribution centre] to be up and running and delivering efficiencies. We expect Mocka to be making its first steps towards an omni-channel strategy. These factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple. ADD.”

Morgans has an add rating and $3.50 price target on its shares.

In repect to dividends, its is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.84, this will mean yields of 6.7% and 9.1%, respectively, over the next couple of years.

Centuria Industrial Reit (ASX: CIP)

Another ASX dividend share to look at is Centuria Industrial. It is the largest domestic pure play industrial REIT, with a high-quality portfolio of properties across key metropolitan locations throughout Australia. These assets include in-demand areas such as distribution centres, cold storage, and transport logistics.

Although the company’s shares have rallied 25% higher over the last 12 months, the team at Macquarie doesn’t believe it is too late to invest. In fact, its analysts believe Centuria Industrial’s shares are attractively priced and that its portfolio is well-placed for growth thanks to tailwinds being experienced in the industrial sector.

The broker currently has an outperform rating and $4.27 price target on its shares.

And as for dividends, Macquarie is forecasting a 17.3 cents per share distribution in FY 2022 and a 17.8 cents per share distribution in FY 2023. Based on the current Centuria Industrial share price of $3.92, this will mean yields of 4.4% and 4.5%, respectively

The post Brokers name 2 excellent ASX dividend shares with big yields to buy 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. owns and has recommended ADAIRS FPO. The Motley Fool Australia owns and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The two ASX growth shares in this article could be the way to go according to some of the leading analysts in Australia.

These are businesses that are growing revenue quickly, have growing profit margins and have long-term growth planned. They are utilising digital business models to serve their customers and consumers.

Here are two ASX growth shares liked by experts:

Airtasker Ltd (ASX: ART)

Airtasker is currently rated as a buy by the broker Morgans, with a price target of $1.25. That suggests a potential doubling of the Airtasker share price over the next 12 months.

What does Airtasker do? It provides a platform that connects people or businesses that want work doing with people willing to do that work (for a fee). Airtasker takes a small cut of that transaction value.

The gross marketplace volume (GMV) of Airtasker is growing at a double-digit rate. Despite lockdowns in its two major markets of Sydney and Melbourne during the first half of FY22, Airtasker saw GMV increase by 15.5% year on year to $83.6 million.

After the lockdowns ended, Airtasker saw a “strong rebound” in the second quarter with GMV up 39% quarter on quarter to $48.6 million. It managed to achieve a record weekly GMV run rate of $4.5 million in December 2021.

It has a very high gross profit margin of 93%.

Not only is the number of tasks increasing on the ASX growth share’s platform, but the average task price is also going up. In December, the average task price reached $255 (up 24% year on year).

But the company is also targeting the much larger markets of the US and UK. In Australia, Airtasker says it has achieved a market share of 0.3% for the local service industries. If it achieved the same 0.3% market share in the UK and USA, that would translate to annual GMV of $210 million and $1.5 billion, respectively.

In the second quarter of FY22, Airtasker said task growth was 71% quarter on quarter in the US. Turning to the UK, second-quarter GMV grew by 121% year on year.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is currently rated as a buy by Morgan Stanley, with a price target of $4. That implies a potential doubling of the Adore Beauty share price over the next year.

This ASX growth share is the leading e-commerce platform for beauty products in Australia. It sells almost 12,000 products from over 270 brands.

The company has pointed out many times that it continues to benefit from the structural shift to online shopping. It is also seeing new customer growth, high levels of retention and growing brand awareness. All of these factors “strongly positions the company for future growth”.

Adore Beauty continues to see double-digit revenue growth. In the first half of FY22, revenue rose 18% to $113.1 million. Active customers rose 13%, whilst returning customers increased 56%. Annual revenue per active customer increased 5% year on year to $224.

The gross profit margin was 33.1%, an increase of 0.6 percentage points thanks to product margin expansion and brand funding.

The company is planning on launching its first private label brand. It’s also working on other priorities including its mobile app, loyalty and adjacency expansion. This ASX growth share operates in an $11 billion sector that is growing, and Adore Beauty is growing its market share within that.

In the first six weeks of the second half of FY22, it said that revenue had grown by another 14%.

The post 2 ASX growth shares experts think have exciting futures 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 recommended Adore Beauty Group Limited and Airtasker Limited. The Motley Fool Australia has recommended Adore Beauty 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 fund manager Wilson Asset Management (WAM) has recently identified two top small cap ASX shares that it owns in its portfolio that could be ideas.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There’s also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 21.7% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 9.3%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Seven West Media Ltd (ASX: SWM)

Seven West is a media corporation business with a “market-leading” presence on content production across broadcast television, publishing and digital, according to WAM.

In February 2022, the company announced its financial result for the six months to 25 December 2021.

WAM noted that the small cap ASX share’s profit before significant items, net finance costs and tax from continuing operations was $204 million, up 34% compared to the prior year.

The fund manager said that the strong result was reflective of its television network Seven returning to the number one position in ratings and the solid growth of the television advertising market.

Wilson Asset Management believes that Seven West Media’s future growth runway will be driven by its strong balance sheet and its potential expansion into subscription streaming services.

Swoop Holdings Ltd (ASX: SWP)

Swoop is an ASX share that provides national internet and telecommunications to wholesale business and residential customers with a focus on fibre and fixed wireless infrastructure.

The fund manager noted that in February 2022, the company reported its half-year result to 31 December 2021, which showed revenue growth of 62% as well as a 130% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) compared to last year.

Swoop finalised three acquisitions which will add to earnings with a further two acquisitions to be completed in the coming months.

At the end of the half-year period, the small cap ASX share had $44.6 million of cash and a $30 million loan facility which is close to finalising.

WAM noted that the Swoop share price didn’t do well in February. It dropped 9%. Swoop shares are down another 11.7% since the start of March 2022.

However, the fund manager is confident about the future because of the organic growth profile of the business, with additional potential upside coming from acquisitions.

The post Top fund manager rates these 2 small cap ASX shares as buys appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns WAM MICRO FPO. 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 Tuesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled lower. The benchmark index fell 0.7% to 7,097.4 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to rise

It looks set to be a better day for the Australian share market on Wednesday following a strong night in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.4% higher this morning. In late trade on Wall Street, the Dow Jones is up 1.8%, the S&P 500 is up 2.1%, and the Nasdaq is up a sizeable 2.8%.

Oil prices slump again

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices slumped further. According to Bloomberg, the WTI crude oil price is down 6.9% to US$95.94 a barrel and the Brent crude oil price has fallen 7.2% to US$99.23 a barrel. Easing supply concerns have been weighing on prices.

ANZ shares rated as a buy

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price could be in the buy zone according to analysts at Goldman Sachs. This morning the broker has been looking over the banking sector and reiterated its buy rating and $30.84 price target on ANZ’s shares. Goldman believes the market’s view on major bank net interest margins seems too bearish given its view on rates.

Gold price sinks again

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a bad day after the gold price continued to fall. According to CNBC, the spot gold price is down 1.9% to US$1,923 an ounce. This has been driven by Russia-Ukraine talks and traders betting on US rate hikes coming sooner than expected.

Inghams goes ex-dividend

The Inghams Group Ltd (ASX: ING) share price is likely to trade lower this morning. This is because the poultry producer’s shares are due to trade ex-dividend this morning for its fully franked 6.5 cents per share interim dividend. Eligible shareholders can look forward to receiving this distribution next month on 7 April.

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

More reading

• Here’s how ANZ plans to keep ‘decision making fair’
• Why has the Coles (ASX:COL) share price rallied 7% in a month?
• Leading brokers name 3 ASX shares to sell today
• Why Chalice Mining, Santos, Yancoal, and Zip shares are dropping
• Why is the crude oil price tumbling and which ASX 200 shares are being impacted?

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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Investors that are looking for some new shares to buy might want to look at the blue chips listed below.

These three blue chip ASX 200 shares have been tipped to climb meaningfully higher from where they trade today. Here’s what you have to know about them:

CSL Limited (ASX: CSL)

The first blue chip for investors to look at is one of the world’s leading biotechnology companies. CSL comprises the CSL Behring and Seqirus businesses, which are leaders in their respective fields – plasma therapies and vaccines. The company is also aiming to acquire Vifor Pharma in a blockbuster deal that will expand its product portfolio and pipeline. All in all, this deal, its billion-dollar per annum spend on R&D, and improving plasma collections, appear to have positioned CSL well for long term growth.

Yesterday the team at Citi retained its buy rating and $335.00 price target on CSL’s shares. Its analysts believe that plasma collections will bounce back beyond pre-pandemic levels this year. Citi expects this to be a big boost to investor sentiment.

Goodman Group (ASX: GMG)

Another blue chip ASX 200 share that could be in the buy zone is Goodman. It is a global integrated commercial and industrial property company with a world class property portfolio. These properties have exposure to key growth markets such as ecommerce and are in high demand. Thanks to this strong demand and its lucrative development pipeline, Goodman has been tipped to continue its strong growth long into the future.

Citi is also positive on Goodman’s future. Its analysts currently have a buy rating and $29.50 price target on its shares. The broker recently stated that it expects Goodman to outperform its upgraded earnings guidance in FY 2022.

ResMed Inc. (ASX: RMD)

A final blue chip ASX 200 share to look at is ResMed. It is a sleep treatment focused medical device company which has been tipped to continue its stellar growth long into the future. This is thanks to its world class products, significant market opportunity, the growing prevalence of sleep disorders, and, as Morgans highlights, its “unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

It is partly because of the latter that Morgans is positive on the company and has an add rating and $40.46 price target on its shares.

The post 3 quality blue chip ASX 200 shares analysts are tipping as buys appeared first on The Motley Fool Australia.

More reading

• Why CSL (ASX: CSL) shares climbed on Monday
• Why CSL, Dicker Data, Elders, and Virtus Health shares are charging higher
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Elders jumps, Magellan and Zip tumble
• $20k invested in these ASX shares 10 years ago is now worth…

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 CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed 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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