The Insurance Australia Group Ltd (ASX: IAG) share price performed strongly in February, gaining 8.49%.

For comparison, the S&P/ASX 200 Index (ASX: XJO) gained just 1.11% over the same period.

As of the final close of February, the IAG share price was $4.60.

Let’s take a closer look at how the insurer’s stock performed last month.

What boosted the IAG share price in February?

The IAG share price gained 4.18% on the release of the company’s results for the first half of financial year 2022.

The gain came despite the company reporting a 4.4% decrease in revenue – coming to around $9.2 billion – and a 62% decrease in cash earnings – falling to $176 million.

That likely resulted in IAG’s decision to cut its dividend to 6 cents per share – a 14.3% drop.

However, the insurer showed confidence in its future performance, upgrading its guidance on gross written premium growth from low single-digit growth to mid-single digit growth.

It also stuck by its insurance margin guidance of between 10% and 12%.

There was more good news from the company later that month.

On 22 February, it released news of a favourable appeal judgement handed down by the Full Court of the Federal Court of Australia regarding business interruption insurance policies.

The Full Court agreed with previous conclusions that generally found that business interruption policies weren’t intended to provide coverage for pandemic-related losses.

Unfortunately, the IAG share price ended the month with a sizeable tumble.

It slipped 6.5% over the final 3 sessions of February despite the company’s silence. Though, the drop coincided with major flooding in south-east Queensland and northern New South Wales.

Since the end of last month, the IAG share price has slipped to trade at $4.45.

That’s 0.2% lower than it was at the start of 2022. It is also 7.4% lower than it was this time last year.

The post The IAG (ASX:IAG) share price managed to gain 8% in February. Here’s how appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• ‘$2 billion cost’: How are the floods impacting ASX 200 insurance shares this week?
• IAG (ASX:IAG) share price slumps amid $300m Greensill hit
• Why is the IAG (ASX:IAG) share price sliding this week?
• 4 ASX shares that love rising interest rates: report

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. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Insurance Australia 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 BHP Group Ltd (ASX: BHP) share price has outperformed the S&P/ASX 200 Index (ASX: XJO) since the start of 2022.

In the year to date, BHP shares have risen by 18% whilst the ASX 200 has actually fallen by 6%.

After outperformance of more than 20% in the first couple of months in 2022, what’s next for the resources giant?

Plans for growth

BHP is one of the largest businesses in the world with a market capitalisation of $253 billion according to the ASX.

However, the company’s management is now looking at growth options for the business.

The last decade has included some significant divestments by BHP. For example, it divested South32 Ltd (ASX: S32) and it is on track to merge the petroleum segment with Woodside Petroleum Limited (ASX: WPL).

Once that divestment happens, that will leave the business with the following exposures: iron ore, coal, copper, nickel and potash.

The boss of BHP, Mike Henry, has spoken to the Australian Financial Review about the company’s plans. He said:

One of the objectives I have is to create and secure more options for growth in future-facing commodities, which we’ve said are copper, nickel and potash.

As the world progresses on decarbonisation and electrification, it’s going to need more copper and nickel.

There’s a huge opportunity ahead for Australia in resources. You only have to think about where we sit geographically.

You’ve got billions of people in broader Asia and South-East Asia, all seeking a higher standard of living where we’re going to see growth for decades to come. Australia is at the centre of all of that and able to help make some of that happen.

Different resources will play a key part

Whilst iron ore has been a very important commodity for Australia’s resources boom over the last decade (and have helped the BHP share price), it could be other materials that grow in importance over the next decade.

Mr Henry said that Australia is going to have to work harder to stay competitive and take advantage of the global demand for some of the commodities that it offers.

Australia isn’t a world leader in copper, nickel or potash. But it is doing well with lithium for electric vehicles and other types of energy storage.

One suggestion for Australia was that it can increase funding to support smaller-sized businesses that can help with exploration, cybersecurity and new technologies for mining according to the AFR. Those businesses could then expand globally and/or into other sectors.

Higher performance?

Mr Henry is aiming for growing value for shareholders.

How can BHP achieve that? It can be done with “sustained operational excellence” which can produce both financial returns and allows management to focus on growing the business in other areas.

The company is going to be pursuing those future-focused commodities like copper, nickel and potash. BHP is working on removing its whole thermal coal business, as well as a lot of its metallurgical coal business.

BHP share price target from brokers

UBS rates BHP shares as ‘neutral’, though the price target is only $42 on expectations of lower resources prices over the next year or two. It also thinks BHP will have to start choosing between investing for growth and paying big cash payments to investors.

However, Macquarie currently rates BHP as a buy with a price target of $53 thanks to the current strong environment for commodities.

The post Up 20% this year, what is the outlook for the BHP (ASX:BHP) share price? appeared first on The Motley Fool Australia.

More reading

• Why is the iron ore price hitting 6-month highs?
• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis
• Why BHP (ASX:BHP) is ‘having its time in the sun’: expert
• ‘Hope for the best and plan for the worst’: BHP boss
• Here’s how these top 3 ASX 200 mining shares performed in February

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 Macquarie 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 AGL Energy Limited (ASX: AGL) share price will be one to watch on Monday.

This follows the release of a takeover update exactly two weeks after the last.

Why is the AGL share price on watch?

As readers might recall, two weeks ago AGL received a takeover offer from a consortium led by Brookfield Asset Management and Atlassian co-founder Mike Cannon-Brookes’ private investment firm, Grok Ventures.

The parties, collectively known as the Brookfield Consortium, made a non-binding offer of $7.50 per share, which was swiftly rejected by the energy giant.

This morning AGL revealed that the Brookfield Consortium has returned with an improved offer.

According to the release, the consortium has made a revised unsolicited, preliminary, non-binding offer to acquire 100% of the shares in AGL Energy for $8.25 per share by way of a scheme of arrangement. This represents a 10% increase on its previous offer and an 11% premium to the current AGL share price.

However, this is still not enough to tempt the AGL Board. It has just as quickly rejected the new offer on the grounds that it is still well below both the fair value of the company on a change of control basis and relative to the expected value of the proposed demerger.

Why was it rejected?

AGL’s Chairman, Peter Botten, explained why the Board has rejected this latest offer.

He said: “The Revised Unsolicited Proposal continues to ignore the opportunity that AGL Energy shareholders have through our proposed demerger to realise potential future value. It also ignores the momentum we have recently seen in the business through our solid half year result, strong progress on the demerger, strong interest in our Energy Transition Investment Partnership and the improvements we are seeing in forward wholesale prices.”

“The proposed demerger will be a catalyst for the potential realisation of shareholder value. It will create two industry leading companies with distinct value propositions. It will allow each business to be valued separately and more positively by the market on the basis of their own specific business fundamentals. We have defined distinct dividend policies and capital structures for each company that will support both future growth and appropriate returns to shareholders, as both organisations pursue their commitment to responsibly decarbonise without impacting energy reliability and affordability,” he concludes.

The post AGL (ASX:AGL) share price on watch amid improved takeover offer appeared first on The Motley Fool Australia.

More reading

• Will Mike Cannon-Brookes bring an extra $1 billion to the table in his AGL takeover bid?
• Why did AGL (ASX:AGL) shares smash Origin in February?
• Shareholder calls out AGL (ASX:AGL) planned demerger as ‘value destructive’
• These 5 ASX 200 shares are trading ex-dividend today
• Here’s why Mike Cannon-Brookes isn’t giving up on AGL (ASX:AGL)

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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S&P Dow Jones Indices has just announced changes to the S&P/ASX 200 Index (ASX: XJO).

These changes are for the March quarterly rebalance, that will take place at the commencement of trade on 22 March.

ASX 200 exits

A total of four ASX 200 shares will be kicked out of the index later this month.

These are struggling biotechnology company Mesoblast limited (ASX: MSB), casino and resorts operator SKYCITY Entertainment Group Limited (ASX: SKC), New Zealand telco Spark New Zealand Ltd (ASX: SPK), and shopping centre operator Unibail-Rodamco-Westfield (ASX: URW).

This could be bad news for these shares, as when a company is removed from the ASX 200, it can lead to an increase in selling. This is because index funds that track the ASX 200 will need to sell these shares in order to reflect the changes.

In addition, some fund managers have mandates that mean they are only allowed to own shares that are included in certain indices. With these shares now dumped out of the benchmark index, they could soon be dumped out of portfolios of fund managers that are only allowed to own shares included in the ASX 200.

ASX 200 additions

Replacing these shares in the benchmark index on 22 March will be lithium exploration company AVZ Minerals Ltd (ASX: AVZ), plus sized fashion retailer City Chic Collective Ltd (ASX: CCX), gold explorer De Grey Mining Limited (ASX: DEG), and property company Home Consortium Ltd (ASX: HMC).

Their inclusion in the index could have a positive effect on their respective share prices for the same reasons mentioned above, but in reverse. Fund managers (with ASX 200-only mandates) that have wanted to own these shares will soon be able to, and index funds tracking the ASX 200 will have to purchase shares as part of the rebalance.

The post These ASX 200 shares are being dumped out of the index and replaced with… appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week
• Here are 4 ASX shares insiders are putting their money behind
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• Is now the time to buy these 2 beaten-up ASX shares in March 2022?

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 Xero Limited (ASX: XRO) share price could represent a top investment opportunity at the moment.

For readers that aren’t aware, Xero is a cloud accounting software business that aims to provide beautiful accounting to users.

There are many different users in the ecosystem including business owners, accountants, bookkeepers, advisors and employees.

It aims to make things easy to understand, simple to use, efficient and increasingly automated.

This offer is resonating with customers and that’s one of the first reasons why the Xero share price could be a smart idea:

Subscriber growth

Xero has come a long way over the last decade. Its cloud-only software has won over millions of subscribers. In the FY22 half-half-year result, Xero revealed its total subscribers had reached 3 million, up 23% year on year.

It now has a very strong position in New Zealand and Australia. But the company is growing quickly in several other countries too like the UK, South Africa and Singapore.

The company recently made an acquisition (called TaxCycle) in Canada that has quickly ramped up its presence in the country, which has a materially bigger population than Australia.

Strong metrics

One of the factors that may be helping the Xero share price is a number of its strong metrics.

It has a very high gross profit margin (over 87% and rising), which allows the business to re-invest a high proportion of its new revenue into more growth investing. Management is indeed prioritising spending growth over generating a big net profit at this stage.

The average revenue per user (ARPU) increased by 5% to $31.32 in HY22. Churn also remains very low.

The above factors helped the annualised monthly recurring revenue (AMRR) increase by 29% to $1.13 billion in HY22. Xero’s lifetime value of subscribers increased 61% to $9.94 billion.

Growing ecosystem

Xero wants to be the leading global platform for smaller and medium businesses around the world.

For a long time, the company has provided a very powerful accounting and business management system for business owners and accountants. But it has also allowed external software developers to provide support and technology for businesses with extra analysis, unique inventory management tools and so on. There are lots of different options.

Xero has also been acquiring businesses to expand its offering. Recent acquisitions include: Planday, Tickstar and Waddle.

Xero share price target

Morgan Stanley rates the business as a buy, with a price target of $137. That’s approximately 40% higher than where it is today.

The post Here’s why the Xero (ASX:XRO) share price is a top buy right now: expert appeared first on The Motley Fool Australia.

More reading

• Goldman says the tech selloff has made Xero (ASX:XRO) shares a buy
• 5 things to watch on the ASX 200 on Friday
• 3 ASX tech shares going gangbusters today
• 2 top ASX growth shares that have been heavily sold off
• Analysts see huge upside potential for these beaten down ASX tech shares

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 Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A little-known ASX stock that represents a supplier for the ubiquitous Chemist Warehouse chain is set to zoom ahead this year.

That’s the opinion of Prime Value portfolio manager Shih Thin Wong, who said that in turbulent times such as now, businesses with resilient demand would win.

“I want to be comfortable owning companies which I think will give me earnings growth profile regardless of the macro environment,” he told Switzer TV Investing. 

“And can control a number of elements that will drive growth internally… And I want to be owning companies that are less reliant on what’s happening in the global financial markets.”

We’ll continue to buy regardless of economy

One ASX share that fits all those criteria is New Zealand’s EBOS Group Ltd (ASX: EBO), according to Wong.

“It’s not a company which is really followed by Australian fund managers that closely. But it’s a hidden gem in the mid-cap space.”

Wong notes that one of EBOS’ clients is a huge retailer that all Australians will have shopped at one time or another. 

“It really is a key supplier to Chemist Warehouse, which we know is growing very strongly. So there’s growth in that pipeline.”

In times of rising interest rates and wars, pharmacy and medical supplies industries are known to be robust.

“We’re comfortable that it’s got 8% to 12% earnings growth in the next 2 to 3 years,” said Wong.

“We will continue to buy pharmacy products whether the economy is good or bad.”

There is also an acquisition that EBOS will settle in the coming 24 months, which will bring it earnings growth, according to Wong.

“The management of this company is really strong.”

EBOS, which is dual-listed on the NZX and ASX, has a market capitalisation of $6.9 billion. 

Its ASX shares have lost about 7% for the year so far, closing Friday at $36.05.

According to CMC Markets, 6 out of 10 analysts currently rate the stock as a “buy”. Five of them consider it as a “strong buy”.

The post Why this $7 billion ASX-listed company is a ‘hidden gem’: expert appeared first on The Motley Fool Australia.

More reading

• Analyst tips 20% upside and 6.5% dividend yield for this ASX share
• 5 things to watch on the ASX 200 on Monday
• Analysts name 2 ASX 200 dividend giants to buy in March
• 2 ASX shares rated as strong buys by brokers
• 3 buy-rated ASX growth shares analysts are recommending

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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If you’re wanting to boost your income with some dividend shares, then you may want to consider Adairs Ltd (ASX: ADH).

It could be one of the best dividend shares to buy right now, according to analysts at Morgans.

Why Adairs?

Adairs is one of Australia’s leading furniture and homewares retailers thanks to its growing portfolio of brands – Adairs, Focus on Furniture, and Mocka.

It’s fair to say that FY 2022 has been a disappointing year so far due to COVID impacts, which have reduced store trading hours and store visits materially due to lockdowns and Omicron concerns.

However, the company is being tipped to bounce back swiftly by the team at Morgans.

It said: “Demand for ADH’s homewares is showing no sign of underlying weakness. The business has faced multiple challenges in recent months (many of which are in common with other retailers, but some are unique to ADH), but we think the investor should look to what comes next.”

Coming next are its belief that the Focus business will start improving store economics, the new national distribution centre will be delivering efficiencies, and the Mocka business will make its first steps towards an omni-channel strategy.

Morgans added: “These factors underpin an expectation of positive earnings growth in FY23 and FY24, which we do not think are reflected in the multiple.”

In light of this, it will come as no surprise to learn that the broker has an add rating and $3.50 price target on the retailer’s shares. Based on the current Adairs share price of $2.90, this implies potential upside of over 20%.

In addition, Morgans is forecasting fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. This equates to very attractive yields of 6.5% and 9%, respectively, for investors over the next two financial years.

The post Analyst tips 20% upside and 6.5% dividend yield for this ASX share appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend with attractive yields that brokers rate as buys
• What’s the outlook for ASX retail shares like Kogan (ASX:KGN)?
• 2 compelling ASX shares that could be buys in March 2022
• Own ASX dividend shares? Here are some of the payouts that have surprised so far this earnings season
• ‘Significant’ COVID-19-related disruptions: Adairs (ASX:ADH) share price sinks 5% following horror first-half results

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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week in the red. The benchmark index fell 0.6% to 7,110.8 points.

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

ASX 200 expected to rebound

The Australian share market looks set to start the week on a positive note despite a poor finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.4% higher this morning. On Wall Street, the Dow Jones fell 0.5%, the S&P 500 dropped 0.8%, and the Nasdaq tumbled 1.7%.

Oil prices rise again

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a great start to the week after oil prices surged higher again. According to Bloomberg, the WTI crude oil price jumped 7.5% to US$115.68 a barrel and the Brent crude oil price rose 6.9% to US$118.11 a barrel. Supply concerns are supporting prices.

ASX 200 quarterly rebalance

After the market close on Friday, S&P Dow Jones Indices announced changes to the ASX 200 at the next rebalance. These changes will see Mesoblast limited (ASX: MSB), SKYCITY Entertainment Group Limited (ASX: SKC), Spark New Zealand Ltd (ASX: SPK), and Unibail-Rodamco-Westfield (ASX: URW) dumped out of the index on 22 March.

Gold price up again

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a good start to the week after the gold price pushed higher on Friday night. According to CNBC, the spot gold price rose 1.6% to US$1,966.6 an ounce. The gold price added 4.1% over the week thanks to increased demand for safe haven assets.

Blackmores downgraded to sell

The Blackmores Limited (ASX: BKL) share price could come under pressure today. This follows news that Goldman Sachs has downgraded the health supplements company’s shares to a sell rating with a $75.20 price target. The broker believes that the need for reinvestment will suppress the company’s near-term earnings.

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

More reading

• These were the best performing ASX 200 shares last week
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• Here are the top 10 ASX shares today
• Playing limbo… Magellan (ASX:MFG) share price hits 7-year low
• ASX 200 dives to 4-day low following Ukraine nuclear power plant crisis

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 Blackmores 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 wanting to add some ASX 200 dividend shares to your portfolio, then it could be worth considering the two giants listed below.

Here’s why analysts think they could be top options for income investors in March:

Commonwealth Bank of Australia (ASX: CBA)

The first ASX 200 dividend share to consider is Australia’s largest bank, Commonwealth Bank. It could be a top option due to its leadership position in the sector and the improving outlook for interest rates in Australia.

Bell Potter certainly thinks it would be a good option. And while its shares are trading at a premium to the rest of the big four, its analysts believe they deserve to and have put a buy rating with a $108.00 price target on them.

The broker commented: “Despite the misgivings of the market and especially COVID-19’s Omicron strain, CBA sees FY22 as a strong year. The unemployment (and underemployment rate) are the lowest since 2008 and Australian household accumulated savings are stronger than ever (likewise the rate at which wage growth in anticipated). Inflation is likely to increase in due course (and that’s a good thing for all banks) while non-mining investment including infrastructure continue to hold up reasonably well. The bank has again bounced back from its lows and is on its way back to its usual top line growth potential.”

As for dividends, the broker is forecasting fully franked dividends per share of $3.87 in FY 2022 and $4.07 in FY 2023. Based on the current CBA share price of $94.60, this will mean yields of 4.1% and 4.3% respectively.

Telstra Corporation Ltd (ASX: TLS)

Another ASX 200 dividend share to look at is telco giant, Telstra. It could be a top option due to its ever-improving outlook which is being underpinned by the successful execution of its transformative T22 strategy and the impending T25 strategy.

The latter is aiming to drive strong earnings per share growth in the coming years, which could bode well for dividends.

Morgans is very positive on the company and has an add rating and $4.55 price target on them. It feels the market is undervaluing its shares and expects attractive yields for the foreseeable future.

The broker commented: “The SOTP [sum of the part] for TLS is worth more than the current share price (and steps to release this value are underway; albeit timing is unclear).”

In respect to dividends, Morgans continues to expect fully franked dividends per share of 16 cents for FY 2022 and FY 2023. Based on the current Telstra share price of $3.92, this implies yields of 4% for investors.

The post Analysts name 2 ASX 200 dividend giants to buy in March appeared first on The Motley Fool Australia.

More reading

• 3 reasons why Soul Pattinson (ASX:SOL) is a strong ASX dividend share idea
• These 3 ASX 200 shares are topping the volume charts on Friday
• The Telstra (ASX:TLS) share price has tumbled 9% in 6 weeks. What’s happening?
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• Here are the 3 most heavily traded ASX 200 shares this Thursday

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 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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There are plenty of opinions out there on different ASX shares. Some stocks are rated as buys by multiple brokers.

If a business is seen as an opportunity by multiple analysts who think there is plenty of upside, then there could be an opportunity there. It is possible that all of those analysts are wrong at the same time though. So, keep that in mind.

Tyro Payments Ltd (ASX: TYR)

As the name may suggest, Tyro is a payments business. Its payment terminals are being used by many thousands of businesses around the country such as cafes.

The Tyro Payments share price has fallen by almost 60% over the past six months, with a 46% drop since the start of the year.

This business is rated as a buy by four brokers, including Ord Minnett and Morgans.

Brokers noted that margins and costs were worse than expected. However, despite the disappointment, brokers are expecting growth from the business.

Tyro is expected to show that transaction volume growth will help the ASX share’s margins.

Management pointed out that the second half is seeing strong momentum. January transaction value was up 35% to $2.7 billion and the February transaction value (to 18 February) was up 50% to $1.8 billion. E-commerce transactions soared 836% to $36.5 million. The payments business gross profit jumped 24% to $11.1 million.

The Ord Minnett price target is $3 on Tyro and the Morgans share price target is $2.68.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is an ASX share where it invests in investment managers to give them the optimal environment to deliver strong investment returns.

The company takes care of a number of things including distribution and client services, compliance, finance legal, technology, seed funds under management (FUM) and working capital, fund administration and so on. It means the fund managers can just focus on generating the best returns.

It’s invested in a number of fund managers including Hyperion, Plato, Solaris, Antipodes, Firetrail, Spheria, Metrics, Coolabah and Five V.

Pinnacle is rated as a buy by at least four brokers, including Ord Minnett with a price target of $15. Whilst the Pinnacle share price has fallen by 37% since the start of the year, the broker likes the growth potential of the business. It’s possible the business could make another acquisition – it’s looking for opportunities.

The HY22 result showed that the ASX share’s aggregate affiliate funds under management (FUM) was $93.6 billion at 31 December 2021, which was up 33% year on year. The net profit after tax (NPAT) rose 32% to $30.3 million.

Pinnacle says that it has an excellent platform in place to continue to prosper, driven by growth within existing affiliates, incubating new affiliates and strategies, domestically and offshore.

Ord Minnett thinks the Pinnacle share price is valued at 23x FY22’s estimated earnings.

The post 2 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia.

More reading

• Tyro (ASX:TYR) share price continues its tumble, down 5% today
• ASX tech shares take a hammering on Friday
• This ASX share just halved in price, so why is it time to buy?
• Why Betmakers, Fortescue, Suncorp, and Tyro shares are falling
• These are the 10 most shorted ASX shares

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 PINNACLE FPO and Tyro Payments. The Motley Fool Australia owns and has recommended PINNACLE FPO. The Motley Fool Australia has recommended Tyro Payments. 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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