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

One day after electric truck company Rivian Automotive (NASDAQ: RIVN) voluntarily blew up its stock price by announcing it would raise the price of its R1T pickup truck by 17%, and its R1S SUV by 20%, Rivian stock is tumbling once again on Thursday.

As of 10:25 a.m. ET, Rivian is down another 5% — a total of an 18% drop since this debacle began.

So what

Rivian tried to mitigate the PR damage this morning. After announcing yesterday that “inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips)” necessitated the price hikes just yesterday, today Rivian CEO RJ Scaringe promised that Rivian would eat some of those costs itself.

In a letter to customers, he wrote, “Earlier this week, we announced pricing increases that broke the trust we have worked to build with you. … [W]e wrongly decided to make these changes apply to all future deliveries, including pre-existing configured preorders.”

In an attempt to rectify this mistake, Scaringe said, “For anyone with a Rivian preorder as of the March 1 pricing announcement, your original configured price will be honored. If you canceled your preorder on or after March 1 and would like to reinstate it, we will restore your original configuration, pricing, and delivery timing.”

Now what

This should go a ways toward repairing customer trust in the company, but … once burned, twice shy. Rivian is still going to suffer a reputational hit from this debacle.

It will also take a financial hit. In explaining the company’s original move to raise prices, Scaringe reiterated that “everything from semiconductors to sheet metal to seats has become more expensive,” pointing out that other automakers have raised their average prices “more than 30%” to cover their own added costs of production. Rivian will now have to eat those higher costs on the more than 70,000 preorders it racked up in past months.

If you figure that the average price increase that the company attempted to pass along was about $13,000 per vehicle, you have to assume that Rivian is now looking at something like $910 million in unanticipated costs — and losses — from keeping its word on all those preorders.

Final point: Rivian will want to make up those losses down the road. Expect even higher prices on new preorders and sales going forward and a consequent decrease in customer willingness to pay those high prices — depressing future sales.

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

The post Why Rivian stock keeps going down appeared first on The Motley Fool Australia.

More reading

• Yet another billionaire buys Rivian stock: Should you too?

Rich Smith 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.

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

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As most investors would be acutely aware, the S&P/ASX 200 Index (ASX: XJO) hasn’t exactly had a smooth run in 2022 thus far. In fact, even after yesterday’s gains, the ASX 200 remains down by almost 5.8% year to date. But the Telstra Corporation Ltd (ASX: TLS) share price has fared even worse.

Telstra shares were in the red yesterday and closed at $3.91 a share. The ASX 200 telco also remains down by a nasty 6.9% in 2022 so far. What’s more, the company last peaked at its current reigning 52-week high of $4.31 back in mid-January. That means Telstra has now dropped more than 9% over the past 6 weeks or so.

So what has gone wrong with the Telstra share price?

Telstra starts 2022 off on the wrong side of the bed

Well, it’s not too clear. There have been a number of developments around the company though that may have contributed.

The first is the recruitment of the former New South Wales premier Gladys Berejiklian by Telstra’s rival telco Optus that was announced last month. As my Fool colleague Monica covered at the time, this move had one analyst predict the reaction at Telstra would be one of “quaking in their boots”. Investors seemed to share that sentiment, with the Telstra share price losing some steam at the time.

Another factor may have been Telstra’s half-year earnings report that the company divulged on 17 February. This saw the company announce underlying earnings growth of 5.1%, as well as an 8 cent per share interim dividend. That dividend was flat on the previous year’s payout. This may have disappointed some investors, many of whom may have been hoping for a pay rise after a few years of a static 16 cents per share annual dividend. The company traded ex-dividend for this payout earlier this week, which has also dented the company’s recent performance.

But a final factor to consider is the Telstra share price itself. Telstra, as a blue-chip ASX 200 telco, doesn’t exactly have a reputation as a hot growth share. It still hasn’t ever risen above its all-time high of almost $9 that we saw back in 1999, after all. And yet 2021 saw Telstra shares return a very pleasing 43%. Even after yesterday’s close, the telco remains up more than 27% over the past 12 months.

After a run of that nature, it’s not exactly unusual for an ASX share to have a breather.

Is the Telstra share price a buy today?

So those might be some of the reasons why Telstra shares have had a rather lacklustre 6 weeks. But it’s not all bad news.

As my Fool colleague James recently covered, broker Morgans is expecting more gains out of Telstra soon. It currently has an add rating on the telco, complete with a 12-month share price target of $4.56. That would represent a gain of more than 16% on yesterday’s close.

At Telstra’s last share price, this ASX 200 telecom has a market capitalisation of $46.17 billion, with a dividend yield of 4.09%

The post The Telstra (ASX:TLS) share price has tumbled 9% in 6 weeks. What’s happening? appeared first on The Motley Fool Australia.

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• Telstra (ASX:TLS) share price in the red amid new satellite deal
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• Battle for 5G: here’s why Telstra (ASX:TLS) is ruffling feathers of its rival
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• What’s with the Telstra (ASX:TLS) share price today?

Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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It’s been a big year so far for BHP Group Ltd (ASX: BHP), and its share price.

The company took over the top spot on the ASX in late January, officially becoming the index’s largest entity after it merged with its London-listed twin.

Additionally, commodity prices boosted the company’s profits for the first half of this financial year a whopping 57% higher.

As of Thursday’s close, the BHP share price is $50.06, 18% higher than it was at the start of 2022.

But will the ‘Big Australian’s’ big run continue? SG Hiscock portfolio manager, Hamish Tadgell has weighed in.

Why is this expert bullish on BHP shares?

BHP shares have boomed higher in 2022, but they are still Tadgell’s “preferred large, diversified commodities play”, he told the Australian Financial Review.

The quality of BHP’s business is undoubtable, said the expert. And with commodity prices surging, the company is “having its time in the sun

Over the first half, BHP recorded around US$33.8 billion of revenue and underlying earnings before interest, tax, depreciation, and amortisation (EBTDIA) of US$21.3 billion – respective increases of 27% and 46% on those of the first half of financial year 2021.

Its profit from continuing activities reached US$9.7 billion.

The resources giant’s results were helped along by a 9% increase in its realised iron ore price – which reached US$113.54 per wet metric tonne.

Meanwhile, its realised copper and nickel prices both surged 30%.

Realised coal prices also took off. Those of metallurgical coal, thermal coal, and hard coking coal gained 166%, 210%, and 162% respectively last half.

Additionally, Tadgell compared the mining giant’s post-merger position to that of News Corporation (ASX: NWS) in the 2000s. He said, back then, the media conglomerate “dominated the index”.

Further, worries over BHP’s unification are like some that existed when CSL Limited (ASX: CSL) launched upwards to join other ASX giants, Tadgell said.

Though, an investment in BHP shares isn’t without risk, warned Tadgell.

“It’s a cyclical industry, and things can change, as we have seen with News Corp and CSL over the years,” he said.

The post Why BHP (ASX:BHP) is ‘having its time in the sun’: expert appeared first on The Motley Fool Australia.

More reading

• ‘Hope for the best and plan for the worst’: BHP boss
• Here’s how these top 3 ASX 200 mining shares performed in February
• Why did the BHP (ASX:BHP) share price deliver such lacklustre gains in February?
• ‘A lot of headroom to grow’: Is 2022 the year ASX investors turn to ESG shares?
• How might the conflict in Ukraine impact the iron ore price?

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 CSL Ltd. 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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Fans of small cap ASX shares will ask you what is the point in only investing in well-known brands?

If you’re just holding large-cap household names, then you might as well just put your money into an index fund, they say.

Smaller businesses also present more opportunities when the stock price doesn’t fairly reflect the actual future potential, or even current performance.

The fewer people that pay attention to it, the higher the chance the share price will peel off what’s expected.

With this in mind, here are a pair of ASX shares you may not have heard of that experts have picked as “buys” right now:

‘Earnings outlook is strong’

In a year when most ASX shares have dipped, the NRW Holdings Limited (ASX: NWH) stock price has risen more than 20%.

“The earnings outlook is strong for this mining services company,” Fairmont Equities founder Michael Gable told The Bull.

The company provides contracted services to the mining industry. Think drilling, digging, blasting and equipment maintenance.

NWR is riding the boom that its resources sector clients are currently experiencing.

Despite the recent share price surge, Gable feels like “the valuation remains cheap”. 

“From a charting perspective, the share price had been consolidating for the past few months before breaking higher after its half-year results,” he said.

“We now expect the shares to trend higher from here.”

‘Strong tailwinds’

XRF Scientific Limited (ASX: XRF) also services the mining industry but with more scientific activities, such as chemical analysis.

According to Medallion Financial Group director Philippe Bui, the company put up “solid results” for the first half.

“Revenue grew by 24% and net profit after tax increased by 17%,” he said. 

“Also, results indicated continuing momentum into the second half, with record orders.”

With the resources sector basking in increasing commodity prices, Bui sees more upward movement for the XRF Scientific share price.

“Increasing capital expenditure is expected in the mining exploration sector, which should provide strong tailwinds for XRF.”

The share price more than quadrupled since the March 2020 COVID-19 crash.

Bui’s colleague Michael Wayne told The Motley Fool last year that XRF’s valuation was still not excessive.

“It’s got a strong balance sheet,” he said. 

“A multiple of 25, 30 times earnings, as well, isn’t too challenging for a company that is growing quite nicely.”

The post 2 totally obscure ASX shares in the buy zone right now: experts appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in February
• These were the best performers on the ASX 200 last week
• NRW (ASX:NWH) share price leaps 14% on ‘high end’ earnings and upgraded guidance
• Why Challenger, CSL, NRW, and Woodside shares are pushing higher
• ASX 200 (ASX:XJO) midday update: Telstra, Wesfarmers, and Woodside report

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

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The Blackmores Limited (ASX: BKL) share price has been a poor performer in 2022.

Since the start of the year, the health supplements company’s shares have tumbled 15% to $77.53.

Is the Blackmore share price good value now?

According to a recent note out of Morgans, its analysts aren’t ready to buy the company’s shares just yet.

Its analysts have maintained their hold rating on the Blackmores share price. Though, with a price target of $88.50, this suggests that there could still be decent upside for investors over the next 12 months.

What did the broker say?

Morgans notes that Blackmores delivered a largely positive result during the first half of FY 2022. Though, it was disappointed with the performance of the China business, which experienced a marked slowdown on ecommerce platforms.

The broker said: “Blackmores’ 1H22 result beat our EBIT forecast but missed our NPAT due to higher than expected minorities. Impressively, strong sales growth was reported across International, and ANZ reported double digit EBIT growth. However, China disappointed.”

“The China result was materially weaker than expected due to the slowing growth on e-commerce platforms, lower levels of domestic travel and elevated economic uncertainty,” it added.

And while Morgans acknowledges that management has a clear strategy aiming to deliver strong earnings growth in the coming years, it isn’t enough for a more positive rating. This is due to the multiples the Blackmores share price trades on and the risks that its ANZ business is facing.

The broker concludes: “After revising our forecasts, our valuation has decreased to $88.50. BKL has a clear strategy to deliver material earnings growth through to FY24. However, growing ANZ’s revenue in line with its targets won’t be easy given structural and competitive threats and this may also be the case for China following today’s weaker than expected result.”

The post Top broker gives its verdict on the Blackmores (ASX:BKL) share price appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Why is the Blackmores (ASX:BKL) share price tumbling another 10% today?
• Why Blackmores, BWX, Kogan, and Magellan shares are dropping
• ASX 200 (ASX:XJO) midday update: Block rockets, Blackmores sinks
• ‘Ongoing uncertainty’: Blackmores (ASX:BKL) share price falls 6% on cloudy future

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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A2 Milk Company Ltd (ASX: A2M) shares were hot in February, making solid gains on the previous month.

The A2 Milk share price climbed nearly 5% between market close on 31 January and 28 February.

Let’s take a look at why the A2 Milk share prices made gains last month.

What happened to A2 Milk shares in February?

The A2 Milk share price rose in February, but one bounce, in particular, stood out.

The biggest surge took place on 21 February, on the back of the company’s financial results. A2 Milk shares exploded 11% on this day alone.

A2 Milk reported net profit after tax (NPAT) fell 53.3% to NZ$56 million. Revenue also fell 2.5% on the prior corresponding period, but was up 24.8% on H2 2021. The company also improved its outlook for revenue in H2 2022.

CEO and managing director David Bortolussi said:

Despite challenging market conditions in China and COVID-19 volatility, we are making good progress stabilising the business.

We remain confident in the long-term China infant milk formula market, and we are growing share in our China label business in-store and online with strong consumer offtake and share growth.

Analysts responded positively to these results, as my Foolish colleague James reported towards the end of the month. Bell Potter retained its buy rating and placed a $7.70 price target on the A2 Milk share price. This is 40% more than the current share price of $5.51. Bell Potter believes A2 Milk can double its profit by the 2024 financial year.

Meanwhile, Macquarie analysts kept their underperform rating on the company’s shares but lifted the price target to $5.60.

A2 Milk shares finished the month on a good note, jumping 3% between market close on 24 February and 28 February. As the Fool reported at the time, analysts at Citi retained their buy rating on the company’s shares with a price target of $7.02.

A2 Milk share price snapshot

A2 Milk shares have descended 42% in the past year. Meanwhile, year to date A2 Milk shares have climbed just 1%.

In contrast, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 4% over the past year.

A2 Milk has a market capitalisation of about $4.1 billion, based on its current share price.

The post Hot or cold? Here’s how the A2 Milk (ASX:A2M) share price performed in February appeared first on The Motley Fool Australia.

More reading

• A2 Milk (ASX:A2M) share price slips amid ‘long-term implications’ of flooding
• Why this top broker rates these ASX shares as buys in March
• What’s next for the A2 Milk (ASX:A2M) share price?
• Why the A2 Milk (ASX:A2M) share price can climb 40%: broker
• Top brokers name 3 ASX shares to buy next week

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 A2 Milk. 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 CSL Limited (ASX: CSL) share price will be one to watch on Friday.

This follows the release of an update after the market close yesterday.

What did CSL announce?

Yesterday evening, CSL provided the market with an update on its proposed acquisition of Vifor Pharma.

CSL is currently in the process of acquiring the Swiss biotech giant for US$12.3 billion (A$17.2 billion) in cash. Management expects the deal to expand its leadership across an attractive portfolio focused on renal disease and iron deficiency.

It also highlights that Vifor has a high quality pipeline and complements CSL’s existing therapeutic focus areas. These include Haematology, Thrombosis, Cardiovascular, and Transplant.

Why is the CSL share price on watch today?

The CSL share price could be one to watch today after it revealed that 74% of Vifor shares have been tendered as part of its public tender offer.

While this is short of its original 80% target, the company has decided to waive this acceptance rate condition and thus declare the offer successful.

The company commented: “CSL welcomes the strong support it has received from Vifor shareholders for the acquisition and now plans to waive the original 80% acceptance rate condition and to declare the offer successful. Following this, a tender period for subsequent acceptance of the offer will commence on 9 March 2022 and run through until 22 March 2022.”

What now?

This development means that the transaction is on track to complete as planned, pending the satisfaction of the remaining conditions.

It explained: “CSL further advises that the regulatory approval process for the acquisition is on track and CSL remains confident that the remaining conditions will be satisfied and the transaction completed by mid-2022, as previously indicated.”

The post CSL (ASX:CSL) share price on watch following Vifor Pharma acquisition update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 2 ASX 50 shares Morgans rates as buys
• Why did the CSL (ASX:CSL) share price go backwards in February?
• ‘A lot of headroom to grow’: Is 2022 the year ASX investors turn to ESG shares?
• Which ASX shares might be impacted by Probuild’s collapse?

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 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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In this period of volatile returns, the ability to receive cash payments as dividends (or distributions) from ASX dividend shares could be very useful and more consistent.

Brokers are always on the lookout for investment opportunities. If they think that a business is at good value, they’ll rate it as a ‘buy’, ‘outperform’ or something similar.

Some businesses are also expected to pay attractive dividends or distributions in FY22.

These two ASX dividend shares are rated as buys:

Centuria Office REIT (ASX: COF)

This real estate investment trust (REIT) is rated as a buy by at least three brokers, including Morgans.

The broker has a buy rating on the business with a price target of $2.50. That’s approximately 10% higher than where it is today.

As the name may suggest, it provides exposure to office real estate, it’s the largest in Australia. Centuria says that it’s predominantly exposed to metropolitan and near city office markets that are well connected to transport and lend themselves to affordable rents.

When the ASX dividend share released its FY22 first half result, it said that it has 23 assets worth $2.3 billion, with a portfolio occupancy of 94.3% and a weighted average lease expiry (WALE) of 4.3 years.

The FY22 funds from operations (FFO) – the rental profit – is now expected to be 18.3 cents per unit. This is expected to fund a forecast FY22 distribution per unit of 16.6 cents.

At the current Centuria Office REIT share price, its guidance translates into a FY22 yield of 7.4% and further growth in FY23.

Atlas Arteria Group (ASX: ALX)

This business is a global toll road operator. It is smaller than Transurban Group (ASX: TCL), but still has a very sizeable market capitalisation of $6.1 billion according to the ASX.

It owns, operates and develops toll roads. Atlas Arteria wants its roads to reduce travel time, give greater time certainty, reduce fuel consumption and carbon emissions.

The business has investments in toll roads in France, the US and Germany.

Atlas Arteria recently announced its full-year result for the 12 months to December 2021.

Traffic is continuing to recover despite the ongoing impacts of COVID. Weighted average traffic in 2021 was 18.6% higher than 2020 and only 8.4% below 2019.

It made statutory net profit after tax (NPAT) of $163.7 million, compared to a net loss of $99.2 million in 2020. Net profit after tax excluding notable items was $179.1 million, up from 2020’s net profit of $26.2 million.

The ASX dividend share is rated as a buy by at least four brokers, including Credit Suisse which has a price target of $7.15. That’s more than 10% higher than today’s level.

Credit Suisse is expecting distribution growth in FY22, with a projected yield of 6.5%.

The post 2 ASX dividend shares to buy right now: brokers appeared first on The Motley Fool Australia.

More reading

• CSL (ASX:CSL) share price on watch following Vifor Pharma acquisition update
• Are these 2 ASX tech shares good buys in March?
• This ASX share just halved in price, so why is it time to buy?
• 2 long-term ASX stars now cheap enough to buy: experts
• 2 compelling ASX shares expecting big growth this decade

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 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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It’s already March 2022. Where has the year gone? With all of the volatility and declines in the stock market, there may be some attractive ASX tech shares to consider.

Worries about inflation and interest rates have given investors a lot to think about since the start of 2022.

Plenty of ASX tech shares have been sold down. Are some of them opportunities?

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price has fallen by 18% since the start of the year.

This business provides global enterprise resource planning (ERP) software. It’s working on growing its offering through a software as a service (SaaS) solution in the cloud.

It’s currently rated as a buy by the broker Morgans with a price target of $13.73.

The company has substantial long-term goals to help grow the business over time.

In FY21, it saw net profit before tax growth of 19% to $97.8 million. The company says that it has a $145 million annual recurring revenue (ARR) runway to move from on-premise to SaaS by FY26. Management says that the quality of the SaaS revenue is very high because it has a recurring contractual nature, combined with a very low churn rate of around 1%.

The goal is for the total ARR to reach more than $500 million by FY26.

The ASX tech share is also expecting to grow its profit before tax margin to 35% or more in the next few years. It was 31% in FY21.

There are three things that the company pointed to which could help with this.

It said that cost reductions reflect the efficiencies from the transition to SaaS.

There would be benefits from rebalancing investment and headcount from on-premise to growth areas.

Finally, it will maintain COVID-inspired remote implementations and digital user groups.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

This is an exchange-traded fund (ETF) listed on the ASX which aims to give investors exposure to the Asian technology sector.

It holds 50 businesses in the Asian tech industry, outside of Japan.

BetaShares says that due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

Some of the businesses in the ASX tech share’s portfolio includes Taiwan Semiconductor Manufacturing, Samsung electronics, Tencent, Alibaba, Meituan, Infosys, JD.com, Netease, Pinduoduo and SK Hynix.

There are four sectors that have a double-digit weighting in the ETF – internet and direct marketing retail (25.3%), semiconductors (22.3%), interactive media and services (17.7%) and tech hardware, storage and peripherals (13.7%).

The biggest four allocations geographically are: China (46.7%), Taiwan (24.1%), South Korea (17.8%) and India (7.2%).

It has been a rough last 12 months for the Betashares Asia Technology Tigers ETF share price. The ASIA ETF has dropped 34%, with the drop of the valuations of the underlying businesses.

The post Are these 2 ASX tech shares good buys in March? appeared first on The Motley Fool Australia.

More reading

• Check out these ETFs in March
• Why this top broker rates these ASX shares as buys in March
• 2 popular ETFs you need to know
• 3 fantastic ETFs for ASX investors today
• 3 ETFs for ASX investors to watch in 2022

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 BetaShares Asia Technology Tigers ETF. 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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What happens when one of the best ASX shares in your portfolio suddenly becomes a stinker?

This is the dilemma that the Market Matters team faced in its Emerging Companies Portfolio.

Investment distributor Pinnacle Investment Management Group Ltd (ASX: PNI) gave Market Matters a 258% return in 12 months when its share price peaked in November.

Nice.

But since then the stock has almost halved, going from above $19 to $10.10 at Thursday’s close.

Yikes.

Dramas for ASX shares in investment sector 

Market Matters portfolio manager James Gerrish explained that “all listed managers” in the investment sector had suffered in recent months.

But he believes Pinnacle is “somewhat different to the rest”, taking a stake and providing backend services in a very diverse universe of fund managers — equity, debt, local and international markets.

In a not-so-subtle reference to the misfortunes of Magellan Financial Group Ltd (ASX: MFG) shares, Gerrish pointed out Pinnacle is “not just reliant on one star manager investing in one asset class”.

“They have further capacity to scale up and with exposure across a variety of asset classes with a cross section of boutique managers,” he said in his newsletter.

“It’s likely to receive both a steady stream of performance fee and inflows in all market environments.”

Add to portfolio now

Market Matters analysts are, therefore, bullish on Pinnacle and currently seeking to add to the portfolio.

“Performance fees, in particular, provide a free kick for growth if/when they come,” said Gerrish.

“And with the core business already growing 10+% per annum, it’s hard not to like Pinnacle after this recent pullback.”

Capital H Management chief Harley Grosser told The Motley Fool last month that Pinnacle is one of the ASX shares he regretted not buying years ago.

“I think probably one that was in our wheelhouse that we missed because it was a bit big for us was Pinnacle Investment Management,” he said. 

“That’s one that we probably should have been more across.”

The post This ASX share just halved in price, so why is it time to buy? appeared first on The Motley Fool Australia.

More reading

• Why Domino’s, Magellan, PointsBet, and Zip shares are falling
• Leading brokers name 3 ASX shares to sell today
• These were the worst performing ASX 200 shares last week
• Why Blackmores, BWX, Kogan, and Magellan shares are dropping
• Magellan (ASX:MFG) share price slips 6% as funds continue mass exodus

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