Two years after COVID-19 arrived in Australia, the world is still a very uncertain place.

A year ago optimism was high with vaccinations about to roll out — then the Delta variant plunged Australia’s 2 largest cities into long winter lockdowns.

Spring arrived, those lockdowns ended, and by November most of us were vaccinated. Huzzah! 

Then bam, Omicron landed and Australians were left scrambling for rapid tests like they had been for toilet paper 20 months earlier.

So it’s no wonder ASX shares have been up and down in recent times.

Sure, the S&P/ASX 200 Index (ASX: XJO) returned a tidy 13% over the 2021 calendar year. But it has lost 3% since the August reporting season.

In such volatile times, IML Investors Mutual is turning to big reliable businesses.

“As we head into 2022, we believe share markets will be primarily influenced by the direction of interest rates as central banks continue to mull over whether current inflationary trends are [transitory] or becoming embedded,” an IML memo to clients read. 

“We continue to steer away from the riskier parts of the sharemarket and remain focused on identifying and holding what we assess to be good quality companies, …which can do well over the next 3 to 5 years.”

Here are 2 such examples currently held in IML’s Concentrated Australian Share Fund:

A recent loser ready to rejuvenate

Giant biotech company CSL Limited (ASX: CSL) has been a frustrating stock to own the past couple of years.

The share price is still about 19% down on its pre-COVID high, despite good prospects for the years to come.

Late last year it even pulled off a $17.2 billion acquisition of Swiss firm Vifor Pharma. But the market punished CSL even further, sending the shares down 14% since late November.

For IML, all this means is that CSL is a bargain right now.

“The acquisition is forecast to be double-digit accretive to CSL’s earnings as well as provide them with a strong distribution channel to sell their kidney-related drugs currently in phase III development,” the IML memo read.

“CSL continues to look attractively priced, considering the quality of the business and the large number of potential products they have in phase III trials, including CSL 112 and a number of transplant drugs.”

CSL shares closed Wednesday at $270.91 and remain the largest holding in the fund.

A recent winner set to rocket further

Unlike CSL, telecommunications provider Telstra Corporation Ltd (ASX: TLS) has had a nice run of late.

The share price is up 35% over the past 12 months, while giving out a handy 2.36% dividend yield.

But the IML team certainly doesn’t think it’s done yet.

“The company.. Announced at its investor day in November that it has finalised the separation of the company’s fixed line infrastructure into InfraCo Fixed, paving the way to unlock further value through a potential partial sale of that asset,” the memo read.

“This follows the sale of a 49% stake in the company’s tower assets (Amplitel) to the Future Fund earlier in 2021 for a higher than expected price, highlighting the strong valuations currently being achieved for infrastructure-type assets in the current environment.”

The team also loved Telstra’s buyout of Digicell Pacific.

That deal saw the telco only have to pay about 20% of the acquisition cost, while the Australian government footed the rest of the bill as a foreign policy move.

IML analysts don’t think the business from South Pacific islands will make a huge difference in the bottom line of a $50 billion company like Telstra.

But they liked the non-monetary message behind the deal.

“While not overly material from a financial perspective, the deal cements a stronger relationship between Telstra and the government — since highlighted by a 5-year $1 billion contract with the Department of Defence.”

Telstra shares closed Wednesday on $4.18.

The post 2 killer ASX shares to buy for a volatile 2022 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 2 excellent ASX shares for a retirement portfolio
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• The Novonix (ASX:NVX) share price just tanked 10%. What’s going on?

Motley Fool contributor Tony Yoo owns CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. 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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Are you looking for income options for your portfolio? If you are, then you might want to consider the ASX dividend shares listed below.

Here’s why they could top options for income investors:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is Adairs. It is a leading homewares and furniture retailer with both a bricks and mortar and online presence. This includes through its core brand, the online-only Mocka brand, and the recently acquired Focus on Furniture brand.

The team at Morgans is positive on Adairs. A recent note reveals that its analysts have an add rating and $4.80 price target on the company’s shares. Morgans sees a lot of positives from the acquisition of Focus on Furniture. It believes it will be complementary to the core business and may offer enhanced opportunities for network expansion.

As for dividends, Morgans is forecasting fully franked dividends of 23 cents per share in FY 2022 and 29 cents per share in FY 2023. Based on the current Adairs share price of $3.90, this will mean yields of 5.9% and 7.4%, respectively.

Commonwealth Bank of Australia (ASX: CBA)

Another ASX dividend share to consider buying this week is Australia’s largest bank, CBA.

It could be a top option in the banking sector due to its leadership position in home lending and retail deposits. And while competition for mortgages is likely to weigh on its near term performance, the team at Bell Potter remain positive and is predicting growing dividends.

Bell Potter currently has a buy rating and $111.00 price target on the bank’s shares. As for dividends, the broker is forecasting fully franked dividends per share of $3.94 in FY 2022 and $4.15 in FY 2023. Based on the current CBA share price of $99.33, this will mean yields of 4% and 4.2%, respectively.

The post 2 buy-rated ASX dividend shares with fully franked yields appeared first on The Motley Fool Australia.

More reading

• How are ASX bank shares performing today?
• Will the CBA (ASX:CBA) share price climb another 23% in 2022?
• 2 ASX dividend shares rated highly by analysts
• CBA (ASX:CBA) is about to lose the mantle of the ASX’s largest company, here’s why
• Is Westpac (ASX:WBC) going to be the best big 4 bank for dividends in 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. 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 Wednesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and sank lower. The benchmark index fell 1% to 7,332.5 points.

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

ASX 200 expected to rise

The Australian share market looks set to edge higher on Thursday despite declines on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 20 points or 0.3% higher this morning. In late trade on Wall Street, the Dow Jones is down 0.45%, the S&P 500 is down 0.3%, and the Nasdaq has fallen 0.3%.

Block hits the ASX boards

After the market close on Wednesday, Afterpay Ltd (ASX: APT) shares were removed from the Australian share market. They have been replaced with Block, Inc. (ASX: SQ2) shares, which will trade on a deferred settlement basis from 11am AEST this morning. The new SQ2 CDIs will represent shares of Square Class A common stock at a ratio of 1 for 1. In late trade, the Block share price is down over 1% on Wall Street.

Oil prices rise

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a solid day after oil prices pushed higher again. According to Bloomberg, the WTI crude oil price is up 1.7% to US$86.87 a barrel and the Brent crude oil price is up 0.9% to US$88.32 a barrel. An outage in Turkey added to the tight supply outlook.

A2 Milk named a buy

The A2 Milk Company Ltd (ASX: A2M) share price could be good value according to the team at Bell Potter. According to a note this morning, the broker has retained its buy rating and $7.70 price target on the struggling infant formula company’s shares. It said: “We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while regaining 50% of the lost sales (from FY20-21) in English label IMF.”

Gold price jumps

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price stormed higher. According to CNBC, the spot gold price is up 1.7% to US$1,842.9 an ounce. A number of ongoing geopolitical considerations including concerns around Ukraine and Russia have boosted gold’s appeal.

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

More reading

• ASX tech shares sink amid Megaport (ASX: MP1) crash and NASDAQ fall
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• The Novonix (ASX:NVX) share price just tanked 10%. What’s going on?
• Are the worst-performing ASX 200 shares turnaround opportunities?

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 Afterpay Limited and Block, Inc. The Motley Fool Australia owns and has recommended Afterpay Limited. 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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Key points

• ETFs can be an effective way to invest for the long-term
• One ETF with underlying growth is one from VanEck which focuses on the global video gaming and e-sports sector
• The NASDAQ 100 ETF from BetaShares is another investment that has a lot of holdings that are growing

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On the ASX there are some high-quality exchange-traded funds (ETFs) that look like they’re capable of producing attractive long-term returns.

Businesses which are growing revenue at an attractive rate and are growing profit margins give themselves a good chance of producing bottom line growth that investors like.

Whilst some ETFs predominately own businesses that aren’t generating much long-term compound earnings growth, others have holdings that are making a lot of progress:

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This ETF is all about the global video gaming and e-sports sector. It has seen its price fall by more than 13% over the last two months. This may be a chance for investors to look at the ETF when it’s at a cheaper level.

There is a lot of consumer demand for video games and e-sports. This demand has been growing for a long time. Since 2015, e-sports revenue has grown by an average of 28% per year according to the Newzoo Global Esports Market Report.

The competitive video gaming audience is expected to reach 646 million people globally in 2023. E-sports reflects the convergence of entertainment, video gaming, sports and media businesses.

VanEck says that with an active, engaged and relatively young demographic, the stage is set for sustainable long-term growth. The average age of e-sports enthusiasts is under 30.

The Asia-Pacific region was forecast to generate game revenue of US$78.4 billion in 2020, accounting for 49% of the global games market.

There are a number of high profile businesses in this portfolio, including Tencent, Nvidia, Advanced Micro Devices, Nintendo, Activision Blizzard, Sea, Netease, Electronic Arts, Take-Two Interactive Software and Bandai Namco.

However, Microsoft just announced that it wants to buy Activision Blizzard.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This ETF has many of the leading American businesses in the portfolio. It’s made up of 100 of the biggest companies on NASDAQ.

Many of the world’s fastest-growing blue chips are in this portfolio – Apple, Microsoft, Amazon, Facebook/Meta, Tesla, Nvidia, Alphabet and so on.

The reason why the Betashares Nasdaq 100 ETF has managed to do so well over the past five years, with net returns of 27.7% per annum to 31 December 2021, is because the underlying businesses have performed so well. Many have introduced new products and services, growing their earnings and addressable markets.

But it’s not just the biggest tech companies that are generating performance. Plenty of others are generating growth too including Netflix, Costco, PayPal, Qualcomm, Texas Instruments, Advanced Micro Devices, Intuitive Surgical, Moderna and so on.

As BetaShares says, in one trade on the ASX we can get access to companies like Apple, Amazon and Google, that have changed the way we live. Technology is a sector that is typically higher-growth but also under-represented on the ASX. This option gives us the ability to get exposure to great tech companies.

The ETF has an annual management fee of 0.48%. It has done very well in recent years, but past performance is no guarantee of future performance.

The post 2 ASX ETFs with strong growth potential appeared first on The Motley Fool Australia.

More reading

• The VanEck Video Gaming and Esports ETF (ASX:ESPO) looks set for a major shakeup. Here’s why
• Here are 2 ASX tech ETFs to buy after recent weakness
• These 2 beaten-down growth ETFs could be a buy today
• An ASX XI to take on the world
• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?

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 BETANASDAQ ETF UNITS. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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There are a large number of ASX shares to choose from on the Australian share market.

Two that come highly rated are listed below. Here’s why these ASX shares are being tipped as buys:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with trusted tradies.

Hipages has been growing at a strong rate in recent years and appears well-placed to continue this trend in the future. Particularly given its leadership position in Australia and the recent agreement to acquire New Zealand-based rival Builderscrack that gives it access to a NZ$26 billion total addressable market.

In response to the news, the team at Goldman Sachs maintained their buy rating and lifted their price target on the company’s shares to $5.15. The broker sees a material growth opportunity ahead for Hipages and is forecasting a 24% revenue CAGR and a 38% EBITDA CAGR from FY 2021 to FY 2024. It also notes that the company currently only captures 5% of total industry advertising spend at present. Whereas the broker sees scope for this to grow materially in the future as its ecosystem builds out.

It commented: “We see HPG as an attractive medium-term growth stock – HPG currently captures c.5% of the total industry advertising spend; by contrast REA/CAR capture c.40-60% of spending in their respective categories. As HPG builds out its ecosystem (including the imminent launch of the new “TradieCore” field service software solution), we see scope for HPG to increase its share towards these levels over the long term as the marketplace leader.”

Life360 Inc (ASX: 360)

Another ASX share to look at is Life360. It operates in the digital consumer subscription services market and has a focus on products and services for digitally native families. This is where all members of the household are connected by smartphones. A massive 33.8 million monthly active users are using its app at present, which is underpinning stellar recurring revenue growth. In addition, Life360 has significant opportunities to monetise its user base further in the future through cross and upselling opportunities and acquisitions.

Bell Potter is bullish on Life360. It has a buy rating and $15.00 price target on the company’s shares. The broker is forecasting revenue growth of 37% to $110.8 million in FY 2021 and then the more than doubling of it to US$273 million in FY 2022. It expects this to be underpinned partly by the monetisation of its huge user base.

The broker said: “Life360 has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents. An example is roadside assistance where Life360 launched a subscription-based product called Driver Protect which disrupted the market and helped enable monetisation of its user base. Other markets Life360 could potentially enter include insurance, item & pet tracking, senior monitoring, home security and/or identity theft.”

The post Analysts name 2 fantastic ASX shares to buy right now appeared first on The Motley Fool Australia.

More reading

• Here are 4 ASX shares insiders are putting their money behind
• Here are the tech shares leading the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• 3 buy-rated ASX shares
• Sticky revenue winners. Here are the 5 best ASX SaaS shares of 2021

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Hipages Group Holdings Ltd. and Life360, Inc. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Generally, an individual’s risk appetite will fall with age. This is because someone in their 20s has a lot more time to recoup their losses compared to someone in their 60s who is nearing retirement and will soon be reliant on their nest egg to fund their future lifestyle.

In light of this, it could be important to focus on capital preservation when you are reaching retirement and select shares that are consistent with your risk profile and investing timeframe.

With that in mind, here are a couple of shares that could be suitable for a well-balanced retirement portfolio:

Coles Group Ltd (ASX: COL)

The first ASX share that could be a top option for a retirement portfolio is this supermarket giant.

This is due to Coles’ solid growth prospects thanks to its refreshed strategy, its generous dividend policy, and its defensive qualities. The latter was on display for all to see during the pandemic. Another positive is the company’s focus on automation which will cut costs and support its online business.

The team at Citi is positive on Coles. It recently upgraded the supermarket giant’s shares to a buy rating with a $19.60 price target. This implies almost 20% upside for investors, as well as an attractive ~4% yield based on Citi’s forecasts.

Telstra Corporation Ltd (ASX: TLS)

Another top option for a retirement portfolio could be Telstra.

As with Coles, Telstra has defensive qualities, a favourable dividend policy, and solid growth prospects. The latter is being underpinned by the telco giant’s T25 strategy which replaces the highly successful and transformational T22 strategy later this year.

Morgans is very positive on Telstra’s outlook and has put an add rating and $4.55 price target on its shares. The broker also expects attractive fully franked dividend yields of 3.8% over the next couple of financial years.

The post 2 excellent ASX shares for a retirement portfolio appeared first on The Motley Fool Australia.

More reading

• Why the Telstra (ASX:TLS) share price zoomed 43% higher in 2021
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• 2 big-name ASX shares to buy right now
• These 3 ASX 200 shares are topping the volume charts on Monday
• 2 top ASX dividend shares to buy next week

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 COLESGROUP DEF SET and 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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Key points

• The Universal Store share price traded as high as 8% today
• The retailer has repeated an 8.2% drop in sales for H1 FY22
• The Universal share price has increased by 20% in 12 months

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The Universal Store Holdings Ltd (ASX: UNI) share price surged today, jumping as high as 8% after the fashion retailer released a trading update. At the time of market close, the Universal Store share price was up 7% at $6.85 apiece.

But even though its share price was up, its sales revenue was not.

The retailer aims at customers between the ages of 16-35 with 76 fashion stores across Australia as well as an online presence. Let’s take a closer look at its news today.

Universal sales down

In today’s announcement, Universal Store released its expected unaudited financial results for the first half of FY22.

The company advised it expected overall sales for the 6 months ending 31 December 2021 to be down 8.2% to $108.3 million. Online sales generated $20.9 million and contributed to almost 20% of sales for the company.

The retailer said it lost 25.5% of potential trading days due to the Australian coronavirus lockdowns.

As such, the company reported a 0.6% increase in gross profit margin (excluding delivery costs for online sales) against the prior corresponding period, despite markdowns of merchandise due to store closures.

Freight costs associated with online sales has also affected the net gross profit margin.

Universal Store was happy with the growth of its online presence, despite its sales growth seeing half the traffic it had in the previous corresponding period.

While its trading operations were affected by the pandemic, Universal Store said it had not experienced disruption to its shipping or imported container supply.

Overall, Universal Store expects its underlying earnings before tax to fall between $19 million to $19.5 million. It expects its net cash for this quarter to be $33.7 million, entailing $48.8 million cash and $15.1 million of bank debt.

Universal Store said it was “satisfied with the overall result” of the figures. The company will release its results for H1 FY22 on 23 February.

Universal store share price snapshot

Over the last 12 months, the Universal Store share price has lifted almost 20%, but only 1% this year to date.

The fashion retailer saw its share price hit a 52-week-high of $8.34 in November last year before it reversed direction with steep drops and rebounds through the December period. Having said that, analysts at the Swiss investment bank, UBS, considered the stock a buy last month due to expansion opportunities and product pricing.

The company currently has a market capitalisation of $501 million and a price-to-earnings ratio (P/E) of 17.2.

The post Why did the Universal Store (ASX:UNI) share price surge 7% today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares rated as strong buys by brokers
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Alice de Bruin 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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Key points

• ASX 200 tech shares had a tough day on Wednesday
• Technology shares followed a similar pattern as on US markets overnight
• Megaport had a particularly grim day, falling 16%.

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ASX technology shares finished in the red today after a tech selloff on the NASDAQ overnight and with Aussie tech company Megaport falling dramatically.

The S&P/ASX All Technology Index (ASX: XTX) fell 1.71% today while the S&P/ASX 200 Info Tech (ASX: XIJ) finished 2.56% lower. The Megaport Ltd (ASX: MP1) share price had a particularly disastrous day, shedding 16.15%.

Let’s take a look at what weighed on technology shares today.

Tech shares fall

ASX tech shares fell after the NASDAQ-100 Technology Sector Index (NASDAQ) dropped 3.39% in the US overnight. Australian technology shares often follow in the footsteps of their US peers, as Motley Fool Australia has noted previously.

Megaport led the pack in share fallers today. The company’s shares fell to their lowest level in 8 months, closing at $15.32. This is the worst result for the company’s shares since 7 June, when the company’s shares finished at $15.24.

As my Foolish colleague James reported earlier, investors appeared to expect better growth in the company’s second-quarter update.

Despite the company reporting an 8% gain in second-quarter revenue to $26.6 million, investors sold down the share.

The Afterpay Ltd (ASX: APT) share price also fell 2.81% while Xero Limited (ASX: XRO) sunk 2.36%.

Meanwhile, Altium Limited (ASX: ALU) dropped 1.95% and TechnologyOne (ASX: TNE) fell 1.52%.

However, Appen Ltd (ASX: APX) bucked the trend today, gaining 3.87% to finish at $10.47.

Sadly, Afterpay’s drop today coincided with its last day trading on the market. The company will be taken over by Block Inc (NYSE: SQ) and replaced on the ASX with SQ2 shares.

ASX technology share recap

The All Technology Index has fallen 5.78% in the past year, while the Info Tech index has dropped 14.69%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned 8.75% in the past year.

The post ASX tech shares fall amid Megaport (ASX: MP1) crash and NASDAQ fall appeared first on The Motley Fool Australia.

More reading

• Why Allkem, Megaport, Redbubble, and Temple & Webster’s shares are falling
• Are the worst-performing ASX 200 shares turnaround opportunities?
• ASX 200 (ASX:XJO) midday update: BHP’s update, Megaport sinks, HUB24 impresses
• Nick Molnar and Anthony Eisen will say goodbye to their Afterpay (ASX:APT) shares tomorrow. What will they be left with?
• Why the Megaport (ASX:MP1) share price is crashing 12% today

The author has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Altium, Appen Ltd, and MEGAPORT FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and Appen Ltd. The Motley Fool Australia has recommended MEGAPORT 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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Shares in resources giant Rio Tinto Limited (ASX: RIO) winched higher today and finished less than 1% in the green at $109.91.

The Rio Tinto share price has reclaimed territory after bottoming in November and is now trading back above monthly highs.

Now, following the release of the mining juggernaut’s Q4 production update yesterday, investors are evaluating their next moves, alongside the analyst teams at several leading brokers.

Here’s what they had to say in response to Rio’s update yesterday.

Quick recap of Rio’s Q4 trading update

For the 3 months ended 31 December, Rio recognised a 5% decline in its Pilbara iron ore shipments to 84.1 million tonnes (Mt).

Mined copper came in at 132 thousand tonnes (kt) for the quarter, flat year on year, whereas full-year copper mined came in 7% lower year on year at 494kt. Aluminium volume also contracted 7% last quarter to 757kt, resulting in a 1% decrease to 3,151kt.

Much of the headwinds experienced by Rio during the period stemmed from COVID-19 lockdowns compounded by softening commodity markets that were each weaker on the year.

For 2022, Rio is forecasting iron ore shipments of 320Mt–335Mt and mined copper production of 500kt–575kt.

What are brokers saying about Rio Tinto?

The team at RBC Capital Markets reckons that Rio’s production report will ultimately result in a small downgrade in the consensus view of its 2021 earnings.

However, whilst the broker takes this posture, it also believes there will be a limited impact on 2022 forecasts. Even still, RBC acknowledges that capacity issues in iron ore markets are likely to inflect on the Rio share price this year.

“With wider strategic questions and unresolved situations in Mongolia, Serbia and Guinea” the broker says, “we continue to prefer other exposures, like Glencore and Anglo American globally and BHP in Australia”.

RBC Capital Markets has Rio Tinto as a ‘sector perform’ and values the company at $110 per share.

Meanwhile, analyst Myles Allsop from investment bank UBS notes that Rio Tinto still struggles operationally, noting its meandering operations and ongoing challenges to mine-capacity in a note to clients.

Allsop notes that Rio’s 2022 production guidance was also disappointing, with the broker expecting more out of Rio for the coming production year.

It rates Rio as a sell and values the company at $80, factoring in a considerable amount of downside potential from the current share price.

Long-term Rio bull Citi notes that production results were mixed, with a stronger than anticipated result for titanium dioxide and worse than expected outcome in its copper division.

On the other hand, with respect to production guidance, Citi notes that “iron ore [was] marginally lower than we anticipated” and is aligned with the view of UBS.

Finally, analyst Mark Crouch at brokerage eToro claims that there is heightened demand for precious metals right now, supporting a buoyant commodities sector.

Crouch says that he expects a “significant spike in demand once China, one of the world’s largest consumers of precious meals, ditches its zero-Covid policy and returns to full growth potential”.

The analyst reckons that Rio’s production guidance issues aren’t that surprising considering the current shortage of available workers, and government enforced lockdowns in key mining areas.

Morgan Stanley, Goldman Sachs, Credit Suisse and Macquarie rate Rio Tinto as a buy right now, whereas JP Morgan and Jefferies have it as a hold.

The Rio Tinto share price has climbed 10% already this year to date having rallied 4% in the previous 5 days of trading.

The post What are brokers saying about the Rio Tinto (ASX:RIO) 2022 production update? appeared first on The Motley Fool Australia.

More reading

• Why the Rio Tinto (ASX:RIO) share price will be in focus today
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• Rio Tinto (ASX:RIO) share price on watch after Q4 update: How did it perform compared to expectations?
• Leading fund manager says these blue-chip ASX shares are buys right now

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

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Key points

• The Viva Energy share price gained nearly 10% over the last month
• Investors have reacted positively to operating earnings almost doubling
• The company was the fifth best energy share to hold in 2021

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The Viva Energy Group Ltd (ASX: VEA) share price is on a roll this past month.

Shares in the company increased 9.77% in the last month, from $2.15 to $2.36. However, the company’s shares closed down 1.26% today.

Let’s take a look at what might driving the energy company’s performance lately.

What’s happening at Viva Energy

The Viva Energy share price has been on a steady rise throughout the month with only a couple of minor bumps on its path.

Investors appear to have driven the company’s momentum after it provided a well-received financial update in late December.

The company predicted its operating earnings to increase by up to 96% to between $470 and $490 million in FY2021. This was almost double the figure in FY2020.

Viva’s Coles Express business segment averaged 55 million litres a week in fuel sales. These sales have been boosted since lockdown restrictions ended.

Price increases in crude oil have also likely had a positive impact. The crude oil price has jumped nearly 15% from US$75.21 to US$86.41 per barrel this year.

Viva Energy was also ranked the fifth-best energy share to hold in 2021, as reported by my Foolish colleague Bernd in early January. The company’s share price gained 15.8% in 2021.

The Australian Financial Review reported yesterday that Viva has benefited from improved profit margins. The company owns the Geelong Oil Refinery in Victoria. Its rival Ampol Ltd (ASX: ALD) has also seen profit margins increase at its Lytton refinery in Brisbane.

Earlier in December, Viva Energy entered into a memorandum of understanding with natural gas producer Woodside. The Woodside Petroleum Limited (ASX: WPL) share price has also surged 16% in the past month.

Viva Energy share price snap shot

The Viva Energy share price is up 2.16% in a week and 0.43% year to date. In the past year, the company’s shares have jumped a healthy 25.33%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned 8.75% in the past year.

Viva Energy has a market capitalisation of nearly $3.7 billion based on its current share price.

The post Why is the Viva Energy (ASX:VEA) share price up 10% in a month? appeared first on The Motley Fool Australia.

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

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