Key points

• Supply issues are impacting the retail sector as COVID-19 forces workers into isolation
• Federal Treasurer Josh Frydenberg has flagged cutting isolation requirements to five days
• Consumer confidence fell in the second week of January

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ASX retail shares are on watch today amid talk of potential cuts to COVID-19 isolation requirements to five days.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) dropped 0.25% yesterday to finish at 3,398.50 points. Meanwhile, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) fell 0.17% to 12,670.00 points.

Let’s take a look at what may impact retail shares today.

Isolation cuts

Supermarkets and retail outlets have been facing supply issues due to worker shortages amid the COVID-19 outbreak in Australia.

Some of the retail shares on the ASX include Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW), Wesfarmers Ltd (ASX: WES), and Harvey Norman Holdings Limited (ASX: HVN).

Other big-name retailers include Adairs Ltd (ASX: ADH), JB Hi-Fi Limited (ASX: JBH), Kogan.com Ltd (ASX: KGN), City Chic Collective Ltd (ASX: CCX) and Australian Pharmaceutical Industries Ltd (ASX: API).

The Australian Financial Review reported COVID-19 isolation requirements could be cut to five days to help solve the worker supply issue. Federal Treasurer Josh Frydenberg said during a speech in Melbourne:

I do note that a number of other countries around the world have actually reduced the isolation requirements, even for those who have tested positive from seven or 10 days, down to five days.

It’s never set and forget. The government will do everything possible to help support the Australian community on both the health and the economic front.

The news comes as consumer confidence has dropped to its lowest level since October. A survey from ANZ-Roy Morgan, released on Tuesday, shows confidence dropped 8.1 points in the second week of January to 97.9.

ANZ Economics head David Plank said:

Consumer confidence dropped 7.6% last week as Omicron case numbers surged. Consumer confidence readings are usually positive during the month of January and the level of 97.9 is the weakest January result since 1992, when the Australian economy was experiencing sharply rising unemployment. 

The post ASX retail shares on watch amid potential cuts to COVID-19 isolation requirements appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• This is how much the average Aussie needs to feel ‘rich’

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 ADAIRS FPO and Kogan.com ltd. The Motley Fool Australia owns and has recommended ADAIRS FPO, COLESGROUP DEF SET, Harvey Norman Holdings Ltd., Kogan.com ltd, and Wesfarmers 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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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.

There’s a potential event that Ethereum (CRYPTO: ETH) investors are looking forward to, and it’s called the flippening. This will take place the moment that Ethereum overtakes Bitcoin (CRYPTO: BTC) in terms of market capitalization. Ethereum, with a market cap of $373 billion as of Tuesday morning, would have to more than double to overtake Bitcoin at $786 billion. 

The gap has actually widened over the past month, as Ethereum’s 20% decline finds it falling behind Bitcoin despite the leading crypto’s 10% slide in the same time frame. Bitcoin isn’t the only rival that Ethereum investors should be watching. Bulls are spending so much time looking through the windshield at Bitcoin that they’re not paying attention to what’s happening in the rearview mirror. Smaller players led by Cardano (CRYPTO: ADA) and Solana (CRYPTO: SOL) are starting to catch up, and there’s no doubt that those crypto investors see an entirely different “flippening” scenario playing out. 

Objects in the mirror may be closer than they appear

January has historically been a great time to own Ethereum. The world’s second most valuable digital currency has appreciated by at least 35% in the first month of the year in all but one year since its debut in the summer of 2015: 

• January 2016: 148%
• January 2017: 35%
• January 2018: 48%
• January 2019: (20%)
• January 2020: 39%
• January 2021: 78%

It’s off to a rough start in 2022. Ethereum has fallen roughly 16% month to date, challenging the 20% January decline it experienced three years ago. Naturally a lot can happen in the next two weeks. Ethereum is a volatile beast, and historically it has favored the bulls. 

However, the bullish thesis for owning Ethereum in 2022 hangs largely on its upcoming migration to proof-of-stake protocols. It will be a dramatic transformation. Ethereum is the crypto world’s platform of choice with its bar-raising blockchain technology, powering smart contracts and other digital applications. There are more than 3,000 popular decentralized apps built on top of Ethereum. The knocks on Ethereum — that the crypto is too resource draining to mine and too slow and expensive to move around — will grow quieter when the Ethereum 2.0 transition is complete. 

There are two sticking points that could be holding Ethereum back, and the first is that the shift to proof of stake is taking a long time to happen. Originally slated to happen in 2019, the next major phase of Ethereum 2.0 has been pushed out to June of this year. No one will be surprised to see the goalpost moved again. There are also concerns that, even after the transformation is complete, it won’t make Ethereum faster or cheaper to use than Solana and Cardano are right now.

In the same past 30 days that we’ve seen Ethereum surrender 20% of its value, we’ve seen Cardano climb by 20%. As the crypto market in general retreated over the holiday weekend, Cardano was one of the rare climbing digital currencies. It even overtook Solana in terms of market cap late last week. Solana has had a challenging past month like Ethereum, but over the past year it has popped 35-fold compared with a 150% advance by Ethereum. 

This isn’t necessarily the time to dump Ethereum. It has a history of bouncing back after sharp corrections. However, if your crypto portfolio consists exclusively of Ethereum and/or Bitcoin it may be a good time to consider adding some other types of cryptocurrencies to your risk-tolerant portfolio. Cardano is trending with strong momentum right now, and Solana has some key speed, cost, and other efficiencies working in its favor. 

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

The post Is Ethereum losing steam in 2022? appeared first on The Motley Fool Australia.

More reading

• Bitcoin (CRYPTO:BTC) takes most popular crown, here are 3 cryptos hot on its heels
• Crypto is crashing: Should you invest now?
• Why Solana could be poised to rally
• Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover
• Why Cardano is on the move higher today

Rick Munarriz owns Bitcoin, Ethereum, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. 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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Key Points

• The Rio Tinto share price is on watch today amid news on the company’s Jadar lithium project
• There’s been a delay in production following a slow approvals process
• The final project go-ahead rests with the Serbian prime minister

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The Rio Tinto Ltd (ASX: RIO) share price will be on watch today following news on the company’s Jadar lithium project in Serbia.

In the past month, the company’s shares have risen almost 12% in value. In contrast, the S&P/ASX 200 Index (ASX: XJO) has pushed 1.43% higher over the same time frame.

At Tuesday’s closing bell, Rio Tinto shares finished the day down 0.35% to $109.65.

Rio Tinto pushes back production date for Jadar lithium project

On the back of the company’s latest update, investors are likely to send the Rio Tinto share price on the move.

According to multiple news sources, Rio Tinto has pushed back the timeline for first production from its Jadar lithium project.

The mine has been plagued by slow progress in obtaining the necessary licences for environmental assessment. It’s expected that the delay will result in the company producing lithium no earlier than 2027.

Rio Tinto noted that the revised schedule for Jadar was in response to concerns by Serbian stakeholders about the potential environmental impact. The claim is that the lithium mine, when in development, will pollute land and water affecting valuable farmland.

The Serbian prime minister has advised he will make a decision in April’s general election as to whether Rio Tinto can proceed.

This comes at a time where the mining giant is close to reaching a deal with traditional owners in Australia. The company destroyed an ancient aboriginal site in Western Australia as part of an iron ore exploration project.

If the Jadar project goes ahead, it will become the biggest lithium mine in Europe and one of the largest in the world.

The mine is predicted to have a 40-year life, producing 2.3 million tonnes of lithium carbonate per year.

Rio Tinto plans to invest $2.4 billion in the construction of the lithium mine.

Rio Tinto share price summary

Despite travelling 10% higher in 2022, it has been a disappointing 12 months for Rio Tinto shareholders. The company’s shares have lost around 8% in value driven by a lower production result across its commodities in the fourth quarter of 2021.

Based on valuation grounds, Rio Tinto has a market capitalisation of $40.70 billion and a price-to-earnings (P/E) ratio of 13.98.

The post Why the Rio Tinto (ASX:RIO) share price will be in focus today appeared first on The Motley Fool Australia.

More reading

• 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
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Aaron Teboneras 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

• BHP has handed in its second quarter report card
• The Big Australian delivered almost record high iron ore production
• COVID-19 labour shortages are being experienced and impacting its performance

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The BHP Group Ltd (ASX: BHP) share price will be on watch on the ASX 200 on Wednesday.

This follows the release of the mining giant’s second quarter update this morning.

BHP share price on watch following second quarter update

All eyes will be on the BHP share price today after it released its highly anticipated second quarter update.

For the three months ended December, BHP’s iron ore production grew 4% quarter on quarter to a near record of 66.1Mt. This brought its half year production to 129.1Mt. Management advised that the higher volumes reflect strong supply chain performance, increased ore car availability, and the continued ramp up of South Flank. This was partially offset by the impact of temporary rail labour shortages due to COVID-19 related border restrictions

Things weren’t quite as positive for BHP’s copper production, which fell 3% quarter on quarter to 365.5kt. This led to a 12% decline in production to 742kt for the first half. This was driven by lower volumes at Olympic Dam due to the planned smelter maintenance campaign, which was partially offset by higher volumes at Antamina.

Metallurgical coal production was flat quarter on quarter at 8.8Mt and down 8% for the half to 17.7Mt. Volumes were flat due to double the amount of rainfall recorded in the quarter impacting most operations and planned maintenance in the previous quarter.

Whereas energy coal production tumbled 30% quarter on quarter to 3Mt, limiting its first half production growth to 5% to 7.2Mt. BHP advised that the lower volumes were due to three times the amount of rainfall in this quarter impacting stripping and mine productivity.

BHP’s nickel production was strong and rose 21% quarter and quarter to 21.5kt. However, this was not enough to stop the miner recording a 15% decline in half year nickel production to 39.3kt. The second quarter’s higher volumes were due to planned maintenance across the supply chain in the previous quarter.

Finally, the company’s petroleum operations, which are now classed as discontinued due to the merger with Woodside Petroleum Limited (ASX: WPL), reported a 7% production decline for the quarter to 25.7Mmboe. Half year production was up 5% to 53.2Mmboe. Management advised that the second quarter’s lower volumes were due to reduced seasonal gas demand at Bass Strait. This was partially offset by a Shenzi infill well which was brought online and higher production at North West Shelf.

What about the remainder of FY 2022?

Pleasingly, BHP’s production guidance for FY 2022 remains unchanged for iron ore, energy coal, and nickel. Whereas its copper production is trending towards the low end of its guidance range and metallurgical coal guidance has been reduced due to significant wet weather impacts and COVID-19 related labour constraints.

It is a similar story for its cost guidance. BHP’s full year unit cost guidance for WAIO, Escondida and NSWEC remains unchanged. Whereas unit cost guidance for Queensland Coal has been increased, reflecting lower expected volumes for the full year.

BHP’s Chief Executive Officer, Mike Henry, commented: “Our continuing focus on people and on operational reliability enabled us to achieve near record production in iron ore and to reduce the impacts of adverse weather and COVID-19 related labour constraints in our operations. Cost control remained strong across the business, in the face of a more inflationary environment. Unit cost guidance remains intact bar a change to metallurgical coal which is a function of the lowering of production guidance as a result of significant wet weather and in anticipation of Omicron headwinds in the early part of the second half of the financial year.”

The post BHP (ASX:BHP) share price on watch following second quarter update appeared first on The Motley Fool Australia.

More reading

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• Own BHP (ASX:BHP) shares? Here’s why the iron ore giant is pushing for battery-powered trains
• Leading fund manager says these blue-chip ASX shares are buys right now
• 2 buy-rated ASX dividend shares
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Key Points

• The Woodside share price closed 0.16% down to $25.20 on Tuesday
• The company has announced the sell-down of its 49% stake in Pluto Train 2
• The LNG asset is on track for its first cargo in 2026

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The Woodside Petroleum Ltd (ASX: WPL) share price will be one to keep an eye on this Wednesday morning. This comes after the company advised it completed the sale of its onshore LNG processing facility located in Western Australia.

At yesterday’s closing bell, the oil and gas company’s shares finished the day down 0.16% to $25.20.

Woodside completes sell-down of Pluto Train 2 interest

Investors will be keen to watch how the Woodside share price reacts today following the company’s announcement last night.

In a statement to the ASX, Woodside advised it has finalised the sale of Pluto Train 2 Joint Venture to Global Infrastructure Partners (GIP). This will see a 49% non-operating participating interest transferred to GIP. The remaining 51% stake will be controlled by the energy giant’s subsidiary Woodside Burrup Train 2 A Pty Ltd.

The deal was originally announced on 15 November 2021 after both parties signed a sale and purchase agreement.

A week later, the final investment decision was approved for the Pluto Train 2 Joint Venture Scarborough developments. The landmark achievement also included new domestic gas facilities and modifications to Pluto Train 1.

The estimated capital expenditure for the development of Pluto Train 2 is estimated to be around US$5.6 billion (A$7.8 million).

Following the new joint venture arrangement, GIP will now need to fork out US$822 million (A$1.14 billion) in capital expenditure.

The first LNG cargo from Pluto Train 2 is being targeted to go online sometime in 2026.

Woodside CEO Meg O’Neill touched on the close collaboration with its co-party, saying:

GIP brings established, global capabilities to the Pluto Train 2 Joint Venture which will support delivery of a world-class project.

The development of Scarborough gas through Pluto Train 2 is expected to deliver significant value to our shareholders, create thousands of jobs and deliver energy to domestic and international customers for decades to come.

About the Woodside share price

Over the past 12 months, the Woodside share price has fallen by 6%. However, year to date, its shares have risen by 15% following a surge in oil prices.

Based on today’s price, Woodside commands a market capitalisation of roughly $24.43 billion with approximately 970 million shares on its registry.

The post Woodside (ASX:WPL) share price on watch following sell-down of onshore LNG asset appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Woodside (ASX:WPL) share price struggles amid hydrogen project update
• 5 things to watch on the ASX 200 on Tuesday
• Is this driving Santos (ASX:STO) and Woodside (ASX:WPL) shares higher on Monday?
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise

Motley Fool contributor Aaron Teboneras owns Woodside Petroleum Ltd. 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 Webjet share price is moved sideways this year
• The company’s management is taking advantage of present opportunities
• Brokers weigh in on Webjet shares

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The Webjet Ltd (ASX: WEB) share price has failed to take off in 2022 following a broader market sell-off on the S&P/ASX 200 Index (ASX: XJO).

It’s no secret that record cases of COVID-19 have caused severe disruptions in Australia’s travel market.

At Tuesday’s market close, the online travel agent’s shares ended 1.11% lower to $5.37 apiece.

What’s the latest with Webjet?

While COVID-19 continues to rapidly accelerate across the country, Webjet has been taking advantage of its opportunities.

It noted in its FY22 first-half results that competition has decreased due to financial pressures impacting the travel industry.

As such, the company highlighted that its WebBeds business is poised to deliver significant revenue growth.

Management has focused on expanding the domestic offering in all regions, with increased penetration into the North American B2B market.

Webjet also boosted and optimised its application programming interface (API) connections for key business to consumer (B2C) clients. It stated that the financial strength of the company makes it a trusted partner for hotel suppliers.

A retained global footprint, hotel supply relationships, and global customer network is set for the global travel market to reopen.

The above has led its WebBeds business to return to profitability. Total Transaction Value (TTV) in H1 FY22 stood at $436 million, a 504% increase when compared against the prior corresponding period.

In addition, WebBeds costs came down to $43 million, a decline of 25% on H1 FY21 levels. This means the company’s transformation into a much leaner and agile business is on track for FY22.

Will Webjet shares make a comeback in 2022?

It’s anyone’s guess when the Webjet share price will return to pre-COVID levels. However, a number of brokers recently weighed in with their thoughts on the company’s shares.

In November, analysts at Morgan Stanley raised the 12-month price target for Webjet shares by 16% to $5.00 a share.

On the other hand, Credit Suisse slashed its outlook on the online travel agent’s shares by 5.3% to $5.40.

Leading Australian investment firm, Morgans had a more bullish outlook. The broker lifted its view on Webjet shares by 6.5% to $6.60.

Also following suit, the team at Macquarie cut its 12-month price target on Webjet shares by 8.3% to $6.10 apiece.

While each of the brokers has varying price points, it’s worth noting that Morgans and Macquarie offer an attractive upside. Based on the current share price, this implies increases of around 22.9% and 13.5%, respectively.

Looking ahead, Webjet is scheduled to report its FY22 results in May 2022.

Webjet share price summary

Year to date, the Webjet share price has risen by 4% despite Australia experiencing record COVID-19 cases in the background.

Based on valuation grounds, Webjet has a market capitalisation of around $2.04 billion, with approximately 380.51 million shares on issue.

The post Will the Webjet (ASX:WEB) share price travel higher in 2022? appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 travel shares down today?
• These are the 10 most shorted ASX shares
• How did the Webjet (ASX:WEB) share price perform in 2021?
• When did Webjet (ASX:WEB) last pay a dividend and when might the next one be?
• These are the 10 most shorted ASX shares

Motley Fool contributor Aaron Teboneras 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 Webjet 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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Key points

• JB Hi-Fi and Pacific Current are two ASX dividend shares expected to pay big yields in FY22
• JB Hi-Fi continues to see strong customer demand for its products, supporting profit
• Investment manager Pacific Current is seeing net inflows. It’s also adding to its portfolio

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There are some ASX dividend shares in Australia that offer both a high yield and have been consistent with their payouts.

Plenty of the ASX’s blue chips have cut their dividends in recent years like Australia and New Zealand Banking Group Ltd (ASX: ANZ), Sydney Airport (ASX: SYD) and Transurban Group (ASX: TCL).

Dividends are certainly not guaranteed. But the below two options have been growing the dividend and could pay a high yield in FY22:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the biggest retailers in Australia (and New Zealand) with its JB Hi-Fi and The Good Guys businesses.

The retailer is currently rated as a buy by the broker Morgans, with a price target of $54.

JB Hi-Fi recently gave its second quarter sales update which showed that JB Hi-Fi Australia sales were up 1.9% year on year, New Zealand sales were down 3.4% and The Good Guys sales went up 3.4%.

The ASX dividend share noted that sales momentum was strong throughout the first half of FY22, with continued heightened customer demand for both consumer electronics and home appliance products. Total half-year sales were down 1.6% year on year, but up 21.7% over a two-year period.

JB Hi-Fi noted that net profit is expected to be a bit lower in HY22, with net profit after tax showing a 9.4% drop to $287.9 million. However, net profit was still 68.8% higher over a two-year period thanks to management of gross profit margins and “disciplined cost control”.

Morgans is expecting JB Hi-Fi to pay a FY22 annual dividend per share of $2.17. This translates to a grossed-up dividend yield of 6.2%.

Pacific Current Group Ltd (ASX: PAC)

Pacific describes itself as a multi-boutique asset management outfit that applies its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its investment partners excel.

At the end of September 2021, Pacific’s total funds under management (FUM) controlled by the boutique asset managers it’s invested in was $150.1 billion, an increase of 5.5%. Strong inflows at Victory Park, Roc, EAM and GQG Partners Inc (ASX: GQG) helped FUM grow.

Management were pleased with the breadth of that growth and expect it to continue “well into 2022”.

The ASX dividend share continues to expand its portfolio. A couple of weeks ago it bought a 35% stake of Banner Oak Capital Partners, a private equity real estate business which had $5.7 billion of assets on its platform. The initial investment is US$35 million. Pacific will receive 35% of the management company’s earnings.

The Oak Capital Partners contribution is expected to add approximately 25% of Pacific Current’s FY21 underlying net profit before tax.

It’s currently rated as a buy by the broker Ord Minnett, with a price target of $10.30 – that’s 40% higher than where it is right now.

Ord Minnett thinks Pacific is going to pay a grossed-up dividend yield of 7.4% in FY22 and 8.3% in FY23.

The post 2 ASX dividend shares with large yields and consistent payouts appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why Allkem, BrainChip, Data#3, and JB Hi-Fi shares are charging higher
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• JB Hi-Fi (ASX:JBH) share price shoots 7% higher on ‘strong sales’
• Why Adbri, Australian Ethical, JB Hi-Fi, and Wesfarmers shares are racing higher

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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Key points

• The NAB share price has outperformed in recent months
• NAB is expected to keep growing its dividend in FY22 and FY23
• Analysts don’t think the big four bank is going to deliver much capital growth this year

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Could the National Australia Bank Ltd (ASX: NAB) share price be an undervalued opportunity for dividends in 2022?

Looking at the last six months of performance, NAB shares have materially outperformed the other big four banks.

In the past half-year, the Westpac Banking Corp (ASX: WBC) share price has fallen 13%, the Commonwealth Bank of Australia (ASX: CBA) share price has risen 3% and the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has gone up 6%.

But the NAB share price has been the star performer, rising almost 15% over the last six months.

What’s driving the NAB share price higher?

Investors have been judging the NAB business as one that is now higher quality and more promising than (some of) its peers in the banking sector.

Wilson Asset Management (WAM) noted a few months ago that NAB delivered a “strong” FY21 result. Cash earnings rose by 77% to $6.56 billion.

For the WAM Leaders Ltd (ASX: WLE) portfolio, NAB was/is the preferred exposure in the banking sector due to its capital management team, a sector-leading business bank taking market share, further progressed cost management initiatives than peers and its strong capital position.

NAB is liked by some brokers as well, including Macquarie, partly because it has less exposure to mortgages than other banks.

However, the tight mortgage market is putting pressure on profitability for the sector. Whilst NAB may have less exposure, it does still have a very large mortgage book. But in the last several weeks, NAB and other banks have been raising interest rates.

How is the dividend tracking?

NAB more than doubled its FY21 annual dividend to $1.27 per share thanks to its significant profit growth, a high level of capital on the balance sheet and the regulator removing the main COVID-era dividend limitations.

There are expectations of dividend growth in FY22 and beyond. For example, Macquarie thinks that NAB will pay annual dividends of $1.35 and $1.37 per share in FY22 and FY23, translating to grossed-up dividend yields of 6.6% and 6.7% respectively.

Commsec numbers suggest even bigger potential dividends from NAB – $1.39 per share in FY22 and $1.49 in FY23. Those annual payouts would be 6.75% and 7.2% respectively.

Is the NAB share price a buy?

Macquarie rates NAB shares as a buy. However, the price target is $30.50, suggesting a fairly low single digit capital return over the next year.

Some brokers are a bit less optimistic. For example, Morgan Stanley only rates NAB as a hold (‘equal weight’) on the bank with a price target of $27.90. That’s around 5% lower than where NAB shares are now.

One of the most optimistic views on NAB is from the broker Ord Minnett, with a price target of $31.40. That’s a potential upside of around 7% for the major bank.

So, whilst analysts are expecting dividend growth and pretty high yields from the bank, the general view seems to be that the NAB share price isn’t going to do much in 2022.

The post Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends? appeared first on The Motley Fool Australia.

More reading

• Is the NAB (ASX:NAB) share price an ASX buy or sell for 2022?
• Brokers name 2 ASX 200 dividend shares to buy
• 2 buy-rated ASX dividend shares
• Analysts name 3 ASX 200 shares that could generate strong returns
• An ASX XI to take on the world

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 and Westpac Banking Corporation. 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

• WAM has revealed two ASX shares that are liked in the WAM Active portfolio
• TPG Telecom is one buy-rated stock, with merger synergies and a potential asset sale as positives
• Mincor Resources is a nickel player which is making promising progress in WA

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Respected fund manager Wilson Asset Management (WAM) has recently identified two ASX shares that it owns in one of its portfolio.

WAM operates several listed investment companies (LICs). Two of those LICs are WAM Capital Limited (ASX: WAM) and WAM Leaders Ltd (ASX: WLE).

There’s also one called WAM Active Limited (ASX: WAA) which looks at businesses it thinks are the most undervalued.

WAM says WAM Active invests in market mispricing opportunities in the Australian market.

The WAM Active portfolio has delivered gross returns (that’s before fees, expenses and taxes) of 11.8% per annum since inception in January 2008, which is superior to the Bloomberg AusBond Bank Bill Index return per annum of 2.9%.

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

TPG Telecom Ltd (ASX: TPG)

TPG is a business that owns and operates mobile and fixed networks. It is the owner of a few of Australia’s most well-known brands including Vodafone, TPG and iiNet.

The fund manager pointed out that in early December, founder David Teoh entered into an agreement to sell around 53.1 million TPG Telecom shares, which led to a sell-off of the TPG share price.

WAM also noted that the spread of the Omicron COVID variant also weighed on the company during the month as it reduced the number of international visitors, leading to a reduction in its consumer subscriber numbers.

WAM Active remains invested in TPG and the fund manager remains optimistic on the company’s fixed wireless rollout strategy which should help increase profit margins.

The fund manager thinks the base business of the ASX share is undervalued considering its growth profile over the next few years, it likes the risk-reward profile. WAM is particularly attracted by the potential sale of the mobile tower business which could take place over the coming months.

Mincor Resources NL (ASX: MCR)

The other ASX share outlined was Mincor Resources. This business is focused on re-establishing sustainable, high-grade nickel production in the Kambalda district of Western Australia.

WAM points out that in December, the business provided an exploration update which said that nickel had been extracted from two development headings at Kambalda. The fund manager said this was a key achievement in the company’s nickel restart plans and supported the investment thesis.

The bull case for the company by WAM is that there is potentially significant undiscovered nickel sulphide at the company’s Kambalda site.

WAM invested in Mincor Resources because of its high-quality management team, the projects which are key to the BHP Group Ltd (ASX: BHP) nickel strategy and the potential for nickel sulphide discoveries.

WAM Active continues to own Mincor Resources shares because the fund manager believes it will continue to grow its resources as it nears production in 2022.

The post 2 top ASX shares to buy according to WAM appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy today
• This top broker just rated the TPG (ASX:TPG) share price as a buy
• 2 beaten-up blue chip ASX shares rated as buys

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 TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Technology shares have taken a beating the past couple of months.

In Australia, the S&P/ASX All Technology Index (ASX: XTX) has lost more than 14% since mid-November. 

Across the Pacific, it’s even worse.

“Right now about 40% of US tech stocks on the NASDAQ are down 50% since their peak,” said commentator Peter Switzer on his Switzer TV Investing show.

“That makes me think that many good companies are oversold.”

Switzer’s team recently compiled the share price outlook of ASX tech shares from multiple analysts and came up with a few that could be absolute bargains right now.

Here are 2 that have more than 80% upside:

Wearing the big boy pants from this week

Buy now, pay later provider Zip Co Ltd (ASX: Z1P) has seen its shares tumble an eye-watering 74% off its 52-week high.

The stock closed Tuesday at $3.66, with the $14.53 high in February a distant memory.

But analysts are convinced this one’s wildly oversold. On average, the experts think Zip shares have an 82.6% upside.

One broker, Ord Minnett, reckons it can rocket up 157% from the current level.

This week Zip became the largest pure BNPL company on the ASX, as Afterpay Ltd (ASX: APT) departed the bourse.

“I think sometime this year these stocks will benefit from a rotation back into the tech and payment sector,” said Switzer.

“But you’ll have to have patience.”

Elmo sad now, but happy later?

The other stock to look out for is ELMO Software Ltd (ASX: ELO).

The share price for the human resources software maker has fallen more than 40% off its 53-week high, prompting analysts to think this might be a bargain at current levels.

On average, the professionals are betting on an 80.6% upside for the stock.

Morgan Stanley made the biggest call, looking for an 83% spike in Elmo shares this year.

“Good things come to those who wait,” said Switzer.

Elmo shares closed Tuesday at $4.26.

The post 2 ASX shares that now have 80% upside: analysts appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• How did ASX 200 tech shares perform on the market today?
• Own AMP (ASX:AMP) shares? Here’s why this expert downgraded some of its funds
• Zip (ASX:Z1P) will become the largest pureplay BNPL on the ASX this week. What might this mean for shareholders?
• These are the 10 most shorted ASX shares

Motley Fool contributor Tony Yoo owns Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Elmo Software, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Afterpay Limited and Elmo Software. 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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