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.

Most investors make an important mistake when they’re building their investment portfolio, and it can be a costly one. Luckily, we can all take valuable insights from an important chart that’s used by professional asset managers. This chart won’t create the perfect portfolio for you, but it provides essential guidelines for building an investment allocation.

The efficient frontier

The efficient frontier is a chart that plots portfolio returns against portfolio risk. 

The chart is well-known among asset managers and financial advisors, but it’s rarely mentioned by individual investors. Professionals have to focus more on risk management — losses tend to shake a client’s confidence in an asset manager. Meanwhile, financial media overwhelmingly covers market indexes and the performance of individual stocks.

Returns are intuitive. If you invest a certain amount of capital, the value of that investment grows or falls by a certain percentage. Over the long term, those returns are based on the fundamental performance of the asset. Companies that grow and produce profits tend to have stocks that appreciate. The stocks of unsuccessful companies generally lose value. That’s all pretty straightforward. 

Risk is a bit more complicated, and there are whole fields of study dedicated to understanding it to a high degree. Risk is defined in different ways, but portfolio risk usually refers to volatility. Volatility is generally calculated as the standard deviation of returns over a given period, and beta is a popular metric for measuring relative volatility. Portfolio returns tend to follow long-term trend lines, but they fluctuate over the short term around that trend. The bigger the swings in a portfolio’s value, the higher a risk it’s considered to be. 

This chart suggests that there’s a trade-off between investment risk and return over the long term. In an efficient capital market, investors are forced to accept more risk in exchange for higher expected returns. Equities are more volatile than bonds, but they produce larger gains in the long term. Growth stocks have higher upside than value stocks, but they’re also prone to steeper losses due to high valuation ratios.

How the efficient frontier works

The efficient frontier is theoretical — the exact numbers aren’t really known or universally established. Instead, it represents the highest theoretical return that can be achieved at a given level of volatility. The curve is the collection of potential returns across the spectrum of risk, from low volatility to high.

From a portfolio composition perspective, any point along the frontier is just as valid as any other. It might seem odd to suggest that a strategy with a 6% average rate of return could be just as good as one with a 10% average return, but it’s true in the context of asset management. Not everyone is in the position to assume the risk that’s required to achieve higher rates of return, and the frontier illustrates a balance between the two. Investors with low risk tolerance can’t achieve the same long-term growth as those with high risk tolerance.

Any point below the frontier is inferior to any point that’s on the frontier. If a portfolio’s long-term combination of volatility and returns places it below the frontier on a graph, then that portfolio is not compensating investors enough for the risk that’s being taken. In that case, there are better allocations that could deliver more growth without adding any additional volatility.

Using the frontier

The key to portfolio management is to identify your optimal spot along the efficient frontier, then ensure that your investment strategy gets as close to the theoretical limit as possible. That’s how the best allocations are defined, rather than simply the biggest gains over a small window.

The first step is to quantify risk tolerance, which should reflect time horizon and personality. Risk tolerance questionnaires are popular tools to accomplish this, and they allow investors to set a volatility target for a portfolio.

Once that volatility cap has been determined, it’s important to maximize the potential growth within those boundaries. Obviously, that’s easier said than done, and there are tons of variables and unknowns that dictate gains and losses moving forward. Fill your allocation with high-conviction stocks that will deliver growth, but make sure that it’s governed by risk tolerance. That’s the best way to place yourself on the right part of the efficient frontier curve.

People who have long time horizons and can stomach volatility are able to take more risks in favor of growth. Those portfolios should contain more growth stocks, small caps, and emerging markets. On the other end of the spectrum, some investors need to sacrifice growth to limit volatility. Those portfolios tend to have more bonds, dividend stocks, and stable value stocks. 

A 30-year-old should generally focus on growth in their 401(k) or IRA. Investors nearing retirement have to pull back on the reins to ensure that they aren’t forced to sell stocks at the bottom of a market cycle.

We’re seeing this in action with the current stock market correction. Any retiree whose well-being is seriously jeopardized by this pullback has mismanaged their volatility exposure and ignored the efficient frontier. 

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

The post Is this the most underrated chart for building your investment portfolio? appeared first on The Motley Fool Australia.

More reading

• Top broker says Harvey Norman (ASX:HVN) share price is cheap
• Own Medibank (ASX:MPL) shares? Here’s all you need to know about the latest dividend
• 4 ASX shares that love rising interest rates: report
• These are the 10 most shorted ASX shares
• Buy these 2 impressive ASX shares in March 2022: experts

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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The Harvey Norman Holdings Limited (ASX: HVN) share price could be in the buy zone.

That’s the view of the team at Goldman Sachs, which has responded positively to the retail giant’s half year results.

What did Goldman say?

According to the note, Harvey Norman delivered a half year result ahead of the broker’s expectations.

It commented: “HVN delivered 1H22 sales growth of +1.7% to A$2.34bn, +5.2% vs. GSe and group EBIT at +13.6% vs. GSe on an underlying basis, after adjusting for property revaluation and interest income. The results were a broad based retail beat across Australia, NZ as well as key international regions, largely driven by strong margin execution.”

Pleasingly, the broker notes that this strong form has continued into the second half, which has led to its analysts upgrading their estimates.

Goldman explained: “Trading into early 2H22 remained positive vs. GSe, reporting strong double digit growths on a 2 year basis across all regions excl. Asia and Slovenia and Croatia on a comparable basis. In Australia, the underlying 2 year trend improved to 23% comparable growth vs. 15.9% into mid November and +17.1% in December.”

“We revise earnings forecasts for HVN to factor in the 1H22 results. Regionally, we revise FY22 Australia earnings the most, by +13.6%, as the 1H22 EBIT was significantly ahead of GSe, largely due to the continued absence of tactical support, in our view, given the strong trading environment,” it added.

Is the Harvey Norman share price good value?

Goldman believes the Harvey Norman share price is good value at the current level, particularly in comparison with rival JB Hi-Fi Limited (ASX: JBH). In addition, it notes that its shares offer a generous yield at current levels, boosting the total potential return.

The broker said: “HVN continues to trade at P/E 1.5x lower than JBH. On a property adjusted basis, HVN currently trades at 6.5x FY22e P/E vs. JBH at 12.4x. Our 12m Target Price for HVN remains unchanged at A$6.00, implying an upside of 16.5% and total return of 24.6% [including dividends]. We maintain our Buy rating on HVN.”

The post Top broker says Harvey Norman (ASX:HVN) share price is cheap appeared first on The Motley Fool Australia.

More reading

• Harvey Norman (ASX:HVN) share price jumps following half-year results
• Could this be the biggest issue faced by ASX retail shares heading into earnings season?

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 Harvey Norman 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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Medibank Private Ltd (ASX: MPL) shareholders might be feeling frustrated after the company’s share price tumbled 6% over the last week.

The private health insurer released its half-year results for the 2022 financial year, reporting single-digit increases across key metrics.

Nonetheless, the board opted to increase its upcoming interim dividend to eligible investors.

Let’s take a look below at what you need to know.

What’s the deal with Medibank interim dividend?

The Medibank share price backtracked late last week, which appears to have been caused by an underwhelming performance.

In total, the company will be paying out 6.1 cents per share for the 6 months ended 31 December 2021. That’s 5% higher than last year’s interim dividend for financial year 2021.

Furthermore, the payout ratio for the latest dividend is at 78.5% (in line with the target range of 75% – 85%).

Management noted that the full-year dividend for FY22 is expected to be towards the top end of the above target range.

The higher dividend came despite Medibank’s net profit after tax (NPAT) falling 2.7% to $220.2 million over the first half. It noted that a $40.9 million, or 57% decrease, in net investment income dragged down the company’s bottom line.

When can shareholders expect to be paid?

Medibank will pay the interim dividend to eligible shareholders next month on 24 March.

However, to be eligible you’ll need to own Medibank shares before the ex-dividend date on Friday 4 March. This means if you want to secure the dividend, you will need to purchase Medibank shares by Thursday 3 March at the latest.

It is worth noting that on the ex-dividend day, the share price traditionally falls in proportion to the dividend amount.

In addition, the dividend is fully-franked which means that investors will receive tax credits when tax time comes along.

Currently, Medibank has a dividend trailing yield of 4.16% and a market capitalisation of roughly $8.4 billion.

The post Own Medibank (ASX:MPL) shares? Here’s all you need to know about the latest dividend appeared first on The Motley Fool Australia.

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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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The S&P/ASX 200 Index (ASX: XJO) tumbled in January due to fears of rising interest rates.

After a mini-revival to start February, the index has again headed down as the Russian military started a war in Ukraine.

However, the primary force that’s putting downward pressure on ASX shares is actually the same as a month ago.

It’s all about inflation.

The fear in January was that inflation arising from COVID-19 issues such as supply chain and economic recovery would become persistent.

This time a war involving Russia and Ukraine could result in a surge in prices for anything from gas, oil, wheat and corn.

And of course, rising and persistent inflation will result in higher interest rates.

“Forward-looking rate markets are now starting to factor in much higher rates,” read the Inflation Beneficiaries: What is Currently Priced In? memo from Wilsons.

“The pivot from the [US] Federal Reserve in January 2022 and the RBA earlier this month has only heightened the markets’ expectations of rate increases.”

In this report, the analysts at Wilsons examined which ASX shares might fare the best in such an environment:

40% boost if interest rates rise one percent

Wilsons reported that “cyclical sectors” typically outperform during times of rising interest rates.

“The performance so far in this cycle looks very similar to what we have seen in prior cycles.”

Stock transfer provider Computershare Limited (ASX: CPU) is a direct beneficiary of any rate rises.

This is because the company holds investors’ unclaimed dividends as a cash balance that’s invested.

According to management, incredibly, a 1 percentage point increase in interest rates will result in a 40% boost to Computershare’s profitability. 

“Interest earning cash balances CPU holds across key business lines are expected to average ~$40 billion this half. 

“The recent acquisition of the Wells Fargo Corporate Trust has doubled Computershare’s exposure to interest rates.”

Insurance is a lovely business in 2022

QBE Insurance Group Ltd (ASX: QBE) is another stock that Wilsons analysts would target.

“Insurance companies typically provide outperformance opportunities in periods of rising inflation/interest rates,” the report read.

“They benefit from higher premiums due to the rising inflation environment and higher interest income on policyholders’ funds.”

While QBE itself hasn’t indicated how much it would benefit from rising rates, the Wilsons team made its own calculations.

“We estimate QBE would see a benefit of 10-20% to earnings if rates were to rise by 1.0%,” stated the report.

“This assumes that higher premiums are not offset by higher claims inflation; the capital base is unchanged while profit margins expand marginally.”

Similarly, Wilsons saw Insurance Australia Group Ltd (ASX: IAG) as a beneficiary, but not as convincing as QBE.

“We see IAG as offering mild positive exposure to higher inflation/interest rates. Premium growth of 6.2% in 1H22 reflects IAG pricing power in a duopoly market,” the report read.

“So far, higher claim costs are not enough to detract from the premium benefits.”

How would a payments company benefit?

One stock that might be so obvious as a rate-rise beneficiary is payments company EML Payments Ltd (ASX: EML).

“As a payments business, EML earns a return on client funds held in its accounts,” read the Wilsons report.

“The guidance provided by EML equates to a 15% to 20% uplift in earnings for a +1.0% move in rates.”

This possible boost is not reflected in financial year 2023 market estimates, according to Wilsons analysts.

“If rates move through 2%, the leverage becomes even greater given EML’s rate structures in the US,” stated the memo.

“With rate rises already in place in the UK, and all but given in the US, higher rates should assist in EML meeting guidance.”

The post 4 ASX shares that love rising interest rates: report appeared first on The Motley Fool Australia.

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

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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains the most shorted share despite its short interest easing to 14.9%. Last week the travel agent’s shares came under pressure after it posted another large half year loss.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise again to 11.8%. The betting sector has come under significant pressure in recent months and short sellers don’t appear to expect that to change any time soon.
• Zip Co Ltd (ASX: Z1P) has seen its short interest rise week on week to 11.3%. This buy now pay later provider recently released its half year update and revealed a greater than expected loss. This has led to speculation that a capital raising is coming soon.
• Kogan.com Ltd (ASX: KGN) has seen its short interest rise to 10.5%. This ecommerce company’s shares came under pressure last week after it swung to a loss during the first half. The company also revealed a sharp pullback in its core Kogan revenues despite a rise in customers.
• Nanosonics Ltd (ASX: NAN) has short interest of 9.8%, which is up again week on week. This infection prevention company’s shares have been falling heavily this year following the announcement of a change in its sales model in the United States.
• Mesoblast limited (ASX: MSB) has short interest of 9.7%, which is up slightly week on week. Short sellers have been going after this biotech amid poor trial results, significant cash burn, and the loss of a major deal with Novartis.
• Webjet Limited (ASX: WEB) has short interest of 9.7%, which is down slightly week on week for a second week in a row. Some short sellers may have been closing positions now international borders are reopening.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise again to 9.3%. This medical device company’s mixed performance appears to be attracting short sellers.
• Tyro Payments Ltd (ASX: TYR) is back in the top ten with short interest of 8.4%. Last week this payments company’s shares were sold off after its EBITDA tumbled 67% to just $2.8 million.
• Temple & Webster Group Ltd (ASX: TPW) has seen its short interest rise to 8.3%. Like many online retailers, Temple & Webster’s shares have come under pressure in recent months amid concerns over valuations, increasing marketing costs, and slowing growth.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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• Why Blackmores, BWX, Kogan, and Magellan shares are dropping
• Why has the BetMakers (ASX:BET) share price dumped 30% so far this year?

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 Betmakers Technology Group Ltd, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, Temple & Webster Group Ltd, Tyro Payments, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Kogan.com ltd and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, Temple & Webster Group Ltd, Tyro Payments, and 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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Experts have rated some ASX shares as impressive opportunities in March 2022.

These are businesses with long-term growth plans and a management team that is motivated to achieve those goals.

Whilst brokers don’t always get everything right, they like to keep a keen eye on business valuation to find ideas.

These are two ASX shares that experts like right now:

Bubs Australia Ltd (ASX: BUB)

Bubs is one of the leading Australian infant formula companies, which is currently seeing a lot of growth with plans for a lot more.

Citi rates Bubs as a buy with a price target of $0.73 – that’s around 70% higher than where it is today.

The broker pointed to several positives from the Bubs half-year result, including US distribution expansion and the potential for Australia’s international borders opening up providing a tailwind to sales.

In the first six months of FY22, Bubs reported positive underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.2 million, after 84% year-on-year growth of group revenue to $33.6 million. There was also a “significant improvement” in the gross profit margin to 38%.

One of the key highlights was that the ASX share’s corporate daigou gross revenue was at a record high, exceeding pre-COVID levels, rising by 276%. There was also 53% growth of Chinese cross-border e-commerce gross revenue.

Bubs revealed that it’s now listed with the three largest US national food distributors. It has also secured ranging at Southern California’s largest food retailer.

Citi thinks that Bubs could start making a positive net profit after tax (NPAT) in FY23.

ELMO Software Ltd (ASX: ELO)

ELMO is a provider of HR and payroll software to small and medium businesses in Australia and the UK.

It’s currently rated as a buy by the broker Morgan Stanley with a price target of $7.80. That suggests a possible upside of around 110% over the next year, if the broker ends up being right.

The first half of FY22 showed a lot of growth for the business and it increased its FY22 guidance, but that seemingly wasn’t enough for the market to be positive about the result.

ELMO said that annualised recurring revenue (ARR) of $98.3 million was an increase of 35% compared to 30 June 2021. Revenue rose by 41% to $43.1 million.

The ASX share generated a positive EBITDA. Half-year EBITDA rose by $0.9 million to $0.3 million. ARR guidance was increased to a range of $107 million to $113 million for FY22.

ELMO revealed that operating leverage continues to improve with a reduction in key spending ratios across the business which has driven the positive EBITDA result and reduced the monthly operating cash burn by 36%.

The company launches new modules to make itself more useful for clients and increase the possible value of each client to ELMO, if they sign up. This can make the client even more sticky as well.

Management also noted that the UK acquisitions are performing “exceptionally well” and provide a solid foundation to increase its market share in the region.

The post Buy these 2 impressive ASX shares in March 2022: experts appeared first on The Motley Fool Australia.

More reading

• Bubs (ASX:BUB) share price jumps 10% amid 73% revenue growth
• How did ASX tech shares perform today?
• ELMO Software (ASX:ELO) share price higher after reporting more stellar growth
• Potential buys: 2 compelling ASX shares
• Broker names 3 speculative ASX shares 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 Elmo Software. The Motley Fool Australia owns and has recommended Elmo Software. The Motley Fool Australia has recommended BUBS AUST 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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Last month it was inflation fears and now it’s the war in Ukraine.

The S&P/ASX 200 Index (ASX: XJO) has taken a beating this year and, in the short term, there is no relief in sight as Russian troops march in.

The index is now down almost 8% for the year.

This, however, does mean there are some bargains out there. And this month’s reporting season has shed further light on which ASX shares could be the hidden gems.

The team at Morgans this week picked out a couple of stocks that have plunged so much that they now present once-in-a-generation entry points:

This ASX share is just too cheap to ignore

Pizza maker Domino’s Pizza Enterprises Ltd. (ASX: DMP) fell below expectations in its financial results last week.

Underlying net profit dived 5.3% to $91.3 million for the half-year ending 31 December, and the firm forecast it would fall below its target range for same-store sales growth.

Morgans analyst Andrew Tang pointed out that the profitability in its Asian operations was disappointing in its latest result.

“This represents a reset of Asian margins after the COVID tailwinds of last year, but we believe margins will improve in the months ahead as the rush of new corporate stores matures,” he reported in Morgans’ “best calls to action” memo.

“We have lowered EBIT forecasts by 5% for FY22 and 4% for FY23.”

Despite this, the Domino’s share price is now too tempting.

The stock has now sunk 34% for the year, and a hair-raising 51% since September.

“After a period of sustained weakness in the share price, we think now is the time to give Domino’s another look. We upgrade to ‘add’,” he said.

“Domino’s remains a growth story. It has a platform to deliver a positive trajectory of sales and earnings as its store rollout strategy continues and network efficiencies increase.”

Domino’s shares closed Friday at $82.20.

This healthcare company reported strong numbers

The reception to Healius Ltd (ASX: HLS)’s half-year result was opposite to Domino’s.

“1H underlying results were above expectations, with solid revenue growth underpinned by COVID-related gains and cost outs, driving margins and operating cash flow to record levels,” said Tang.

“Pathology posted triple-digit profit growth, on uplift in both COVID and non-COVID testing.”

With Healius shares falling more than 20% since the end of December, the stock is now at the “right price and well placed for a rebound”.

“While no FY21 guidance was provided, as COVID uncertainty remains, we believe the company looks well placed to not only benefit from a likely ‘baseload’ of COVID PCR testing going forward, but also from any rebound in demand from the backlog in diagnosis and surgery as the country opens up.”

Healius shares closed Friday at $4.29.

The post 2 ASX shares now at an awesome price for buying: expert appeared first on The Motley Fool Australia.

More reading

• Buy these ASX shares following the market correction: experts
• These were the worst performing ASX 200 shares last week
• ‘Attractive entry point’: Broker upgrades Domino’s (ASX:DMP) shares
• 5 ASX 200 shares tumbling to 52-week lows today
• Why Australian Ethical, Domino’s, Scentre, and St Barbara shares are falling

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

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If you’re in the process of building an income portfolio, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone right now:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that could be in the buy zone is Accent. It is the owner of a growing portfolio of store brands including Glue, HYPEDC, Pivot, Platypus, Sneaker Lab, and Stylerunner.

While lockdowns have weighed heavily on its performance in FY 2022, the team at Bell Potter believe it is worth sticking with the company. Especially with its analysts forecasting a big rebound in Accent’s profits and dividends in FY 2023.

Bell Potter has pencilled in a fully franked dividend of 6 cents per share in FY 2022 and then 11 cents per share in FY 2023. Based on the current Accent share price of $2.00, this will mean yields of 3% and 5.5%, respectively.

Bell Potter also sees plenty of upside for the company’s shares. It has a buy rating and $2.75 price target on them.

Woodside Petroleum Limited (ASX: WPL)

Another ASX dividend share that could be in the buy zone is Woodside. This energy producer’s shares may have stormed 23% higher so far in 2022, but they are still expected to provide investors with generous yields in the near term.

In addition, the future looks very bright for Woodside thanks to its upcoming merger with the petroleum assets of BHP Group Ltd (ASX: BHP). This transformative merger with make the company a top ten global producer with a collection of world class operations and numerous growth options.

Morgans is a fan of Woodside and is forecasting dividends per share of $1.29 in FY 2022 and then 94 cents in FY 2023. Based on the current Woodside share price of $27.95, this will mean yields of 4.6% and 3.4%, respectively.

The broker has an add rating and $30.35 price target on its shares.

The post Analysts name 2 top ASX dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• How might the Ukraine crisis impact the Woodside (ASX:WPL) share price?
• 5 things to watch on the ASX 200 on Friday
• The oil price has just hit an 8-year high. What might this mean for ASX shares?
• Even the Woodside (ASX:WPL) share price isn’t immune to today’s sell-off. Here’s why

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

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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a very difficult week with a small daily gain. The benchmark index rose 0.1% to 6,997.8 points.

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

ASX 200 expected to surge higher

The Australian share market looks set to start the week on a very positive note following a strong finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day a massive 166 points or 2.4% higher this morning. On Wall Street, the Dow Jones jumped 2.5%, the S&P 500 climbed 2.25%, and the Nasdaq rose 1.6%.

Oil prices pull back

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a tough start to the week after oil prices pulled back. According to Bloomberg, the WTI crude oil price fell 1.3% to US$91.59 a barrel and the Brent crude oil price dropped 1.2% to US$97.93 a barrel. Traders appear to have been taking a bit of profit off the table following strong gains during the week.

Zip half year results

The Zip Co Ltd (ASX: Z1P) share price will be on watch today when it releases its half year results. While its financials have largely been pre-released, there has been speculation that the buy now pay later (BNPL) provider could announce a capital raising with its results this morning.

Gold price drops

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a poor start to the week after the gold price tumbled lower on Friday night. According to CNBC, the spot gold price fell 2% to US$1,887.60 an ounce. The safe haven asset dropped after investors flooded back into risk assets.

Bank of Queensland half year results

The Bank of Queensland Limited (ASX: BOQ) share price could be one to watch when it releases its half year results. According to CommSec, the market consensus estimate is for a net profit after tax of $202.6 million for the first half. The market is also expecting the regional bank to declare an interim dividend of 24.3 cents per share.

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

More reading

• These were the best performing ASX 200 shares last week
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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 ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Investors that are looking for some new shares to buy may want to look at the ones listed below.

While these three ASX 200 shares are from different areas of the market, one thing they have in common is that they have been tipped to climb higher from here.

Here’s what you have to know about them:

Goodman Group (ASX: GMG)

The first ASX 200 share that could be in the buy zone is Goodman. It is a global integrated commercial and industrial property company with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil. Goodman has a world class portfolio of properties which have exposure to key growth markets such as ecommerce and logistics. Given the strong demand it is experiencing and its huge development pipeline, Citi believes it is well-placed for growth over the coming years.

Its analysts currently have a buy rating and $29.50 price target on its shares. This implies potential upside of almost 33% for investors.

ResMed Inc. (ASX: RMD)

Another ASX 200 share to look at is ResMed. It is a medical device company with a focus on the sleep treatment market. ResMed has been a very strong performer over the last decade and looks well-placed to continue this strong form over the next decade. This is thanks to its world class products, significant market opportunity, and the growing prevalence of sleep disorders. Its near term performance is also being boosted by a 5.2 million CPAP device recall from Philips.

Morgans is a fan of the company and has an add rating and $40.46 price target on ResMed’s shares. This suggests potential upside of 23% over the next 12 months.

Westpac Banking Corp (ASX: WBC)

A final ASX 200 share to look at is Westpac. This banking giant’s shares are down notably from their highs. This has been driven by concerns about its margins and cost cutting plans. However, the team at Morgans believe the challenges facing Westpac are not unsurmountable. As a result, it doesn’t believe its shares should be priced like a value trap and feels its recent update should alleviate concerns over its cost outlook.

The broker has an add rating and $29.50 price target on its shares. This implies potential upside of almost 30% for investors over the next 12 months.

The post Analysts name 3 ASX 200 shares with potential upside of 20%+ appeared first on The Motley Fool Australia.

More reading

• 2 blue chip ASX 200 shares analysts rate as buys
• Own Westpac (ASX:WBC) shares? Here’s the latest on the bank’s cost-cutting crusade
• Analysts name 2 ASX 200 blue chip shares to buy
• Should you be buying ASX 200 bank shares in February?
• The Westpac (ASX:WBC) share price has gained less than $4 in 10 years. Have the dividends been worth it?

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. 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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