The takeover of Sydney Airport (ASX: SYD) is likely preparing to take off early next month. Shareholders are set to vote in a ballot on 3 February.

If all goes to plan, the takeover will see one of the globe’s major airports taken from public boards and placed among private investment firms. Having said that, it will still be in the hands of regular Australians.

It’s to be taken over by the Sydney Aviation Alliance – a consortium of superannuation funds. That means many Aussies will see their super balance grow on the back of the airport.

But will the delisting of Sydney Airport prove to be positive for day-to-day Australian investors?  

Right now, the Sydney Airport share price is $8.69. That’s slightly lower than the consortium’s takeover bid of $8.75.

What does Sydney Airport’s takeover mean for retail investors?

The Sydney Airport might be in its final weeks as a listed entity.

It’s set to be purchased in part by the consortium’s leader IFM Investors – owned by 23 pension funds.

Global Infrastructure Partners ­– on behalf of its managed funds and clients – is also expected to have a tight hold on the consortium.

Meanwhile, super funds AustralianSuper, QSuper, and UniSuper, will each hold interests ranging from 7.5% to 18%.

Super funds are effectively run to benefit Australians. But will the delisting of a major Australian stock be a hit to retail investors?

Association of Superannuation Funds of Australia CEO Martin Fahy isn’t worried. He told The Age Sydney Airport’s takeover doesn’t mark the start of a “great delisting”:

Aussie Super and IFM taking a company off the ASX boards is effectively putting it into the hands of ‘mom and pop’ investors. Other investors might not see it like that, but that’s effectively what it is.

Though, Wilson Asset Management chair and chief investment officer Geoff Wilson isn’t so optimistic.

He said, while super funds snapping up companies ultimately sees them owned by Australians, there’s a downside to the privatisation of Australian companies. The Age quoted Wilson:

[A]s an investor in the stock market, I’d like more companies, more opportunity, and more variety.

Australians have a very high participation in investing in the stock market, and it’s unfortunate if they don’t get that opportunity.

While the takeover is likely to see Sydney Airport taken from the ASX – at an aggregate price of $23.6 billion – it’s also boosted its share price.

Since the consortium’s initial $8.25 per share bid was first posted, the airport’s stock has gained 49%.

The post Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter? appeared first on The Motley Fool Australia.

More reading

• Why is the Sydney Airport (ASX:SYD) share price worth keeping an eye on?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021
• These 3 ASX 200 shares are topping the volume charts this Thursday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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.

from The Motley Fool Australia https://ift.tt/3zMZImw

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

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

What happened?

Many of the most-watched cryptocurrencies are seeing interest rebound today, as investors continue to digest macro data and adjust their portfolios according to the aggregate risk profile the market is comfortable with. Top tokens Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) appreciated 1.8% and 3.5%, respectively, over the past 24 hours as of 11 a.m. ET.

These moves generally aligned with the overall crypto market, which surged 3% higher over this same time frame. These moves also correlated with the price action we’ve seen in recent days, which shows Bitcoin as a lower-beta play relative to the overall market on up days and down days as well.

For meme token Dogecoin (CRYPTO: DOGE), a surge in risk-on appetite from traders has propelled this token 4.8% higher over the past 24 hours. Additional support for Dogecoin from talking heads such as [American entrepreneur] Mark Cuban, and wider acceptance of Dogecoin as a means of payment from various corporations, has continued to spur interest in this meme token over the past day.

So what?

Today marks the first day in a while where we’re seeing cryptocurrencies really diverge from risk assets in the stock market in terms of returns. The directional moves of these top tokens do not align with most high-growth stocks today, which are down as of late morning. Accordingly, perhaps crypto bulls asserting that digital tokens could be viewed as a market hedge have a leg to stand on.

It appears investors are once again focusing on the relative risk-reward of cryptocurrencies relative to equities today. As investors continue to diversify their portfolios, allocations toward digital currencies appear to be holding steady. Currently, the entire crypto market continues to hover around the $2 trillion mark, with these three tokens collectively making up more than half of the overall market.

Now what?

Bitcoin and Ethereum remain the two top tokens most crypto investors watch closely. The daily price action of these tokens drives much of the sentiment across the broader crypto markets. That being said, the outsize moves some smaller tokens such as Dogecoin are making today provide an interesting bull thesis for those looking to take on additional risk.

Given this macro environment, adding more risk to one’s portfolio does seem like a dicey game to play. However, the divergence we’re seeing once again among crypto assets relative to stocks does add to the intrigue of this sector for investors.

As always, investors looking to put some money to work in cryptocurrencies should be aware of the risks, and they should practice proper portfolio discipline in sizing positions appropriately and ensuring risk management protocols are in place.

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

The post Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover appeared first on The Motley Fool Australia.

More reading

• Why Bitcoin, Ethereum, and Dogecoin plunged today
• Forget Bitcoin! These were the 5 crypto assets you wish you’d held in 2021
• Bitcoin and Ethereum are crashing: Is now the time to invest?
• Could Shiba Inu Surpass Dogecoin in 2022?
• The Bitcoin (CRYPTO:BTC) price has tumbled 10% since the start of 2022. Is it a buy?

Chris MacDonald owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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

from The Motley Fool Australia https://ift.tt/3K6zEYC

The Treasury Wine Estates Ltd (ASX: TWE) share price has had a difficult time in recent years.

On Wednesday, the wine giant’s shares are up 1% to $12.19.

While this means the Treasury Wine share price is almost 35% higher year on year, it is still a long way from its pre-COVID levels of ~$18.00.

Will the Treasury Wine share price ever get back to its pre-COVID levels?

Firstly, it is worth remembering that a lot has changed for the company since COVID-19 hit markets.

For example, late in 2020 the Treasury Wine share price was sold off when it was effectively kicked out of the lucrative China market after regulators slapped extreme duties on its portfolio.

Following an anti-dumping investigation, China’s Ministry of Commerce put a duty rate of 175.6% on Treasury Wine’s Australian country of origin wine in containers of two litres or less imported into China. This essentially means that a $50 bottle of wine would cost Chinese consumers $137.80 after duties have been applied.

As the China market was a big one for the company, this created a huge gap in its earnings. This makes it much harder for the Treasury Wine share price to reach its previous levels.

But management is certainly working hard to get there and is looking to reallocate this wine to other markets in order to fill the earnings gap. In addition, it recently announced a major acquisition that looks set to boost its earnings in the coming years.

Will it get there?

One leading broker that isn’t expecting much from the Treasury Wine share price in the near term is Goldman Sachs.

According to a note this week, its analysts have reviewed its recent acquisition of Frank Family Vineyards and retained their neutral rating and lifted their price target slightly to $11.80. This implies potential downside of 3.2%.

Goldman commented: “We believe that this acquisition remains positively aligned with the longer term portfolio strategy in the Americas and in terms of changing consumer channel preferences. However, we remain conservative in the potential for FFV to become a margin accretive channel for wine currently used in lower margin brands.”

“As a result, our forecasts remain conservative vs. the prior 3 year volume CAGR of +7.7% into FY24 and beyond. We update our earnings outlook to include this acquisition, resulting in +1.7% and +3.8% increases to the Group EBITS. In line with management guidance, our forecasts imply that leverage is likely to remain elevated into FY23, before returning to the 1.5x-2.0x range,” it added.

The post Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels? appeared first on The Motley Fool Australia.

More reading

• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?
• 5 things to watch on the ASX 200 on Monday
• What brokers are saying about the Treasury Wine (ASX:TWE) share price
• Analysts tip A2 Milk (ASX:A2M) and this share as buys
• How did the Treasury Wine (ASX:TWE) share price perform in 2021?

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

from The Motley Fool Australia https://ift.tt/34BOPZf

The performance of S&P/ASX 200 Index (ASX: XJO) banks could be impacted by one particular factor during 2022.

In 2021, the loan market was subject to intense competition in terms of pricing. There were some loans that had an interest rate that started with a 1.

However, all of the major banks – Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) – have increased their interest rates for borrowers a few times in the last few months.

The RateCity.com.au research director, Sally Tindall, noted that these hikes are really adding up. For example, NAB’s 3-year fixed rate loan is now around a full percentage point higher than it was a few months ago.

Ms Tindall said:

We expect fixed rates to keep on rising in 2022, creating a very different landscape to what we’ve become accustomed to. Next year there’s going to be a lot of mortgage holders coming off a fixed rate starting with a ‘1’ who are going to get the shock of their lives when they discover just how far prices have climbed.

However, there could be another factor that’s even more important in 2022 for borrowers when it comes to picking an ASX 200 bank.

Loan processing times a focus

One of the online-only leaders, Lendi, thinks that home loan processing times will be an important factor for borrowers in 2022, according to reporting by The Australian.

Lendi boss David Hyman said:

Processing times have fluctuated significantly over the last two years due to increased demand, particularly for refinances, in the ultra low-rate environment and COVID-related disruption.

However, many lenders have been working hard to improve their service level agreements because the customer experience is just as important as price to many borrowers.

Indeed, ANZ recently attributed its failure to process applications at a good pace as a key reason why its market share recently fell. ANZ said that it took urgent action to fix those processing issues by materially increasing its assessment capacity as well as simplifying and automating processes.

ANZ chair Paul O’Sullivan said about its processing of mortgage applications:

Let me be frank, we got it wrong. Although we expanded capacity, we didn’t expand capacity enough. And as a result, we lost market share to those who could process it.

We have spent a lot of time at board and management understanding this issue. There has been significant work done to bring in new processes, new ways of handling things and to look externally at best practice, so we can learn from that and improve.

The big four ASX 200 bank has been working hard on improving its performance with loan applications.

Differences in loan processing times could lead to different growth rates of the loan book for the ASX’s banks. It’s not just the big four banks wanting to win market share, there are others including Macquarie Group Ltd (ASX: MQG), Bank of Queensland Limited (ASX: BOQ), Suncorp Group Ltd (ASX: SUN) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

While loan book growth helps the banks’ net interest income, many of them have been warning of a deterioration of the net interest margin (NIM).

For example, CBA said that its NIM was “considerably lower” in the first quarter of FY22 because of impacts like home loan price competition, customers switching to lower margin fixed rate loans and the impact of a low interest rate environment.

RateCity.com.au’s research director Ms Tindall thinks that the variable interest rates could see some volatility from banks too:

Banks are still trimming variable rates, but the cuts have largely been to their basic loans and almost always reserved for new customers.

While we expect more cuts to variable rates in the next few months, we could see some lenders hike later this year ahead of the RBA, if the cost of funding continues to escalate.

The post Could this impact the performance of ASX 200 banks more than interest rates in 2022? appeared first on The Motley Fool Australia.

More reading

• What made the NAB (ASX:NAB) share price so appealing in 2021?
• These were the top 5 ASX 200 bank shares in 2021
• Why the CBA (ASX:CBA) share price jumped 23% in 2021
• Why did the Westpac (ASX:WBC) share price significantly underperform the other big banks in 2021?
• Analysts name 2 ASX 200 dividend 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. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank Limited. 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.

from The Motley Fool Australia https://ift.tt/333hmH2

The ASX share market is a dynamic world for investors. Sectors go in and out of fashion, individual companies rise to stardom and fall to the wayside.

Usually, specific groupings of shares sway between being embraced and shunned over the years. For instance, growth shares have held a prominent place in portfolios over the years as interest rates have crept lower and lower.

However, more recently, growth shares — such as tech names — have lost some of their shine in the eyes of investors. In their place, the more matured and less premium valued shares on the ASX have gained heightened focus.

So, why have value shares become more appealing than growth recently?

Rising rates give ASX value shares a new life

The ultra-low interest rate environment that has dominated the past several years has enticed more investors into growth shares. This could be a result of people being forced to move higher along the risk curve to find their desired return. Simultaneously, lower rates make future profits more attractive — benefitting the more forward-looking investments.

But nothing lasts forever — as the United States Federal Reserve looks to lift interest rates to fend off high inflation. The mere expectation alone has put a dampener on high-flying growth shares. Taking a look at the performance of some high profile ASX growth shares in recent times, we can see this:

• Afterpay Ltd (ASX: APT) down 35% in the last six months
• Xero Limited (ASX: XRO) down 8% in the last six months
• Kogan.com Ltd (ASX: KGN) down 26% in the last six months

Overnight, US Federal Reserve chair Jerome Powell noted he won’t refrain from increasing rates more if required. This strong signal from Powell has ASX value shares back on the radar of many investors, given that the Reserve Bank of Australia may follow suit.

How does an investor find a value opportunity?

Value investing is reliant on some basic fundamental analysis. As such, the first critical characteristic of a traditional ‘value share’ is profitability.

From there, investors will take a closer look at the price-to-earnings ratio (P/E) — a metric that indicates what multiple the market is willing to pay for the company’s profits. If the P/E ratio is notably lower than its peers in the given industry then value investors might consider it to be a buying opportunity based on its value.

Often a solid ASX value share will boast a sturdy balance sheet, primed with plenty of cash. The combination of profitability and backup cash means that these shares are capable of paying attractive dividends to investors as well.

The post Why is everyone talking about ASX value shares and how do you find them? appeared first on The Motley Fool Australia.

More reading

• Will the Treasury Wine (ASX:TWE) share price get back to its pre-COVID levels?
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher
• Why this top broker says the Fortescue (ASX:FMG) share price is overinflated
• Will Amazon shares hit $4,000 in 2022?

Motley Fool contributor Mitchell Lawler owns Afterpay Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Kogan.com ltd, and Xero. The Motley Fool Australia owns and has recommended Afterpay Limited, Kogan.com ltd, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3to1YQ3

The Liontown Resources Limited (ASX: LTR) share price has returned from its trading halt and is zooming higher.

In morning trade, the lithium developer’s shares are up 13% to $1.75.

Why is the Liontown share price zooming higher?

The Liontown share price is rising today after investors responded very positively to the release of an announcement.

According to the release, the company has made a major step towards the development of its flagship Kathleen Valley Lithium Project in Western Australia after executing its first binding offtake term sheet.

The release reveals that Liontown has signed its offtake agreement with one of the world’s premier battery manufacturers, LG Energy Solution (LGES). It is a major electric vehicle (EV) battery supplier for leading global automakers and is continuing to rapidly expand its business amid growing demand for lithium-ion batteries from the EV sector globally.

Liontown will supply LGES with up to 150,000 dry metric tonnes (dmt) per annum of spodumene concentrate produced at Kathleen Valley when production commences in 2024. This represents approximately one-third of the project’s start-up SC6.0 production capacity of ~500ktpa.

Under the offtake term sheet, pricing will be determined by a formula-based mechanism linked to market prices for Lithium hydroxide. Positively, based on today’s market pricing for lithium hydroxide, the contract terms would deliver a price outcome greater than the pricing assumptions used in its DFS.

Another positive is that the company revealed that it is continuing to progress negotiations with other potential Tier-1 global customers which would complement its off-take strategy.

“A fantastic outcome”

Liontown’s Managing Director and CEO, Tony Ottaviano, was very pleased with the agreement.

He said: “The signing of this historic first Offtake Term Sheet for Kathleen Valley represents a fantastic outcome for our shareholders and marks a very satisfying result for the Liontown Board and team. We have been steadfast in our strategy to negotiate terms that we believe accurately reflect the significance of our position in the global lithium market, as well as the quality and location of our Kathleen Valley resource to ensure that we extract the best value for our shareholders.”

“Not only is this Offtake Term Sheet consistent with our strategy, it also represents a strong validation for the Tier-1 credentials of the Kathleen Valley Project as one of the world’s premier new spodumene projects. Having a customer of the calibre and standing of LGES endorse the Project, by signing up to become a foundation customer, represents a significant vote of confidence in Kathleen Valley and in Liontown’s ambition to become a globally significant provider of battery materials for the clean energy market,” Mr Ottaviano added.

The post Here’s why the Liontown (ASX:LTR) share price is rocketing 13% higher appeared first on The Motley Fool Australia.

More reading

• Here’s why the Liontown (ASX:LTR) share price is caged up today
• Why AGL, Genetic Signatures, Liontown, and Novonix shares are charging higher
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• These are the 5 best performing ASX shares of 2021
• The 5 best ASX lithium stocks of 2021

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

from The Motley Fool Australia https://ift.tt/3njYiuR

Shares in iron ore juggernaut Fortescue Metals Group Limited (ASX: FMG) finished the session more than 2% in the green on Tuesday and closed the day at $21.12.

The gain extends a short-term rally that Fortescue shares have embarked on since mid-November, amid a positive upswing in the price of iron ore around the same time.

Shares bounced from a low of $13.95 apiece in November and have gathered support at each new high along the way until the open on Wednesday.

Yet, despite the strengths rolling into 2022, not all are as rosy on the outlook of the Fortescue share price. Here’s what the team at Citi are saying about the outlook for Fortescue investors.

A bridge too far?

Given Fortescue’s core operations are shifting out of iron ore, analysts at investment bank Citi downgraded its recommendation on the company to a sell on grounds of valuation.

Underpinning the broker’s decision was its assessment of Fortescue Future Industries (FFI) which Citi feels presents with “unreasonable” expectations on valuation. The firm says “we don’t think it possible for [FFI] to bridge the valuation gap – the math is just too demanding”.

Even though iron ore pricing has regained strength in recent months, it is still trading well off single-year highs at US$120.5/tonne at the time of writing.

Not only that, but Fortescue’s share price has accelerated north at a faster pace versus the raw ingredient, a fact Citi alludes to in its note to clients.

However, the broker acknowledges this as an upside risk to its sell rating if iron ore rallies towards its previous highs once again. Nonetheless, it was hard for Citi to look past the valuation gap in light of key staff departures and the likelihood that iron ore will remain bottom-heavy.

“While iron ore prices have surprised to the upside and dividend yields for the iron ore names remain robust, there’s now a large valuation gap between Fortescue and peers”, it says.

The broker also notes that a valuation of approximately $11.3 billion is required on FFI to close the gulf in valuation, a feat that would require more than 20 projects and capital expenditure of over $40 billion.

Citi concluded from its examination that “at this early stage, and with no visibility, this seems a bridge too far”.

What are other brokers saying?

Whilst Citi is bearish on the outlook, analysts at Macquarie and Bell Potter each recommend the stock as a buy right now.

However, scoping out the list of analysts covering Fortescue provided by Bloomberg Intelligence, 45% recommend the company as a sell, whereas 35% have it as a hold. Just 20% of coverage reckon the iron ore giant is a buy at the current standing.

Moreover, the consensus price target for Fortescue in 2022 now sits at $15.72, which, at the time of writing, implies a downside potential of 34%.

Goldman Sachs is one of the most bearish and values Fortescue at just $11 per share whereas Morgan Stanley has it as a sell at $14.05.

In the last 12 months, the Fortescue share price has fallen 16% but has started the year to date up 10%. The gains come after shares have rallied almost 17% in the previous month of trading for the $65 billion company by market cap.

The post Why this top broker says the Fortescue (ASX:FMG) share price is overinflated appeared first on The Motley Fool Australia.

More reading

• Dividend beasts: 5 ASX 200 shares with the highest dividend yield
• 2 high-yielding ASX 200 dividend shares to boost income
• Own Fortescue (ASX:FMG) shares? Here’s how the share price performed in 2021
• What’s impacting the Fortescue (ASX:FMG) share price on Monday?
• Top brokers name 3 ASX shares to sell next week

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.

from The Motley Fool Australia https://ift.tt/3flEXox

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.

In 2020, business was booming for e-commerce companies because of the pandemic and related government-imposed lockdown orders. It’s with this momentum that Amazon (NASDAQ: AMZN), one of the largest players in the industry, started 2021. However, the tech giant lagged the market last year, and several factors likely contributed to Amazon’s underperformance in 2021. 

First, investors largely shifted away from the so-called “pandemic stocks,” and many of these companies had a terrible year as a result. Second, Amazon’s iconic founder, Jeff Bezos, stepped down from his role as the CEO of the company in the third quarter, leaving his deputy Andy Jassy in charge. Will these factors continue to weigh on Amazon’s stock performance, or can the company get back to its market-beating ways?

Amazon’s shares currently trade at $3,251.08 apiece. Let’s see whether the company’s stock can rise roughly 23% this year to hit the $4,000 mark.

AMZN data by YCharts

Near-term headwinds

While the pandemic brought forth increased adoption of e-commerce, from which Amazon benefited, the outbreak also came with several issues for the company’s consumer business. As it reported in its latest quarterly update, the tech giant is currently facing “labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs.”

The company also doubled the size of its fulfillment network since the pandemic started to deal with capacity constraint issues. Amazon largely insulated its customers from these higher costs, which means it is taking them on itself. The company said it would incur “several billion in additional costs” due to the issues it is facing, which may harm the bottom line, at least in the short run. 

Long-term opportunities

Amazon has always been laser-focused on pleasing its customers, and it is showing this commitment once again. The money Amazon is spending to deal with its current issues will help keep its retail business efficient. Getting items to customers promptly is what matters in the long run. But then there’s also the company’s cloud computing unit, Amazon Web Services (AWS), to consider.

AWS continues to contribute substantially to Amazon’s overall business performance. The company recorded net sales of $110.8 billion in the third quarter, 15% higher than the year-ago period. Meanwhile, operating income and net income both dropped for the company. Amazon’s operating income decreased by 21.7% to $4.9 billion, while net income declined to $3.2 billion, 50.2% lower than the year-ago period.

How did AWS perform? Net sales from the segment soared by 38.9% to $16.1 billion — a much higher growth rate than Amazon’s overall business. Furthermore, AWS’ operating income increased by 38.1% to $4.9 billion while Amazon’s international segment reported an operating loss. The North America division only saw a comparatively modest operating profit of $880 million.

According to Statista, Amazon held a 32% slice of the cloud computing market in the third quarter; its closest peer came in at 21%. And while increased competition in this field is a potential headwind to keep in mind, Amazon generates loads of cash, and we can expect the company to continue investing heavily in this business. Amazon ended the third quarter with $30.2 billion in cash and cash equivalents, which remained more or less flat compared to the year-ago period.

According to some estimates, the cloud computing market will expand at a compound annual growth rate of 17.9% through 2028. That’s good news for Amazon — and its shareholders. Expect the tech giant to continue to benefit from this tailwind.

How will the market react? 

Despite the near-term challenges, Amazon is still ideally positioned for long-term growth. That’s what matters most: After all, the market is supposed to be forward-looking. That’s why, after it was a laggard last year, I expect the company to beat the broader market in 2022. Analysts see Amazon growing its revenue by 17.7% this year.

Furthermore, the company’s analyst consensus price target stands at $4,104.88, or 26.3% above its current price (as of this writing). I see Amazon exceeding this price target within the next 12 months. But even if it doesn’t, investors should remain focused on the company’s excellent long-term prospects. 

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

The post Will Amazon shares hit $4,000 in 2022? appeared first on The Motley Fool Australia.

More reading

• If you’d invested $5,000 in Amazon in 2015, this is how much you would have today
• Is Amazon stock too expensive?
• Why are Aussies going mad for this $0 revenue company?
• 5 unstoppable trends to invest $5,000 in for 2022

Prosper Junior Bakiny owns Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Amazon. The Motley Fool Australia has recommended Amazon. 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.

from The Motley Fool Australia https://ift.tt/3zR1Wla

The Mesoblast Limited (ASX: MSB) share price has had a hard time of it lately. Its struggles seem to have been born from a 17% single-day plunge last month, from which the company – whose stock is also listed on the Nasdaq exchange under the ticker NASDAQ: MESO – hasn’t yet managed to recover.

In early morning trade on Wednesday, the Mesoblast share price is $1.36. That’s 20% lower than it was this time last month.

Let’s take a look at what’s been weighing on the biotechnology company recently.

What’s dragging the Mesoblast share price lower?

The Mesoblast share price has been feeling down since it announced a Swiss healthcare company dumped its product in mid-December.

Novartis terminated an agreement that could have seen Mesoblast’s remestemcel-L used to treat COVID-19-induced acute respiratory distress syndrome (ARDS).

As The Motley Fool noted at the time, the agreement’s cancellation saw around US$1.2 billion of Mesoblast’s potential earnings washed down the drain.

Of course, the agreement’s termination might have been expected by some.

It was put in place less than a month before Mesoblast released news its randomised control trial treating ventilator-dependent patients with ARDS due to COVID-19 was called off early after it became apparent it was unlikely to meet its primary endpoint.

The Mesoblast share price recovered some of its losses on 16 December. That’s when the company released positive news of a trial using remestemcel-L to treat chronic back pain.

Its shares gained 11% that day, but they didn’t manage to hold onto the boost.

In fact, the Mesoblast share price has already shed 3.55% year to date. It’s also 47% lower than it was this time last year.

On top that that, Mesoblast remains one of the most shorted stocks on the ASX. The Motley Fool’s most recent weekly breakdown of shorting found 9.1% of the company’s shares were in the hands of short sellers.

The post The Mesoblast (ASX:MSB) share price has tumbled 25% in a month. What’s going on? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These were the worst performing ASX 200 shares in December
• Why the Mesoblast (ASX:MSB) share price is rising 5% today
• Why Bega Cheese, Magnis, Mesoblast, and Neometals shares are pushing higher
• These are the 10 most shorted ASX shares

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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.

from The Motley Fool Australia https://ift.tt/3fdG0XA

The Cochlear Limited (ASX: COH) share price is pushing higher on Wednesday morning.

At the time of writing, the hearing solutions company’s shares are up 1% to $208.79.

Why is the Cochlear share price rising today?

Investors are bidding the Cochlear share price higher today after it released an update on its Nucleus Implants.

According to the release, the U.S. Food and Drug Administration (FDA) has approved Cochlear’s Nucleus Implants for the treatment of unilateral hearing loss (UHL)/single-sided deafness (SSD).

Cochlear’s implants are already FDA approved for those with moderate to profound bilateral sensorineural hearing loss. However, with this approval, for the first time Cochlear can expand implantable treatment options for those with UHL/SSD to include cochlear implants, which is a significant market.

UHL is classified as hearing loss in one ear and near to near-normal hearing in the opposite ear. Whereas SSD is specific to individuals with severe to profound hearing loss in one ear and normal or near-normal hearing in the other ear. Every year, about 60,000 people in the United States acquire SSD.

Cochlear Americas’ Vice President, Clinical Affairs, Christine Menapace, commented: “It is not often that approvals to expand indications and increase awareness about effective treatments for hearing loss come along. Now with this approval, Cochlear is proud to offer the most hearing implant options available to those with unilateral hearing loss/single-sided deafness through our cochlear implant and bone conduction solutions.”

“It is important that those with this type of hearing loss recognize the impact to their lives and understand there are several options available to them, and we encourage them to talk to their hearing health professional today to find out what would work best for them,” she added.

The post Cochlear (ASX:COH) share price higher on FDA approval appeared first on The Motley Fool Australia.

More reading

• Hear this: Why the Cochlear (ASX:COH) share price had such a difficult time in 2021
• Where are Cochlear (ASX:COH) shares headed in 2022?
• 2 ASX 50 shares to buy in 2022
• What’s the outlook for ASX healthcare shares 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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/31RTzJs