The Healius Ltd (ASX: HLS) share price has been bouncing around in recent trading sessions.

This has been caused by a mixed reaction to a new acquisition, with some analysts questioning the price it paid.

What did Healius acquire?

Last week Healius announced an agreement to acquire leading bioanalytical laboratory business Agilex for an enterprise value of $301.3 million.

Agilex is expected to generate revenue and EBITDA in the range of $36-40 million and $14-16 million, respectively, in calendar year 2022. This values the transaction at 20x forward EBITDA.

Though, management does note that Agilex has strong future earnings growth potential and is expected to deliver low single digit earnings per share accretion in the first full year of ownership.

The reaction

The team at Citi was not overly impressed with the deal. In response the broker retained its neutral rating and $5.10 price target on Healius’ shares.

Citi commented: “We place a lot of emphasis on ROIC when assessing businesses because high excess returns have a positive compounding effect on valuations. We estimate the proposed HLS acquisition of Agilex was priced at a ~20x EBITDA or CY22E EBIT ROIC of <5%, well less than the cost of capital. It is not obvious to us that this acquisition is so strategic that it justifies the price paid.”

Elsewhere, Morgans has a few concerns over the price paid, but not enough to stop it from upgrading Healius’ shares to an add rating with a $5.79 price target.

Morgans commented: “Healius is acquiring Agilex Biolabs, a leading Australian bioanalytical laboratory, for A$301.3m in cash funded via existing debt. We see limited conditions to close (Jan-22), with the transition expected to be low single digit EPS accretive in the first full year. However, paying a peak multiple (20x EV/EBITDA) in a frothy market sees return metrics fall short and reliant on future above market growth for shareholder value.”

Nevertheless, thanks to strong COVID-19 testing demand, the broker has upgraded its earnings estimates and recommendation accordingly.

The broker concluded: “While we view adding a pricey clinical testing company adds another layer of complexity as the company continues to transition to a specialist diagnostic and day hospital operator, the near term remains all about COVID testing, with Omicron driving a new phase of the pandemic which we view as underappreciated by the market.”

In early trade on Tuesday, the Healius share price is up over 1% to $5.36.

The post Healius (ASX:HLS) share price higher despite analysts questioning acquisition value appeared first on The Motley Fool Australia.

More reading

• 2 value ASX shares ready for a big 2022: fund manager
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• ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns
• Healius (ASX:HLS) share price falls despite $300m acquisition
• 3 fantastic ASX growth shares to buy right now

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.

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The Goodman Group (ASX: GMG) share price has kept rising this month. It has notched up several all-time highs in December 2021. What’s going on?

Goodman is one of the world’s biggest industrial property groups. It has a presence in Australia, New Zealand, Asia, Europe, the UK, North America and Brazil. Goodman aims to create innovative property solutions that meet the individual requirements of customers, whilst finding long-term returns for investors.

What’s going on with the Goodman share price?

Since the start of the month, Goodman shares have risen another 6.5%.

The business has been benefiting from structural trends for a while now and COVID-19 effects are accelerating those trends.

Indeed, Goodman says that it has been deliberately positioning its portfolio over the last decade to adapt to and leverage the changes in the digital economy. Those changes are now being realised. Customer demand for high-quality properties close to consumers has never been greater, according to Goodman.

Those trends are helping Goodman’s rental growth, increased development activity and higher valuations.

The rental side of the business is seeing very high levels of utilisation. At 30 September 2021, Goodman had an occupancy rate of 98.4% with a portfolio weighted average lease expiry of 4.7 years. Its 12-month like for like net property income growth was 3.2% in the last quarter.

The assets under management (AUM) had increased to $62 billion.

Further growth is expected

Goodman is benefiting from increased customer demand, which has resulted in an acceleration of development, particularly in infill locations.

At 30 September 2021, its work in progress (WIP) had reached $12.7 billion, with an annual production rate for the year expected to average approximately $6.8 billion. The strong demand is driving “strong margins” and the yield on cost is currently at 6.8%. These are some of the underlying factors that may be helping the Goodman share price.

The pre-commitments have a long WALE of 14 years.

Regeneration of existing brownfield sites is providing more sustainable development opportunities closer to consumers. Goodman expects this activity to continue to be a major source of development into the future.

Goodman said that its outlook is strong and it’s expecting its AUM to grow to around $70 billion by June 2022. Last month, Goodman acknowledged that COVID disruptions have been managed so that they have had less impact on the business than initial assumptions.

The property business also said that due to the strength of development projects, leasing success and stronger-than-expected performance of its partnerships, it increased its FY22 market guidance for operating earnings per security (EPS), which is now expected to be at least 15%.

Broker rating on the Goodman share price

There are still quite a few buy ratings on the business. However, Goodman shares have risen to those price targets.

One of the highest price targets at the moment is from Morgan Stanley, which has a target of $26.50 on the business. That’s only slightly higher than where it is now, suggesting the price may not move much over the next year if the broker is right (or doesn’t change the target).

The post The Goodman Group (ASX:GMG) share price has notched up 8 all-time highs this month. Here’s why appeared first on The Motley Fool Australia.

More reading

• 2 fantastic blue chip ASX 200 shares to buy next week
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• ‘Close your eyes’: ASX share you can buy and forget

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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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

The price of Ethereum (CRYPTO: ETH), the world’s second-largest cryptocurrency by market cap, was slipping today on a broader sell-off in crypto and stocks.

As of 2:31 p.m. ET, Ethereum was down 1% over 24 hours after losing as much as 4% earlier in the day.

So what

The only Ethereum-specific news out today was positive, as the Ethereum Foundation launched the Kintsugi Merge testnet, a step in the process to Ethereum’s Merge, which is its transition to Eth2, a set of upgrades that will make the cryptocurrency more scalable, secure, and sustainable.  

However, that news wasn’t enough to push the token’s price higher as Ethereum instead pulled back with the rest of the crypto and stock markets. Most high-profile cryptocurrencies and stocks were down today on fears of the omicron variant, which is already driving a spike in cases in the New York area. Investors are fearing that it could cramp the global economy, especially ahead of the busy holiday travel season.

The explanation for cryptocurrencies being down on the omicron news is less direct. You might expect another COVID-19 outbreak to drive gains in cryptocurrencies, as digital currencies benefitted from the initial phases of the pandemic and related lockdowns.

However, that hasn’t been the case. The new asset class has largely moved in tandem with big stock market moves because investors still view crypto as a risk asset. It goes up as risk appetites increase and it goes down as investors look for safer assets. 

Now what

There are few fundamental drivers when it comes to cryptocurrencies as the asset class is devoid of metrics that guide other productive asset classes like stocks or real estate.

However, Ethereum, which is the network on which most non-fungible tokens (NFTs) are bought and sold, has more real-world utility than any other crypto, and that along with its usage should help guide its value.

Still, it’s helpful to remember that cryptocurrencies are still likely to move with the broader direction of the stock market, and increased worries about omicron and an extended sell-off in stocks will likely push Ethereum lower. 

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

The post Why the Ethereum price was sliding today appeared first on The Motley Fool Australia.

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• Ethereum (CRYPTO:ETH) is up 419% in 2021. Here’s what’s ahead for 2022
• Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on?

Jeremy Bowman owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends 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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With interest rates at virtually zero, bank deposits are not even counted as investments these days.

For example, at the Commonwealth Bank of Australia (ASX: CBA), you can lock away your money for 5 years and it would only earn 0.25% per annum.

That’s actually shrinkage in real terms, as inflation would likely run much higher than that.

So if an ASX shares fund declared that it’s on track for 10% gross income this financial year, a few eyebrows would be raised.

But that’s exactly what Plato Australian Shares Income Fund did this month.

Buybacks and miners handing out cash like there’s no tomorrow

Senior portfolio manager Dr Peter Gardner said multiple factors had come together to form a tsunami of yields.

“Because we manage our portfolio specifically for low tax investors such as retirees, we have been able to take advantage of off-market buybacks undertaken by key portfolio holdings including CBA, Woolworths Group Ltd (ASX: WOW) and Metcash Limited (ASX: MTS).”

After buybacks, ASX shares in the mining sector had treated investors well too.

“While the retraction in the iron ore price has worried investors, we’ve seen companies such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) generate exceptional cash and franking credits for investors in recent months and many of these strong companies remain highly profitable,” said Gardner.

“Looking ahead, there will be further tax-effective income opportunities in the sector. In particular, we think the BHP and Woodside Petroleum Limited (ASX: WPL) merger could result in BHP’s petroleum assets being spun-off in the form of a special dividend with franking credits attached.”

Don’t worry about Omicron

Even with the COVID-19 Omicron raging across the world, Gardner reckons the Australian economy looks strong heading into 2022.

“There appears to be little political appetite for widespread lockdowns in the foreseeable future and while variants bring uncertainty, we feel the strong economic bounce-back we’ve seen over the past year is sustainable,” he said.

“So when you look at financials, a return to pre-COVID levels of dividends looks likely over the next year and many of the leading banks have robust balance sheets.”

And with consumers armed with a cash stockpile after lockdown, retail ASX shares have much potential in 2022.

“We expect strong retail trading over Christmas to benefit select retailers such as JB Hi-Fi Limited (ASX: JBH) and Super Retail Group Ltd (ASX: SUL),” Gardner said.

“The retail sector is another area that could generate strong income in the second half of the financial year.”

Gardner added that an actively managed portfolio is critical to maximise the yields currently on offer.

“We do think investors are in the midst of a bonanza year for dividends.”

Over its 10-year life, the Plato Australian Shares Income Fund has returned 9.4% of income per annum including franking credits.

The post Fed up with term deposits? How to get 10% income from ASX shares appeared first on The Motley Fool Australia.

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• 2 value ASX shares ready for a big 2022: fund manager
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• Why is the BHP (ASX:BHP) share price having such a lousy start to the week?
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• Wesfarmers (ASX:WES) share price rises amid latest push for API

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 Super Retail Group Limited. The Motley Fool Australia owns and has recommended Super Retail 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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The short interest in Zip Co Ltd (ASX: Z1P) shares fell in early December and has remained flat since.

According to The Motley Fool Australia’s weekly breakdown of the ASX’s most shorted shares, the buy now, pay later (BNPL) company ended November with 9.4% short interest.

As of yesterday, the most recent data sees the company with a short interest of 9%.

So, what might be making short sellers slightly more bullish on the Zip share price? Let’s take a look.

Why did the short interest in Zip shares drop?

Short sellers likely had a field day on the Zip share price in November – it tumbled 20% over the course of last month.

But things seemed to be looking more favourable for Zip in early December. The dip in its short interest could have been strengthened by a positive update released earlier this month.

On 7 December, Zip announced it saw its monthly transaction volume grow to $906.5 million in November – a 52% increase of the same month of 2020. It also saw the number of transactions using its service jump 86% to 7.5 million.

However, the broader BNPL sector’s movements have been weighing heavily on the Zip share price lately. Of course, that’s fantastic news for short sellers.

The company’s stock has hit numerous new 52-week lows in December.

First, a particularly bad day for ASX tech shares saw the Zip share price tumble 10% to a new 12-month low of $4.34.

It also slumped 6% to another low of $4.05 on Friday amid news from a United States regulator.

The nation’s Consumer Financial Protection Bureau had ordered Zip, along with 4 of its popular peers, to provide it with the pros and cons of its offerings. The companies’ answers will help make up an inquiry into the BNPL industry.

All in all, those holding Zip’s 9% short interest are probably having a joyous December – the company’s share price has tumbled another 20% since the month began.

The post Why has the short interest in Zip (ASX:Z1P) shares fallen in December? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended 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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Today is payday for the shareholders of Westpac Banking Corp (ASX: WBC), with the banking giant planning to pay its final dividend of FY 2021 this morning.

Westpac dividend being paid today

At the start of November, Westpac released its full year results for FY 2021 and reported a 138% increase in statutory net profit to $5,458 million and a 105% jump in cash earnings to $5,352 million.

This was driven largely by a 144% increase in Business segment cash earnings to $1,789 million, which was supported by a more modest 12% increase in Westpac’s Consumer business cash earnings to $3,081 million.

Together with its strong balance sheet, this allowed Westpac to announce a $3.5 billion buyback and declare a fully franked final dividend of $2.2 billion or 60 cents per share.

The latter brought its full year dividend to a total of 118 cents per share, which represents an increase of 280% over the COVID-impacted FY 2020 dividend and a payout ratio of 62%.

Dividend outlook

The good news for Westpac shareholders is that a number of brokers expect further dividend increases in the years to come.

For example, the team at Morgans has pencilled in a fully franked Westpac dividend of 123 cents per share in FY 2022 and then 162 cents per share in FY 2023.

Based on the current Westpac share price of $21.01, this implies very generous yields of 5.9% and 7.7%, respectively, for investors over the next two financial years.

Morgans also sees plenty of upside for Westpac’s shares. It currently has an add rating and $29.50 price target, which suggests they could climb as much as 40% over the next 12 months.

The broker commented: “Westpac is our preferred major bank. While WBC stock is now being priced like it is a value trap, we do not believe it is a value trap.”

The post The final Westpac (ASX:WBC) dividend is being paid today. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Westpac (ASX:WBC) share price falls despite asset sale announcement
• Top brokers name 3 ASX shares to buy next week
• Is it a buy? Here’s what Macquarie is saying about the Westpac (ASX:WBC) share price
• 2 high yield ASX 200 dividend shares to buy

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 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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The Boral Limited (ASX: BLD) share price has been a strong performer in 2021.

Since the start of the year, the building products company’s shares have risen 21%.

Is it too late to invest?

The broker community remains extremely divided on the Boral share price.

In one corner you have Macquarie Group Ltd (ASX: MQG) and Citi which believe Boral’s shares can rise from here.

In the other corner you have Morgan Stanley and UBS that believe Boral shares are fully valued now.

Where next for Boral share price?

Macquarie and Citi currently have buy and neutral ratings, respectively, with price targets of $7.20 and $7.15. Based on the current Boral share price, this represents upside of 19% to 20%.

While Macquarie was disappointed with the sale price of Boral’s fly-ash business, which it notes has a lot of potential due to fly ash’s key role in the green concrete process, it remains positive due to the strengthening infrastructure demand environment and its transformation plan.

Elsewhere, the teams at Morgan Stanley and UBS currently have underweight and neutral ratings, respectively, with $6.10 price targets. This is broadly in line with where the Boral share price trades today, which suggests its shares are fully valued at the current level.

While UBS acknowledges that infrastructure demand is strong, it believes this is being offset by higher costs due to higher freight and labour expenses.

Morgan Stanley appears to agree with this view. In fact, it expects Boral to deliver a very disappointing half year result early next year. According to a recent note, the broker has pencilled in first half earnings decline of approximately 40% in FY 2022. In light of this, Morgan Stanley doesn’t appear to be in a hurry to change its rating on the Boral share price.

Which brokers make the right call, time will tell.

The post Is the Boral (ASX:BLD) share price already fully valued? appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to sell today
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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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie 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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Webjet Limited (ASX: WEB) shares are among the most shorted on the ASX. The company’s short interest reached 9.3% this week.

That makes it the fourth most shorted Australian stock.

But what does that actually mean? Let’s take a look at the implications of Webjet’s considerable short interest.

What does Webjet shares’ short interest mean for investors?

The Webjet share price is still under short attack, and it might be bad news for those invested in the company for growth.

To put it simply, short selling is a way for large-scale investors to profit from share price falls.

To ‘short’ a stock, a person must borrow it from another investor for a designated amount of time. The borrower then sells those loaned shares on the market.

The idea is the borrower will take the cash from selling the loaned shares and sit on it for a time.

If all goes well for the short seller (and poorly for long term investors), the share price of the borrowed stock will fall.

That will let the short seller buy the loaned shares back for less than they sold them for, before returning the stock to their owner.

The short seller can then pocket the difference as profit.

So, what is short interest? It’s how many of a company’s shares are currently involved in short selling operations.

Thus, 9.4% of Webjet’s outstanding shares are currently being wagered on its share price falling in the short to medium term.

Of course, that figure is probably worrying to many long-term investors.

Still, there’s always a chance the share price will go up and short sellers will have to fork out more than they earned to return the shares.

Interestingly, that’s what many brokers seem to expect will happen.

As The Motley Fool Australia recently reported, Morgans and Goldman Sachs both expect to see growth out of the company.

Goldman Sachs has a price target of $6.90 on the travel company’s stock, while Morgans has slapped it with a target of $6.60.

As of Monday’s close, the Webjet share price is $5.04, leaving the brokers predicting it has an upside of 30% to 36%.

The post Webjet (ASX:WEB) shares have a 9% short interest. What does this mean? appeared first on The Motley Fool Australia.

More reading

• How high will ASX travel shares fly in 2022?
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• Analysts say these ASX shares are buys
• How might the Webjet (ASX:WEB) share price perform in 2022?
• 2 buy-rated ASX travel shares that could take off

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 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Perennial Value Management portfolio management director Stephen Bruce explains how growth has overlapped with value in the past 2 years and his fund’s 2 biggest bets at the moment.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Stephen Bruce: We’re a broad-cap ESG-aware, value-oriented Australian equities fund. We’ve got a long track record. We’ve been around for over 20 years, with a moderate value-style process. 

The important thing is that we’ve got a real broad-cap focus. So we want to be able to find the opportunities wherever they are across the market cap spectrum. I think one of the reasons that we think we’ve got a good opportunity to do that is that we’re part of a very big equity business with 21 investment staff who cover everything from large caps, small caps, micro caps — and even down into the unlisted space, which is kind of helpful too in the sense that it gives you a good feel for what’s coming to [Initial Public Offering] IPO, et cetera.

MF: The last month or so has been poor for growth stocks with inflation and interest rate fears. Do you feel like next year will be a positive one for value stocks?

SB: I think in the same way the last 12 months has been pretty good for value and, in fact, since the day the market turned back in March 2020, it’s been good. 

That really, in our view, comes down to this change of emphasis in the way the economy’s being managed — from an exclusive focus on monetary policy towards the acceptance that fiscal policy is important as well. 

That’s led to this kind of a broadening of growth across the market. And if that continues, which on balance we expect it will — I’ll say why in a second — then we would think that you’re going to start to see this sort of kick up in interest rate, inflation being a bit more normal, lower than it is now but higher than it has been.

And in that environment where you could find growth across quite a number of parts of the market and money isn’t quite as free as it used to be, the more valuey parts of the market tend to do better. 

Some of the really expensive parts of the market might start to feel a bit of valuation pressure coming onto them. We’ve seen a bit of that just recently.

Biggest convictions

MF: What are your two biggest holdings?

SB: Healius Ltd (ASX: HLS), which was one of our biggest holdings last time we spoke, is actually our biggest holding at the moment. 

The investment case with that one hasn’t really changed in the sense that it’s got this really strong leverage to COVID testing. Being the second biggest pathology operator in Australia and doing about 20% of all pathology tests, it’s had an enormous first quarter. 

Just as we’re sort of expecting it to fade, with the latest variant of COVID entering the scene, those testing rates have started to go back up again. So that’s the headline near-term driver but, in the background, it’s a business which is being, we believe, significantly improved from an operating point of view — we should see that once COVID’s washed through over time, the business that’s left will be in much better shape and generating much better margins.

It’s also in a sector where there’s a lot of corporate activity. One of the really interesting things is infrastructure investors, which are a growing part of the market as more and more money is looking for assets with supposedly stable returns, it’s been expanding what is considered “infrastructure”. Many healthcare businesses are now starting to fall under the broader umbrella of infrastructure. 

And if you think about something like pathology, where it grows at about 5% per annum, it’s largely government-funded, it’s pretty economically insensitive, that’s potentially an attractive space and we’re starting to see offshore non-traditional investors starting to look at that space.

MF: What’s your other big one?

SB: Interestingly our other second-biggest overweight is actually BHP Group Ltd (ASX: BHP). We have been underweight off miners for probably the last 6 months or so, but just with the extent that the share prices have come back and how far the iron oil price has fallen — it’s done the round trip from $100 to $200 and back again — even if you assume that iron ore stays at $100, BHP’s probably trading on 10 times cash flow and it’ll pay you a 10% dividend yield, which to us looks like really good value.

But our expectation is that as we go into the new year, Chinese steel production will start to pick up again as the property market starts to accelerate. Because now, as we all know, the Chinese government has been clamping down on the property market which accounts for 40% of steel consumption in China.

But now they’ve sort of seemed to have achieved a fair bit of what they’ve been wanting to do — rein in the big private developers, cool the market a bit — we’re starting to see the early signs of them easing up there. 

It’s obviously such an important part [of the economy] and the comments that have come out of the most recent party meetings around their areas of focus all kind of indicate that housing, a recovery in housing and including construction of say, social housing, are going to be important. 

That augurs pretty well. So if the iron ore price, which already seems to [have] started to head back up — it’s $114 or so now — if that continues, then we see a lot of upside in all of the big miners. But BHP is quite good in the sense that at the moment it’s got pretty good operational performance. It’s got an ungeared balance sheet. It’s divested. Its fossil fuel exposure though is cleaning itself up and attracts some extra interest from that perspective as well.

The post 2 value ASX shares ready for a big 2022: fund manager appeared first on The Motley Fool Australia.

More reading

• Why is the BHP (ASX:BHP) share price having such a lousy start to the week?
• These are the 10 most shorted ASX shares
• 2 fantastic blue chip ASX 200 shares to buy next week
• ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns
• Healius (ASX:HLS) share price falls despite $300m acquisition

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

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The Nine Entertainment Co Holdings Ltd (ASX: NEC) share price will be on watch on Tuesday.

This follows the release of a positive update after the market close on Monday.

Why is the Nine share price on watch?

The Nine share price could be given a boost today from news that it has secured the broadcast rights to the NRL for the 2023 to 2027 seasons. This extends its partnership with the league beyond three decades.

According to the release, the agreement will see the live broadcast of NRL matches on Free-To-Air TV remain broadly in line with Nine’s current contract, except for an extra three matches per year. This is due to the expansion of the league to a 17-team competition in 2023.

Nine’s agreement includes the exclusive Free-to-Air broadcast of three premium live games a week, on each of Thursday and Friday evenings and Sunday afternoons, as well as the Finals series, and other special event matches. Nine will also show a Saturday night match live in each of the last five rounds of the weekly competition.

Furthermore, the NRL Grand Final and State of Origin will continue to be exclusively shown on Nine and 9Now. All State of Origin matches will be broadcast on Wednesday evenings from 2023.

Finally, the company has secured the radio and audio streaming rights for at least four matches each week, as well as the finals series and State of Origin series.

What is Nine paying?

The good news for Nine is that there hasn’t been an escalation in prices for these rights.

Nine is paying an average of ~$115 million per annum, which is in line with the price it paid for the 2018 to 2022 contract. The only difference this time is the additional ~$15 million per annum of contra and other non-cash services that will be provided. This is up from ~$10 million per annum previously.

Nine’s Chairman, Peter Costello, said: “This is a major deal for our business to bring this exciting sport to the Australian public across our platforms. The negotiation has been constructive and in the spirit of partnership across our businesses and we thank the NRL for the positive engagement in the process for an outcome that benefits all Australians and fans of the game.”

This sentiment was echoed by Nine’s CEO, Mike Sneesby.

He commented: “We are very pleased to extend our 30-year partnership with the NRL for a further five years. This certainty enables Nine to continue to bring the game live and free to all Australians, and partner with the NRL to further develop the game for the clubs and the broader community. This is an outstanding result as together we build a strong media partnership delivering quality, and free, NRL coverage for all Australians for the next six years.”

The post Nine (ASX:NEC) share price on watch following $650m NRL deal appeared first on The Motley Fool Australia.

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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. 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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