The S&P/ASX 200 Index (ASX: XJO) is having a pretty disappointing day of trading so far this Tuesday. At the time of writing, the ASX 200 is down by 0.11% at 7,371 points. But one ASX 200 share is putting that loss well and truly to shame. That would be the Australian Ethical Investment Limited (ASX: AEF) share price.

Australian Ethical shares are currently up a very pleasing 7.72% to $12.97 a share so far today, after closing at $12.09 a share yesterday afternoon and opening at $12.04 this morning.

Well, unfortunately, it’s not entirely clear why Australian Ethical shares are rocketing higher today. There has been no news or announcements out of this ethically-focused fund manager today. Nor any other major developments as of yet.

Why is the Australian Ethical share price rocketing today?

However, it’s very important to keep in mind this company’s recent performance. Sure, today’s move looks like an amazing gain for shareholders (which it is). But consider this: Australian Ethical shares are still down by close to 12% over the past month. This is what today’s move looks like in that context:

Just last week, we looked at why it has been such a dreary time for Australian Ethical shares of late. It all seemed to stem from the earnings guidance update that Australian Ethical put out on 1 December. Investors seemed supremely disappointed with the data Australian Ethical released in this update. It included a 9% increase in funds under management (FUM) over the 4 months to 31 October. As well as an expectation of underlying profit before tax of between $5 million and $5.5 million for the half year ending 31 December, an 8% increase on its previous half year to 31 December.

We also touched on Australian Ethical’s valuation. At today’s pricing, this company still commands a price-to-earnings (P/E) ratio of 126.58. That’s arguably very high, considering that the broader P/E ratio average for the entire ASX 200 is currently sitting at around 17.53, according to iShares.

So it could be said that today’s pricing pop is just a liftoff from the recent lows we have seen with this company. Remember, the Australian Ethical share price is still up an incredible 164% year to date in 2021 so far.

The post Why is the Australian Ethical (ASX:AEF) share price surging 8% today? appeared first on The Motley Fool Australia.

More reading

• Why has the Australian Ethical (ASX:AEF) share price tanked 17% in a week?
• Why Australian Ethical, GUD, Nuix, and Redbubble shares are tumbling lower
• Australian Ethical (ASX:AEF) share price sinks on earnings update
• This sector could be a $50 trillion investment opportunity: expert
• Why is the Australian Ethical Investment (ASX:AEF) share price surging 7% today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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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Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are both tumbling.

Bitcoin is down 6% over the past 24 hours, currently trading for US$47,120 (AU$66,360).

Ethereum, the world’s number 2 crypto with a market cap of $US454 billion, is down 7% since this time yesterday. One Ether is currently worth US$3,822.

The Bitcoin price is still up 60% in 2021. But it’s now down 31% from its record high of US$68,789, set on 10 November.

Ethereum also reached its record high on 10 November, peaking at US$4,859. That puts Ether down 21% from its all-time highs, though the token remains up an impressive 419% year-to-date.

Why are Bitcoin and Ethereum deep in the red?

Bitcoin, Ethereum and almost every crypto are in the red today, according to data from CoinMarketCap.

With altcoins often following the direction of Bitcoin, we’ll keep our focus there.

So what headwinds is the world’s first and biggest digital token battling?

Recent months have shown that Bitcoin is behaving more like a risk asset than a safe haven in times of market uncertainty. When global share markets fall, Bitcoin tends to lose value.

With the Omicron COVID variant spreading rapidly, and investor concerns over structural inflation growing, investors have been re-evaluating their riskier holdings.

Yesterday (overnight Aussie time) we saw US markets selloff sharply. The tech-heavy Nasdaq closed down 1.4%. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down a more muted 0.2%.

What else should crypto investors be watching?

With Bitcoin now having retraced for 5 weeks running since hitting its record high, it’s fallen right about level with its 200-day moving average. That’s a key price level which crypto analysts keep an eye on. Any significant fall below the 200-day moving average is seen as bearish for the nearer-term price outlook.

Addressing Bitcoin’s continuing volatility and the perception by some crypto investors that it can serve as an inflation hedge, Marc Chandler, chief market strategist at Bannockburn Global Forex said (quoted by Bloomberg), “The idea that as it matured, the volatility would ease has not really materialised. The volatility is deadly and its other supposed attributes, like a hedge against inflation, seems spurious.”

The post Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on? appeared first on The Motley Fool Australia.

More reading

• After a wild 2021, what can crypto investors expect in 2022?
• What is the better buy: Bitcoin vs. Ethereum
• Why cryptocurrencies like Bitcoin, Polygon, and Terra fell today
• Bitcoin, Ethereum, and Cardano continue to recover from late-week selloffs
• Here’s what crypto investors need to know about the metaverse

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

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The Noxopharm Ltd (ASX: NOX) share price is on the rise today after a clinical trial update.

Noxopharm shares hit an intraday high of 39 cents, a 6.85% gain, before settling at 37 cents at the time of writing, up 1.37%.

Noxopharm is a drug development company working on treating cancer and septic shock.

What did Noxopharm announce today?

It seems investors were responding to an update from the company on a cancer treatment trial.

The company has recruited its first group of patients for its Direct and Abscopal Response to Radiotherapy (DAART-2) phase two clinical trial.

DARRT is a cancer treatment that combines Novopharm’s Veyonda drug candidate and a low dose of external beam radiotherapy.

The patients receiving the treatment are suffering from a range of cancers including prostate, breast, and lung.

The patients are enrolled at the Beverly Hills Cancer Centre in Los Angeles and the MD Anderson Cancer Centre in Houston.

Noxopharm said the momentum of patient and site recruitment is on the rise, with a first Australian trial site also now open for enrolment.

The company aims to recruit 100 patients across Australia, the United States, and Europe for this trial.

Management comment

Commenting on the announcement that may have impacted the Noxopharm share price, company Chief Medical Officer Dr Gisela Mautner said:

This phase two study builds on our phase one trial where we saw promising signals that it may be possible to achieve cancer reduction through the abscopal response.

A combination of Veyonda and low-dose radiation therapy would be a very important new treatment option for cancer patients worldwide…

Noxopharm share price snap shot

It’s been a tough year for shareholders in the drug development company. The Noxopharm share price has fallen more than 23% in the past 12 months, plunging 24% this year to date.

In contrast, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned nearly 11% in the past year.

Shares in the company reached a 52-week high of 95 cents, while the low was 36.5 cents.

The post Here’s why the Noxopharm (ASX: NOX) share price leapt 7% today appeared first on The Motley Fool Australia.

More reading

• Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on?
• When it comes to the Webjet (ASX:WEB) share price, do the brokers or the shorters have it right?
• 3 ASX shares now bargains after a nightmare November
• Is the Brickworks (ASX:BKW) share price a buy? Leading brokers weigh in
• What to look for when investing in ASX microcap shares

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 Webjet Limited (ASX: WEB) share price is trading lower again on Tuesday.

In afternoon trade, the online travel agent’s shares are down 2% to $5.33.

This means the Webjet share price is now down 14% since this time last month.

Where next for the Webjet share price?

The market appears incredible divided on where the Webjet share price will be going next.

In one corner you have a number of bullish brokers such as Goldman Sachs and Morgans, whereas in the other corner you have a growing number of short sellers better against the company.

In respect to the latter, earlier this week Webjet’s short interest rose to 9.4%. This makes Webjet one of the most shorted shares on the Australian share market alongside Flight Centre Travel Group Ltd (ASX: FLT), which has 13.9% of its shares held short.

Short sellers appear to have concerns over its valuation and the travel market’s stuttering recovery from COVID-19, particularly given the emergence of the Omicron variant.

All in all, the bears appear confident there’s more chance of the Webjet share price falling than rising from here.

What about the bulls?

Last week Goldman Sachs retained its buy rating but trimmed its price target on the company’s shares to $6.90. Whereas a week earlier, Morgans upgraded Webjet’s shares to an add rating with a $6.60 price target.

Based on the current Webjet share price of $5.33, these price targets imply potential upside of 24% to 29% over the next 12 months.

Goldman commented: “Overall, WEB continues to make progress in the right direction through the reopening with the 20% cost savings target remaining intact for the Webbeds division. We continue to see a long term growth story in this business and view WEB as net beneficiaries of the post COVID recovery. We slightly lower our 12m Target Price to A$6.90 (vs. A$7.00 prior) and maintain our Buy rating on WEB.”

Morgans agrees and notes that Webjet’s shares are trading on attractive post-recovery multiples.

It said: “WEB’s share price has been weak this month as concerns around rising COVID cases and lockdowns in Europe have weighed on the sector. Following forecast changes, our blended valuation has risen to $6.60. With 16.4%  [now 24%] upside to our new price target, we move to an Add rating. Based on our forecasts, WEB is trading on an FY24 recovery year PE of 17.9x which is at a discount to its five-year average PE (pre-COVID) of 20.6x.”

Time will tell whether it is the brokers or the short sellers that make the right call on the Webjet share price.

The post When it comes to the Webjet (ASX:WEB) share price, do the brokers or the shorters have it right? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Goldman says Webjet (ASX:WEB) share price is a buy with 25% upside
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings

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 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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You can’t win them all, especially in the stock market investing game.

Each month you’ll see some of your ASX shares plunge in value. During market downturns you might even see your entire portfolio in the red.

But short term movements, experts say, should be ignored. If you invest with a long-term horizon, the more important factor is whether you still have faith in the businesses you own.

It’s not just the everyday investor but even the professionals have to make such judgments.

Cyan Investment portfolio manager Dean Fergie was faced with this exact dilemma as he pored over 3 ASX shares in his fund that shockingly underperformed in November:

ASX share that’s haemorrhaging value but with ‘exceptionally bright’ future 

Delivery service platform provider Zoom2u Technologies Ltd (ASX: Z2U) saw its shares plummet 22% last month.

According to Fergie, it underperformed even though the business was showing “strong underlying customer growth and revenue of its courier service”.

“It’s obviously exceedingly frustrating when stock prices appear to contradict underlying operating performance,” he said in a memo to clients.

“But we are also not so naive as to not consider possible underlying issues.”

Zoom2U’s white-label fleet management software Locate2U was also seeing “impressive expansion”, he added.

“We met with MD Steve Orenstein in Sydney last week and remain confident the company’s future is exceptionally bright with strong scalability and significant structural tailwinds.”

Unfortunately the stock has dropped a further 20% this month, to trade at 34 cents on Tuesday afternoon.

Neither no news or some news convince the market

Shares for healthcare software maker Alcidion Group Ltd (ASX: ALC) sank 12% in November.

No news is apparently bad news, as far as the market is concerned.

“The Alcidion share price has been sliding of late on an apparent lack of news-flow,” said Fergie.

“However, this month they have announced the win of their long-awaited $23 million+ government contract along with a significant acquisition in the UK.”

Investor patience will be further tested though, as the Alcidion share price has lost another 20% in December.

The market yet to grasp this opportunity

Touch Ventures Ltd (ASX: TVL), which is an investment firm spun-off from Afterpay Ltd (ASX: APT), debuted in September with an initial public offer price of 40 cents a share.

It was about break-even when November started but that month saw a calamitous 17% fall in the share price.

Fergie suspects it’s a temporary misunderstanding by the market.

“Touch Ventures traded lower with the market not embracing (for the moment) our analysis of the underlying value of the investment portfolio and the company’s significant relationship with Afterpay.”

The Cyan team met with Touch Ventures boss Hein Vogel, which did not change its bullish view on this stock.

“Additionally the company conducted an investee company webinar during the month which should improve investor understanding of the company’s asset portfolio.”

Touch shares have fallen even more this month, to trade at 28 cents on Tuesday afternoon.

The post 3 ASX shares now bargains after a nightmare November appeared first on The Motley Fool Australia.

More reading

• Here’s why the Zoom2u (ASX:Z2U) share price zoomed 26% higher today
• Why Alcidion, Magellan, Redbubble, and Seven West shares are dropping
• Why is the Alcidion (ASX:ALC) share price down 14% today?
• Alcidion (ASX:ALC) share price halted amid acquisition news
• Why the Alcidion (ASX:ALC) share price is rocketing 11% higher

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 Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group 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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Shares in building products manufacturer Brickworks Limited (ASX: BKW) are nudging higher today and now trade less than 1% in the green at $24.58 apiece.

Investors are holding onto positive sentiment in Brickworks after the company released a property update yesterday, confirming it expects record earnings in 1H 2022 and has recently purchased an additional 121 acres of land.

Now leading brokers have weighed in and offered their speculation on the direction of the Brickworks share price in 2022. Is it a buy? Let’s take a closer look.

Is Brickworks a buy right now?

According to the team at Ord Minnett, Brickworks could be a decent buy as it currently stands. In a recent note to clients, the firm was pleasantly surprised by the valuation increase in Brickworks’ property assets.

Not only that, but Brickworks’ expected $290–$310 million in first half property earnings in FY22 – a record for the company – is well above its own internal estimates of $130 million, the broker says.

It also notes that the outlook for this division remains strong amid heightened demand for residential and industrial property assets in Australia.

However, amidst its bullishness, Ord also cautions investors that Brickworks’ stake in Washington H. Soul Pattinson Ltd (ASX: SOL) could be a drag on its share price performance in the comping periods.

The firm highlights that whilst Brickworks’ expanding property portfolio and strengthened earnings profile are net positives, it still doesn’t offset the declining value of its Soul Pattinson stake.

The value of Brickworks’ stake has fallen by approximately 20% since late September, in direct contrast to the company’s own fundamental momentum.

As such, the broker recently trimmed its price target on the share price by around 5%. Nevertheless, Ord Minnett retains its buy rating on Brickworks, and values the company at $27.50 per share, implying an upside potential of around 12%.

Fellow broker Citi also recently advised that it values the building products manufacturer at $30, implying that a considerable amount of upside is yet to be priced in by the market.

Not all are as rosy on the outlook for Brickworks, however. Macquarie retained its neutral rating on the company’s shares today even after revising its price target upwards by 1% to $26.40. In contrast to Citi, it reckons that the company’s strong property portfolio looks to be well priced in by the market.

Meanwhile, Morgans also has Brickworks as a hold, slapping a $26.10 per share valuation on the company in an update yesterday.

Henceforth sentiment appears to be mixed amongst the list of brokers mentioned in this report, however, in the list of analysts provided by Bloomberg Intelligence, the consensus price target for Brickworks is $26.45.

Brickworks share price snapshot

In the previous 12 months, the Brickworks share price has gained around 29% after climbing 28% this year to date.

It has gained more than 5% in the last month of trading and is up around 6% in the last week.

Each of these returns has outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of around 10.5% in the last year.

The post Is the Brickworks (ASX:BKW) share price a buy? Leading brokers weigh in appeared first on The Motley Fool Australia.

More reading

• Why AVZ, Brickworks, Charter Hall, and Senex shares are storming higher
• Brickworks (ASX: BKW) share price lifts 3% on record forecast property earnings
• ASX 200 (ASX:XJO) midday update: CSL acquisition talks, Charter Hall guidance upgrade
• Top broker tips 30% upside for the Brickworks (ASX:BKW) share price. Here’s why
• 2 ASX dividend shares that could provide rock-solid income

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks. The Motley Fool Australia owns and has recommended Brickworks. 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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When it comes to investing in ASX shares, most investors tend to stick with the famous names. If you select a random ASX investor, chances are they will have at least one of the four major banks in their ASX share portfolios, for example. Or perhaps BHP Group Ltd (ASX: BHP). Or Telstra Corporation Ltd (ASX: TLS) or Woolworths Group Ltd (ASX: WOW). But chances are they won’t have a single ASX microcap share.

Shares outside the S&P/ASX 200 Index (ASX: XJO) tend to have market capitalisations of less than $1 billion. But an ASX microcap is normally a company with a market cap of less than $300 million. So well outside most ASX investors’ universe.

That’s usually because the companies are less well-known and data on them is limited compared to larger ASX companies. And, well, small-cap and microcap shares simply tend to have a reputation as poor investments, often dismissed as ‘penny stocks’.

Experts: what to look for in an ASX microcap

But if you can successfully invest in the microcap space, the rewards can be lucrative. It’s a lot easier for a $100 million company to double in size than a $5 billion one, after all.

So what does one look for in a potentially successful ASX microcap investment?

In a recent interview with Livewire, two fund managers expand on that very question. Here’s some of what Dean Fergie of Cyan Investment Management, and Luke Winchester, of Merewether Capital, had to say:

“A lot of the companies in my portfolio don’t yet have earnings, so first and foremost, we look at the revenue they’re producing,” says Fergie. “Many earnings numbers can be fudged. For example, you see “underlying earnings” mentioned frequently in half-yearly results, which I think aren’t very useful…. [In a nutshell, we] look at the revenue and then subtract the costs.”

Art and science…

“The art and science lie in judging whether microcaps are either over-earning or under-earning,” Winchester adds. “If an early stage or growing business is tipping a big chunk of its revenue into development or expansion initiatives, it’s probably under-earning.”

Fergie agrees, saying, “We sometimes see businesses that are driving top-line sales that are also spending the same amount on marketing. If you’re spending $100 to get $90 of revenue, that doesn’t work for long.”

Winchester says his team doesn’t avoid unprofitable microcaps, but he treats them with extreme caution:

“We get taught that risk and volatility are the same things, but they really aren’t,” he stated. “When you invest in a loss-making business, you assume that capital will always be available. But it obviously won’t be.”

So what to avoid? Winchester cites “companies in the EV metals and clean-tech spheres”. He says, “To me, they feel like the themes that come up every couple of years, and they’re crowded as a result.”

So there you have it, two ASX expert investors on how to successfully navigate the world of ASX microcap investing. While it may remain a space that many ASX investors feel uncomfortable with, these two investors have clearly made it work for them.

The post What to look for when investing in ASX microcap shares appeared first on The Motley Fool Australia.

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• Could 2022 be a good year for the Vanguard International Shares ETF (ASX:VGS)?
• 5 things to watch on the ASX 200 on Tuesday
• What is the outlook for the ANZ (ASX:ANZ) share price in 2022?
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen owns Telstra Corporation Limited. 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 Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Cardno Limited (ASX: CDD) share price is having a very eventful day.

Depending on your source, the infrastructure and environmental services company’s shares are either up 57% to 22 cents or down 87% to 22 cents today.

What’s going on with the Cardno share price today?

The Cardno share price is in fact down a massive 87% on Tuesday afternoon.

However, this isn’t necessarily a bad thing for shareholders. The reason for the decline is that Cardno shares are trading ex return of capital today.

Earlier this month, Cardno completed the sale of its Americas Consulting Division and Asia Pacific Consulting Division to Stantec Inc for a total aggregate cash consideration of US$500 million (A$667 million).

Following the sale, the company revealed that it would distribute the vast amount of the proceeds to shareholders. A total of A$582 million or A$1.49 per share will be returned, comprising a capital return of A$360 million or A$0.92 per share and an unfranked dividend of A$222 million or A$0.57 per share.

As the Cardno share price is now trading without the rights to these capital returns and new buyers won’t be entitled to them, it has dropped to reflect this. After all, why would you pay yesterday’s share price of $1.63 if you were not going to receive this return?

What next?

Eligible shareholders can now look forward to receiving these payments next week on 22 December, just in time for some last minute Christmas shopping.

As for the company, the sale of the Americas Consulting Division and Asia Pacific Consulting Division to Stantec means that Cardno is left with just its International Development Business and Latin American group companies.

Though, that could yet change. Last month Cardno appointed Greenhill & Co as its financial adviser and Gilbert + Tobin as its legal adviser in relation to the strategic review of the International Development Business. This will include an assessment of acquisition, merger or sale options with a view to enhancing value for Cardno shareholders.

The post Is the Cardno (ASX:CDD) share price really plummeting 87% today? appeared first on The Motley Fool Australia.

More reading

• Why Cardno, Incitec Pivot, Mesoblast, and WiseTech are storming higher

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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Some crypto investors will be sitting on outsized gains after a wild ride amongst the digital tokens in 2021. Others, of course, will have bought near the highs and sold out during the lows and be nursing some hefty losses.

While volatility continues to be an among most cryptos, there’s no denying the strong year many have had.

Bitcoin (CRYPTO: BTC), the world’s biggest token by market cap, may be down more than 30% from its all-time highs hit in November. But it’s still up 60% year-to-date.

Ethereum (CRYPTO:ETH) is also down from its November all-time highs, and also still up an impressive 420% in 2021, according to data from CoinMarketCap.

But those gains pale compared to the best performer among the world’s top-100 cryptos. That honour goes to Gala (CRYPTO: GALA). With a market cap of US$3.6 billion, it ranks as the world’s 42nd biggest token. And it’s gained a phenomenal 49,543% this year.

Yep. That’s no typo.

But that’s the year almost gone by.

Returning to our future outlook…

What can crypto investors expect in 2022?

For the answer to that question, The Motley Fool turned to the experts.

Ian Lowe, CEO of crypto wealth platform Dacxi, told The Motley Fool to keep an eye on the growth in mainstream and institutional inclusion:

Cryptocurrency’s role is evolving. Our research shows that the vast majority, 56%, of investors in Australia are investing in cryptos with long-term goals in mind, which goes against the grain of popular media coverage which focuses on ‘get rich quick’ messages.

That said, 2021 was a breakout year for cryptos. The industry tripled its market cap to US$2.25 trillion in 2021 alone.

2022 does have some major milestones for cryptocurrencies to watch carefully. For example, regulation from major markets like the US and closer to home in Australia. As these regulations take shape, Bitcoin and Ethereum will become strong candidates for inclusion in ETFs and other structured products. This will widen the pool of potential investors into the major cryptocurrencies significantly, which is likely to start happening in 2022.

We also reached out to Jonathon Miller, managing director Australia at cryptocurrency exchange Kraken. Miller told us NFTs (non-fungible tokens) could have a growing role to play amongst cryptos in 2022:

Bitcoin and Ethereum both reached all-time highs in 2021 and global adoption from institutions and individuals has been unprecedented. This is in no small part due to the tremendous growth and excitement around a relatively new subset in the cryptosphere known as NFTs. Kraken’s latest analysis showed NFTs saw returns of 42% in November despite the market downturn.

I’m hopeful 2022 will see the further adoption of NFTs, a technology that is still in its infancy and offers a lot of scope for content creators and companies to leverage it.

One of the long tail effects of the surge in NFTs over the past year is that a whole new diverse group of people have become familiar with the underlying technology, blockchain and crypto. With these developments, I’m optimistic we will see greater adoption of crypto in Australia in 2022, in particular with groups that research has shown in the past have yet to adopt cryptocurrencies.

Inflation and record low interest rates

Josh Gilbert, crypto analyst at multi-asset investment platform eToro, also pointed to the growth of NFTs, but added some other key elements crypto investors should watch in 2022.

Gilbert told The Motley Fool:

Inflation is still running red hot, with last Friday’s US print coming in at 6.8%, the highest level in 40 years. This will continue to support inflation defensive assets such as crypto in the early part of 2022.

It’s expected that there will be an acceleration of NFTs, DeFi [decentralised finance] and the Metaverse next year. Therefore, we can anticipate the crypto market will grow further in 2022.

We’re also seeing staking playing an important role in crypto. With interest rates at rock bottom, investors will be looking for alternative ways to earn income and this is something that staking can offer.

If history is anything to go by, this could mean that we haven’t quite seen the peak for crypto yet and 2022 could be a key year. History also tells us that bull markets don’t last forever, which is why it’s more important than ever for investors to remember to do their research and diversify their portfolios in order to protect their investments.

We’ll leave off with this snippet from Aaron Brown, former managing director and head of financial market research at AQR Capital Management.

According to Brown (quoted by Bloomberg), 2 big potential tailwinds for crypto in 2022 are things we sincerely hope don’t occur!

“Crypto’s advantages over traditional finance soar in wartime and financial conflict,” Brown said. “The best bets for this scenario are the most established coins – Bitcoin and Ethereum – with large holders in all countries, plus crypto with strong privacy protections, such as Monero and Dash.”

The post After a wild 2021, what can crypto investors expect in 2022? appeared first on The Motley Fool Australia.

More reading

• What is the better buy: Bitcoin vs. Ethereum
• Why cryptocurrencies like Bitcoin, Polygon, and Terra fell today
• Bitcoin, Ethereum, and Cardano continue to recover from late-week selloffs
• Here’s what crypto investors need to know about the metaverse
• Bitcoin (CRYPTO:BTC) sinks again. Who’s going to catch that falling knife?

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

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Shares in the banking big 4 member Westpac Banking Corporation (ASX: WBC) are inching higher this morning and now trade less than 1% in the green at $20.90.

Westpac shares started to tumble at the end of October after the company revealed its full-year results, leaving many investors and analysts alike unimpressed with its performance.

The Westpac share price has come down hard from a high of $26.23 in October and continued its downward path until climbing again in December.

With this in mind, several leading investment firms have afforded us their opinion on the outlook for Westpac investors. So is Westpac a buy? Let’s find out.

What are brokers saying about Westpac?

The team at Citi reckons Westpac is a buy right now. However, in a recent note, the firm also acknowledges Westpac’s off-market buyback is of less value compared to that of banking rival CBA.

It notes that the complex moving parts involved with off-market buybacks have created a peculiar situation for the bank. This comes after it recently extended the tender period and reworked the discount it was awarding on the offer.

Even after the revision, the bank’s post-tax returns are still a way behind CBA’s 13% gain, the broker notes. City says, “With less tax benefits on offer, we expect Westpac will likely receive significantly less demand than CBA but has pledged to redirect any shortfall into an on-market buy-back.”

Nevertheless, Citi has Westpac as a buy and is attracted to the bank’s current valuation after the pullback in its share price over the last 2 months.

Fellow investment bank Jefferies isn’t so rosy on the outlook for Westpac shares, noting it needs a cultural overhaul rather than focusing on its $8 billion cost-reset strategy in FY24.

Jefferies also is critical of Westpac’s buyback, noting the $3.5 billion off-market purchase of its own shares is less attractive due to the run down in its share price. It says this effectively reduces the fully-franked dividend component of the buyback.

It also forecasts another compression of Westpac’s net interest margin (NIM) in its trading update in January. It points out potential investor dissatisfaction on the horizon if shareholders employ the first no vote strike on its remuneration report at its AGM tomorrow.

Jefferies has Westpac as a hold and values the company at $19.20, implying a small percentage of downside potential at the time of writing.

Finally, Goldman Sachs also weighed in on Westpac’s investment debate in a recent note. Goldman says the bank’s recent results are an indication of a weak platform to grow revenue in FY22.

It too retains its neutral rating on the banking major and thinks the market might need to apply a heavier discount on Westpac’s potential to reach its FY24 $8 billion cost target.

Goldman values the bank at $25.60 per share, even with its neutral rating, implying almost $5 of upside potential at the time of writing.

Meanwhile, Morgans has Westpac as a buy, whereas Jarden, Barrenjoey, and Evans & Partners have it as a sell.

Westpac share price summary

In the last 12 months, the Westpac share price has gained just over 4%, climbing 8% this year to date.

However, during the past single-month period to date, it has reversed course and is now trading around 8% in the red.

The post Is it a buy? Leading brokers analyse the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

More reading

• Could the CBA share price peak have been and gone?
• Is the Westpac (ASX:WBC) share price a buy after falling 19% in 6 weeks?
• Top brokers name 3 ASX shares to buy next week
• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update
• Westpac (ASX:WBC) share price higher on $3.5bn buyback update

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 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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