Key points

• ASX 200 mining shares are seen to be safer bets due to high commodity prices and strong balance sheets
• But Goldman Sachs warns that miners may take a more conservative stance on dividends and capital returns
• Given high expectations on both these fronts, the sector could be vulnerable to a sell-off

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Our large ASX mining shares are seen as a bastion of strength during these volatile times, but a top broker is warning that they could disappoint this reporting season.

This isn’t what investors want to hear as many are on tenterhooks ahead of this month’s profit announcements.

The US$251 billion collapse in the Meta Platforms Inc (NASDAQ: FB) share price underscores the anxiety. In contrast, high commodity prices and balance sheets overflowing with cash have made S&P/ASX 200 Index (ASX: XJO) mining shares a safe haven of sorts.

Earnings growth largely locked in for ASX 200 mining shares

But there’s a risk that our bulk miners may not meet investors’ expectations when they turn in their profit report cards, warned Goldman Sachs.

The issue isn’t so much with profit growth. Thanks to the quarterly updates by ASX 200 mining shares, there should be few surprises.

In fact, Goldman Sachs is forecasting ASX bulk miners to deliver a circa 45% uplift in earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2021 December reporting period compared to the same time last year.

The broker is tipping a further circa 10% increase in EBITDA for 2022, both estimates are market cap weighted.

Areas to watch this reporting season

However, there is still plenty of room for the sector to surprise – both in a good and bad way. Some of the things that could catch investors off guard are costs, production growth, capital expenditure, dividends and capital returns.

It’s the last two that may be of particular interest as the bar of expectation is set high. Many are expecting big cash handouts from the excess cash sitting on balance sheets.

“Although capital returns should be strong, we think those companies that are reporting interim/1H results will likely take a conservative approach to the dividend based on uncertainty on costs and the China outlook,” cautioned Goldman.

“The Dec Q results saw significant operating cost inflation from higher input prices and labour shortages (FX is the only tailwind) and a large build in working capital from higher commodity prices and logistics challenges.”

The broker is tipping that the average payout for the sector is approximately 50% of earnings per share (EPS). This puts the average dividend yield at around 8%.

ASX 200 mining shares to buy

But Goldman believes that the rise in operating expenses is likely to persist into 2023. Further, the growth in capital expenditure will be the next talking point for the market.

“Overall we think CY22 opex and capex guidance (and even production) may be an area of disappointment for the sector relative to expectations,” added Goldman.

This doesn’t mean there aren’t strong buys among ASX 200 mining shares. The broker’s “conviction” buys are the South32 Ltd (ASX: S32) share price and Iluka Resources Limited (ASX: ILU) share price.

Outside of its conviction list, the Rio Tinto Limited (ASX: RIO) share price and the Champion Iron Ltd (ASX: CIA) share price are also rated as “buys”.

The post Why mighty ASX 200 mining shares could stumble this reporting season appeared first on The Motley Fool Australia.

More reading

• Looking to buy NAB (ASX:NAB) shares? Read what this broker says first
• Morgans names 4 more of the best ASX shares to buy in February
• Read all about it: News Corp (ASX:NWS) share price leaps on record quarter
• Own AGL (ASX:AGL) shares? Here’s what to look for when the company reports next week
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brendon Lau owns Iluka Resources Ltd., Rio Tinto Ltd., and South32 Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. 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 National Australia Bank Ltd (ASX: NAB) are rangebound from the open today and are trading 0.9% down at $27.66.

The NAB share price chart has been on a wave-like journey these past 3 months, trading as high as $30.15 and as low as $27.13.

Still, NAB shares are up almost 12% in the last 12 months, even though the new year has erased a good chunk of its 2021 gains.

Nevertheless, the team at JP Morgan are constructive on the NAB share price. They note that NAB deserves an overweighting in any ASX shares investor’s portfolio.

Here’s what the investment bank had to say about NAB in a recent note.

Stronger revenue growth prospects versus ASX peers

Analysts at JP Morgan are bullish on NAB shares due to a number of factors in the bank’s earnings profile.

Firstly, the broker reckons NAB is well-positioned to deliver stronger-than-peer revenue growth. Hence, this is “more than offsetting uncertainty on potential enforcement action from AUSTRAC on AML”.

The company notes that NAB’s “stronger revenue profile” reflects the bank’s small business banking segment. This, it reckons, should insulate NAB from return on equity (ROE) pressures in retail banking.

Not only that, but the bank’s customer metrics are “very sound with strategic NPS showing strong improvement in recent periods”. The broker reckons this is a bullish signal.

Even when factoring in foreseeable headwinds from NAB’s AML investments, JP Morgan still sees the bank’s pre-provision profit growth outpacing the other banking majors.

It forecasts a net interest income of $14.37 billion in FY22, growing to $14.7 billion in FY23, and $15.41 billion in FY24.

This should carry through to total operating revenues of $17.72 billion in FY22, $18.2 billion in FY23, and $19 billion in FY24.

JP Morgan also expects NAB to pay dividends of $1.40 per share this year and $1.50 and $1.59 in subsequent periods.

Importantly, the broker also sees NAB holding its net interest margin (NIM) at 1.6% over the coming 3 years. This contrasts with the consensus view that the entire banking sector will see ongoing compression to NIMs in years to come.

Instead, JP Morgan sees the bank’s NIM declining by 10 basis points from 1.7% last year to 1.6% in FY22. It expects the NIM to hold the line at this level into FY24.

What’s the outlook for the NAB share price?

The analysts have a December 2022 price target of $31.50 per share for NAB.

They say this reflects “the aggregate of the present value of the dividend stream paid to shareholders through to FY24E and the present value of a multiple of FY24E tangible book value”.

“While we do think it likely that NAB will face some cost headwinds from AML investments, these are factored into our forecasts and still we see NAB’s pre-provision profit growth outstripping peers,” the broker concluded.

NAB share price snapshot

This year to date, the NAB share price has faltered by 5.9%.

The shares have regained support as of this week, having climbed 1.65% into the green over the past 5 trading days.

The post Looking to buy NAB (ASX:NAB) shares? Read what this broker says first appeared first on The Motley Fool Australia.

More reading

• Hunting for ASX shares? Experts say to avoid this sector in 2022
• What can the Westpac results tell us about the outlook for ASX 200 bank shares?
• 3 reasons Goldman Sachs thinks NAB (ASX:NAB) shares are a conviction buy
• How are ASX bank shares responding to the RBA’s interest rate call?
• ASX 200 shares offer 12% upside after sell-off: JP Morgan

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow 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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Over the past couple of days we have been looking at the ASX shares that Morgans has named as its best ideas for February.

These are the shares it believes offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.

We’ve previously looked at financial shares (here) and resources shares (here). Whereas today, let’s round things up with four more shares across several sectors. Here are the picks:

ResMed Inc (ASX: RMD)

This sleep treatment specialist makes Morgans list. It has an add rating and $40.46 price target on its shares.

While the broker acknowledges that COVID could make the near term volatile, that doesn’t change its “medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

Tabcorp Holdings Limited (ASX: TAH)

This gaming and gambling company’s shares are rated highly by Morgans. The broker has an add rating and $5.70 price target on them.

The broker explained: “We continue to view the risk/return profile of TAH as asymmetrically skewed to the upside over the next ~12 months as the demerger of the high quality, infrastructure-like Lotteries & Keno business progresses.”

Morgans believes this business will trade on higher multiples once operating on a standalone basis.

Transurban Group (ASX: TCL)

Morgans has this toll road operator on its best ideas list. Its analysts currently have an add rating and $14.57 price target on its shares. The broker likes the company due to the high quality of its assets, management team, balance sheet, and growth prospects. In addition, Morgans appears confident Transurban’s dividends will grow quickly post-COVID.

Its analysts commented: “Watch for rapid recovery in DPS alongside traffic recovery and WestConnex acquisition prospects.”

Wesfarmers Ltd (ASX: WES)

Finally, Morgans is a fan of this conglomerate and has an add rating and $60.80 price target on its shares. The broker believes it has one of the highest quality retail portfolios in Australia, which are being led by a highly regarded management team. In light of this, it feels recent weakness in the Wesfarmers share price could be a buying opportunity.

It said: “While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the recent pullback in the share price as a good entry point for longer term investors.”

The post Morgans names 4 more of the best ASX shares to buy in February appeared first on The Motley Fool Australia.

More reading

• The Wesfarmers (ASX:WES) share price is 20% off its all-time high. Is it a buy?
• Broker names 2 ASX 200 dividend shares to buy in February
• 3 fantastic ASX shares to buy this month
• Leading brokers name 3 ASX shares to buy today
• Wesfarmers (ASX:WES) threatens to fly the WA coop. Here’s the latest

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

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Key points

• The News Corp share price leapt 6% at the market open today
• The media giant reported record profits among its latest financial results
• Kayo and BINGE both hit more than 1 million subscriptions

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The News Corp (ASX: NWS) share price is soaring today after the company announced its results for the second quarter and first half of 2022.

At the time of writing, the News Corp share price is up 4.37% at $32.95. However, soon after the market opened, its shares hit $33.60 — a gain of 6.4% on the previous close.

Let’s take a look at what the media giant announced.

Revenues ‘highest of any quarter’

The News Corp share price is climbing on the back of a record-breaking quarter for the three months ended December 21. The company said it had achieved “record revenues and the highest profit of any quarter since the company was formed in 2013”.

Highlights of the second-quarter FY22 results included:

• Revenues up 13% to $2.72 billion, compared with $2.41 billion for the prior corresponding period (pcp);
• Net income of $262 million, compared with $261 million for the pcp;
• ‘Total segment’ earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 18% to $586 million, compared with $497 million for the pcp — the highest since the company separated in 2013;
• ‘News media segment’ EBITDA up 68%; and
• Earnings per share (EPS) of 40 cents, compared with 39 cents for the pcp.

Looking at the first-half FY22 results, highlights included:

• Revenues up 15% year-over-year (YoY);
• Net income rose 72% YoY; and
• Total segment EBITDA up 30% YoY.

News Corp attributed its growth to all revenue streams, namely “real estate, advertising, and recent acquisitions”.

The company saw its digital retail estate services segment revenues increase by 35%. This was helped by ongoing traffic gains at Move — operator of realtor.com — and strong listings volumes at REA Group.

Its news media segment EBITDA increase was due to a “rebound in the advertising market, new content licensing revenues and strong subscriber gains”.

The Dow Jones also saw “its highest quarterly since its acquisition and highest revenue since fiscal 2011”.

Looking at its streaming services, News Corp’s Foxtel subscribers grew by 66% against its pcp, and both BINGE and Kayo each hit more than 1 million total subscribers.

All in all, the company’s profitability for the first half of FY22 was up 30% YoY to almost $1 billion.

‘From strength to strength’

Commenting on the results that appear to be driving the News Corp share price today, chief executive Robert Thomson said:

We are delighted with our planned acquisitions of the OPIS and Base Chemicals businesses, which we expect will close in the first half of calendar 2022 and bolster the highly profitable Dow Jones Professional Information Business.

The landmark agreements with Big Tech continued to benefit our journalism and our bottom line. In addition to the substantial deals with Google and Facebook, we expanded our multi-year global agreement with Apple, which is expected to be an important source of subscriptions and of advertising revenue from our news sites around the world.

Our increasing momentum has given us the ability to make opportunistic acquisitions and further our $1 billion share buyback program.

News Corp is clearly going from strength to strength.

News Corp share price snapshot

Over the last 12 months, the News Corp share price has increased by more than 30%. During that time, Its lowest price of $25.10 came exactly a year ago, with its highest price of $35.20 in August.

It is also up 11% over the past week.

The company has a market capitalisation of $1.39 billion and a price-to-earnings ratio (P/E) of 26.81.

The post Read all about it: News Corp (ASX:NWS) share price leaps on record quarter appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets
• 4 reasons to buy these ASX media shares this month: UBS
• Meta (NASDAQ:FB) share price plunges 22%. How might this impact ASX shares?

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

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Key points

• Plenty of eyes will be on AGL shares on Thursday when the company releases its report for the first half of financial year 2022
• Previously, the company has given guidance for the whole of financial year 2022. It included EBITDA between $1.2 billion and $1.4 billion and NPAT of $220 million to $340 million
• Its upcoming demerger could also prove to be a key issue next week

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Next week could be a big one for the AGL Energy Limited (ASX: AGL) share price as the company is set to drop its results for the first half of financial year 2022 (FY22).

AGL’s half year results will be released to the ASX on Thursday morning. It will be the first time investors get a chance to compare its FY22 performance to its previously-given guidance.

At the time of writing, the AGL share price is $7.24, 0.56% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.1%.

Let’s take a look at what might be the key talking points within the energy provider’s report.

Could this drive the AGL share price next week?

The AGL share price could be in for a shakeup on Thursday. The market is preparing to learn if it’s on track to hit its FY22 guidance.

The company’s results for FY21 saw a 10% downturn in profits – they came to $10.9 billion. Meanwhile, its full year dividends dropped 23.5% to hit 75 cents.

Its earnings before tax, interest, depreciation, and amortisation (EBITDA) came to approximately $1.67 billion. Finally, its underlying profit after tax reached $537 million.

The dip was due to lower wholesale electricity prices, reduced electricity generation output, and the roll-off of legacy supply contracts in wholesale gas.

Though, it expects this financial year to be worse. Thus, plenty of eyes will be on AGL’s shares next week.

The company’s guidance predicted FY22 would bring underlying EBITDA of between $1.2 billion and $1.4 billion and net profit after tax of $220 million to $340 million.

AGL also expected to drop its operating costs by $150 million this financial year compared to that of FY20. The company stated:

These ranges reflect a further material step down in wholesale electricity earnings as hedging positions when wholesale prices were higher progressively roll off and a small impact to wholesale gas gross margin from the roll off of legacy gas supply contracts…

AGL Energy looks to FY22 with cautious optimism, the wholesale prices of our key commodities have improved and AGL Energy operates some of the lowest cost generation in the National Electricity Market.

Of course, next week’s release will only cover the first half of FY22. Still, it will show how AGL is tracking against its full year guidance.

What else might be worth looking for when AGL reports?

It could also be worth keeping an eye out for word of AGL’s planned demerger and its carbon footprint in its half year report.

AGL is aiming to split into two in the coming half. Though, the market hasn’t heard any updates on its plan in more than 6 months. Thus, it’s likely that market watchers are hungry for news on what to expect in the fourth quarter of FY22.

Previously, the AGL share price fell 9.9% on news that the company is to be renamed Accel Energy. Accel Energy will then split off a new entity, AGL Australia.

Accell Energy will be charged with the company’s energy generation business while AGL Australia will take over its retail businesses.  

Word on that front could have the potential to bolster or pummel the AGL share price next week.

Additionally, the company is seemingly under constant pressure to lower its carbon emissions.

While it has a number of environmentally-friendly initiatives under its belt, its coal-fired power generation means that it’s Australia’s highest emitting entity.

It’s likely some will be watching AGL’s results for news that might see it reducing its emissions.

The post Own AGL (ASX:AGL) shares? Here’s what to look for when the company reports next week appeared first on The Motley Fool Australia.

More reading

• AGL (ASX:AGL) share price withstands healthcare pressure to exit coal ASAP
• These were the best performing ASX 200 shares in January
• What is green shorting and which ASX 200 shares are being targeted?
• Why have ASX energy shares become such hot property in 2022?
• Why are AGL (ASX:AGL) shares having such a stellar start to 2022 while the ASX 200 is struggling?

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.

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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.

With Meta Platforms (NASDAQ: FB) stock getting hammered today following its fourth-quarter earnings report, many investors may be wondering if this a good opportunity to buy shares of the Facebook parent company.

To decide whether Meta stock is worth a closer look after its decline, let’s assess the reason behind the stock’s move and whether the reason truly justified this big of a pullback.

Getting to the root of the problem

The main reason for the tech stock’s sharp decline on Thursday is management’s guidance for first-quarter revenue growth to slow significantly. The company guided for first-quarter revenue to grow just 3% to 11% year over year to between $27 billion and $29 billion. Analysts, on average, were expecting guidance for $30 billion.

“We expect our year-over-year growth in the first quarter to be impacted by headwinds to both [ad] impression and price growth,” said Meta CFO Dave Wehner in the company’s fourth-quarter earnings call. Specifically, the company expects continued challenges related to advertising measurement and targeting related to Apple‘s recent iOS changes. Other headwinds include lower monetization rates of new social media products like Facebook’s TikTok-like Reels, foreign exchange rates, and supply chain disruptions that have impacted some advertiser budgets.

A buying opportunity?

These are some formidable issues. But Meta does think that over a “multiyear” period it can rebuild its ad optimization systems “to drive performance while we’re using less data,” according to comments from management in its fourth-quarter earnings call. Moreover, this isn’t the first time Meta has faced advertising headwinds early in a social product’s lifecycle.

“Right now, Reels monetizes at a lower rate than feed and Stories, but we expect this to improve over time,” explained Meta Chief Operating Officer Sheryl Sandberg. “We’ve made successful transitions before, the shift from web to mobile and then another shift from feed to Stories. We have a playbook here.”

So not only does Meta appear well positioned to eventually overcome these challenges, but investors now get an opportunity to buy the stock at just 17 times earnings. These headwinds definitely lead to new risks and narratives that investors will have to watch closely, but the stock’s cheaper valuation after its decline may more than compensate for these new risks. 

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

The post Meta Platforms’ plummeting stock: Is it a buy? appeared first on The Motley Fool Australia.

More reading

• Why Meta shares cratered on Thursday
• Why is Twiggy suing Facebook? Hint: It involves cryptocurrency
• Meta (NASDAQ:FB) share price plunges 22%. How might this impact ASX shares?
• 1 green flag and 1 red flag for Meta’s Metaverse dreams
• FAANG Stocks: 2022 Winners and Losers

Daniel Sparks owns Apple. His clients may own shares of the companies mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Meta Platforms, Inc. 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory. The benchmark index is currently up slightly to 7,080.5 points.

Here’s what is happening on the ASX 200 today:

REA Group half year results impress

The REA Group Limited (ASX: REA) share price is trading higher today after it outperformed the market’s expectations during the first half. The property listings company delivered revenue growth of 37% to $590 million and EBITDA growth of 27% to $368 million. The latter was ahead of the market consensus estimate of ~$350 million. REA also revealed that January had started strongly.

News Corp shares rise on results

The News Corp (ASX: NWS) share price is on the charge today after the media giant released its second quarter and half year update. News Corp reported a 13% increase in revenue and an 18% lift in EBITDA during the second quarter. This led to a first half operating profit of almost US$1 billion, which is up 30% year on year.

Boral shares plummet (but for a good reason)

The Boral Limited (ASX: BLD) share price has crashed 41% lower on Friday. However, this decline is due to the building materials company’s shares trading ex-capital return today. Eligible shareholders can now look forward to receiving a total cash distribution of $2.72 per share. This comprises a $2.65 per share capital reduction and an unfranked dividend of 7 cents per share. Boral is returning a total of $3 billion to shareholders following a series of asset sales.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the PointsBet Holdings Ltd (ASX: PBH) share price with a gain of almost 5% following an update on its North American operations. The worst performer by some distance is the Boral share price with a 41% decline due to its capital return.

The post ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets appeared first on The Motley Fool Australia.

More reading

• Did the Boral (ASX:BLD) share price really just collapse 40%?
• Here’s why the PointsBet (ASX:PBH) share price is charging higher today
• REA (ASX:REA) share price higher after smashing first half expectations
• Should you buy ASX shares now or wait just a little bit?
• 5 things to watch on the ASX 200 on Friday

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and REA 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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As most investors would be aware, the ASX hasn’t had the best time of it of late. Over 2022 so far, the S&P/ASX 200 Index (ASX: XJO) is down 6.6%, including the 0.09% rise we’ve seen thus far today. It’s also been one of the most volatile starts to a year that we’ve seen in quite a while.

But not all ASX shares have been so flaky. For example, how has the BetaShares Crude Oil Index ETF (ASX: OOO) returned more than 18% over the past month?

Yes, this ASX exchange-traded fund (ETF) has risen 18.9% over the past month. It has risen from $6.24 a unit to the $7.40 we see today. That’s a phenomenally large outperformance of the broader market.

Well, to answer this question, let’s check out what this ETF invests in.

The BetaShares Crude Oil Index ETF is a rather unique one. Unlike most ETFs on the ASX, it doesn’t actually invest in individual shares or companies. Instead, it tracks an index that follows the price of West Texas Intermediate (WTI) crude oil futures, hedged against currency movements.

A futures contract is a form of derivative that allows investors to make a bet on the future price of oil. In a gross simplification, if the price of WTI crude rises, this ETF is likely to do well.

OOO… BetaShares Crude Oil ETF gives investors black gold

Fortunately for OOO investors, the price of crude oil has indeed been doing well — actually very well — over the past 30 days. According to Bloomberg, WTI crude was being priced at around US$76 a barrel just one month ago. Today, it is asking more than US$90 for that same barrel. That’s a rise of more than 18%.

So with that number in mind, it’s perhaps no surprise that this ETF has performed so well over the same span of time.

It gets even better for investors if we zoom out a little. One year ago, WTI crude was being priced at just under US$56 a barrel. So again, it’s not too surprising to see that the BetaShares Crude Oil Index ETF has returned a staggering 58.46% (as of 31 December). That includes a very meaty trailing dividend distribution yield of 18.8%.

But zooming out again, the picture isn’t quite as bright. Even though OOO has given investors a very pleasing return over the past month and year, it’s still very much underwater for any periods longer than that. It’s returned an average of -12.8% per annum over the past 5 years and -16.73% per annum since its inception in 2011.

The BetaShares Crude Oil Index ETF charges a management fee of 0.69% per annum.

The post Slick: Here’s why the BetaShares Crude Oil Index ETF (ASX:OOO) has surged 18% in a month appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX ETFs of 2021

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. 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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Shares in WAM Capital Limited (ASX: WAM) are rising following the release of the equity manager’s investment portfolio performance for the 2021 calendar year.

At the time of writing, the WAM Capital share price is $2.20, up 0.92%.

Let’s take a look.

WAM Capital share price up on news of 17.1% portfolio gain

There was plenty to share in WAM’s update today. The company made these key announcements:

• Gain of 17.1% in WAM’s investment portfolio performance for the 2021 calendar year
• 15.5 cents per share annualised FY22 fully franked interim dividend
• 7.1% FY22 annualised fully franked interim dividend yield
• 7% total shareholder return in the 2021 calendar year
• Fully franked dividend of 7.75 cents per share announced today
• Annualised grossed-up dividend yield of 10.1% based on Thursday’s closing price of $2.18.

What else did WAM Capital announce in its update today?

WAM Capital advised it had a total shareholder return (capital gains + dividends) of 5.3% in the 6 months to 31
December 2021.

WAM Capital said in a statement that the gain mirrored “the company’s investment portfolio performance and the slight increase in share price premium to net tangible assets (NTA)”.

In further commentary, WAM Capital said:

In the same period, the investment portfolio increased 4.8% outperforming the S&P/ASX All Ordinaries Accumulation Index with an average cash holding of 12.9%. In the 2021 calendar year the investment portfolio increased 17.1% with an average cash holding of 10.9%.

These results led to an alpha generation above the S&P/ASX Small Ordinaries Accumulation Index of 0.2% for 2021 and 0.7% for the trailing 3-years of portfolio returns.

However, the portfolio lagged the All Ords by -0.6% after expenses, fees, taxes, and capital management initiatives.

It was also a busy period for WAM on the corporate finance side. In October for instance, the company acquired an unlisted investment company with net assets totalling around $36.3 million.

Perhaps the biggest update was WAM’s takeover bid for PM Capital Asian Opportunities Fund (ASX: PAF). This got the green light in late December last year.

Finally, in December, WAM Capital, Westoz Investment Company Ltd (ASX: WIC) and Ozgrowth Limited (ASX: OZG) announced they will merge under separate transactions. WAM started the party by aiming to buy Westoz in an all-scrip deal in the same month.

“We estimate the accretion from the corporate activities for FY22 will be approximately 1.9% and will generate over $34.0 million in value for WAM Capital shareholders,” the company said.

Management commentary

Speaking on the announcement, WAM Chairman and Chief Investment Officer Geoff Wilson AO said:

Pleasingly, since inception in August 1999, WAM Capital has consistently delivered returns to shareholders and has paid 269.50 cents per share in fully franked dividends.

WAM Capital Lead Portfolio Manager Oscar Oberg also said:

I am pleased with the performance of the investment portfolio for shareholders during the period as Australia emerged from coronavirus lockdowns and economies began rebounding. We remain focused on our investment process and are positive on small and mid-cap companies going forward.

What’s next for WAM Capital?

The ex-dividend date for the interim dividend is 6 June. Shareholders will be paid on 17 June.

After the proposed merger with Ozgrowth and Westoz, WAM says it “will grow its net assets to approximately $2.0 billion”. This will give WAM Capital a market capitalisation of over $2.3 billion.

“The Board of Directors believe the Proposed Transactions will provide WAM Capital shareholders with appealing benefits including the issuance of new shares at a premium to the Company’s underlying NTA, a reduced management expense ratio and access to greater on-market liquidity,” the release concluded.

WAM Capital share price snapshot

In the last 12 months, the WAM share price has barely moved, faltering by just 0.68%.

It is down 1.12% since 1 January compared to a 6.5% fall for the S&P/ASX 200 Index (ASX: XJO).

The post ‘Solid performance’: WAM Capital (ASX:WAM) share price spikes after portfolio update appeared first on The Motley Fool Australia.

More reading

• Here are 3 ASX dividend shares with grossed-up yields over 5%
• WAM (ASX:WAM) share price unmoved despite victory in PAF acquisition fight
• Own WAM Capital (ASX:WAM) shares? Here’s how the share price performed in 2021

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

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Key Points

• Boral shares tank 40% on capital return and ex-dividend date
• Eligible shareholders set to receive $2.72 per share
• Payment expected on Monday 14 February

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The Boral Limited (ASX: BLD) share price is by far one of the worst performers on the S&P/ASX 200 Index(ASX: XJO) today.

The building materials company’s shares are down a mammoth 41.04% to $3.85. This means that its shares are now trading at a 17-month low following the COVID-19 impact on Boral’s operations.

Why are Boral shares in freefall?

The Boral share price is sinking on Friday after going ex-dividend along with a massive capital return to shareholders.

Earlier this week, management announced a $3 billion return of surplus capital to shareholders following a string of asset sales.

In 2021, Boral offloaded its North American Building Products, 50% owned Meridian Brick businesses, and Australian Building Products businesses.

The company has been busy with its divestment strategy, focusing on strengthening core assets and delivering improved returns.

As of today, each eligible shareholder will receive a total cash distribution of $2.72 per share. This consists of a $2.65 per share equal capital reduction, totalling $2,923 million and an unfranked dividend of 7 cents per share, totalling $77 million.

The decision to distribute the proceeds follows the vote in favour at the company’s annual general meeting in late October.

Boral recently engaged with the Australian Taxation Office (ATO) in regards to the tax implications of the capital reduction.

As such, the ATO confirmed that no part of the capital reduction will be treated as a dividend for Australian taxation purposes.

Boral expects the ATO to issue a class ruling soon in respect to how the income will be treated.

Shareholders can expect to receive the return of capital and dividend on Monday 14 February.

Boral share price snapshot

Due to today’s significant drop, the Boral share price is down 27% over the last 12 months.

When looking at year to date, its losses extend to more than 35%.

Based on today’s price, Boral presides a market capitalisation of around $4.34 billion, with over 1.1 billion shares on its books.

The post Did the Boral (ASX:BLD) share price really just collapse 40%? appeared first on The Motley Fool Australia.

More reading

• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Why Boral, Carsales, Credit Corp, and PointsBet shares are racing higher
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• Boral (ASX:BLD) share price takes off amid $3b return of capital
• The Boral (ASX:BLD) share price is surging 5% on Friday. Here’s what might be going on

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

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