The Westpac Banking Corp (ASX: WBC) share price will be one to watch today this morning.

This follows the release of the banking giant’s first quarter update.

Westpac share price on watch following Q1 growth

• Unaudited cash earnings of $1.58 billion, up 74% (1% excluding notable items) over the quarterly average during the second half of FY 2021
• Net interest margin down 8 basis points to 1.91%
• Expenses down 7% excluding notable items to $2.7 billion
• CET1 capital ratio of 12.2%
• Impairment charge of $118 million

What happened during the quarter?

The Westpac share price will be on watch today after it released a first quarter update that appears to have fallen short of expectations.

For the three months ended 31 December, Westpac’s unaudited cash earnings came in at $1.58 billion. While this was a 74% increase over the quarterly average during the second half of FY 2021, or 1% excluding notable items, the team at Bell Potter was forecasting cash earnings of $1.82 billion.

Management advised that this reflects lower expenses, and a strong contribution from Treasury and Markets, which were partly offset by lower net interest margins, a turnaround in impairment charges, and the absence of revenue from businesses sold, particularly insurance.

In respect to its net interest margin, which came in 8 basis points lower at 1.91%, management blamed competitive pressure in mortgage and business lending and the continuing growth in lower spread fixed rate mortgages. Unfortunately, given these competitive pressures, the bank expects its net interest margin to decline further through FY 2022.

Another disappointment that could weigh on the Westpac share price today is its impairment charge of $118 million. While asset quality continues to improve, the bank believes it is prudent to increase provisions due to continuing uncertainties relating to COVID-19. Particularly given the current supply chain disruptions and reduced activity in certain sectors.

Management commentary

Westpac’s CFO, Michael Rowland, was pleased with the bank’s start to the year.

He said: “We have made a sound start to the year and we are seeing the cost benefits of our simplification programs. The environment however remains highly competitive, and we continue to see pressure on margins.”

“Given this, we are bringing forward our simplification plans and changing our operating structure to improve efficiency and move more of our people closer to the customers they support.”

These plans will see Westpac create a smaller, more focussed head office, reducing the size of corporate functions by around 20%.

Westpac’s CEO, Peter King, said: “We are building a simpler bank, streamlining our organisation and lowering the cost of running the Group. This is key to delivering better services for customers and better results for shareholders. The changes are primarily across head office and support functions, and not customer-facing roles. Bringing our workforce closer to the frontline, combined with the increases we have already made to the number of bankers, will further strengthen our franchise for customers.”

The post Westpac (ASX:WBC) share price on watch after reporting $1.58bn Q1 profit appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• How are ASX bank shares responding to the RBA’s interest rate call?
• Morgans names the best ASX financial shares to buy in February
• Own Westpac (ASX:WBC) shares? Outlook ‘highly uncertain’ says this broker
• Brokers rate these 2 top ASX shares as buys in February 2022

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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Key points

• Both of these ASX shares are predicted to achieve double-digit share price growth in 2022
• Temple & Webster is rapidly growing revenue, increasing its customer base and expanding its product range
• Brickworks is expecting long-term valuation gains for both its investments and industrial property trust

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There is nearly always an opportunity to be found on the ASX share market. Share prices change all the time, opening up the potential for investors to jump on compelling businesses at better prices.

January 2022 was a volatile start to the year. But with the dust settling on that market correction, these two ASX shares look like opportunities:

Temple & Webster Group Ltd (ASX: TPW)

The homewares and furniture business is currently rated as a buy by the broker Morgan Stanley with a price target of $16.25. That implies a potential rise of the Temple & Webster share price of more than 80% over the next year.

Temple & Webster shares have dropped 27% over the last three months. But its long-term positives remain.

The ASX share’s revenue continues to grow strongly. In FY22 to 15 October 2021, revenue had increased 56%.

It’s still experiencing the strong tailwind of ongoing adoption of online shopping because of structural and demographic shifts, accelerated by COVID-19.

Temple & Webster’s increasing scale is driving operating leverage, which is allowing it to increase its investment in future growth and take market share. This is leading to a better consumer proposition as well as better unit economics.

Profit margins are expected to increase over time as the business benefits from scale and can utilise its existing infrastructure more efficiently across more customers. Private label sales continue to grow as well.

The company continues to invest in technology to improve the online shopping experience, such as AI interior design technology.

Brickworks Limited (ASX: BKW)

Brickworks is one of Australia’s largest building products businesses. It’s currently rated as a buy by Ord Minnett, with a price target of $26.20.

The two biggest asset values within the Brickworks business is the 50% share of the joint venture industrial property trust and the shares of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) that it owns.

Brickworks notes that Soul Pattinson has a history of long-term outperformance and this is expected to continue. The merger with listed investment company (LIC) Milton provides scale, diversification and liquidity to pursue additional investment opportunities.

Meanwhile, in partnership with Goodman Group (ASX: GMG), there is an unprecedented development pipeline within the property trust as it benefits from the huge demand in e-commerce and logistics facilities.

The completion of pre-committed facilities over the next two years will result in a “significant uplift in rental income and asset value” for the property trust. This in turn will add to Brickworks’ cashflow and assist in the funding of higher dividend payments from the ASX share.

Work is finishing up, or finished, on a large Amazon distribution warehouse facility in Sydney. The trust is now working on a very large distribution centre for Coles Group Ltd (ASX: COL).

However, it must be noted that the building products divisions in Australia and the USA are seeing mixed conditions with COVID-19 effects impacting costs and the supply chain.

The post 2 ASX shares that could be great buys in February 2022 appeared first on The Motley Fool Australia.

More reading

• Is the Brickworks (ASX:BKW) share price a smart buy in this volatility?
• Dividend investors should put these 2 top ASX shares on the watchlist
• 2 strong ASX shares profiting from the e-commerce boom
• 2 ASX tech shares to buy that have plunged: experts
• Why Allkem, Megaport, Redbubble, and Temple & Webster’s shares are falling

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks, Temple & Webster Group Ltd, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Temple & Webster 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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Key points

• These two ASX dividend shares are expected to pay large dividends in FY22
• Furniture business Nick Scali has expanded its growth potential with the acquisition of Plush
• Charter Hall Long WALE REIT is a leading property business with a high distribution payout ratio and a high occupancy rate

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ASX dividend shares may be able to provide attractive cash returns during this period of significant market volatility.

One of the benefits of a market decline, aside from the lower price, is that the dividend yield is also increased for prospective investors.

With that in mind, here are two ASX dividend shares with pretty large expected yields for FY22:

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest retailers of furniture in Australia. It has a national network of showrooms showcasing its higher-quality products.

The company has been rated as a buy by the broker Macquarie with a price target of $15.50. Macquarie thinks that Nick Scali will benefit from the acquisition of Plush. In FY22, it’s expected to pay a grossed-up dividend yield of 6.3% in FY22 and 7.3% in FY23.

Plush-Think Sofas comes with a network of 46 showrooms across Australia. Management said that this acquisition adds an exciting new chapter in the company’s growth. Plush is making more than $120 million in sales revenue and it has achieved “good” profit margins which will be enhanced.

Supply chain costs will be brought down in Plush as Nick Scali brings its logistics in-house. It’s planning to double the number of Plush stores in the long-term across Australia and New Zealand.

Management is expecting that the overall online channel will continue to grow as it develops further capabilities.

In the first quarter of FY22, the ASX dividend share’s sales revenue was in line with the previous year, with the “margin” being in line with the previous year too despite shipping delays and lockdowns in countries that it sources from.

Charter Hall Long WALE REIT (ASX: CLW)

This is a diversified real estate investment trust (REIT) that owns a very diverse array of property across Australia such as government buildings, telco buildings, long weighted average lease expiry (WALE) retail properties and so on.

It’s currently rated as a buy by the broker Macquarie with a price target of $5.31. That’s almost 10% higher than where it is right now.

Based on Macquarie’s numbers, the ASX dividend share is expected to pay a yield of 6.2% in FY22.

The REIT is steadily making more acquisitions, to improve the strength and diversity of its portfolio and rental income. One of the recent deals was buying Ale Property.

Charter Hall Long WALE REIT has rental income growth built into its contracts, giving it organic income growth potential.

For the three months to December 2021, the REIT had its portfolio revalued, which led to an 8.1% increase on prior book values. This helped grow the pro forma net tangible assets (NTA) per unit by 14.4% to $5.85.

In FY22, it’s expecting operating earnings per security (EPS) to grow by at least 4.5%. It now has a WALE of around 13 years.

The post 2 ASX dividend shares that could be buys with yields above 5% appeared first on The Motley Fool Australia.

More reading

• Morgans names the best ASX financial shares to buy in February
• Why is the Macquarie (ASX:MQG) share price smashing the other big banks today?
• How will ASX shares perform this earnings season? Experts explain what to look for
• How does the Macquarie (ASX:MQG) dividend compare to the big four banks?
• What’s happening to ASX bank shares today?

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 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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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, Forager Funds Management senior analyst Gaston Amoros discusses his biggest regret in investing and the 2 ASX shares to lock way for the next 4 years.

ASX shares for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for 4 years, which stock would you want to hold?

Gaston Amoros: I’m going to go safe on this one. So if the market shuts down for 4, 5 years, I would buy CSL Limited (ASX: CSL) or Cochlear Limited (ASX: COH) at the prices that you can get today. 

Why? It’s because these are very reliable but fancy businesses that generate high single digits — call it around 8% — revenue growth, every single year. And they’re very, very hard to disrupt because they’re very entrenched in their ecosystems.

They have a very wide moat and you get, on top of the high single digit revenue growth, you get a bit of operating leverage that gets your [earnings per share] EPS growth to the double digits or low double digits. 

On top of that, you get a dividend. 

Again, these are businesses that are very well run, the management teams have a pristine reputation. They’re great capital allocators. And you’re going to be very, very safe and compound safely for the next 4 or 5 years.

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

GA: I wish I could go back in time, as far back as possible, and just buy all the winner-takes-all businesses that I could find. 

Let’s say if I could buy Amazon.com Inc (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT)… I wish I could just buy them, never sell, constantly adding through the cycle. 

These are businesses that once they build their ecosystem and they keep winning and they keep solidifying that moat that we discussed, [like] CSL and Cochlear.

I think that when we start out in the profession, very often we are very risk-averse. And we tend to play for small moves, when you can be playing for something way bigger, but you need to be willing to embrace and take the volatility. And just willing to invest long term. 

Most people, when they start out, they don’t have that. And I didn’t have that. And I wouldn’t be sitting here, I would be sitting in a yacht somewhere nice and warm, if I had done that. So that’s something that I clearly regret. 

MF: But the funny thing with stocks like Amazon and Microsoft is that, sure, their growth has been phenomenal over 20 years, but there’d be very few people who would’ve held their holding for the entire duration? Because once a stock goes up 10 times, you’re so tempted to sell it, rather than wait for a 100-fold return?

GA: That’s absolutely right. That’s a natural temptation.

But the important thing to realise, and this is something we do at Forager, we say “We should sell a stock when the investment thesis exhausts itself”. 

So if the business is executing well and they’re growing into a large market, or they’re dominating a market and this is a growth sector, then just keep growing with the sector, let them dominate, let them do what they do. 

And the thing that people always forget is that these companies don’t just dominate one sector. They create the next sector, they move into the next adjacency and they keep leading. They create markets. 

So before Apple Inc (NASDAQ: AAPL) came along, there wasn’t an iPhone. And now there is an iPhone. And Microsoft transformed the whole office productivity space. It didn’t exist, right? So that’s why you back the company as much as you back the management team behind the company. But it only works in companies that can improve and sustain their competitive advantage.

The post Do this now to be filthy rich later: expert appeared first on The Motley Fool Australia.

More reading

• 2 reasons the Nasdaq has led the market lower in 2022
• Analysts name 2 ASX 200 blue chip shares with 30% upside
• Top broker says latest CSL (ASX:CSL) acquisition will boost more than its bottom line. Here’s why
• Alphabet and Amazon will make or break the Nasdaq this week
• 3 ‘champion stocks’ for ASX investors in 2022

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns Amazon, CSL Ltd., Cochlear Ltd., and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd., Cochlear Ltd., and Microsoft. The Motley Fool Australia has recommended Amazon, Apple, and Cochlear 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was on form and charged notably higher. The benchmark index rose 1.2% to 7,087.7 points.

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

ASX 200 futures flat

The Australian share market looks set to have a subdued day on Thursday despite a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day flat this morning. In late trade on Wall Street, the Dow Jones is up 0.45%, the S&P 500 is up 0.7%, and the Nasdaq has risen a modest 0.15%.

Westpac Q1 update

The Westpac Banking Corp (ASX: WBC) share price will be on watch today when it releases its first quarter update. According to a note out of Bell Potter, its analysts are forecasting cash earnings of $1.82 billion, down 7.6% from the $1.97 billion recorded in the prior corresponding period. Investors will also be keen to hear how the bank’s net interest margin and cost cutting are faring.

Oil prices rise

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a decent day after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.15% to US$88.33 a barrel and the Brent crude oil price is up 0.35% to US$89.48 a barrel. This follows news that OPEC is increasing its production as planned in March. However, this is not as much as some countries wanted in order to tame prices.

Aristocrat’s Playtech takeover fails

The Aristocrat Leisure Limited (ASX: ALL) share price will be on watch today after it revealed that its $5 billion takeover of Playtech failed. Although the majority of Playtech shareholders voted in favour of the deal, it wasn’t enough to get over the line. This was due to votes by a group of new investors that have built a blocking stake and are refusing to engage with Aristocrat in relation to the deal.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.45% to US$1,809.4 an ounce. Traders were buying gold after the US dollar and treasury yields softened following the release of US jobs data.

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

More reading

• Here are the top 10 ASX shares today
• TechnologyOne (ASX:TNE) share price jumps on broker upgrade
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• How are ASX bank shares responding to the RBA’s interest rate call?
• Morgans names the best ASX financial shares to buy in February

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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If you’re looking for an easy way to invest in international shares for diversification purposes, then exchange traded funds (ETFs) could be the answer.

But which ETFs should you look at? Listed below are three excellent ETFs that could be worth getting better acquainted with this months. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

This Lunar New Year is the year of the tiger. Perhaps this could be a good omen for the BetaShares Asia Technology Tigers ETF, which provides investors with easy access to a number of the most promising tech shares, or tigers, in the Asian market. By investing in this ETF, investors will be owning a slice of well-known companies such as Alibaba, Baidu, Samsung, Taiwan Semiconductor, and WeChat owner Tencent. There are also a host of lesser known but high quality companies such as Meituan Dianping and Pinduoduo.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF for investors to look at is the VanEck Vectors Morningstar Wide Moat ETF. When legendary investor Warren Buffett looks for an investment, he looks for companies with sustainable competitive advantages or moats. VanEck has taken that into account and built a whole ETF around it. This ETF currently contains 46 attractively priced companies with sustainable competitive advantages. These include the likes of Alphabet (Google), Altria, Boeing, Coca Cola, Kellogg Co, and Walt Disney.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a global video game market estimated to comprise 2.7 billion active gamers. Among the companies you’ll be buying a slice of are AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two. VanEck believes these companies are well-placed to benefit from the increasing popularity of video games and eSports.

The post 3 of the best ETFs for ASX investors this month appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares that could be buys in February 2022
• 2 popular ETFs for ASX investors to buy this week
• 3 high quality ETFs for ASX investors in February
• Are these 2 leading ETFs good buys in February 2022?
• 2 top international ETFs for ASX investors

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 BetaShares Asia Technology Tigers ETF, VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF, and VanEck Vectors Morningstar Wide Moat ETF. 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 GWR Group share price surged 17.24% today to 17 cents
• In earlier trading, the GWR share price was up by nearly 21%
• GWR reveals it has secured multiple iron ore shipments

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This ASX mining share had a stellar day on the market today. The GWR Group (ASX: GWR) share price skyrocketed after the company revealed that its flagship high-grade C4 iron ore mine is back in full production.

At the market close, the GWR share price was up 17.24% to 17 cents. However, in earlier trade, the company’s shares surged by as much as 20.69% to 17.5 cents.

Let’s take a look at what attracted ASX investors to GWR today.

What did GWR announce to make its share price go skyward?

GWR is an iron ore producer exploring the Wiluna West Iron Ore Project and the 100% Wiluna West Gold Project in Western Australia.

The miner revealed today that its flagship iron ore mine is back in full production after it restarted operations in January.

GWR also announced that a shipment of 30,438 tonnes of iron ore left the Port of Geraldton in January. GWR sold the ore at a fixed price of US$100 per tonne, making it worth more than $3 million. The shipment was shared with iron ore and copper miner, CuFe Ltd (ASX: CUF).

In addition, GWR announced that it has secured fixed-price contracts for 1 vessel per month up to July. GWR said these contracts provide certainty for the company.

The shipments include:

• February shipment of 30,000 tonnes at US$95 per tonne (fines) and US$100 p/t (lump)
• March lump shipment at US$110 p/t
• April, May and June lump shipments at US$111 p/t
• July lump shipment at US$114 p/t.

GWR hopes to secure more fixed-price contracts by tapping into Asian markets including Malaysia, Indonesia, and China.

GWR said that its C4 mine has more than 2 million tonnes of high-grade iron ore available for mining.

Management comment

Commenting on the announcement, GWR chairman Gary Lyons said:

It is great to see the flagship C4 Iron Ore mine back in full production, having worked through the recent volatility in iron ore prices, the GWR team has been able to refine its operations focused on cost reduction and fixed priced contract shipment.

Due to the nature of our high-grade iron ore, we have been able to take advantage of alternative markets such as Malaysia and Indonesia as well as China.

There are many moving parts to our operation, and I am very pleased with our ability to tie these in all together as we continue to build our haulage fleet with long term haulage contractors supplemented by additional haulage companies.

GWR share price recap

The GWR share price has descended 45% in the past 12 months. But the miner has had a good start to the new year, with its shares up 6.25%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned 3.8% in the past 12 months.

GWR has a market capitalisation of $51 million based on its current share price.

The post Why this small-cap ASX mining share rocketed 17% today appeared first on The Motley Fool Australia.

More reading

• Why has the Rumble Resources (ASX:RTR) share price rallied 25% in a week?
• 2 ASX dividend shares with grossed-up yields over 8% right now
• BNPL? Try sell now, buy later! Laybuy (ASX:LBY) share price tipped to crash 70%
• Here are the top 10 ASX shares today
• Origin (ASX:ORG) share price hits 52-week high before slumping. What’s going on?

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

• The Rumble Resources share price is up more than 25% in the past week
• It follows further mineral discoveries at the company’s Western Australian sites
• The Rumble Resources share price has jumped more than 200% in the past year

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The Rumble Resources Ltd (ASX: RTR) share price has had an impressive week, gaining more than 25%.

During that time, the miner has delivered a wealth of news — including a discovery at its Western Australia project and a trading halt before the release of its activities report for the latest quarter.

Today, the Rumble Resources share price closed at 47 cents, a rise of 4.44% on the day.

So what’s been behind the recent performance of the Australian-based miner and exploration company. Let’s dive straight in.

Discovery at project

On Monday, Rumble Resources announced it had intercepted “high-grade sulphide mineralisation” within its Earaheedy Project, around 110km northeast of Wiluna, Western Australia.

The Earaheedy prospect is Rumble Resources’ most prominent. The company is working to extract zinc-lead-sulphide from the “world-class” site.

The recent discovery of zinc and lead (Zn-Pb) was made at the Kalitan Feeder Zone within the Chinook Zn-Pb-Ag-Cu Prospect of the site.

A drill hole has returned 51m @ 4.76% Zn + Pb, 5.81 grams per tonne (g/t) Ag from 82m.

Further, this measurement includes 20m @ 8.78% Zn + Pb, 11.65 (g/t) Ag from 98m (and 8m @ 14.61% Zn + Pb, 17.7 g/t Ag from 104m and 8m @ 5.53% Zn + Pb, 5.08 g/t Ag from 124m).

The miner’s exploration target for the site is gaged between 100 to 120 million tonnes, at a grade ranging between 3.5% Zn-Pb to 4.5% Zn-Pb Sulphide.

Further drilling is expected to continue over the next 12 months.

Business snapshot

Last Thursday, Rumble Resources entered into a trading halt, just before releasing its activities and cash flow statement for the latest quarter (ending 31 December 2021).

In it, the company reported a number of further developments at its Western Australian sites and tenements, including:

• Earaheedy: drill program completed with 50% assays pending, zones intersected and results obtained
• Munarra Gully: assays pending with a Cu mineralisation anticipated to correlate with Au-Ag
• Lamil Au-Cu Project: drill program completed with assays pending
• Wardawarra: Ni defined over 1.7km of the strike, with other untested sites

The company also reported:

• A cash position of $27.3 million (at end of quarter)
• $770,000 expected in research and development return (not included in the cash position)

Since exiting the trading halt, the Rumble Resources share price has shot up 11%.

Rumble Resources share price snapshot

Over the last 12 months, the Rumble Resources share price has skyrocketed by more than 203%. Its shares were trading as low as 10 cents in April 2021, around the time the company gave a drilling update on its zinc-lead-silver project.

About a month later, the miner’s stock hit a 52-week-high, with its shares reaching 76 cents apiece.

Currently, the company has a market capitalisation of around $291 million with more 620 million shares issued.

The post Why has the Rumble Resources (ASX:RTR) share price rallied 25% in a week? appeared first on The Motley Fool Australia.

More reading

• Why this small-cap ASX mining share rocketed 17% today
• 2 ASX dividend shares with grossed-up yields over 8% right now
• BNPL? Try sell now, buy later! Laybuy (ASX:LBY) share price tipped to crash 70%
• Here are the top 10 ASX shares today
• Origin (ASX:ORG) share price hits 52-week high before slumping. What’s going on?

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Finding an ASX dividend share that yields anything north of 4% isn’t the easiest task, especially if you want to filter out any dreaded ‘dividend traps’. But finding ASX dividend shares with a grossed-up yield over 8% is even harder, given there is only a handful or two on the share market.

But if you do find an ASX dividend share sporting that kind of yield, it can make a big difference to your share portfolio’s cash flow. So here are two such ASX dividend shares offering trailing and fully franked yields of that size right now.

2 ASX dividend shares with fully franked yields over 8% today

Adairs Ltd (ASX: ADH)

Adairs is the bedding and homewares company that has made quite the splash on the ASX boards over the past few years. Its shares are up an impressive 143% over the past 5 years. But more recently, the company has been battling some disappointing share price moves. It was only in April last year that the company was making all-time highs of close to $5 a share. But the company has taken a recent tumble, and is now down more than 20% over just the past month. A disappointing trading update earlier this month saw the company crater close to 20% in just one day, driven largely by the narrowing of margins that Adairs reported.

But a share price fall does wonders for a company’s trailing dividend yield and this turns out to be the case here. Adairs paid out two dividends last year. There was an interim dividend of 13 cents per share in March. And the final dividend of 10 cents per share was paid out in September. That gives Adairs a raw trailing dividend yield of 7.08% on the company’s last share price. Since those dividends both came fully franked, this yield grosses-up to a whopping 10.11%.

WAM Research Limited (ASX: WAX)

WAM Research is our second ASX dividend share to check out today. We have here a Listed Investment Company (LIC), which means, unlike most ASX companies, WAM Research only invests in other ASX shares for the benefit of its shareholders. It typically holds a portfolio of small or mid-cap industrial shares that WAM’s analysts believe are poised to rise in value. Some of its current holdings (as of 31 December) include Lovisa Holdings Ltd (ASX: LOV) and Brickworks Limited (ASX: BKW)

WAM Research has long had a reputation as a dividend income heavyweight, due to its consistently high dividends. Last year, it paid out 9.9 cents per share in dividends, which was a slight increase on 2020’s 9.8 cents. That gives WAM Research a raw trailing yield of 6.19% on today’s closing share price. WAM Research’s dividends also typically come fully franked, which means that trailing yield grosses-up to 8.84% with the value of those credits included. 

The post 2 ASX dividend shares with grossed-up yields over 8% right now appeared first on The Motley Fool Australia.

More reading

• 2 buy-rated ASX dividend shares for February
• Are these 2 ASX dividend shares buys in February 2022?
• Why analysts are bullish on these 2 ASX dividend shares
• Broker says Adairs (ASX:ADH) share price is cheap after selloff
• Why Adairs, Bigtincan, Regis Resources, and Telix shares are sinking

Motley Fool contributor Sebastian Bowen owns ADAIRS FPO and WAM Research Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ADAIRS FPO and Brickworks. The Motley Fool Australia owns and has recommended ADAIRS FPO and Brickworks. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Laybuy Group Holdings Ltd (ASX: LBY) share price continued its steep descent into negative territory today.

The buy now, pay later (BNPL) services provider closed the day down 5.13% with its shares trading at 18.5 cents each.

It seems weakness across tech-weighted indices and high-beta names in the S&P/ASX 200 Small Ordinaries index (ASX: XSO) have impacted Laybuy’s share price these last few months.

The drawdown hasn’t gone unnoticed either. In a note to clients today, analysts from Australian brokerage Bell Potter have slashed their recommendation on the company to hold from buy.

Let’s take a closer look.

Bell Potter tips Laybuy share price to plunge 72%

Following Laybuy’s third-quarter trading update last week, Bell Potter analyst James Filius has made some updates to the broker’s modelling for the company.

Laybuy didn’t provide any specific guidance in its quarterly update, only that it has optimistic expectations of landing in the “top 3 BNPL providers in the large UK retail market”.

Despite this, Filius cut customer growth estimates on Laybuy from FY22 onwards, restructuring earnings forecasts in the process.

For instance, the BNPL player recognised just 5% customer growth for this recent quarter, well short of the broker’s internal estimates.

This prompted Bell Potter to reduce its forecasts on customer growth by 20% for FY22. In turn, this has resulted in a corresponding 6% haircut to revenue growth expectations.

As it goes in financial modelling, the downstep in sales and customer growth estimates has flow-on effects. Bell Potter has also lowered its earnings per share (EPS) estimates for the coming 3 years.

It’s lowered FY22, FY23 and FY24 EPS estimates for Laybuy by 23%, 10% and 2% respectively.

Perhaps the most scathing outcome from Bell Potter’s ratings downgrade today was the adjustment to its valuation on the company.

The broker now values Laybuy at just 24 cents a share after slashing its price target by 72%. That drop is parallel to losses seen by the company, and also the wider industry, over the last 12 months.

From another perspective, Canadian broker Canaccord Genuity rates Laybuy as a ‘speculative buy’ at an 85 cent valuation. However, it should be noted this rating was provided on 1 December 2021, well before the company’s Q3 FY22 trading update last week.

Laybuy share price snapshot

In the last 12 months, the Laybuy share price has collapsed almost 87% and trails the benchmark index substantially over that time.

This year, things aren’t any better with the company’s shares down 21% since January 1.

That gives Laybuy a market capitalisation of $47 million.

The post BNPL? Try sell now, buy later! Laybuy (ASX:LBY) share price tipped to crash 70% appeared first on The Motley Fool Australia.

More reading

• Buying ASX shares in 2022? Here’s what you need to know: expert
• Can you guess the best and worst All Ordinaries performers of 2021?
• These are the 5 worst performing ASX shares of 2021
• 5 worst ASX 200 tech shares of 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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