Shares in biopharma company Imugene Limited (ASX: IMU) are inching lower in afternoon trade and are now changing hands at 48.8 cents apiece, down 4.41%.

Whilst there’s been no market-sensitive information from the company today, its share price has slipped more than 16% in the past month amid a sector-wide selloff in ASX healthcare shares that’s been in situ since late November.

Let’s take a closer look.  

Why is the Imugene share price falling today?

Imugene was added to the S&P/ASX 200 Index (ASX: XJO) after its quarterly rebalancing exercise last Friday.

The S&P/ASX 200 is Australia’s leading share market index that measures the performance of the top 200 ASX-listed companies by float-adjusted market capitalisation. 

Inclusion into the index is often a high watermark as there are several inclusion criteria a company and its share price must pass in order to qualify.

For instance, a company must be listed on the ASX and must be considered “institutionally investible”, whilst holding a minimum 3-month float adjusted market cap of $120 million.

Not only that, but many large Australian fund managers are limited to investing in ASX 200 companies, to avoid excessive volatility and risk-taking. 

Therefore, any new additions into the index have immediate buying power or selling pressure behind them as said large fund managers have to rebalance their own portfolios in accordance with these regulations.

We see this in action on Monday as order volume on Imugene’s shares was already at 74% of its 4-week average trading volume earlier in the day as prices take a dip.

Imugene share price snapshot

In the past 12 months, the Imugene share price has soared over 294% after rallying an impressive 392% this year to date.

This is well ahead of the benchmark index’s return of around 9% in that time.

The post Inclusion: Why is the Imugene (ASX:IMU) share price falling today? appeared first on The Motley Fool Australia.

More reading

• The Imugene (ASX:IMU) share price has rocketed 80% since August. Here’s why
• Here are the top 10 ASX shares today
• Why Calix, Imugene, Legacy Iron Ore, and Lovisa shares are charging higher
• Imugene (ASX:IMU) share price leaps 9% on Pfizer, Merck deal

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

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The Rio Tinto Limited (ASX: RIO) share price is down 1.8% at the time of writing as protests grow in Serbia.

According to reporting by various international media, such as The Guardian, thousands of protestors blocked major roads in Serbia with the government seemingly on course to allow Rio Tinto to go ahead with its lithium mine. There were reportedly similar protests last week as well.

Whilst Rio Tinto has been buying land around the western town of Loznica, it has yet to be given the final approval for the mine.

It was reported that protestors say the Serbian government is “setting the stage for illegal land appropriations and ignoring environmental concerns.”

Even Novak Djokovic has had a say on the situation. On Instagram, the tennis player said:

Clean air, water and food are keys to health. Without that, every word about ‘health’ is obsolete.

What’s the miner trying to do in Serbia?

In July 2021, it committed $2.4 billion for the Jadar lithium-borates project in Serbia.

The miner said that it’s one of the world’s largest greenfield lithium projects, though it remains subject to approval, permits and licences.

Rio Tinto says that the project would scale up Rio Tinto’s exposure to battery minerals and “demonstrate the company’s committed to investing capital in a disciplined manner to further strengthen its portfolio for the global energy transition.”

If approved, Jadar will produce battery-grade lithium carbonate. Management said Jadar would position Rio Tinto as the largest source of lithium supply in Europe for at least the following 15 years. Jadar will also produce borates, which is used in solar panels and wind turbines.

In trying to sell the economic benefits of Rio Tinto, the company said that Jadar will be one of the largest industrial investments in Serbia, contributing 1% directly and 4% indirectly to GDP, with many Serbian suppliers involved in the construction of the mine. It will also be a “significant employer”, creating 2,100 jobs during construction and 1,000 mining and processing jobs once in production.

What else could be impacting the Rio Tinto share price?

On Friday, on the London Stock Exchange, there was quite a lot of volatility for the Rio Tinto share price. Depending on the timing of global volatility, the ASX listing can either be ahead or behind the London Stock Exchange’s movement.

Also, last week Evergrande said in an announcement to the Hong Kong Stock Exchange that “there is no guarantee that the Group will have sufficient funds to continue to perform its financial obligations.”

The company has received a demand to “perform its obligations” under a guarantee for the amount of approximately US$260 million.

If Evergrande is unable to meet its guarantee obligations or certain other financial obligations, it “may lead to creditors demanding acceleration of repayment”.

The post Rio Tinto (ASX:RIO) share price sinks amid Serbian protests, Novak Djokovic weighs in appeared first on The Motley Fool Australia.

More reading

• Evergrande admits it may not meet debt repayments
• Top brokers name 3 ASX shares to buy next week
• Analysts say these are the ASX resources shares to buy now for big returns
• Did the Rio Tinto (ASX:RIO) share price start a recovery in November 2021?
• The Fortescue (ASX:FMG) share price hit by broker downgrade

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

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $17.10 price target on this artificial intelligence data services company’s shares. Citi is sticking with Appen despite news that Amazon has launched a new SageMaker Ground Truth Plus service that uses an expert workforce to deliver high-quality training datasets faster. The broker believes that while competition in the Enterprise space may increase, competition with Appen’s major technology customers shouldn’t be impacted. The Appen share price is trading at $9.21 on Monday afternoon.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

A note out of Morgans reveals that its analysts have retained their add rating and $31.00 price target on this banking giant’s shares. Morgans remains positive on the banking sector as a whole and believes there is potential for further capital management and generous dividends in the near term. Its analysts also expect rising interest rates to be supportive of earnings growth in the coming years. The ANZ share price is fetching $26.87 today.

ResMed Inc. (ASX: RMD)

Analysts at Macquarie have upgraded this medical device company’s shares to an outperform rating with a $39.00 price target. While Macquarie acknowledges that supply chain issues are putting pressure on near term device supply, its analysts remain positive. This is due to an expected increase in industry volume growth from 2023 and market share gains for ResMed. Macquarie believes this will support revenue and earnings growth ahead of current analyst consensus estimates. The ResMed share price is trading at $36.29 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks
• 2 healthcare ASX shares that Morgans loves right now
• What’s Appening? The Appen (ASX:APX) share price has tumbled 20% in 2 weeks
• Here are the 3 top-performing ASX 200 banks of November
• 2 ASX shares with strong long term growth potential

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 shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. 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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The Bank of Queensland Limited (ASX: BOQ) share price is continuing its poor form from last month. This is despite the company keeping a relatively low profile on the news front in recent times.

The regional bank’s shares dropped 12.49% in November. So far today Bank of Queensland shares are down 0.13% to $7.62.

In comparison, the S&P/ASX 200 Index (ASX: XJO) also ended November in the red, shedding 1.56% over the same timeframe. The benchmark index is hovering 0.4% lower to 7,212.5 points.

Let’s take a look at what might have weighed on Bank of Queensland shares lately.

What happened to Bank of Queensland shares in November?

The Bank of Queensland share price finished lower than it started last month, dragged down by negative investor sentiment.

The company did not release any price-sensitive market announcements to the ASX throughout November. However, broader market weakness coupled with the new Omicron COVID-19 variant put pressure on investor confidence.

This led Bank of Queensland shares to fall across the month. In particular, losses extended to 8 consecutive business days from 11 November to 22 November.

Furthermore, after the World Health Organisation reported the Omicron variant on 24 November, the company’s shares tumbled. In just 3 trading days, Bank of Queensland shares dropped 4% to a low not seen since January 2021.

Notably, senior executive and chair Patrick Allaway appeared to think that the company’s share price was trading at a bargain. Mr Allaway conducted an on-market trade, buying 10,000 Bank of Queensland shares at a price of $8.55 each in early November.

Non-executive director Mickie Rosen followed suit, also picking up 10,000 shares during the middle of the month at $8.50 apiece.

This could be considered an absolute steal given that a broker weighed in on the company’s shares on 2 December.

Although New Zealand’s Jarden reduced its outlook on Bank of Queensland shares by 5%, its price target stood at $9.60. Based on the current share price, this implies an upside of around 26%.

Bank of Queensland share price summary

The last 12 months have seen Bank of Queensland shares continue to move in circles, recording nil gains for the period. Year-to-date growth has also failed to take off, registering just 2% higher in 2021.

Bank of Queensland commands a market capitalisation of roughly $4.9 billion, with approximately 642.63 million shares outstanding.

The post Why the Bank of Queensland (ASX:BOQ) share price hit reverse in November? appeared first on The Motley Fool Australia.

More reading

• Should Bank of Queensland (ASX:BOQ) shares be on your Christmas list? Here’s what top brokers think
• What’s JP Morgan saying about ASX 200 bank shares?
• Are Bank of Queensland (ASX:BOQ) shares really going to pay a 10% dividend yield?
• Here’s why Morgans tips 30% upside for the Bank of Queensland (ASX:BOQ) share price
• What is Bank of Queensland (ASX:BOQ) doing to compete with BNPL rivals?

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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The Australian Strategic Materials Ltd (ASX: ASM) share price is still in the freezer as the company prepares to announce potentially exciting study results.  

The company froze the trading of its shares before the market opened on Friday. Since then, the Australian Strategic Materials share price has been sitting at $11.40.

Let’s investigate what the market might hear from the speciality metals and oxide producer when it exits the trading halt.

What’s going on?

Plenty of eyes are on Australian Strategic Materials share price today after the company flagged it would either release highly anticipated news or restart trading on Tuesday morning. Unless, of course, it extends its trading halt.

The anticipated news regards an optimisation study at the company’s wholly-owned Dubbo Project – a critical pillar of its business.

In October, the company said the study’s results would be released before the end of November. However, no news has been heard of it yet.

The study is aiming to update previous findings at the project with current pricing and design improvements.

Following its completion, Australian Strategic Materials hopes to start moving towards the next phase of the project’s development.

The Dubbo Project’s said to be a globally significant resource of rare earths, zirconium, niobium, hafnium, tantalum, and yttrium.

According to the company, the metals play an important role in future technologies, particularly in the clean energy and transportation sectors.

The company expects the project will see it becoming one of few critical metal oxide supply options outside of China.

It plans to process the project’s productions at its critical metals plants, located in key technology markets. The first plant will be in South Korea.

Australian Strategic Materials share price summary

Right now, the Australian Strategic Materials share price is trading 73% higher than it was at the start of 2021. However, it has fallen 6.4% since this time last month.

At its current share price, the company has a market capitalisation of $1.59 billion.

The post Why is the Australian Strategic Materials (ASX:ASM) share price halted? appeared first on The Motley Fool Australia.

More reading

• Why the Bank of Queensland (ASX:BOQ) share price hit reverse in November?
• Crypto market crash: The latest on Solana, Cardano, Ripple, and Terra
• Why Bapcor, Kogan, Sigma, and Zip shares are dropping today
• ‘All successful investment is value investing’: Charlie Munger
• Sigma (ASX:SIG) share price slides 7% to yearly low on guidance update

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.

What happened

So… those who haven’t checked their crypto portfolios yet, might want to.

Crypto markets are in turmoil right now. Most major cryptocurrencies are bleeding, driven by outsized moves at the top of the value chain. 

This market turmoil started late-Friday evening and continued into early Saturday morning. However, by end of day Saturday, much of the market mayhem has died down, to some degree.

As of 11:45pm ET, Cardano (CRYPTO: ADA) and Ripple (CRYPTO: XRP) were two of the bigger losers among large cap cryptocurrencies. Cardano was down 8.4%, while Ripple saw declines of 7.4% over the past 24 hours.

However, Solana (CRYPTO: SOL), a top-5 cryptocurrency by market capitalization, recovered most of its gains from the earlier crypto crash, down only 1.8% since the mayhem began. And Terra (CRYPTO: LUNA) was the big winner-up 20.8% over the past 24 hours.

So what

Starting with the good news-Terra has been a big winner among mega-cap cryptocurrencies of late. This network provides crucial stable coin infrastructure, and appears to increasingly be viewed as a more stable (no kidding) hedge to the volatility that’s been reeking havoc in the crypto markets.

Solana’s positioning as a smart contract/decentralized finance (DeFi) network able to compete with Ethereum has enticed many investors to consider this top token. Accordingly, it appears the market is taking a buy-the-dip approach with this top token.

Ripple and Cardano are two cryptocurrencies with their own set of token-specific headwinds of late. Various regulatory and delisting concerns have plagued the two cryptocurrencies, leading to headwinds which appear to be hindering these tokens’ recovery today.

Now what

Looking at the price action of these four cryptocurrencies, investors can take away two things.

First, the crypto market is a fast-moving space with very unique blockchains, each with individual catalysts and headwinds. Investors looking at picking tokens ought to consider a variety of factors before jumping in. It’s a risky business, picking individual tokens.

Second, market-specific forces can, and will, continue to drive momentum across the sector. However, there’s always room for divergence from market-specific catalysts. In this case, Terra Luna’s upside momentum has overshadowed this weekend’s turmoil. And it appears Solana’s making a break for it to the upside.

Perhaps Ripple and Cardano will catch up to their peers. However, it seems investors are being more selective with the tokens they’re choosing to buy the dip with today. 

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

The post Crypto market crash: The latest on Solana, Cardano, Ripple, and Terra appeared first on The Motley Fool Australia.

More reading

• This crypto could be the Moderna of 2022
• Why Solana is up today amid a sea of red for major cryptos
• Australia’s first direct Bitcoin and Ethereum ETFs are launching
• 3 reasons why Solana could just be getting started
• Here’s why Cardano’s token is jumping today

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

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing, the benchmark index is down 0.4% to 7,213.2 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Bapcor Ltd (ASX: BAP)

The Bapcor share price is down 4.5% to $6.49. Investors have been selling this auto parts retailer’s shares after it revealed that its CEO will now exit immediately instead of in February. Bapcor advised that since announcing the retirement of Darryl Abotomey as its CEO, there has been a marked deterioration in the relationship between him and the Board. As a result, “Mr Abotomey’s position as MD and CEO has become untenable.”

Kogan.com Ltd (ASX: KGN)

The Kogan share price has fallen 5.5% to $7.28. Investors have been selling the ecommerce company’s shares for a couple of reasons. One is the broad weakness in the tech sector following a poor night of trade on the tech-focused Nasdaq index on Friday. The other is Kogan being dumped from the ASX 200 index at the next quarterly rebalance.

Sigma Healthcare Ltd (ASX: SIG)

The Sigma share price is down almost 7% to 49 cents. This follows the release of a trading update from the pharmacy chain operator. According to the release, Sigma expects its earnings before interest, taxes, depreciation, and amortisation (EBITDA) to drop by 10% in FY 2022. This compares to previous guidance for 5% growth in FY 2022 and was driven largely by operational issues resulting from the roll-out of its Enterprise Resource Planning.

Zip Co Ltd (ASX: Z1P)

The Zip share price is down over 9% to $4.38. This appears to have been driven by broad weakness in the tech sector and particularly in the BNPL industry. A number of BNPL shares are recording larger than average declines today following a tough night on the Nasdaq index on Friday. The Zip share price fell to a 52-week low today.

The post Why Bapcor, Kogan, Sigma, and Zip shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Sigma (ASX:SIG) share price slides 7% to yearly low on guidance update
• Why the Zip (ASX:Z1P) share price is sinking 9% to a 52-week low
• ASX 200 (ASX:XJO) midday update: Metcash jumps, Kogan and Zip sink
• Here’s why the Kogan (ASX:KGN) share price just hit another 52-week low
• Bapcor (ASX:BAP) share price sinks again after CEO is kicked out

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 shares of and has recommended Kogan.com ltd and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Bapcor. 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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In the modern investing lexicon, there are many different ‘types’ of investing strategies that investors like to identify themselves with. There’s growth investing, dividend investing, and growth-at-a-reasonable-price investing. Different investors often choose which strategy suits their goals, temperament and interests and go from there. It’s important to say that different investors have proven successful in pursuing all of the different strategies above. Or even a combination. But for Charlie Munger, value investing is the only choice.

Charlie Munger is one of the most famous investors in the world. He has for decades played right-hand man to the great Warren Buffett in managing the investment portfolio of Berkshire Halthaway Inc (NYSE: BRK.A) (NYSE: BRK.B). And even though Mr Munger is less than a month out from his 98th birthday, he is still happy to share his wisdom.

Most recently, this came at the Sohn Hearts & Minds Investment Conference held last week. Mr Munger tuned in to the conference and gave his views on a number of issues. These included cryptocurrencies (“I’m never going to buy a cryptocurrency. I wish they’d never been invented. I think the Chinese made the correct decision, which is to simply ban them.”). As well as the current state of the markets (“Overall, I consider this era even crazier than the dot-com era.”).

Charlie Munger is sticking with value investing

But perhaps his most pertinent remarks came on the topic of investing itself. According to reporting in the Australian Financial Review (AFR), Munger said the following on the value investing strategies he has honed for many decades:

I think all successful investment is value investing in the sense that you’re trying to get better prospects than you’re paying for…

There’s no great company that can’t be turned into a bad investment, just by raising the price. Part of intelligent business is knowing the business that you don’t want and keeping it out. I’m still looking for more value than I pay for.

But Munger did acknowledge that his and Buffett’s style of investing was facing challenges in the current investing climate:

It’s getting very difficult because we have a vast increase in the intellectual horsepower that’s trying to get rich by owning securities… They’ve bid the good businesses up and up and up and up. In America, at least, almost every great business is selling 35 times earnings or more.

That might explain why Berkshire Hathaway is currently sitting in the largest pile of cash it has ever had. Buffett and Munger have previously relished deploying Berkshire’s enormous funds into new investments during share market crashes, so perhaps Munger and Buffett know something we don’t.

Either way, history has shown it is well worth keeping an eye on what Messrs Munger and Buffett are saying and doing at Berkshire Hathaway.

The post ‘All successful investment is value investing’: Charlie Munger appeared first on The Motley Fool Australia.

More reading

• How many stock pickers does it take to change a share portfolio?
• Bear signal? Warren Buffett’s Berkshire Hathaway has been selling shares

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 recommended Berkshire Hathaway (B shares). 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 Sigma Healthcare Ltd (ASX: SIG) share price is plunging today after the company predicted its earnings will fall this financial year.

The Sigma share price is currently down by 6.67%, trading hands at 49 cents a piece. This is a 52-week low for the company.

Sigma is a pharmacy chain operator and distributor with a network of more than 1,200 pharmacies including well-known brands Chemist King, Amcal and Discount Drug Stores.

What did Sigma announce?

In today’s release, Sigma predicted its earnings before interest, taxes, depreciation, and amortisation (EBITDA) would drop by 10% in FY22.

The company downgraded its earnings forecast because of impacted sales and operating costs due to a major software update and COVID-19 restrictions. The company implemented a new enterprise resource planning system during the height of pandemic restrictions.

Sigma expects one-off and non-operating costs to be up $25 to $30 million, also proportionally impacting debt.

But while the prediction for FY22 is negative, the company reported 5% growth in September.

And the company also has a positive outlook on future growth overall.

Chairman Ray Gunston said:

Not withstanding this set-back, we remain confident in the future growth profile for Sigma, which was further underlined with the Sigma board recently approving the extension to our new Victorian Distribution Centre in Truganina.

We remain focused on growing our core business, whilst continuing to build on business expansion opportunities across areas such as hospital services, contract logistics and medical devices and consumables…

Sigma expects to announce its FY22 results on 29 March.

Sigma share price snapshot

Over the past 12 months, Sigma shares have dropped almost 17%. The Sigma share price is down 21% year to date. It reached a yearly high of 73 cents on 8 February. At 49 cents apiece, today’s price at the time of writing is a yearly low for the company.

Based on today’s share price, Sigma has a market capitalisation of roughly $514 million.

The post Sigma (ASX:SIG) share price slides 7% to yearly low on guidance update appeared first on The Motley Fool Australia.

More reading

• Is the Westpac (ASX:WBC) share price a value trap or a bargain buy?
• 3 cryptocurrencies that crushed Shiba Inu in November
• Oil Search (ASX:OSH) share price edges higher on merger update
• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks
• This crypto could be the Moderna of 2022

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The Westpac Banking Corp (ASX: WBC) share price has been one of the worst performing ASX 200 shares over the last few weeks.

Since this time in late October, the banking giant’s shares have lost 21% of their value.

Does this make the Westpac share price great value or a value trap?

Given the significant decline by the Westpac share price recently, investors may be wondering if its shares are great value or a value trap.

The team at Morgans has given its opinion on the matter this morning and appear convinced that the bank’s shares are not a value trap.

Morgans has reiterated its add rating and $30.50 price target. Based on the current Westpac share price of $20.74, this implies potential upside of 47% for investors over the next 12 months.

What did Morgans say?

Morgans notes that the Westpac share price is trading at a level that would indicate that the market thinks it is a value trap, but it doesn’t believe this is the case.

It commented: “WBC shares have been sold off heavily following the FY21 result announcement, such that out of the major banks, WBC is now trading on the lowest FY22F P/NTA multiple, the lowest FY22F P/E multiple and the highest FY22F dividend yield. Such multiples or yields could only be justified if WBC is a value trap, which we think it is not.”

The broker explained that it does not feel the challenges facing the bank are anywhere near as severe as the market may think.

Morgans said: “We believe the challenges facing WBC are not severe enough for WBC to be thought of as a value trap. The two key sources of investor consternation in relation to WBC appear to be: net interest margin (NIM) contraction; and risks to achieving the $8bn cost target by FY24F.”

“On the NIM front, we believe the challenge facing WBC is not too different to the NIM challenge facing CBA. […] However, what has made the NIM of WBC and CBA look particularly bad is the stable NIM (excluding Markets & Treasury) reported by NAB,” it explained.

The good news is that the broker believes these factors of underperformance are addressable.

What about its costs target?

As for its costs, the broker believes the current Westpac share price indicates that the market believes the bank will only be able to cut its costs down from $10.2 billion to $9.5 billion by FY 2024. However, Morgans stated that “we expect WBC to do notably better than this and we consequently believe that the extent of pessimism being reflected in WBC’s current share price is overdone.”

All in all, the broker believes this has created a buying opportunity for investors, with Westpac remaining its top pick of the majors.

The post Is the Westpac (ASX:WBC) share price a value trap or a bargain buy? appeared first on The Motley Fool Australia.

More reading

• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks
• Here are 6 of the worst performing ASX shares of November
• The Westpac (ASX:WBC) share price sank 20% in November: Time to buy?
• Morgans names 2 of the best ASX share ideas for December
• ASX shares to buy for the Omicron COVID outbreak

Motley Fool contributor James Mickleboro owns shares of 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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