In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a gain. At the time of writing, the benchmark index is up 0.4% to 7,423.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Adbri Ltd (ASX: ABC)

The Adbri share price is up 7% to $2.98 after it announced an extension to its supply agreement with Alcoa. According to the release, Adbri’s subsidiary, Cockburn Cement, has secured an extension to its quicklime supply agreement for Alcoa’s operations in Western Australia. Adbri expects a minimum of $25 million in additional revenue from the extended supply.

Australian Ethical Investment Limited (ASX: AEF)

The Australian Ethical share price is up 3.5% to $11.15. This morning Australian Ethical released its funds under management (FUM) update which revealed a 6% increase to $6.94 billion since the end of September. This was driven by continued strong net flows together with a positive investment performance.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is up 3.5% to $46.64. This appears to have been driven by a broker note out of Morgans this morning. According to the note, the broker has upgraded the retail giant’s shares to an add rating with a price target of $54.00. It commented: “At the current share price, we believe JBH’s valuation looks compelling.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is up 3% to $55.52. This follows the release of a trading update this morning for the first half. That update reveals that the conglomerate expects to post a 12.5% to 16.5% decline in profits to between $1,180 million and $1,240 million driven by weakness in the Kmart Group due to COVID pressures. However, this was in line with consensus expectations.

The post Why Adbri, Australian Ethical, JB Hi-Fi, and Wesfarmers shares are racing higher appeared first on The Motley Fool Australia.

More reading

• Here’s why the Adbri (ASX:ABC) share price is raging 8% higher today
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise
• JB Hi-Fi (ASX:JBH) share price pushes higher after broker upgrade
• Wesfarmers (ASX:WES) share price higher despite guiding to first half profit decline
• An ASX XI to take on the world

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 Australian Ethical Investment Ltd. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The Beach Energy share price is trading at $1.455 right now – the highest it’s been since October
• Its gains come as Brent crude futures hit a 3-year high
• The ASX 200 energy sector is one of the market’s top performing sectors on Monday

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The Beach Energy Ltd (ASX: BPT) share price is having a roaring day despite no news having been released by the company.

Though, it’s not alone in its gains, with the price of oil likely bolstering many of its peers.

At the time of writing, the Beach Energy share price is $1.455, 3.93% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.34%.

Let’s take a look at what might be driving the oil and gas producer’s shares higher on Monday.

What’s caused the Beach Energy share price to rally today?

Beach Energy’s stock is trading at levels not seen since October as the price of oil surges higher.

According to data from CNBC, Brent crude futures are currently trading at US$86.20 per barrel – a 0.16% gain.

Additionally, the commodity hit a new 3-year high of US$86.71 earlier today.

Meanwhile, West Texas Intermediate is up 0.48% at US$84.22 a barrel.

That’s on top of their 1.9% and 2.1% respective gains recorded at the end of last week.

While the price of oil likely hasn’t directly impacted Beach Energy’s stock, it might have bolstered sentiment for its earnings.

Of course, the company’s incomes are directly tied to the commodity’s price.

That sentiment might also be lifting the S&P/ASX 200 Energy Index (ASX: XEJ). The sector is one of the ASX 200’s best performers today, having gained 1.52% at the time of writing.

After Beach Energy’s rally, its share price is one of the sector’s best performers today.

It’s been pipped by Whitehaven Coal Ltd (ASX: WHC) which has gained 4.29% at the time of writing. Worley Ltd (ASX: WOR) has also gained 2.98% today.

Interestingly, Beach Energy hasn’t announced any price-sensitive news to the market since early November. Nonetheless, it has already gained 15% year to date.

The post The Beach Energy (ASX:BPT) share price is trading at an 11-week high. Here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why did the Beach Energy (ASX:BPT) share price nosedive 30% in 2021?
• LNG hit record highs in 2021 so why did the Santos (ASX:STO) share price struggle?

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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Key points

• Beforepay completed its IPO raising $35 million at $3.41 per new share
• Investors have sold down the personal lender’s shares to a lowly $1.91
• This was despite the company revealing strong growth during the December quarter

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The Beforepay Group Limited (ASX: B4P) share price has hit the ASX boards today and crashed lower following the completion of its initial public offering (IPO).

In afternoon trade, the personal lender’s shares are down 44% from their listing price to $1.91.

The Beforepay IPO

Beforepay’s shares landed on the ASX today after raising $35 million at $3.41 per new share. This gave the company a market capitalisation of $158.4 million at listing. However, with its shares crashing today, its market capitalisation has now dwindled to approximately $90 million.

The proceeds from the IPO are to be used to allow Beforepay to invest in additional customer acquisition, support growth in cash outs, invest in product and credit model refinements, explore the viability of overseas opportunities, and pay costs associated with the offering.

What is Beforepay?

According to its prospectus, Beforepay was founded in 2019 to offer consumers a better way to manage their personal finances. This is by providing the flexibility to access their pay earlier, without having to rely on credit cards or other forms of revolving debt.

In doing so, Beforepay believes that it meets the demand of consumers who have been increasingly rejecting these forms of credit, while filling a gap in the market for flexible, transparent and on-demand access to credit.

Beforepay’s Chair, former Westpac Banking Corp (ASX: WBC) CEO Brian Hartzer, commented: “I’m delighted to see Beforepay list on the ASX today. The strong support we’ve received from investors is testament to the growth Beforepay has delivered as a startup and the opportunity ahead of us as a public company.”

“On behalf of the Board I’d like [to] thank our existing shareholders for their support during the early stages of our business and welcome the many new shareholders, whose investment in Beforepay is a vote of confidence in both the Pay on Demand industry and Beforepay’s future growth,” he added.

That confidence vote hasn’t lasted long unfortunately. This is despite Beforepay revealing further strong growth during the December quarter. This morning it revealed pay advances up 361% to $77 million and active users up 199% to 139,100.

The post Beforepay (ASX:B4P) share price crashes 44% after IPO appeared first on The Motley Fool Australia.

More reading

• The Beach Energy (ASX:BPT) share price is trading at an 11-week high. Here’s why
• Here’s why the A2 Milk (ASX:A2M) share price lost 52% of its in value in 2021
• Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month?
• This Warren Buffett recommendation could be your best investment in 2022
• Own AMP (ASX:AMP) shares? Here’s why this expert downgraded some of its funds

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

• A2 Milk shares were sold off again in 2021
• Weak demand and excessive inventory weighed on the infant formula company’s performance
• Opinion is divided on where its shares are going in 2022

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For a second year in a row, in 2021 the A2 Milk Company Ltd (ASX: A2M) share price had a disastrous 12 months.

The infant formula company’s shares crashed 52% lower over the period.

Why did the A2 Milk share price sink in 2021?

Investors were selling down the A2 Milk share price last year amid the further deterioration in its performance.

For example, during FY 2021, the company reported a 30% decline in revenue to NZ$1.16 billion and a 79.1% reduction in net profit after tax to NZ$80.7 million. This was driven by structural changes in the daigou channel, softer demand in China, and a major write down of its inventory to address excess stock.

Also weighing on the A2 Milk share price was the company’s strategy day event which outlined its plans for the future. That update confirmed that the company does not expect its sales and profits to rebound as quickly as many investors were hoping.

A2 Milk has set itself a medium term (≥ 5 years) target of growing its sales to NZ$2 billion. While this is a big increase on FY 2021’s COVID-impacted sales of NZ$1.2 billion, it is only a modest increase on FY 2020’s pre-COVID sales of NZ$1.73 billion.

It also revealed that its EBITDA margins will “probably” be in the teens in the medium term due to expected market conditions, investments, and innovation. This is significantly weaker than FY 2020’s EBITDA margin of 31.7%.

In addition, management warned that there was still some uncertainty with these growth targets. It said: “Because of these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear.”

Will things be better in 2022?

Opinion remains divided on whether 2022 will be any better for the A2 Milk share price.

The team at Bell Potter is positive and has a buy rating and $7.70 price target on its shares. Whereas the team at Macquarie has an underperform rating and $5.20 price target.

The post Here’s why the A2 Milk (ASX:A2M) share price lost 52% of its in value in 2021 appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why you shouldn’t expect the A2 Milk (ASX:A2M) share price to bounce back in 2022
• These were the 5 worst performing ASX 200 shares in 2021
• Analysts tip A2 Milk (ASX:A2M) and this share as buys
• Down 50%: Broker tips A2 Milk (ASX:A2M) and this ASX share to rebound in 2022

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 A2 Milk. 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 Lynas Rare Earths share price gained 20% in a month
• In a year, the company’s shares have rocketed 152%
• The company mines rare earths used in batteries for electric cars

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The Lynas Rare Earths Ltd (ASX: LYC) share price is continuing to gain today after a huge year in 2021.

The company’s shares are currently trading at $11.13, up nearly 20% in a month.

Let’s take a look at what investors may have been considering in the past month.

Big month

The Lynas share price gained 23% between market close on 21 December and January 5. Since then, it has seen a couple of minor dips but remains in the green. In the past year, the company’s share price has rocketed nearly 152%.

It seems global demand for rare earths used in batteries for electric vehicles may be continuing to impact the Lynas share price.

Lynas Rare Earths operates a mine at Mt Weld, Western Australia and an advanced materials plant in Gebeng, Malaysia.

A positive broker note out of Macquarie recently gave the company an outperform rating and price target of $12.20 per share. That’s nearly 10% more than the current share price.

In late December, the company revealed its Malaysian permanent disposal facility (PDF) for Water Leach Purification (WLP) residue has received regulatory approval.

The company has conducted multiple impact assessments for the project along with community consultation.

Finally, on 13 January, the company released its 2021 modern slavery statement. This outlined the actions the company is taking to address the risks of slavery in its operations.

Further, Lynas said no workplace transmission of COVID-19 was recorded at the company. The Lynas share price climbed a further 1% on Thursday.

Share price snap shot

The Lynas Rare Earths share price has returned about 152% to investors in the past year. That compares to the S&P/ASX 200 Index (ASX: XJO)’s return of around 10% over the same period.

In the year to date, the company’s shares are up by more than 9%.

The company commands a market capitalisation of roughly 10 billion on the current share price.

The post Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month? appeared first on The Motley Fool Australia.

More reading

• Here’s why leading brokers name the Lynas (ASX:LYC) share price as a buy
• These were the best performing ASX 200 shares last week
• Here are the 5 best performing ASX 200 mining and resource shares of 2021
• Why did the Lynas Rare Earths (ASX:LYC) share price surge 155% in 2021
• ASX 200 (ASX:XJO) midday update: Pilbara Minerals hits record high, energy shares rise

Motley Fool author Monica O’Shea 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.

When we think about big names in the investing space, it’s hard to gloss over Warren Buffett. But while Buffett has been overwhelmingly successful at beating the market, it’s not a strategy he advocates for everyday investors. Rather, Buffett is a firm believer in one investment that has the potential to make the average investor quite wealthy, only without the risk that could come with hand-picking stocks in an effort to outperform the broad market.

Why index funds are a great pick

Whether you’re new to investing this year or are simply looking to grow your portfolio, you have many choices for building wealth. You could, for example, load up on cryptocurrency if you have a strong enough appetite for risk. Or, you could choose a bunch of different stocks that you think have solid growth potential.

While Buffett may approve of the latter move if you’re an educated investor and know what you’re doing, he’d probably shake his head at the idea of putting money into digital coins. The investing giant has made it clear that he’s not a fan of crypto and considers it risky and worthless.

At the same time, Buffett is a big advocate of broad market index funds, like S&P 500 index funds, for everyday investors who want to enjoy solid growth without taking on undue risk. Index funds are passively managed funds that have the goal of matching the performance of the benchmarks they follow.

Now, index funds aren’t without flaw. When you buy them, you don’t get a say in the investments they’re loaded with, and they also won’t help you generate a higher return than what the broad market delivers.

But the benefit of buying broad market index funds is that they take the guesswork out of investing. And also, they allow for instant diversification in your portfolio.

When you buy shares of an S&P 500 index fund, for example, you’re effectively putting your money into the 500 largest publicly traded companies in the market today. You’re also setting yourself up to benefit when the S&P 500 does well.

Now to be clear, the S&P 500 won’t always do well. It may, over time, have strong years and bad years. But between 1957 and 2021, it’s delivered an average annual 10.5% return. And so if you put $5,000 into some S&P 500 index funds this year, sit back, and do nothing, you’ll end up with about $100,000 in 30 years if your investments deliver that same 10.5% average return.

Furthermore, let’s say you steadily invest in S&P 500 index funds over time. If you put $500 a month into these funds over a 30-year period and manage to snag that average annual 10.5% (which, again, accounts for both good and bad years), you’ll end up with $1 million portfolio — all without having to put in a ton of effort.

Take Buffett’s advice

To be clear, Buffett himself isn’t loaded up on index funds. The reason? He doesn’t have to be. As a stock-picking genius, he can afford to look outside of index funds and take on different levels of risk.

But if you’re closer to the average investor than Buffett himself when it comes to stock-picking knowledge, then you may want to follow Buffett’s advice rather than his lead and load up on broad market index funds this year. Doing so could make you incredibly wealthy over time. 

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

The post This Warren Buffett recommendation could be your best investment in 2022 appeared first on The Motley Fool Australia.

More reading

• Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month?
• Own AMP (ASX:AMP) shares? Here’s why this expert downgraded some of its funds
• Leading brokers name 3 ASX shares to buy today
• The Bendigo Bank (ASX:BEN) dividend is smashing the big four right now
• Here’s what happened to the Bank of Queensland (ASX:BOQ) share price in 2021?

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.

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

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Key points

• A research house reportedly downgraded some of AMP’s North-branded investment funds late last year
• An analyst is said to have noted “corporate uncertainty”, “cultural issues”, and “regulatory scrutiny” as key reasons for the downgrade
• The AMP share price has fallen almost 5% year to date

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Owners of embattled AMP Ltd (ASX: AMP) shares likely already know of its troubles.

After all, the AMP share price tumbled 35% over the course of 2021. It’s also currently 80% lower than it was 5 years ago.

Sadly, the financial services company has been dealt another blow recently, with investment analyst house Lonsec reportedly downgrading some of its managed funds.

At the time of writing, the AMP share price is 96 cents, 0.52% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has gained 0.01% today.

Let’s take a look at why Lonsec’s faith in AMP’s investment funds has waned.

Could be the latest blow to AMP?

According to reporting by the Australian Financial Review (AFR), analysts at Lonsec have downgraded 5 AMP index funds.

The publication claims the formerly ‘recommended’ funds have been dropped to ‘investment grade’, meaning the research house believes they have “fewer competitive advantages” than their peers.

The re-rating reportedly occurred late last year and applied to 5 North-branded index diversified investment funds: Growth, High Growth, Balanced, Defensive, and Moderately Defensive.

In a recent investor day presentation, released to the ASX, AMP noted its North platform is a key component of its “Path to new AMP” strategy.

Later, the company announced North’s managed portfolio had surpassed $4 billion of funds under management.

However, the old AMP seems to be plaguing it still.

Lonsec analyst Isrin Khor was quoted by the AFR as saying AMP’s drawbacks include a “material level of corporate uncertainty” and “well-publicised cultural issues and regulatory scrutiny”.

Additionally, Khor was reportedly concerned by high management turnover but noted the company’s new chief investment officer (CIO) Anna Shelley had made “significant progress” in her time with the company.

Shelley was appointed in May. She was previously the CIO of Equipsuper and Catholic Super funds and had worked with JANA and Perpetual Investments.

Finally, the analyst reportedly commented AMP’s funds were relatively expensive compared to those of its peers. An AMP spokesperson told the publication the company would review its charges to ensure they’re competitive.

AMP dropped fees for many of its platform’s funds last year.

AMP share price snapshot

2021 was a tough slog for the AMP share price, and it hasn’t got much better in the new year.

Year to date, the company’s stock has slipped another 4.95%. Though, it has gained more than 5% since this time last month.

The post Own AMP (ASX:AMP) shares? Here’s why this expert downgraded some of its funds appeared first on The Motley Fool Australia.

More reading

• When did AMP (ASX:AMP) last pay a dividend and when might the next one be?
• Leading brokers name 3 ASX shares to sell today
• Why did the AMP (ASX:AMP) share price fall 35% in 2021?
• In the ‘dog basket’: 6 ASX shares that could rebound in 2022
• Leading brokers name 3 ASX shares to sell

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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

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

City Chic Collective Ltd (ASX: CCX)

According to a note out of UBS, its analysts have retained their buy rating and $6.00 price target on this plus sized fashion retailer’s shares. This follows the release of a trading update from City Chic last week which revealed strong sales growth during the first half. And while COVID impacts have weighed heavily on profitability during the period, UBS remains positive on the future. The City Chic share price is trading at $5.00 on Monday afternoon.

IGO Ltd (ASX: IGO)

A note out of Credit Suisse reveals that its analysts have retained their outperform rating and increased their price target on this clean energy focused mining company’s shares to $16.30. According to the note, the broker made the move after upgrading its nickel and lithium price forecasts. These upgrades have underpinned a significant increase in the broker’s earnings estimates for IGO for the coming years. The IGO share price is fetching $12.71 in afternoon trade on Monday.

Life360 Inc (ASX: 360)

Analysts at Morgan Stanley have retained their overweight rating and $16.50 price target on this family focused app maker’s shares. According to the note, the broker believes recent download and app store data points to a strong result from Life360 next month. Morgan Stanley appears optimistic that this strong form will continue and support its share price performance. The Life360 share price is trading notably lower than this price target at $8.21 on Monday afternoon.

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

More reading

• 2 consumer ASX shares ready to pop
• Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher
• Why did the City Chic (ASX:CCX) share price just drop then pop 13%?
• The City Chic (ASX:CCX) share price tumbled 8% today. What’s happening?
• Sticky revenue winners. Here are the 5 best ASX SaaS shares of 2021

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. 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 conventional wisdom on the ASX boards is that the big four ASX bank shares dominate the largest-yielding companies on our share market. Whilst this is usually true to varying degrees, it doesn’t mean that the big four banks such as Commonwealth Bank of Australia (ASX: CBA) or Westpac Banking Corp (ASX: WBC) necessarily offer the largest yields on the market, or even in the ASX banking sector. So today, let’s check out what the Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has to offer.

With a current market capitalisation of $5.17 billion, Bendigo Bank is a relative minnow compared to its larger banking brethren. The smallest bank of the big four by market cap is presently Westpac. But even though Westpac has had a rough few years, it still remains roughly 16 times larger than Bendigo Bank with its current market cap of roughly $78.8 billion.

But even so, size in regards to market cap is irrelevant to the size of a company’s dividend. So let’s see how Bendigo Bank measures up in that regard.

How does the Bendigo Bank dividend measure up against the big four banking shares?

So after a tumultuous 2020, ASX big four bank dividend yields have returned to what you might call their ‘normal’ levels. As it stands today, Westpac is the big four bank offering the largest yield on current pricing. It’s past two dividends equate to a trailing yield of 5.5% right now.

Australia and New Zealand Banking Group Ltd (ASX: ANZ) is offering up a yield of 4.98% today.

National Australia Bank Ltd. (ASX: NAB) is next up with its 4.33% dividend yield.

And Commonwealth Bank comes in last with its 3.46% yield.

So how does that compare to Bendigo Bank?

Well, Bendigo paid out two dividends last year, as you’d expect. Shareholders received an interim payment of 28 cents per share in March. That was followed by the final dividend of 26.5 cents per share that was paid in September. Both dividends were fully franked.

That gives the Bendigo and Adelaide Bank share price a trailing yield of 5.92% on current pricing, which grosses-up to 8.46% with that full franking.

As you can see, that dividend yield runs rings around the majors as they stand today. No doubt a very welcome piece of information for all Bendigo Bank shareholders.

The post The Bendigo Bank (ASX:BEN) dividend is smashing the big four right now appeared first on The Motley Fool Australia.

More reading

• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• How the Bendigo Bank (ASX:BEN) share price went in 2021
• What’s the outlook for the Bendigo and Adelaide Bank (ASX:BEN) share price in 2022?
• Are Bank of Queensland (ASX:BOQ) shares a better buy for 2022 than Bendigo Bank?

Motley Fool contributor Sebastian Bowen owns National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank Limited. 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

• The Bank of Queensland share price is currently up 0.85% to $8.30
• The company completed its ME Bank acquisition in July 2021
• Senior management is conducting on-market trades, taking advantage of share price weakness

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The Bank of Queensland Limited (ASX: BOQ) share price continued its ascent in 2021, despite dipping in the latter months.

Over the calendar year, the regional bank’s shares climbed almost 8%, spurred by investor confidence in the market. In comparison, the S&P/ASX 200 Index (ASX: XJO) gained roughly 13% over the same period.

For the final day of 2021, Bank of Queensland shares closed down 1.34% to $8.09 apiece. It’s worth noting that in early October, its share price touched a 52-week high of $9.84 before treading lower.

What happened to Bank of Queensland shares?

You could be forgiven for thinking that with Australia constantly facing pandemic challenges, the Bank of Queensland share price would suffer.

However, the company’s shares have rallied higher to reach pre-COVID levels, reflecting optimism among investors.

The Bank of Queensland completed its acquisition of ME Bank in July, achieving a critical milestone in its multi-brand strategy. It aims to compete with the big banks offering portfolio diversification and a common digital retail bank technology platform.

In addition, the company moved to strengthen its board, with the inclusion of ME Bank director Deborah Kiers. This led Bank of Queensland shares to leap from the mid $8 mark to as high as $9.73 in the following month (August).

However, the company’s share price sunk during November despite Bank of Queensland not releasing any price-sensitive market announcements to the ASX. It seems the broader market weakness, coupled with the new Omicron variant, may have put pressure on investor confidence.

This led to Bank of Queensland shares falling across the final months of 2021. In particular, losses extended from 8 November to 6 December, when BOQ shares hit a 52-week low of $7.55.

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 $8.55 each back in early November.

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

Are Bank of Queensland shares a buy?

A couple of brokers weighed in on the Bank of Queensland share price last month.

Analysts at Jarden cut its 12-month price target on the regional bank’s shares by 5% to $9.60. Based on the current price of $8.30, this implies an upside of around 15.6% for investors.

The most recent broker note, however, came from JPMorgan which also slashed its outlook on Bank of Queensland shares by 2% to $9.80. Similar to Jarden, this indicates an attractive upside of roughly 18% from where it trades today.

Bank of Queensland commands a market capitalisation of about $5.33 billion, with approximately 642 million shares on its books.

The post Here’s what happened to the Bank of Queensland (ASX:BOQ) share price in 2021? appeared first on The Motley Fool Australia.

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• Is it a buy? Top brokers’ opinion on the Bank of Queensland (ASX:BOQ) share price

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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