The AGL Energy Limited (ASX: AGL) share price has been struggling in November despite no news having been released by the company for more than 3 months.

In fact, the company’s stock hit a record low of $5.10 in intraday trade yesterday.

At the time of writing, the AGL share price has recovered to trade at $5.28, 0.86% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is up 0.73% today.

Let’s take a look at what the future might hold for AGL and its shares.

Could this be the future of the AGL share price?

The share price of AGL – Australia’s largest carbon emitter – has been suffering amid the release of the final consensus from more than 190 countries engaged with the COP26 UN Climate Conference.

The agreement was described by United Kingdom Prime Minister Boris Johnson as sounding the “death knell for coal power”.

That may have renewed pressure on AGL to back away from its coal-fired power stations.

According to reporting by The Age, on Monday, AGL chief operating officer Markus Brokhof told a conference he agrees COP26 outlined the world’s determination to ditch coal power. The Age quoted him as saying:

In general, it’s a clear sign [that] the energy industry, in particular the carbon-heavy industry, has to go.

The company already plans to shut down its NSW Liddell coal-fired power station in 2023. However, it’s not expecting to close its Loy Yang power station in Victoria until 2048.

That’s despite the majority of AGL shareholders voting in favour of the company providing new emissions reduction targets in line with the Paris Agreement at its annual general meeting (AGM). This occurred despite the company urging them not to. The AGL share price gained 2.9% on the day of its AGM.

So, what is AGL doing to sate investors’ demands for emission reductions?

Well, as most investors will be aware, one initiative is the company’s plan to split AGL in two.

One of the resulting halves, Accel Energy will walk away with AGL’s coal-fired assets.

The other, AGL Australia, will take its retail businesses. AGL Australia is expected to boast net-zero scope 1 and 2 emissions.

The company is also targeting net-zero operational emissions by 2050.

Whether that will be enough to ease the pressure on AGL is yet to be seen.

The AGL share price has fallen 13% in the past month. It is also 56% lower than it was at the start of 2021.

The post The AGL (ASX:AGL) share price has lost 8% so far this month. What’s next? appeared first on The Motley Fool Australia.

More reading

• The AGL (ASX:AGL) share price is at all-time lows. Here’s why this fundie still thinks it’s poor value
• Own AGL (ASX:AGL) shares? Is Australia’s biggest emitter taking climate change seriously enough?
• These ASX 200 shares could be set to face fresh pressure over climate action
• What is the current AGL (ASX:AGL) dividend payout ratio?
• What’s going wrong for the AGL (ASX:AGL) share price in November?

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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The Fortescue Metals Group Ltd (ASX: FMG) share price is climbing higher today, up 9.2% to $17.26 per share.

That’s well ahead of the 0.7% gain posted by the S&P/ASX 200 Index (ASX: XJO) at this same time.

So, what’s going on with the iron ore giant?

ASX 200 iron ore miners are in the green today

The answer to that question likely is revealed in the way I phrased it.

With no price-sensitive news from the company today, Fortescue shares look to be getting a healthy boost from a sharp increase in iron ore prices. Iron ore gained 4.3% overnight to trade at $US95.63 (AU$131) per tonne.

While Fortescue is leading the charge, fellow ASX 200 iron ore miners are also well into the green today.

The BHP Group Ltd (ASX: BHP) share price, for example, is up 4.5%. And shares in Rio Tinto Ltd (ASX: RIO) are up 4.4% at the time of writing.

Now, with today’s big leap, what can investors expect next for Fortescue?

That depends on who you ask.

As my Foolish colleague, James Mickleboro, wrote earlier today, “The team at Bell Potter continue to see a lot of value in the Fortescue share price. A recent note reveals that its analysts have a buy rating and $19.75 price target [over the next 12 months] on its shares.”

That’s some 14% above the current share price.

Goldman Sachs, on the other hand, has a decidedly different view, with a sell rating and $11.00 target on the Fortescue share price.

Fortescue share price snapshot

The Fortescue share price was performing strongly into July this year when iron ore was fetching record prices of some US$220 per tonne. Shares are down 34% since 29 July.

More recently, Fortescue shares have gained around 18% in the last month, even as the ASX 200 has slipped 0.5%.

The post What’s causing the Fortescue (ASX:FMG) share price to leap 9% today? appeared first on The Motley Fool Australia.

More reading

• 2 high-yielding ASX 200 dividend shares
• Leading brokers name 3 ASX shares to sell today
• ASX 200 (ASX:XJO) midday update: BHP, Woodside rise, TechnologyOne falls
• Is the Fortescue (ASX:FMG) share price dirt cheap or overvalued?
• Only a few ASX 200 companies have received this honour and Scentre (ASX:SCG) just joined them

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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Plenty of S&P/ASX 200 Index (ASX: XJO) shares have the potential to pay investors attractive dividend yields over the next 12 months. This article is about two high-yielding ASX 200 dividend shares.

Analysts have had a guess at what the business is going to pay in dividends over the coming 12 months.

Investors for income may be interested to know about the below two high-yielding ASX 200 dividend shares:

Centuria Industrial REIT (ASX: CIP)

This is the Australia’s largest pure play industrial property real estate investment trust (REIT).

The business is currently rated as a buy by the broker Macquarie Group Ltd (ASX: MQG), which has a price target of $4.16 on the business. That suggests the analysts believe there’s still potential for a double digit capital increase over the next 12 months.

On Macquarie’s numbers, the ASX 200 dividend share is going to pay a distribution of 17.3 cents per unit in FY22 and 18.7 cents per unit in FY23. That translates into distribution yields of 4.6% and 5% respectively.

The aim of Centuria is to have a portfolio of high-quality industrial assets in key metro locations, underpinned by a quality and diverse tenant base.

It now has a portfolio of close to 80 properties worth more than $3.5 billion.

The fund manager, Jesse Curtis, said:

Centuria Industrial REIT continues to benefit from macro trends that increase demand for last mile industrial space within close proximity to large population catchments. Centuria Industrial REIT’s industrial portfolio is skewed towards these infill markets where increased tenant demand and limited supply opportunities is driving upward pressure on market rents.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is a large iron ore miners with multiple hubs in Western Australia, producing many millions of tonnes of iron ore.

In the first quarter of FY22, its iron ore shipments amounted to 45.6 million tonnes, which was up 3% year on year.

The broker Macquarie currently rates Fortescue as a buy, with a price target of $21. That’s a potential upside of over 20% over the next 12 months, if the broker is right.

Macquarie thinks that Fortescue could pay a dividend of $1.97 in FY22 and a dividend of $1.42 per share in FY23, which translates into grossed-up dividend yields of 16.5% and 11.9% respectively. The broker thought the quarterly update from the business was strong, aside from the lower iron ore price.

I’ve already mentioned the shipments from the quarterly update. Fortescue achieved a C1 cost of US$15.25 per wet metric (wmt), which was in line with the previous quarter. The business had net debt of US$175 million at 30 September 2021, which was after the US$4.7 billion payment of the FY21 final dividend and capital expenditure of US$744 million in the quarter.

Macquarie also notes the continuing development of Fortescue’s green credentials. Recent announcements includes a target to achieve net zero scope 3 emissions by 2040. Fortescue Future Industries has recently announced the development of a green energy and green hydrogen manufacturing industry in Gladstone, Queensland.

Based on Macquarie’s numbers, the Fortescue share price is valued at less than 10x FY23’s estimated earnings.

The post 2 high-yielding ASX 200 dividend shares appeared first on The Motley Fool Australia.

More reading

• Why ASX shares are still good value: fund manager
• Leading brokers name 3 ASX shares to sell today
• ASX 200 (ASX:XJO) midday update: BHP, Woodside rise, TechnologyOne falls
• Is the Fortescue (ASX:FMG) share price dirt cheap or overvalued?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group 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 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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By now, most ASX investors would be pretty used to rising markets and higher ASX shares. The S&P/ASX 200 Index (ASX: XJO) has been trending sideways for several months. Even so, it’s still up a healthy 10.6% year to date so far. And an even healthier 12.7% over the past 12 months. And since the lows of last year’s COVID crash, the ASX 200 has climbed by more than 50%.

But today, COVID-era economic stimulus is slowly being dialled back. There is the prospect of higher interest rates in the medium term. And the ongoing waves of global COVID infections are still sadly rolling on. As such, many an investor might be wondering “where to next?” for ASX shares and the Australian (and global) share market.

Well, one fund manager has a few ideas.

Paul Xiradis, chief investment officer and executive chair at fund manager Ausbil, gave us some insights into where he sees the share market going next.

Fundie predicts strong FY22 and FY23 for ASX shares

Xiradis points out that 25 of the 32 sectors on the ASX “are expected to deliver positive EPS [earnings per share] growth in FY22, representing 80% of the market cap for the S&P/ASX 200″.

He went on to say the following:

We do not believe Australian equities are too expensive on average when you consider them in relative terms against where long-term interest rates are sitting, and their forward earnings growth outlook…

We look at the future earnings growth profile for equities when assessing if sectors are cheap or expensive. On a forward EPS growth view, we believe resources (specifically battery materials, electrification metals and some bulk commodities), banks, general insurance, structural growth leaders and some of the post-lockdown beneficiaries are offering strong potential EPS growth for FY22 relative to value…

Fundamentally, we believe the current economic environment is favourable for equities, and will be for the next year or so.

But FY22 only takes us to next July, which is less than 8 months away now. Luckily for investors, Xiradis is also bullish on FY23:

Our view is that FY23 earnings expectations will also be positive, with growth driven by a very strong post-Delta variant bounce-back, which will be evident in the final months of this calendar year, and will have duration into FY23.

Given the rapid progress on vaccines, we believe earnings growth is likely to surprise again.

At the end of the day, none of us can predict the future. And certainly not the future of the share market. However, many investors will no doubt be pleased with the predictions Xiradis has made and will be keeping their fingers crossed they come to pass.

The post Why ASX shares are still good value: fund manager appeared first on The Motley Fool Australia.

More reading

• 2 high-yielding ASX 200 dividend shares
• ASX 200 (ASX:XJO) midday update: BHP, Woodside rise, TechnologyOne falls
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Monday

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

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With decarbonisation on many minds following the end of the United Nations’ COP 26, shares in the ASX battery metals and electrification sector are looking promising.

At least that’s what Ausbil chair, chief investment officer, and head of equities Paul Xiradis believes.

He states the sector is housing some compelling opportunities for strong financial year 2022 earnings among copper, nickel, lithium, and cobalt producing stocks.

Here are 5 battery materials shares he thinks look pretty good right now.

5 battery metal shares that could outperform

BHP Group Ltd (ASX: BHP)

According to Xiradis, Ausbil likes BHP for its exposure to the electrification sector.

While BHP is predominantly an iron ore, copper, and coal miner, the company also has a nickel branch.

The company recently signed an agreement with Prime Planet Energy & Solutions and Toyota Tsusho Corporation to supply nickel for lithium-ion batteries.

The BHP share price is trading at $38.08 at the time of writing, up 4.1%.

OZ Minerals Limited (ASX: OZL)

Another battery metal share Xiradis expects to perform well in financial year 2022 is copper producer, Oz Minerals.

Oz Minerals recently announced it’s in line to meet its full-year copper production guidance of between 120,000 and 145,000 tonnes.

Right now, a holding in Oz Minerals will cost an investor $26.24 per share.

Orocobre Limited (ASX: ORE)

Xiradis also notes that lithium producer Orocobre appears to be a battery metals share gearing up to post strong earnings for financial year 2022.

The company recently merged with formerly ASX-listed lithium producer Galaxy Resources Ltd.

Its stock is swapping hands for $9.82.

IGO Ltd (ASX: IGO)

All-rounder battery metals producer IGO is also set to outperform this financial year, according to Xiradis.

IGO owns and operates the Nova nickel-copper-cobalt operation and is invested in a lithium-focused joint venture.

Shares in the company are currently going for $10.33 each.

Lynas Rare Earths Ltd (ASX: LYC)

The final battery metals share Xiradis is expecting to post good returns for financial year 2022 is Lynas Rare Earths.

The company is the only large-scale rare earths producer outside of China, operating a deposit in Western Australia.

The company’s share price is $8.68 right now.

The post Looking to invest in the electrification and battery theme? Here are 5 ASX shares to consider appeared first on The Motley Fool Australia.

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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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Fintech Beforepay Group Limited (ASX: B4P) has released its prospectus, marking the start of its much-anticipated initial public offer (IPO).

At $3.41 per share, the IPO will open for applications at the end of the month and the shares will commence standard trading on the ASX on 17 January.

The business name draws obvious comparisons to market darling Afterpay Ltd (ASX: APT), which is due to disappear from the ASX by March. 

After a spectacular publicly listed life that saw the shares multiply more than 100 times since IPO, the buy now, pay later provider will be absorbed into US giant Square Inc (NYSE: SQ).

In contrast, Beforepay is effectively a payday lender, allowing users to access money before their actual pay packet lands.

As The Motley Fool previously reported, the business makes money from a 5% transaction fee and users can pay off the debt from the next paycheque or over 4 weeks.

Former Westpac Banking Corp (ASX: WBC) chief and Beforepay chair Brian Hartzer said the company offers a great alternative for Australians needing credit.

“Beforepay’s business model creates a strong value proposition for customers looking to take control of their finances without turning to credit cards or other forms of revolving debt.”

Burning cash for growth

The startup only started taking customers in August 2020, but already boasts 125,500 active users.

“Loss rates and costs continue to decrease and growth is increasing in both the acquisition and retention of a well-diversified customer base of working Australians,” Hartzer said.

“This demonstrates the broad appeal of the product and a sizable market opportunity.”

Make no mistake, Beforepay is currently burning cash in an early growth stage. It raked in $4.5 million of revenue for the 2021 financial year, while copping a $19.6 million net loss after tax.

The ASX listing will raise $35 million while giving the company a market capitalisation of $158.4 million.

The company was founded by former chief executive Tarek Ayoub, who in May handed over the reins to another former Westpac staffer, Jamie Twiss.

Ayoub will still hold 5.5 million shares after the IPO, representing an 11.8% or $18.8 million stake.

“The IPO will enable us to support more customers and to accelerate our growth, both in Australia and potentially overseas,” said Twiss. 

“I’m proud of the scale we’ve achieved in just over 12 months. I believe that we’ve only just scratched the surface in terms of growth and have the right team to execute on our strategy going forward.”

The post Beforepay (ASX:B4P) just launched its IPO appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. 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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Yesterday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

Blackmores Limited (ASX: BKL)

According to a note out of Citi, its analysts have retained their sell rating and $71.00 price target on this health supplements company’s shares. This follows an update from rival Swisse which flagged difficult trading conditions in China. In addition to this, the broker notes that competition in Australia remains aggressive. The Blackmores share price is trading at $96.98 today.

Commonwealth Bank of Australia (ASX: CBA)

A note out of Macquarie reveals that its analysts have retained their underperform rating and $86.00 price target on this banking giant’s shares. Macquarie believes investors would be better focusing on commercial-focused banks ahead of retail focused banks like CBA. It expects the former to deliver better profit growth. In light of this, Macquarie doesn’t believe CBA’s shares deserve to trade at such a premium. The CBA share price is fetching $96.81 this afternoon.

Fortescue Metals Group Limited (ASX: FMG)

Analysts at Goldman Sachs have retained their sell rating and $11.00 price target on this mining giant’s shares. According to the note, the broker expects Fortescue’s shares to remain under pressure due to lower iron ore prices and the strategic uncertainty implied by its openness to entering other markets (e.g. renewables). The Fortescue share price is trading at $17.03 on Tuesday.

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

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• ASX 200 (ASX:XJO) midday update: BHP, Woodside rise, TechnologyOne falls
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• Is the Fortescue (ASX:FMG) share price dirt cheap or overvalued?
• Only a few ASX 200 companies have received this honour and Scentre (ASX:SCG) just joined them
• Why this mining analyst is upbeat on the iron ore price forecast

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 Blackmores Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CV Check Ltd (ASX: CV1) share price is rebounding fiercely after slumping 20% over the last three trading days.

The online integrated screening and verification company announced a sound second-quarter trading update which has excited investors.

At the time of writing, the online integrated screening and verification company’s shares are up 15.39% to 15 cents.

CV Check achieves positive cash flow

The CV Check share price is on the move today after the company outlined robust performance for the start of Q2 FY22.

According to its release, CV Check reported growth in employment demand across both Australia and New Zealand. This led the company to record $2 million in revenue for October, up 81% on the prior corresponding period. Cash receipts for the month totalled $2.3 million, reflecting a 99% increase from this time last year.

CV Check also became cash flow positive for October, generating $0.4 million. The closing cash balance for the end of the month stood at $12.6 million.

In addition, the company revealed that favourable tailwinds are indicating that November is on track to beat last month’s result.

CV Check CEO Michael Ivanchenko commented on the company’s solid performance:

With strong recent employment demand across the region, CV1 has seen a corresponding uptick in order flows, further validating our strategy of pursuing a B2B focus. CV1’s innovations, such as our Covid-vaccine status check, continue to gain traction with a market needing certainty and reliability as it grows.

We are confident that as the full benefits of our workforce compliance monitoring and management software, Cited, are brought to the market, CV1 will be able to accelerate further growth through the balance of FY22.

CV Check share price snapshot

The CV Check share price is down 9% in the past 12 months and is hovering almost 20% lower year-to-date.

Based on valuation grounds, CV Check has a market capitalisation of around $64.95 million, with approximately 433.02 million shares outstanding.

The post CV Check (ASX:CV1) share price leaps 15% on strong trading update appeared first on The Motley Fool Australia.

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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 recommended CV Check 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 Qantas Airways Ltd (ASX: QAN) share price has alternately crashed and soared on the back of COVID-19 developments.

In February and March 2020, during the wider pandemic-fuelled market rout, the Qantas share price cratered by 67%. That was more than double the 32% losses suffered by the S&P/ASX 200 Index (ASX: XJO).

Moving forward to November 2020, when news of effective COVID vaccines broke, we saw Qantas shares soar 32% in less than a month.

More recently, the Qantas share price got another big lift in August this year when Aussie vaccination rates began to take off and the government unveiled its grand reopening plans.

While shares have retraced some 10% since 9 November 2021, investors may be wondering if the airline is still a good recovery buy.

Is the Qantas share price still a good recovery buy?

To gain some insight into the answer to that question, we defer to Paul Xiradis, head of equities at Ausbil Investment Management.

Looking ahead towards the rest of the 2022 financial year, Xiradis forecasts “another year of strong earnings growth from select cyclicals”.

Among those cyclicals, he points to travels shares, including Qantas.

“Post-lockdown, with borders reopening we see positive earning growth outlooks for companies like Qantas,” he said.

Discussing Qantas and other “select cyclicals”, Xiradis explained:

We are of the view that forward estimates for the next two years will be upgraded, driven by an under-appreciated pick-up in activity beyond COVID lockdowns.

The December quarter ’21 is shaping up to be a very strong period, making up for the lockdown-induced slowing in the September quarter. We expect activity levels will remain elevated for the whole of calendar year ’22, before it starts its march to trend growth commencing in ’23.

But there are risks

As an investor, it’s paramount to keep an eye on potential risks to any investment thesis.

For the case of an increasing Qantas share price in the year ahead, the coronavirus remains one of the biggest uncertainties.

According to Xiradis:

Any resurgent re-infection issues or return to lockdowns and border closures would be a concern, however with vaccination rates so high we believe this risk of such is low. Furthermore, the breakthrough of a COVID-19 antiviral pill by Pfizer could be a game changer. There remains a slim risk that not all Australian states will deliver on vaccination targets, but we believe this risk is negligible.

Qantas share price snapshot

The Qantas share price has gained 8% in 2021, trailing the 11% year-to-date gains posted by the ASX 200.

Qantas shares have slipped just under 8% over the past month.

The post Is the Qantas (ASX:QAN) share price still a good recovery buy? appeared first on The Motley Fool Australia.

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• Is the reopening already priced into ASX 200 travel shares?
• Here’s why ASX 200 travel shares are getting hammered today
• Here’s why Qantas (ASX:QAN) is not having such a ‘Bonza’ day
• Qantas (ASX:QAN) share price shrugs off another Rex route
• Could climate issues pose a bigger risk to the Qantas share price than COVID?

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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In 2021, and especially in the latter part of this year, much of the talk of the ASX town has revolved around inflation, and by extension, interest rates.

Inflation hasn’t been a pressing problem for Australian policymakers or the Reserve Bank of Australia (RBA) for decades now. But resurgent inflation across many of the advanced economies of the world in recent months has certainly raised some eyebrows.

This is highly relevant for investors because rising inflation, and the higher interest rates that normally accompany it, can have big consequences for any investor’s investment portfolio.

If you weren’t aware, inflation is the phenomenon where the intrinsic value of money decreases over time. It means you will need more nominal currency to buy a good or service than you used to. It’s the reason why your grandparents talked about 5 cent loaves of bread, yet that same bread costs $5 today instead.

Normally, governments welcome a little bit of inflation because it helps stimulate a healthy economy. That’s why the RBA has an inflation “target band” of between 2% and 3%. But too much can cause economic distortions across the economy and is almost universally regarded as undesirable. And that’s why the RBA tends to raise interest rates if it believes inflation is getting ahead of itself.

So how does one position an ASX share portfolio for a world of rising interest rates?

Fundie: Why NAB shares are a good pick for a higher-rate world

Paul Xiradis, chief investment officer and executive chair at fund manager Ausbil, has a few ideas.

Xiradis is confident we will see higher interest rates in the near future. He says that even if they remain below historical levels, “they are likely to be higher than their COVID lows”.

He went on to state “it’s not unreasonable for rates to start to rise and normalise” from here.

In this scenario, Xiradis singles out “the major banks” as worthy investments in this environment. And he “specifically” likes Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB). Why? Xiradis says ASX banks such as CBA and NAB “benefit in positive economic growth conditions when rates are firming” and they have “strong capital positions”.

Xiradis isn’t NAB’s only fan though. As my Fool colleague James covered earlier today, investment bank and broker Goldman Sachs is also bullish on NAB shares.

Goldman has a ‘conviction buy’ rating on NAB right now, with a 12-month share price target of $31.15 (implying a near-10% upside over the next year). Goldman likes NAB for its dominance in the business banking space, which it views as more lucrative than residential mortgages right now.

At the current NAB share price of $28.42 (at the time of writing), this ASX bank has a market capitalisation of $93.14 billion, with a dividend yield of 4.47%.

The post Why this fundie likes NAB (ASX:NAB) shares in a firming interest-rate environment appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX 200 blue chip shares to buy now
• Are ANZ (ASX:ANZ) and NAB (ASX:NAB) the best ASX bank shares to buy?
• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 dividend shares to buy
• 3 ASX shares Goldman Sachs rates as conviction buys

Motley Fool contributor Sebastian Bowen owns shares of 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 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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