The Vulcan Energy Resources Ltd (ASX: VUL) share price has returned from its trading halt and is crashing lower.

At the time of writing, the lithium developer’s shares have dropped 20% to $12.05.

Why is the Vulcan Energy share price crashing?

As well as releasing its quarterly update this morning, the company responded to a scathing report from short-focused activist investor J Capital.

In response, Vulcan stated that the report contains many claims that are wrong and misleading.

Vulcan Energy’s Managing Director, Dr. Francis Wedin, stated: “Vulcan Energy Resources is a world class company dedicated to decarbonisation, with world class technical experts.”

“Vulcan’s goal is to be a world leader in sustainable lithium production and to create the world’s first fully integrated renewable energy and battery raw minerals company. While any misinformed short selling attack is disappointing, we are buoyed by the support of our leading institutional investors in understanding the project’s technical detail – and risks.”

Nevertheless, this support from institutional investors hasn’t been enough to stop the Vulcan share price from sinking today. This may be due to the uncertainty that the report highlights and the significant future value that its already priced into the Vulcan share price.

What else did Vulcan say?

Below is a summary of some key points of the response. To read the response in full detail, you can click here.

J Capital claims: “Research by the U.S. Department of Energy published in May 2021 states that the cost to produce a ton of lithium carbonate using DLE will be around $4,000. That would put Vulcan’s project in the highest quartile of cost. Every expert we spoke to believes costs will be at the high end of the cost curve.”

Vulcan refutes this, stating that its cost per tonne is expected to be $2,640. Furthermore, even a cost per tonne of $4,000 would not be in the highest quartile of cost. Rather it would still be the lowest quartile of cost for lithium carbonate for current production.

The company also highlights that the report claims the Upper Rhine Valley has much lower lithium grades than in the Salton Sea. However, Vulcan notes that the grades are actually similar.

In response to criticism of its employees, Vulcan stated that it stands by every one of its employees, noting that many of them are highly respected globally and do not have a “record of failure”, as J Capital claims.

What else?

Another concern J Capital has are the flow rates that will underpin the geothermal power at the Zero Carbon Lithium project.

However, management responded: “As Vulcan stated 11 times within its PFS publication, we have not drilled any geothermal wells into our greenfields development areas, and until we do so, as we have already stated on numerous occasions, risks around flow rate will remain. Vulcan believes it has an appropriate level of confidence around its assumptions surrounding flow rates, based on the experience of its team, and state-of-the-art scientific tools, data and studies as elaborated below.”

“Vulcan has, based on its detailed analysis and the various factors mentioned above, used between 100 and 120l/s as assumed flow rates for its projects in its PFS. The Report incorrectly suggests that Vulcan should base its flow rates off some of the first wells drilled in the area, including a well drilled 41 years ago in 1980, without the benefit of 3D seismic data and industry best practice and learnings,” it added.

What’s next?

Unfortunately for shareholders, one report is rarely where it ends.

J Capital and other short sellers will often respond to the company’s response soon after. So investors may want to keep an eye for that and on the Vulcan Energy share price.

The post Vulcan (ASX:VUL) share price sinks 20% after responding to short seller appeared first on The Motley Fool Australia.

More reading

• What’s going on with the Vulcan Energy (ASX:VUL) share price today?
• Why is this ASX lithium explorer being targeted by activist investors?
• Could the Vulcan Energy (ASX:VUL) share price hit $22 by the end of 2021?
• Which ASX 300 shares are leading the way on Monday?
• Why MyDeal, Senex, Superloop, and Vulcan shares are surging higher

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 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 Insurance Australia Group Ltd (ASX: IAG) share price has been moving in circles throughout the year. This comes as the insurance giant has been battling allegations and regulatory headwinds.

Nonetheless, investors appear to have mixed feelings about the value of IAG shares in the current climate.

At Thursday’s market close, IAG shares finished down 1.79% to $4.94.

How do you value IAG shares?

The most common way to value an ASX share is to calculate the company’s price-to-earnings (P/E) ratio. Traditionally, this metric is used to provide more clarity if a company is overvalued or undervalued.

A P/E ratio can be broken down as the relationship between a company’s share price and its earnings per share (EPS).

Currently, IAG has a P/E ratio of 28.99. The formula to work out the P/E ratio is the current share price divided by EPS.

Essentially, this means that the company can be viewed as expensive when compared to its peers. Banking and insurance company, Suncorp Group Ltd (ASX: SUN) holds a P/E ratio of 15.85, while QBE Insurance Group Ltd (ASX: QBE) is hovering around 16.37.

How is IAG performing lately?

IAG released a trading update at its annual general meeting (AGM) last week, highlighting growth for FY22.

Gross written premium (GWP) improved in the first quarter of the financial year, lifting in the mid-single digit range. Guidance for the full-year is forecasted to increase in the low single-digit area.

IAG is also on track to meet its reported insurance margin guidance of 13.5% to 15.5%. During the lockdowns in both Australia and New Zealand, lower vehicle claims were made by customers. This partly offset by inflationary pressure on claims costs in the company’s motor and home portfolios.

However, weighing down the over result for the Q1 FY22 period came from elevated natural perils costs. Rough storm activity and the earthquakes in Victoria were primarily to blame. IAG has set aside $765 million as a natural perils allowance buffer for the financial year.

Swiss investment firm, UBS cut its rating on IAG shares to “neutral” from “buy” in mid-October. Its analysts reduced the 12-month price target by 5.3% to $5.35 apiece. At the present price, this implies an upside of about 8%.

IAG share price summary

It’s been a rollercoaster ride for IAG shares, having moved unpredictably over the past 12 months. Its shares are currently up just 5% since this time last year.

Based on valuation metrics, IAG has a market capitalisation of around $12.18 billion, with approximately 2.47 billion shares on issue.

The post How do you value the IAG (ASX:IAG) share price? 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 owns shares of and has recommended Insurance Australia 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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The Sezzle Inc (ASX: SZL) share price could be a mover on Friday after the company released its third-quarter market update.

We take a look at how the buy now, pay later (BNPL) provider performed during the quarter ending 30 September 2021.

Third-quarter highlights

Market watchers will be keeping a keen eye on the Sezzle share price after the company recapped its September quarter. It announced triple-digit year-on-year growth across most key performing metrics. Highlights include:

• Underlying merchant sales rose 101.9% to US$460.7 million;
• Total income grew 78.8% to US$28.5 million;
• Active merchants jumped 112.5% to 44,400;
• Active customers rose 77.9% to 3.2 million; and
• Launched Sezzle Capital for merchants.

On 20 July, Sezzle launched its Capital program via a partnership with Wayflyer. The program enables the funding of working capital for up to US$10 million for qualified merchants. The partnership enables qualified Sezzle merchants to apply and receive funding, without adding any credit risk or capital requirements to Sezzle.

Looking ahead, Sezzle said it was excited for the upcoming holiday season and the increase in consumer and merchant engagement it brings.

The company plans to promote several campaigns in the fourth quarter to help consumers shop for the best deals, drive traffic and consumer engagement for merchant partners.

However, it wasn’t a great quarter for the Sezzle share price — it fell almost 35% between July 1 and September 30.

International markets

International markets have been the name of the game for many ASX-listed BNPL players, most notable Zip Co Ltd (ASX: Z1P).

Sezzle continued to see “promising activity” in its international markets, pointing to early-stage growth across Canada, Europe, and India.

Sezzle Canada reached a “key milestone” of 3,000 active merchants in its second year of operations. The company said Canada’s underlying merchant sales run rate currently sits in excess of US$100 million annually. Additionally, consumer adoption remains strong, reaching nearly 190,000 active customers, a 232% year-on-year increase.

Elsewhere, Sezzle Europe and India are in very early stages following recent launches. The performance of both regions remains immaterial to the overall company but shows positive growth rates across key operating metrics.

Sezzle share price snapshot

The Sezzle share price is down 14.5% year-to-date, broadly consistent with the sluggish performance of the broader ASX-listed BNPL sector. It is also down 22.4% over the past 12 months.

The post Sezzle (ASX:SZL) share price on watch following third-quarter update appeared first on The Motley Fool Australia.

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• Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher
• The Sezzle (ASX:SZL) share price has leapt 19% in 2 days. Here’s why
• How did ASX fintech shares perform in the FY22 first quarter?

Motley Fool contributor Kerry Sun 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Leithner & Co joint managing director Chris Leithner tells how a pair of unpopular companies passes his team’s own ethical testing.

Hottest ASX shares

The Motley Fool: What are the 2 best stock buys right now?

Chris Leithner: Again, they fall into the category of well-established industry leaders [and] track record. 

APA Group (ASX: APA) is the country’s biggest natural gas infrastructure business. It is, in a sense, not often talked about, but it’s sort of the successor to Australian gas and lights when they put together the Moomba to Sydney pipeline. That’s the origins of APA from that. 

Its pipeline networks resemble natural monopolies, and long-term contracts secure its revenues. Moreover, because APA’s relatively lightly regulated, its profit margins are very high. 

On 8 November 2018, in his rejection of a foreign entity’s offer to buy APA, the treasurer noted “the size and significance of APA Group”. He added that it’s a “unique company supplying gas for part of all mainland capital cities”. 

Call it cautious contrarianism, conservative contrarianism. We’ve done a lot of research on [fossil fuels] and basically it’s tough to envisage a world that uses considerably less gas than it does at the moment.

Aurizon Holdings Ltd (AXX: AZJ) traces its origins to Queensland’s first railways in the mid-19th century. Today it’s Australia’s largest rail-based transport business. It owns and operates as a government-regulated monopoly one of Australia’s most critical bulk-haulage, multi-user rail networks. 

Both of those are unpopular from a coal, gas, and fossil fuel point of view. But it seems to me in the past, they have been very resilient cash-generating businesses, and it seems to us that’s going to continue. 

Aurizon and APA are also complex beasts, and APA’s effort to buy AusNet further complicates its valuation. 

The ASX share for a comfortable night’s sleep

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

CL: We invest for the indefinite long term, and over our 22 years of operation our average holding period has been more than 5 years. So everything we currently own – as well as what we’ve contracted to buy and hope to acquire in the future – we’re prepared to retain for at least 4 years. 

Looking back

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

CL: We want to avoid what we call ‘sins of commission’, as in ‘My God, why did we do that?’ because it’s turned out to be a stinker.

We’ve also committed a fair few ‘sins of omission’ that, in effect, we had the right company [but] we’re waiting for a price which never eventuated. 

One that comes to mind, this would have been early on in the global financial crisis, Flight Centre Travel Group Ltd (ASX: FLT) fell to something like $4 or thereabouts. And we had colossal orders in, whatever the price was, it didn’t quite reach it — a matter of just 50 cents or some such. And in post-GFC at some stage, it certainly was about $40, into the $50s. So that would be a good example of a sin of omission.

There’s a trade-off that you really can’t avoid. If you want to avoid the sins of commission to minimise the number of stinkers… you’re going to increase the number of sins of omission.

The post 2 very unpopular ASX shares that’ll keep rising: expert appeared first on The Motley Fool Australia.

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• Here’s why the Flight Centre (ASX:FLT) share price is up 26% so far in 2021
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• These 3 ASX 200 shares are topping the volume charts this Tuesday
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• These 3 ASX 200 shares are topping the volume charts this Monday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. The Motley Fool Australia has recommended Aurizon Holdings Limited and Flight Centre Travel 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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The Macquarie Group Ltd (ASX: MQG) share price will be one to watch when it returns from its trading halt.

This follows the release of the investment bank’s half year results this morning.

Macquarie share price on watch after doubling profits

• First half net profit up 107% to $2,043 million
• International income now represents 72% of total income
• Assets under management up 31% during the six months to $737 billion
• CET1 level 2 ratio of 11.7%
• Capital surplus of $8.4 billion
• Partially franked interim dividend of $2.72 per share
• $1.5 billion capital rising announced

What happened during the half?

All eyes will be on the Macquarie share price next week after the investment bank reported a first half net profit of $2,043 million. This was double what it recorded in the prior corresponding period and in line with the second half of FY 2021.

A key driver of this growth was the Macquarie Capital business which delivered a net profit contribution of $468 million. This was up significantly from a loss of $189 million in the first half of FY 2021. Management advised that this reflects higher fee and commission income which was driven by mergers and acquisitions and debt capital markets income.

Supporting this growth was the Macquarie Asset Management (MAM) business, which delivered a net profit contribution of $1,305 million. Management advised that this was up 23% and driven largely by income related to the disposition of Macquarie Infrastructure Corporation assets. This was offset partially by lower performance fees.

The Banking and Financial Services (BFS) business delivered a net profit contribution of $482 million for the half, up 52% on the prior corresponding period. This reflects strong home loan, business lending, platforms and deposits growth and lower credit impairment charges. Partially offsetting this was an increased headcount and investment in technology to support growth.

The Commodities and Global Markets (CGM) business was a strong performer during the half. CGM delivered a net profit contribution of $1,729 million, up 60% on the prior corresponding period. This was driven by increased revenue across Commodities, with strong risk management income from Gas and Power, Resources, and Agriculture. The result also benefited from the partial sale of the UK meters portfolio of assets in May.

Macquarie’s Managing Director and Chief Executive Officer, Shemara Wikramanayake, said: “This first half saw a significant increase in net profit contribution from all four operating groups compared with 1H21, a period which was affected by the COVID-19 pandemic. Today’s result is consistent with a strong 2H21 and reflects improved trading conditions across our diverse platform.”

Capital raising

The reason the Macquarie share price is in a trading halt today is that it is undertaking a non-underwritten institutional placement aiming to raise approximately $1.5 billion. These funds will be raised via a bookbuild process commencing at $190.00 per share. This represents a 4% discount to the Macquarie share price at Thursday’s close.

A share purchase plan will follow, giving shareholders the opportunity to apply for up to $30,000 of shares. This will be offered at the lower of the placement price (adjusted for the interim dividend) or a 2% volume weighted average price during the five days prior to the closing date of the share purchase plan.

Ms Wikramanayake commented: “Having deployed $5.5 billion of capital over 2H21 and 1H22, we continue to see a strong pipeline of opportunities. Raising new capital provides us with additional flexibility to invest in new opportunities where the expected risk-adjusted returns are attractive to our shareholders, while maintaining an appropriate capital surplus.”

Outlook

Macquarie appears cautiously optimistic on the future but provided no guidance for the remainder of FY 2022.

Ms Wikramanayake said: “Macquarie remains well-positioned to deliver superior performance in the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; a strong and conservative balance sheet; and a proven risk management framework and culture.”

The Macquarie share price is expected to return to trade on Tuesday at the latest.

The post Macquarie (ASX:MQG) doubles half year profit and launches $1.5bn capital raising appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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Despite the strong bull run of the ASX share market over the last couple of years, there are a few ASX shares that have been beaten up in recent months. They could be opportunities.

Whilst some businesses have gotten into difficulty and not recovered (yet?), like AMP Limited (ASX: AMP), there are others that are hoping for a turnaround sooner rather than later. If they are able to turn the business around, it’s possible that they might be worth considering.

Kogan.com Ltd (ASX: KGN)

Over the last month the Kogan share price has fallen around 7% and in 2021 to date it has dropped almost 50%.

The e-commerce retailer and services provider has been telling investors of slowing growth for its products and profit impacts during FY21

However, Kogan recently announced how it performed in the first quarter of FY22.

It said that gross sales grew by 21.1% year on year and 23.2% quarter on quarter to $330.5 million.

The gross profit performance was a bit mixed. It generated $52.5 million of gross profit, which was down 1.7% year on year, but up 31.6% quarter on quarter.

The ASX share made $10.8 million of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), which included a $2.3 million contribution from Mighty Ape.

Active customers and Kogan First members continue to climb alongside the gross sales improvement. The active customers increased by 30.7% to 3.35 million, whilst Mighty Ape had almost 750,000 active customers at 30 September 2021. Kogan First members increased 171.1% year on year and rose 64.4% quarter on quarter to 197,000.

The business said that it had resolved previous inventory pressures and closed a number of inefficient overflow warehouses. This reduction in inventory has led to the company significantly reducing its warehousing costs, delivering an average variable cost saving of $0.8 million per month compared to the last quarter of FY21.

Kogan continues to invest in its long-term strategy, improving its technology, logistics, platform, Kogan First membership benefits and so on.

According to Commsec, the Kogan share price is valued at 23x FY23’s estimated earnings.

Magellan Financial Group Ltd (ASX: MFG)

Over the last six months the Magellan share price has fallen by 28.5%. In the last year it has dropped by 38%.

The fund manager has seen its leading investment strategy, the global equity strategy, underperform the global share market in recent times. On top of that, the ASX share saw $1.5 billion of net outflows during the three months to 30 September 2021. That outflow represented 1.3% of the average funds under management (FUM) for the quarter.

However, the broker Macquarie Group Ltd (ASX: MQG) thinks that the decline of Magellan shares could mean it’s an opportunity.

The broker has a price target on Magellan of $38. It is trading cheaper compared to its historical forward earnings multiple. Macquarie also notes the fund manager’s high dividend yield, which could help attract and retain investor attention.

On Macquarie’s numbers, Magellan has a partially franked dividend yield of 6.5%.

Magellan recently held its annual general meeting (AGM).

Whilst the company is confident about the long-term profitability of its core management business, management think that its external investments are very compelling, which includes a 40% economic interest in Barrenjoey, a 12% shareholding of Guzman u Gomez and a 15% interest in FinClear.

Magellan said that Barrenjoey was profitable in the first three months of FY22.

Regarding those investments, Magellan said:

All of these initiatives are investments for the future that we believe can add meaningful additional earnings streams, create a more robust and diverse business and ultimately create meaningful shareholder value over time.

According to Macquarie, the Magellan share price is valued at 15x FY22’s estimated earnings.

The post 2 beaten-up ASX shares that could be buys in November appeared first on The Motley Fool Australia.

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• Why A2 Milk, Adairs, Bapcor, and Kogan shares are racing higher

Motley Fool contributor Tristan Harrison owns shares of Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and 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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Is the Woolworths Group Ltd (ASX: WOW) share price worth looking at? The supermarket business recently revealed how the first quarter of its FY22 has gone.

FY22 first quarter

Woolworths said that its group continuing operations sales went up by 7.8% year on year to $16 billion. E-commerce sales increased by 53.5% to $1.88 billion.

Let’s look at the individual key segments.

Australian food sales rose by 3.9% to $12.27 billion.

It started reporting a new segment, its Australian business to business (B2B) division. That includes the acquisition of PFD Food Services, the establishment of partnership services with Endeavour Group Ltd (ASX: EDV) and the growth of existing B2B businesses. This division saw growth of total sales by 196.4% to $952 million.

New Zealand food increased by 12.9% to $1.96 billion.

Big W sales fell 17.5% to $920 million.

Woolworths said that the first quarter was the most challenging COVID quarter for the business because of disruption to its supply chain and stores, caused by the Delta variant. The Woolworths share price has fallen more than 4% since the release of this trading update.

Looking at the second quarter of FY22, in October to date, Woolworths said that Australian food sales have slowed as NSW lockdown restrictions eased. However, Big W sales have improved as Greater Sydney stores reopen. Management noted that Christmas will be even more important for Big W this year.

Interestingly, despite all the talk about inflation, average Woolworths supermarket prices decreased 0.9% over the quarter, or 1.8% excluding tobacco, with deflation across all major categories except tobacco and meat, due to comparing against the temporary reduction in promotional activity in the prior year and deflation in fruit and vegetables.

During the quarter, Woolworths opened a total of six new stores in Australia, with five supermarkets and one Metro store.

Woolworths is now firmly focused on Christmas and the festive season. Management said the outlook remains uncertain and that there are likely to be “challenges in the weeks ahead”.

What is the broker opinion on the Woolworths share price?

Brokers are mostly neutral on the business at the moment.

For example, the analysts at Macquarie Group Ltd (ASX: MQG) think that Woolworths shares are a ‘neutral’ with a price target of $41.50. Whilst households continue to eat more food at home than before the pandemic, the supermarket business is starting to see this reverse. The broker also thinks that Coles Group Ltd (ASX: COL) is going to stage a comeback as COVID impacts subside.

One of the most negative opinions on Woolworths is from Credit Suisse, which has an ‘underperform’ on the business with a price target of just $31.84. This broker believes that Woolworths’ profit margins could soon be tightened a little bit.

However, it’s not all negative. The broker Ord Minnett thinks the Woolworths share price is a buy, with a price target of $43. Ord Minnett believes that the company still has attractive prospects.

Valuation on the Woolworths share price

Using the middle rating of Macquarie’s ‘neutral’ rating, the broker thinks that Woolworths shares are valued at 30x FY22’s estimated earnings.

The post Is the Woolworths (ASX:WOW) share price a buy in November 2021? appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended COLESGROUP DEF SET and 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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It feels like a decade’s worth of events have occurred in China this year.

There have been clampdowns on technology and education companies, devastating stock prices in those sectors. Sweeping blackouts have been seen in some of the nation’s biggest cities.

The prospect of real estate development companies collapsing, including China’s biggest, has also loomed large.

According to Nucleus Wealth head of investments Damien Klassen, that last issue has been underplayed by western media and analysts.

“Dramatic declines in demand by the largest consumer of commodities in the world, Chinese housing construction, is an ominous sign,” he said in a memo to clients.

“Evergrande is merely the first, there is a lot more to come. Metals are the last places to be invested if Chinese property construction slows.”

Why are ASX shares so vulnerable to China?

And this is where the problem lies for Australia and ASX stocks.

Plunging commodity prices triggered by low demand out of China will lead to a downward whack to ASX shares, which are dominated by the mining sector.

Nucleus’ analysis shows the best-case scenario for China’s urban population growth will mean 20% less construction of homes in the next 10 years than the previous decade. 

The “gradual adjustment” scenario sees building activity reduced by a whopping 33%.

Yet there are many analysts still blowing the horn that stocks will keep heading up. Klassen reckons this is driven by self-interest.

“You make much better commissions convincing investors to blow the bubble bigger,” he said.

“But iron ore and lumber have recently shown us that prices can halve in a matter of weeks. I prefer to bet on a lower tide.”

So what do we do now?

There’s an obvious course of action for Klassen’s team to avoid any calamity China could cause on ASX shares.

“Australian equities have been a good source of investment performance in recent months. We switched out of them and into international equities and cash,” he said.

“So far, the timing has been good. We have largely built the defensive side of the portfolio up, changing out of value winners like resources, banks, and cyclical industrials.”

According to Klassen, the No. 1 current risk to stock investors is “policy error”.

“Markets are [currently] supported to a great degree by central banks and governments,” he said.

“Stock markets are expensive. Debt levels are extremely high. Government/central bank support continues but is slowing. Earnings growth had been really strong, but has come to a halt.”

And any number of factors could bring on “unexpected inflation”.

“Mutations could disrupt supply chains again. Chinese/developed world tensions might rise further, leading to more tariffs. Or, China might reverse its tightening on property sectors. Biden may get through additional stimulus, driving increases to minimum wages.”

The post Should investors worry about China’s impact on ASX shares? appeared first on The Motley Fool Australia.

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• Why has the Silver Lake (ASX:SLR) share price leapt 30% in a month?
• The Nearmap (ASX:NEA) share price is up 20% in 3 weeks. What’s happening?

Motley Fool contributor Tony Yoo 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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If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Both dividend shares are expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Rural Funds Group (ASX: RFF)

The first ASX dividend share to look at is Rural Funds. It is an Australian agricultural property company with a portfolio of high quality assets across five sectors. These comprise almonds, cattle, vineyards, cropping, and macadamias.

These high quality properties are leased to some of the biggest players in the agricultural sector such as Treasury Wine Estates Ltd (ASX: TWE) and Select Harvests Limited (ASX: SHV) on long term leases.

For example, at the last count the company’s weighted average lease expiry stood at 9.3 years. Combined with periodic rental increases, this gives the company great visibility on its future earnings and allows management to target distribution growth of 4% each year.

Speaking of which, in FY 2022 the company intends to increase its distribution by its target rate to 11.73 cents per share. Based on the current Rural Funds share price of $2.80, this represents an attractive yield of 4.2%.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to look at is Telstra. This telco giant has returned to form this year thanks to the success of its T22 strategy.

The good news is that the company’s new T25 strategy is aiming to build on this and deliver solid earnings growth over the medium term. This has led to many analysts now pencilling in dividend increases for the first time in a decade in the coming years, much to the delight of shareholders.

In the meantime, Telstra is guiding to a fully franked 16 cents per share dividend again in FY 2022. Based on the current Telstra share price of $3.92, this represents a 4.1% dividend yield.

The post 2 top ASX dividend shares with 4%+ yields appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Thursday
• Telstra (ASX:TLS) share price struggles amid energy deal news
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• 2 ASX dividend shares that could provide steady income in retirement
• Why the Telstra (ASX:TLS) share price is surging higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Corporation 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.25% to 7,430.4 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to end the week on a subdued note. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points lower. This is despite it being a strong night of trade on Wall Street, which late on sees the Dow Jones up 0.4%, the S&P 500 up 0.8%, and the Nasdaq up 1.2%. The latter hit a record high after a series of strong results.

ResMed quarterly update

The ResMed (ASX: RMD) share price will be one to watch on Friday when it releases its first quarter update. A strong result is expected from the sleep treatment focused medical device company. This is due partly to one of its biggest rivals battling with a major product recall.

Oil prices fall

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a poor end to the week after oil prices edged lower. According to Bloomberg, the WTI crude oil price is down slightly to US$82.64 a barrel and the Brent crude oil price is down 0.5% to US$84.14 a barrel. This follows a surprise jump in U.S. crude inventories and rising cases of COVID-19.

ANZ share price rated as a buy

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price remains great value following its full year results according to analysts at Goldman Sachs. This morning the broker retained its buy rating and lifted its price target on the bank’s shares to $31.82. Goldman was pleased with ANZ’s results, noting that its second half cash earnings came in 11% ahead of estimates.

Gold price rises

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a decent finish to the week after the gold price traded higher. According to CNBC, the spot gold price is up 0.2% to US$1,803 an ounce. Slowing US economic growth boosted the precious metal.

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

More reading

• The Nearmap (ASX:NEA) share price is up 20% in 3 weeks. What’s happening?
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Thursday
• Why ASX 200 energy shares are tanking on Thursday
• ASX 200 (ASX:XJO) midday update: ANZ result impresses, Fortescue higher

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 recommended ResMed. 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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