Just over nine months ago, we were wishing 2020 ‘good riddance’, and looking forward to a better 2021, on the basis that COVID would be gone, or managed, and life would be back to some sort of normal.

But, in late September 2021, I write this as one of the 60% of Australians in lockdown.

We look enviously to our west, north and far south, as Western Australia, South Australia, the Northern Territory, Queensland and Tasmania live, relatively restriction-free, though even there travel restrictions remain in force.

(Gotta say, though, for those in the East pointing to WA residents ‘struggling’ through lockdown as a reason to lift restrictions… the AFL grand final didn’t exactly look like a bunch of miserable West Australians miserable at their plight!)

Of course, the restrictions nationally, though not ideal, are a helluva lot better than the alternative. And Australians should be bloody proud of ourselves for getting vaccinated in large numbers.

(If you can, but you haven’t, please go get jabbed (after appropriate medical advice, of course. I’ve had mine, and my 5G reception has never been so good. I dream about Bill Gates a lot, too. But I’m sure those side effects will fade. Seriously, just get vaccinated, please.)

But back to my theme. Or, more accurately, on to my theme.

See, the headlines are full of bad news. And it’s bad. Too many people are sick, or have died. Too many are recovering, or grieving friends and family no longer with us.

I don’t want to detract from that, or to pretend that’s not the worst thing that’s happened to those people.

And God knows we owe our scientists, medicos and emergency services personnel a debt we’ll never repay. They remain stretched, tired, yet soldiering on. Thank you!

But I do want to also take some time to count our blessings.

It is the way of humanity that we notice (and remember) the big, bad, ugly stuff.

We tend not to notice the small, regular, improvements that compound day after day, year after year.

As Stephen Pinker told Radio Free Europe:

“Those are undoubtedly threats to progress, and it’s essential to realise that progress does not mean that everything gets better for everyone, everywhere, all the time. That would be a miracle, that wouldn’t be progress. And there are definite threats to progress.

It’s important not to let your view of the world be influenced by headlines — because they report isolated incidents — but to look at counts that add up all of the countries that have moved in one direction or another.”

That applies doubly — and more regularly — to investors.

I wrote last week about the risks that continually appear to threaten stock market progress.

The latest one is the Evergrande sage (the company is a large Chinese property developer, if you missed the news).

It’s the latest, but it won’t be the last.

Meanwhile, Woolworths Group Ltd (ASX: WOW) sold groceries all weekend. BHP Group Ltd (ASX: BHP) mined iron ore. Harvey Norman Holdings Limited (ASX: HVN) sold tellies, computers, beds and couches. CSL Limited (ASX: CSL) created more blood plasma products. Seek hosted more job ads.

Did you read about any of that? Me either.

Not that it should be reported, necessarily, but the fact that it wasn’t — and Evergrande was — impacts our brains in unfortunate ways.

We overweight the latter and forget about the former. We know it’s true, of course; we just tend not to account for it.

In stock market terms, the headline that should, by rights, lead every day is “Businesses get a little bit better, again”

In the main section of the paper, the first few pages should be filled with ‘Humans live a little longer’, ‘A few more people got out of poverty, today’, ‘Cars just got safer, again’ and ‘Computing power got even better, for less, again’.

Sport, of all things, perhaps gets it most right. The sports reporters get to write about yet another world record broken, almost like clockwork. It is a neat analogy for life (and we actually pay attention to that, in the same way we should — but don’t — to numbers released by the Australian Bureau of Statistics).

The ABS, itself, is both a victim to, and part of, the problem. The data it focuses on is the change in national data from month to month or this year versus last year.

And, to be fair to the ABS, that’s its role, and its data is used by policymakers and businesses to plan their immediate futures.

But if and when we give extra funding to this vital body (and we should), one of the first things I’d task them with is to prepare and publicise some longer-term data series.

Looking at things like life expectancy, national income, jobs numbers and standard of living (measured not just in how much money we get, but also what we get for our money) would remind us all of the progress we’re making as people and as a country. The same would be true for the rest of the world, too.

(One of the things we most overlook, when it comes to standard of living, is not just how much stuff we get for our money, which is the usual way people think about it, but how good those things are. A Toyota Camry probably costs about the same as it did twenty years ago, yet the hugely improved fuel economy, the vastly improved safety features and the big jump in standard in-car equipment aren’t captured by the stats. The same is true for computers, phones (including data plans) and lots more!)

Bottom line: The bad stuff gets the headlines. Most, as I said last week, don’t happen. But even when the bad things do come to pass, they are the exceptions that prove the rule of continued human improvement.

Yes, we need to strive to do even better. We need to constantly address things like inequality, other social impacts, and environmental damage.

But the presence of bad news, or imperfect outcomes, doesn’t invalidate the long term arc of improvement.

Yes, even in a year partly wrecked by COVID, things continue to improve. Not every day. Not for everyone. But overall. The march of human progress continues.

If you’ve had a tough 2021, I hope that gives you a reminder to hold on to hopes of better times ahead. And if you’ve been lucky enough to do well this year, I hope it’s a reminder that plenty of people haven’t been so fortunate.

But, overall, I want you to remember that, throughout history, optimism has been the right approach. Over time, through our collective efforts and despite the mistakes, missteps and (still) unaddressed failures, things get better.

It would be a brave person to believe that multi-millennium trend is going to reverse any time soon.

And, as an investor, I wouldn’t bet against it, either.

We have some challenges. We need to address them.

But overall, as a species, we’re far from done. And I’m investing accordingly.

Fool on!

The post The best news you won’t read about appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX shares today
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• The interest rate cost of climate inaction. And save, before you spend. Scott Phillips on Weekend Sunrise
• 2 growing small cap ASX shares for your watchlist

Motley Fool contributor Scott Phillips has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Ramsay Health Care Limited (ASX: RHC) share price has been an underperformer over the past year. During the last 12 months, shares in the healthcare facility operator have traded sideways, gaining ~2%. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has dished out a 23.7% return to investors over the same period.

Although, one fund manager is betting on the tide turning as COVID-19 restrictions ease across its operating geographies.

Let’s take a look at why Sydney-based Perennial Partners are bullish on the Ramsay Health share price.

A big backlog filtering through

Firstly, the Perennial Value Australian Shares Trust invests in a broad swathe of ASX shares, with the aim of outperforming the S&P/ASX 300 Accumulation Index on a rolling 3-year basis. At the end of August, the trust held $761 million in funds under management.

To outperform the index, the fund must attempt to balance its investment weightings better than the index itself. As such, compared to the index, the Perennial Value fund is underweight on Rio Tinto Limited (ASX: RIO), Transurban Group (ASX: TCL), Goodman Group (ASX: GMG), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Afterpay Ltd (ASX: APT).

On the contrary, there are several ASX-listed companies in which the fund sees greater upside potential. One of these shares is Ramsay Health Care. As a result, the Perennial Value fund is overweight with Ramsay when comparing to its benchmark index.

In the near term, elective surgery restrictions in Australia are impacting the healthcare company’s earnings. However, looking beyond this, the fund points out a likely bounce back in surgical volumes once restrictions lift.

Providing justification, Perennial drew attention to the increase in volumes in Ramsay’s United Kingdom operations. Considering the UK is largely open again, procedures deferred by COVID-19 are now being tended to.

According to the Australian Institute of Health and Welfare, the median waiting time for elective surgery in Australia for 2019-2020 increased to 77 days from 66 days. On a similar note, The Age recently reported a significant blowout in Victoria’s hospital waiting lists.

Specifically, the state’s elective surgery waiting list has reached more than 65,000 people – with more than 30,000 procedures being cancelled last year.

Positioning for upside in Ramsay Health share price

The Perennial fund is putting its (investors’) money where its mouth is. According to the trust’s activity in August, the fund took profits in some of its outperforming holdings and redirected that capital elsewhere.

In gearing up for a reopening boom, Perennial allocated those proceeds to several ASX shares, including Ramsay Health.

The Ramsay Health share price finished the Monday trading session at $69.28.

The post Ramsay Health (ASX:RHC) share price presents a reopening play: Fund manager appeared first on The Motley Fool Australia.

More reading

• The market’s having a good day, so why’s the Ramsay Health Care (ASX:RHC) share price struggling?
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Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO and Ramsay Health Care Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Ramsay Health Care 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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Today, the S&P/ASX 200 Index (ASX: XJO) started the week on a green note. The benchmark index climbed 0.57% to 7,384.2 points.

Travel shares found themselves in the spotlight after reassuring guidance from politicians regarding the reopening of Australia once the vaccination targets are met.

The question is: which shares delivered the biggest returns to investors on the ASX today? Here are the ten stocks that rose to the occasion:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Flight Centre Travel Group Ltd (ASX: FLT) was the biggest gainer today. Shares in the travel agent company gained 7.18% following the optimistic outlook for the travel sector. Find out more about Flight Centre here.

The next biggest gaining ASX share today was The a2 Milk Company Ltd (ASX: A2M). The milk-producing company’s shares rallied 5.07% to $6.01 despite no announcements from the company. Uncover the latest A2 Milk details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Flight Centre Travel Group Ltd (ASX: FLT)	$21.21	7.18%
The a2 Milk Company Ltd (ASX: A2M)	$6.01	5.07%
IOOF Holdings Ltd (ASX: IFL)	$4.48	4.92%
Beach Energy Ltd (ASX: BPT)	$1.24	4.64%
Virgin Money UK PLC (ASX: VUK)	$4.065	4.23%
Event Hospitality and Entertainment Ltd (ASX: EVT)	$15.52	4.16%
Woodside Petroleum Ltd (ASX: WPL)	$22.98	3.65%
Iluka Resources Ltd (ASX: ILU)	$9.46	3.61%
Lynas Rare Earths Ltd (ASX: LYC)	$7.17	3.61%
Zip Co Ltd (ASX: Z1P)	$7.23	3.43%

Our top 10 ASX shares countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Lynas Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended A2 Milk 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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Are you looking for shares to add to your portfolio? Then here are two blue chips that could be worth considering.

Both are rated as buys by the team at Morgans. Here’s what you need to know:

QBE Insurance Group Ltd (ASX: QBE)

Morgans is very positive on this insurance giant’s shares. The broker was pleased with its first half performance and feels its shares are trading at an attractive level.

It commented: “We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE’s balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~13.5x FY22F PE.”

The broker currently has an add rating and $13.70 price target. This compares to the latest QBE share price of $11.72, which implies potential upside of 17% over the next 12 months. Morgans is also forecasting a 5.5% dividend yield next year.

Santos Ltd (ASX: STO)

The broker also believes the Santos share price is in the buy zone at the current level. This is due to its growth prospects and diversified earnings.

The broker explained: “We expect the resilience of STO’s growth profile and diversified earnings base see it best placed to outperform against a backdrop of a continuing broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.”

Morgans currently has an add rating and $8.55 price target on the company’s shares. This compares very favourably to the latest Santos share price of $6.74, which implies potential upside of 27% over the next 12 months. The broker also estimates that its shares offer a 2% dividend yield at current prices.

The post Broker names 2 blue chip ASX 200 shares to buy appeared first on The Motley Fool Australia.

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• Why the Santos (ASX:STO) share price is up 10% in a week
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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 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Weekend Sunrise on Sunday to discuss the Treasurer’s comments on the higher interest rates Australians might pay if we don’t take concrete action on climate change. Plus, is it time to lower credit card interest caps?

The post The interest rate cost of climate inaction. And save, before you spend. Scott Phillips on Weekend Sunrise appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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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Are you interested in small cap shares? If you are, then you may want to look at the ones listed below.

Both these small cap ASX shares have been given buy ratings and are tipped for big things in the future. Here’s why they should be on your watchlist:

Adore Beauty Group Limited (ASX: ABY)

The first small cap for your watchlist is Adore Beauty. It operates a beauty-focused integrated content, marketing, and ecommerce platform that partners with a broad and diverse portfolio of approximately 260 brands and 10,800 products.

This strategy has worked wonders and led to Adore Beauty’s active customers growing 39% year on year in FY 2021 to 818,000. This and a 7% increase in average revenue per customer helped underpin a 48% jump in full year revenue to $179.3 million.

While this is a large number, it is still only a small slice of a beauty market worth $11 billion at present. This gives Adore Beauty a long runway for growth over the next decade.

Morgan Stanley is a fan of the company. It currently has an overweight rating and $6.00 price target on its shares. This compares to the latest Adore Beauty share price of $4.87.

ELMO Software Ltd (ASX: ELO)

Another small cap to watch is ELMO. It is a cloud-based human resources and payroll software company that provides a unified platform to streamline range of processes.

ELMO has been a strong performer in recent years and this continued in FY 2021. For the 12 months ended 30 June, the company reported a 38.1% increase in revenue to $69.1 million. Positively, 96% of this revenue is subscription based, which helped lift its annualised recurring revenue (ARR) by 52.1% year on year to $83.8 million.

Management advised that this was driven by growth at both the small and mid-end of the market. ELMO’s mid-market business reported an 85.1% increase in customers to 3,114, whereas its small business offering grew its customer base to 9,069.

Looking ahead, management provided guidance for ARR of $105 million to $111 million in FY 2022. This represents year on year growth of 25% to 32%.

Morgan Stanley was pleased with this guidance and remains positive on its long term outlook. It has an overweight rating and $7.80 price target on its shares. This compares to the latest ELMO share price of $4.63.

The post 2 growing small cap ASX shares for your watchlist 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. owns shares of and has recommended Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended Elmo Software. 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 Dimerix Ltd (ASX: DXB) share price is taking off today. Meanwhile, the company has conducted its annual general meeting (AGM).

At the meeting, CEO Dr Nina Webster looked back on a year she described as “pivotal for the future of Dimerix”.

Webster also stated she expects the drug discovery company will begin to glide through the final stages of development and towards profitability.

While Webster’s comments weren’t released to the public until mid-afternoon, the Dimerix share price has been soaring since this morning.

At market close on Monday, shares in the company finished at 33 cents apiece. That represents a 6.45% gain on their previous closing price.

Let’s take a look at the year that’s been for Dimerix and what Webster believes the future will hold.

Dimerix’s boss on a successful FY21

The Dimerix share price is in the green today, the same day the company presented its AGM.  

In the meeting, Webster pointed to the achievements the company made over financial year 2021.

These included 2 clinical studies in which the company’s lead drug candidate, DMX-200, treated COVID-19 patients.

The company also prepared for another phase 3 study into using DMX-200 to treat focal segmental glomerulosclerosis (FSGS).

With numerous drugs in the final stage of trials, Webster noted the company’s portfolio is positioned for growth with commercial potential.

Webster also noted that, while much of the global population is, or soon will be, vaccinated against COVID-19, there will still be a need for treatments against the virus.

Additionally, drugs that can treat severe COVID-19 have typically been more expensive than other similar drugs. This has provided DMX-200 with an attractive market.

Finally, Dimerix finished FY21 under budget.

The company is now looking forward to providing guidance for all its near-term propositions, including the FSGS phase 3 program and its 2 COVID-19 clinical studies.

Dimerix is also engaging with potential licensing partners with the aim to provide the best outcome for its patients and shareholders.

It’s also building alliances with others in commercial, clinical and manufacturing areas to enhance its chances for success.

Dimerix share price snapshot

Today’s included, the Dimerix share price has gained 35% so far this year.

It is also 30% higher than it was this time last year.

The post Dimerix (ASX:DXB) share price soars as boss looks back on ‘pivotal’ year appeared first on The Motley Fool Australia.

More reading

• These 3 ASX Healthcare shares have soared over 10% today
• Dimerix (ASX:DXB) share price soars 9% on COVID-19 news
• The Dimerix (ASX:DXB) share price is up 3% on Thursday

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 S&P/ASX 200 Index (ASX: XJO) is having a fairly decent start to the trading week this Monday. At the time of writing, the ASX 200 is up a reasonably healthy 0.59% to 7,385 points so far today. But let’s dive a little deeper and check out the ASX 200 shares topping the raw volume charts so far this Monday. This data comes from investing.com.

3 ASX 200 shares topping the volume charts today

Oil Search Ltd (ASX: OSH)

ASX 200 energy company and oil driller Oil Search is our first share to check out today. This ASX energy share has seen a hefty 13.13 million shares change hands so far this Monday.

Oil Search has not released any major news or announcements today. However, the ASX 200 energy sector as a whole is having a fantastic day today, thanks to rising crude oil prices. In Oil Search’s case, the company is currently up 1.86% to $4.10 at the time of writing. This is probably the reason why so many Oil Search shares have traded hands so far today.

Pilbara Minerals Ltd (ASX: PLS)

Our next ASX 200 share up today is lithium producer Pilbara Minerals. Pilbara is another company that has not said a peep today. However, that’s where its similarities with Oil Search end. Pilbara shares are down a nasty 3.27% so far today to $2.07 a share.

It’s not entirely clear why investors are hitting the sell button with Pilbara today, but it is worth pointing out that Pilbara is still up roughly 100% over the past 6 months alone. Perhaps there is some profit-taking going on here. Regardless, this nasty fall is the likely cause behind the 15.71 million Pilbara shares that have found new owners so far this Monday.

AMP Ltd (ASX: AMP)

Embattled ASX 200 financial services company AMP is our final share to check out today. AMP has seen a very sizeable 27.7 million of its shares bought and sold so far. The AMP share price hasn’t done anything too remarkable today as of yet. It’s currently sitting at 99 cents, up 0.2% thus far.

However, my Fool colleague Brooke reported on a new court case that AMP is facing this morning. AMP and its Charter Financial Planning business are reportedly being taken to court by Centurion Wealth Advisors. Centurion is alleging AMP breached the terms of its buyout contract for financial advisers. It could be this news that is eliciting a higher volume of AMP shares trading today.

The post These 3 ASX 200 shares are topping the volume charts today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Oil Search (ASX:OSH) share price is up 10% in a week
• ASX 200 (ASX:XJO) midday update: Fortescue jumps, Wesfarmers dealt takeover blow
• Energy shares are leading the ASX 200 on Monday
• AMP (ASX:AMP) share price on watch amid latest legal battle
• How does the Telstra (ASX:TLS) dividend compare to ASX 200 shares?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Brickworks Ltd (ASX: BKW) share price has stepped into the green in afternoon trade today, peaking at $26.25 a share.

That marks a new 52-week high for the property and building specialist with its share price up 10% in the last month alone.

At the time of writing, Brickworks shares were trading hands for $26.02 per share, up 1.01%.

Here’s what we know is propelling the Brickworks share price of late.

Why is the Brickworks share price climbing today?

There’s been no market-sensitive information for the company today. However, last week on 23 September, the company released its FY21 results presentation made to analysts.

In its presentation, the company gave an overview of its FY21 performance and outlook for FY22 while also taking questions from participating analysts.

For reference, it recognised a 95% gain in underlying net profit after tax (NPAT) and increased its dividend by 3% to 40 cents per share in FY21.

The Brickworks share price jumped from a previous low of $24.47 immediately following the release and has now surpassed its previous high of $25.98 on September 14.

Aside from this, there was positive sentiment out of investment bank Citibank whose analysts revealed a buy rating and a price target of $30 on Brickworks’ shares.

The analysts are happy with Brickworks’ FY21 results which came in ahead of expectations and upgraded their modelling accordingly. It implies a 14% upside potential from Brickworks’ current share price.

One other key factor at play appears to be the relationship Brickworks has with fellow ASX share Washington H Soul Pattinson & Co Ltd (ASX: SOL).

Brickworks has a significant equity stake in Soul Pattinson which also has a significant stake in Brickworks.

That means fluctuations in the pairs’ share prices will flow through to one another. For instance, the Soul Pattinson share price has climbed around 12% in the past few days and is up 14.5% in the past month.

Given its relationship with the Brickworks share price, plus the factors mentioned earlier, it starts to form the picture of the moving parts.

The sum of these factors appear to be what is fuelling the returns Brickworks’ shareholders are enjoying today.

Brickworks share price snapshot

The Brickworks share price has climbed 36% this year to date, extending its climb over the past year to 35%.

Both of these results have outpaced the S&P/ASX 200 Index (ASX: XJO)’s gain of around 25% over the past year.

The post Why the Brickworks (ASX:BKW) share price reached a new 52-week high today appeared first on The Motley Fool Australia.

More reading

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• ASX 200 (ASX:XJO) midday update: Transurban falls, Premier Investments jumps
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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 Transurban Group (ASX: TCL) share price has started the week in a positive fashion.

In afternoon trade, the toll road operator’s shares are up 0.5% to $14.12.

Where next for the Transurban share price?

Unfortunately, one leading broker appears to believe the Transurban share price is fully valued at the current level.

According to a note out of Citi this morning, the broker has retained its neutral rating and trimmed its price target on the company’s shares to $13.78.

Based on the current Transurban share price, this implies potential downside of approximately 2.5% over the next 12 months.

And while Citi is forecasting attractive dividend yields of 3% in FY 2022 and 4.4% in FY 2023, it isn’t enough for a more positive rating.

What did the broker say?

Citi has been looking over the company’s acquisition of the remaining WestConnex stake from the NSW Government. While it sees positives from the deal, it suspects it could be dilutive in the near term.

As a result, no changes are made to its rating on the Transurban share price at this point.

Citi commented: “As we come out of a period of restriction, we update our estimates to reflect TCL’s announced of the acquisition of the remaining 49% stake in WestConnex by Sydney Transport Partners (STP), in which TCL holds a 50% stake.”

“The agreed price was $11.1bn and TCL funded its share of commitments ($5.56bn) via a $4.22bn equity raising (at an average price of $13 per share), and the balance by cash. Additionally, TCL introduced 1H22 DPS guidance at 15cps. We believe the transaction is positive but see some near-term dilution to FCF/dividend forecasts. We remain Neutral rated,” the broker added.

All in all, the broker appears to believe investors would be better off looking elsewhere until a better entry point emerges.

The post Is the Transurban (ASX:TCL) share price a buy after the WestConnex acquisition? 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 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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