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This is a common question among homeowners, and according to Damien Klassen from Nucleus Wealth, the answer depends on your income level, age, and mortgage interest rates at the time of your decision.

In a blog, Klassen offers advice for people considering what’s best to do with a spare $10,000 in income.

Let’s look into his findings.

Superannuation or the home loan?

Let’s look at some obvious factors first.

The biggest benefit of using a spare $10,000 in income to pay down your home loan is the guaranteed annual interest savings. The downside is you’ll have to pay full tax on that income if you use it in this way.

The biggest benefit of contributing a spare $10,000 in income into superannuation is the substantial tax saving on the way in (as long as you’re under the concessional contributions cap) and the ongoing earnings on your investments (bearing in mind that investments sometimes result in losses, too).

Just to remind you, concessional superannuation contributions are taxed at 15%, which is lower than most individual income tax rates.

A case study…

Klassen has run the numbers using a fictitious case study of an Australian earning $100,000 per year.

They have a mortgage with an annual home loan interest rate of 6%. They also have a superannuation fund returning an average of 6% per year.

He looks at the different outcomes over a 10-year period of using that spare $10,000 to either pay down the home loan or bump up superannuation this year.

Here’s what he finds:

At $100k, your marginal tax rate (in 2025) is 30% + Medicare levy = 32%.

So, your $10k becomes $6,800 off your mortgage after tax or $8,500 invested in super. i.e., you are $1,700 better off on day 1 in super.

If you save 6% on your $6,800 mortgage reduction over 10 years = $5,378 in interest avoided, tax-free.

If you made 6% in your $8,500 in superannuation and then paid tax on it = $5,155 after tax = $223 worse off in superannuation.

Net effect = $1,477 better off in super.

Klassen emphasises that the outcomes can be different depending on income levels and interest rates.

He says higher interest rates make using the money to pay off your home loan more attractive. Conversely, lower interest rates may make investing the money into superannuation a better option.

Klassen says people on higher incomes will “almost always” come out in front by contributing to superannuation.

Those earning less than $50,000 would likely be worse off if they put their spare $10,000 into superannuation vs. paying down their property loan, he says.

A few caveats…

While putting money into superannuation makes sense for a lot of people, they generally can’t access the funds until they reach preservation age.

Klassen says having inaccessible savings helps some Australians keep their spending in check.

However, there is some risk involved because once your superannuation money is invested, there is no guarantee of positive returns every year.

Klassen comments:

Investment returns within super can fluctuate with market conditions.

While younger individuals have time to recover from downturns, older individuals, such as those around 65, face more immediate risks.

The post Should you pay down your mortgage or add to superannuation? appeared first on The Motley Fool Australia.

More reading

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• Prediction: This will be Nvidia’s next big move
• ASX 200 gives back some heady intraday gains amid Aussie jobs data
• 2 ASX 200 shares with ex-dividend dates next week
• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher

Motley Fool contributor Bronwyn Allen 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 Scott Phillips.

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

Nvidia‘s (NASDAQ: NVDA) performance has been nothing short of remarkable of late. I’m talking about Nvidia the stock and Nvidia the company. The stock’s performance speaks for itself. Shares have exploded higher by about 725% since January 2023. 

But that surge in price wasn’t just driven by overexuberant investors. Nvidia’s business itself has exploded — and its data center business, in particular. Revenue from that segment has more than quintupled in the past year, helping to drive Nvidia’s net income up by more than 600%. Growth from sales of the company’s artificial intelligence (AI) chips to data centers hasn’t yet peaked, but there are already indications of what could drive Nvidia stock’s next big move higher.

Explosive growth in data center sales

Nvidia’s recent good fortune didn’t come by chance. Many years of research and development allowed it to create the most technologically advanced graphics processing units (GPUs) in the industry, and have them available for customers just when the need for that type of computing power skyrocketed. Now, even as it works to accelerate its manufacturing to catch up with current demand, Nvidia already has its next-generation Blackwell chip series in production.

Beyond that, CEO Jensen Huang has also unveiled a new AI chip that it intends to bring to market in 2026. The Rubin platform will succeed the Blackwell, and will include GPUs as well as a new central processing unit (CPU). That will offer customers a more complete data center server system. The already-massive volume of data center spending is reflected in Nvidia’s quarterly segment revenue.

But while data center revenue has gone parabolic, another Nvidia business segment is operating under investors’ radar right now. After all, it wasn’t just Nvidia’s R&D advancements that led to the growing uses of generative AI and other artificial intelligence applications.

There are now multiple companies that are working to put self-driving cars on the road or use computing power to improve existing vehicles’ performance. And there are signs that Nvidia’s automotive business could be its next big revenue driver.

Nvidia’s next major catalyst

While its auto segment numbers pale in comparison to data center sales right now, there’s a trending increase in revenue there as well. Sales growth is already coming as automakers work to improve their vehicles’ performance. Electric vehicle (EV) maker Rivian Automotive just announced it would be using Nvidia chips to enhance computing power and improve the range and performance of its R1 platform vehicles.

Rivian says it will have 10 times more computing power using Nvidia’s DRIVE Orin processors. Nvidia calls its Orin system on a chip the central computer for intelligent vehicles. Other automotive companies partnering with Nvidia include Chinese EV makers BYD, Nio, and XPeng. In addition, Volvo, its subsidiary Polestar, and Mercedes-Benz are among the global automakers that use Nvidia’s autonomous driving system.

Self-driving cars could be Nvidia’s next bonanza

That helps explain the recent sales growth for Nvidia’s automotive segment. However, consider what might come next as more and more self-driving vehicles are being launched. Much attention is given to Tesla and its plans for robotaxi fleets. It has said it will update investors in August on the progress of its self-driving vehicle efforts. But other companies are a step ahead of the EV leader in autonomous driving, and already have vehicles on the road.

Alphabet‘s Waymo is expanding its operations as it trains its systems. In May, the company said it was performing 50,000 rides per week in San Francisco, Los Angeles, and Phoenix. Amazon owns self-driving car company Zoox, and it has plans to test vehicles in Austin and Miami.

To be sure, regulatory hurdles remain, and data will be needed to prove that the technology is safe and advantageous for consumers. But investors who can be patient for that data collection and process to play out could do well by being in Nvidia stock before that sector takes off. 

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

The post Prediction: This will be Nvidia’s next big move appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Alphabet, Amazon, BYD Company, Nio, Nvidia, Rivian Automotive, Tesla, and XPeng. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, BYD Company, Nio, Nvidia, and Tesla. The Motley Fool Australia has recommended Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is up 0.5% at the time of writing, down from early morning gains of more than 0.7%.

The benchmark Aussie index is enjoying a strong run on the back of the latest US inflation figures and Federal Reserve meeting.

ASX investors also initially reacted positively to the latest unemployment data released by the Australian Bureau of Statistics (ABS) at 11.30am AEST.

But the ASX 200 has since slipped more than 0.1% since that announcement.

Here’s what we know.

ASX 200 dips on strong labour figures

In a classic case of good news for the economy equating to potentially bad news for stocks, the ASX 200 has retraced since the ABS reported that Australia’s seasonally adjusted unemployment rate decreased by 0.1% to 4.0% in May.

Investors may be feeling jittery as the strong labour market could usher in further pay rises, adding to inflationary pressures. This, in turn, could pressure the Reserve Bank of Australia to keep interest rates on hold for longer.

Commenting on the latest figures, Bjorn Jarvis, ABS head of labour statistics, said, “With employment rising by around 40,000 people and the number of unemployed falling by 9,000 people, the unemployment rate fell to 4.0%”

That’s an impressive feat, considering the rapid rate of immigration Australia is currently witnessing.

Jarvis noted that May’s decline wasn’t enough to offset the big unemployment spike in April.

In April, more unemployed people than usual were waiting to start work. Some of the fall in unemployment and rise in employment in May reflect these people starting or returning to their jobs.

While the total number of unemployed people fell by 9,000 in May, this followed a 33,000 increase in April. Unemployment was around 24,000 people more than in March, an average increase of around 12,000 people each month.

But in a sign of just how strong the Aussie economy is, Jarvis pointed out that, “There are now almost 600,000 unemployed people, however, that is still nearly 110,000 fewer people than in March 2020, just before the pandemic.”

The rather muted reaction to the strong labour data on the ASX 200 today comes as a number of analysts have been forecasting a dip in unemployment for May.

Among them was the economics team at National Australia Bank Ltd (ASX: NAB) which had forecast the unemployment rate would fall to 4.0%.

According to NAB (quoted by The Australian Financial Review):

The driver is that the prior month had an unusual amount of people who were classified as unemployed, but were waiting to start a new job, which we assessed then was worth around a 10th on the unemployment rate.

The post ASX 200 gives back some heady intraday gains amid Aussie jobs data appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares with ex-dividend dates next week
• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher
• Up 39% in a year, the NAB share price just hit a 9-year high!
• Why ASX, Brazilian Rare Earths, Liontown, and Sigma shares are sinking today
• Guess which A2 Milk rival’s shares just rocketed 21% on US news!

Motley Fool contributor Bernd Struben 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 Scott Phillips.

It’s always big news on the Australian share market when an ASX 200 dividend stock trades ex-dividend. For one, a stock going ‘ex-div’ means that any investors who buy shares on that day forward miss out on the upcoming dividend payment that a company has scheduled for investors.

But whenever a company trades ex-dividend, we also tend to see a big share price drop for the company in question. This drop reflects the loss of that dividend‘s value for any ASX 200 investor who buys shares from that day onwards.

So ex-dividend dates are clearly events of note on our share market. And next week, we’ll see not one, but two ASX 200 shares go through this process.

2 ASX 200 shares scheduled to trade ex-dividend next week

First up, we have ASX 200 building products company CSR Ltd (ASX: CSR). CSR has been making waves in 2024 after the company agreed to a $9 per share takeover offer from the French company Saint-Gobain earlier this year.

Earlier this month, CSR confirmed that its shares would be removed from the ASX 200 Index (and the Australian share market) next Thursday, 20 June, as a result of this takeover. However, before the stage exit, CSR shares have one more trick up their sleeves.

The company will be forking out a swansong dividend on 1 July next month. This passive income payment will be worth a fully franked 12 cents per share and will come out of that $9 per share takeover offer. So eligible shareholders will now receive $8.88 in cash for every CSR share owned. That’s in addition to this 12 cents per share dividend payment.

However, if you want this cash in your bank account, you’ll have to own CSR shares before the company trades ex-dividend for this payment next Friday, 21 June.

CSR shares are currently trading on a dividend yield of 3.9%.

A retail share with a 4% dividend yield

Next, let’s talk about ASX 200 retail share Premier Investments Limited (ASX: PMV). Premier is the company behind famous Australian retail brands like Smiggle, Dotti and Peter Alexander.

Premier delivered its last earnings report back in March. As we covered at the time, this report was well-received, thanks in part to the ASX 200 share’s decision to pay an interim dividend of 63 cents per share, fully franked. That was a 16.7% increase over the ordinary interim dividend of 54 cents per share that investors enjoyed in 2023.

However, this dividend was only set to be paid out on 27 July next month. If ASX 200 investors wish to see this dividend in their bank accounts, they will need to own Premier shares before the ex-dividend date. This has been set for next Tuesday, 18 June.

Premier Investments stock is currently trading on a dividend yield of 4.24%.

The post 2 ASX 200 shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

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

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing, the benchmark index is up 0.5% to 7,755.7 points.

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

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is up almost 17% to 14 cents. Investors have been buying the junior infant formula company’s shares following the release of an update on its US operations. Bubs advised that USA weekly scan revenue exceeds US$1 million per week with over 24,000 tins sold. This compares to its third quarter average of US$750,000 revenue per week. Management also notes that it was the number one, best-selling infant formula product on Amazon USA in May 2024. Bubs’ CEO, Reg Weine, commented: “We are continuing to see exceptionally strong demand for our products in the USA, and we have now reached a new weekly scan sales record in the USA with revenue exceeding US$1m.”

Codan Ltd (ASX: CDA)

The Codan share price is up 8% to $11.53. This appears to have been driven by a broker note out of UBS this morning. According to the note, the broker has initiated coverage on the metal detector manufacturer’s shares with a buy rating and $13.10 price target. UBS is feeling positive about the company’s outlook and is expecting strong revenue growth and margin expansion to drive even stronger earnings per share growth. The broker also sees scope for value accretive acquisitions given its strong balance sheet and new debt facilities.

Life360 Inc (ASX: 360)

The Life360 share price is up over 3% to $14.23. As well as getting a boost from a booming tech sector, this location technology company was the subject of a bullish broker note out of Morgan Stanley this morning. According to the note, the broker has reaffirmed its overweight rating and $17.50 price target on Life360’s shares. It has been looking at the company’s expansion into advertising and sees a very big opportunity based on what it has seen from peers such as ride-sharing apps.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up 1.5% to 3.75 cents. This follows the release of drilling results from the Moblan Lithium Project in Canada. Management highlights that its recent drilling is demonstrating the potential of a single, large continuous orebody. Interim CEO, James Brown, commented: “Moblan continues to present outstanding high-grade drilling results over wide intersections. The deposit now extends over ~2.3km E-W, ~1.2km N-S and to depth of ~450m. Today’s announcement emphasises the continuation of known mineralisation and areas of in-fill between zones, suggesting considerable potential for uncovering additional extensions to this premium lithium deposit.”

The post Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. 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 Scott Phillips.

The National Australia Bank Ltd (ASX: NAB) share price is up 1% today, outperforming the S&P/ASX 200 Index (ASX: XJO), which is up 0.5%. The ASX bank share just hit a nine-year high!

The local share market is getting a boost following news from the US that inflation is headed in the right direction, as reported by my colleague Bernd Struben.

The US core consumer price index (CPI), which excludes volatile items such as food and energy costs, increased by 0.2% in May 2024. The annual core CPI increase was 3.4%, compared to estimates of 0.3% for the month and 3.5% for the year, according to CNBC.

Following today’s rise, the NAB share price is up almost 40% in the last year, as we can see on the chart below. The ASX 200 is up more than 8% in the last 12 months.

Why is this boosting the NAB share price?

As a major ASX bank share, NAB’s performance is heavily linked to the economy. Interest rates play an important part in NAB’s operations because they affect how much the bank can charge on its loans, how much it pays to savers and how comfortably borrowers can afford their loans.

With US inflation moving in the right direction, this could suggest that interest rate cuts are getting closer in the world’s biggest economy. This could encourage other central banks, such as the Reserve Bank of Australia (RBA), to cut rates a little sooner.

Lower interest rates could improve the outlook for NAB’s arrears and bad debts. Additionally, if interest rates are somewhat reduced, investors may be willing to pay a higher price/earnings (P/E) ratio for NAB shares.

Recent profit performance

In the FY24 first-half result, NAB reported it generated $3.55 billion of cash earnings, which was down 12.8% year over year. While that represented a sizeable decline, the bank still generated a significant amount of profit.

The NAB net interest margin (NIM) declined from 1.77% in the HY23 result to 1.72%. This shows that NAB’s profitability reduced when considering its loan rate compared to the cost of its funding (such as savings accounts).

NAB said the home lending margin competition and term deposit cost headwinds were “moderating”, with the HY24 NIM of 1.72% actually higher than the 1.71% achieved in the second half of FY23.

However, lower interest rates may not assist NAB’s profitability. The bank is currently generating higher returns on transaction accounts, which don’t pay interest while lending against that cash at a relatively high loan rate. A lower RBA rate would likely mean a reduced return on transaction account balances.

NAB share price snapshot

Since the start of 2024, the NAB share price has risen 14%, outperforming the ASX 200, which has only risen by 1.7%.

The post Up 39% in a year, the NAB share price just hit a 9-year high! 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 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 Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is back on form on Thursday and pushing higher. In afternoon trade, the benchmark index is up 0.45% to 7,750.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

ASX Ltd (ASX: ASX)

The ASX share price is down over 8% to $57.98. Investors have been hitting the sell button today after the stock exchange operator held its investor forum. At the event, the company provided the market with guidance for cost growth in FY 2025. It is expecting its total expense growth rate to be between 6% and 9% for the year. This is on top of its expected increase of 15% in FY 2024. Management advised that next year’s expense growth rate is primarily being driven by ongoing technology related investment. This includes software licensing, equipment costs, and depreciation and amortisation.

Brazilian Rare Earths Ltd (ASX: BRE)

The Brazilian Rare Earths share price is down almost 11% to $3.26. This has been driven by the completion of the company’s institutional placement this morning. Brazilian Rare Earths advised that it has received firm commitments for a placement of 24.24 million of new shares at a price of $3.30 per share. This will raise a total of A$80 million before costs. Proceeds from the placement will be used to accelerate exploration and development at the Monte Alto, Sulista and Pelé rare earth projects. This includes exploration drilling, feasibility studies, permitting, and for general working capital and corporate purposes.

Liontown Resources Ltd (ASX: LTR)

The Liontown Resources share price is down 4% to $1.09. This is despite there being no news out of the lithium developer today. However, it is worth noting that the majority of ASX lithium stocks are tumbling after a lacklustre night for their peers on Wall Street. Investors continue to sell down lithium shares on concerns over a forecast supply surplus.

Sigma Healthcare Ltd (ASX: SIG)

The Sigma Healthcare share price is down 6% to $1.13. This follows news that the ACCC has raised doubts over the company’s proposed merger with Chemist Warehouse. The ACCC stated: “We have identified a range of preliminary competition concerns, including at the retail level and as a result of the proposed integration of the merged firm across the wholesale and retail level. We want to hear from interested parties, including rival pharmacies as we continue this review.”

The post Why ASX, Brazilian Rare Earths, Liontown, and Sigma shares are sinking today 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 Scott Phillips.

It’s a banner day for the shares of a certain Aussie A2 Milk Co Ltd (ASX: A2M) rival today.

While A2 Milk shares are up a healthy 1.9% in early afternoon trade on Thursday, shares in this ASX infant formula company just surged 20.8% to trade for 14.5 cents apiece.

After some likely bargain hunting, shares are up 18.8% at the time of writing.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.6% at this same time.

Any guesses?

If you said Bubs Australia Ltd (ASX: BUB), give yourself a virtual gold star.

Here’s what’s grabbed ASX investor interest today.

Bubs gains leave A2 Milk shares wanting today

The Bubs share price is racing ahead of the benchmark and A2 Milk shares after the company announced that its weekly scan revenues in the United States have topped US$1 million a week, with more than 24,000 tins sold.

That’s up 25% from the third quarter’s average weekly scan revenue of US$750,000.

Investor exuberance also appears to have been roused by the company reporting it moved from number six to the number one best-selling infant formula product on Amazon USA in May 2024.

Bubs also reported on ongoing progress relating to the Food and Drug Administration’s permanent access pathway and clinical trial. As at 7 June, Bubs had more than 300 infant enrolments, representing 75% of its target.

And the ASX infant formula company said it has commenced the roll-out of new label tins and sizes for the US market.

Commenting on the results seeing the Bubs share price leaving A2 Milk shares far behind today, Bubs CEO Reg Weine said, “We are continuing to see exceptionally strong demand for our products in the USA, and we have now reached a new weekly scan sales record in the USA with revenue exceeding US$1 million.”

Atop the strong online sales growth via Amazon, Weine said, “Pleasingly we are seeing sustained demand for our products right across the USA, from more than 5,800 bricks and mortar retail stores stocking Bubs.”

Looking ahead, Weine added:

We have recently increased our target inventory levels in the US to meet the rise in demand and following the stock shortages which occurred in late 2023 and believe this strong and sustained consumer driven demand will provide a strong tailwind for growth in FY 2025.

Closer to home and addressing a potentially even larger market, Weine noted, “Our China business has now rebounded.”

How have the two ASX dairy stocks been tracking?

With today’s intraday gains factored in, the Bubs share price is up 8% so far in 2024.

A2 Milk shares have performed far better, rocketing an eye-watering 65% year to date.

The post Guess which A2 Milk rival’s shares just rocketed 21% on US news! appeared first on The Motley Fool Australia.

More reading

• Why Bubs, Codan, Life360, and Sayona Mining shares are charging higher
• 2 cash-rich ASX companies to buy now
• Here is the earnings forecast out to 2026 for A2 Milk shares
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Treasury Wine Estates Ltd (ASX: TWE) share price is pushing higher on Thursday.

At the time of writing, the wine giant’s shares are up over 0.5% to $12.01.

Why is the Treasury Wine share price lifting?

As well as getting a boost from a rebounding share market, there has been some news out of the company that may have gone down well with investors.

According to the release, Treasury Wine is integrating its Global Revenue Growth (GRG) function into its Treasury Premium Brands (TPB) Division.

Management notes that this is a move to unlock growth opportunities for its priority premium brands, strengthen innovation, deepen engagement with consumers and customer partners, and increase operating efficiencies within the Premium business.

GRG was established last year under the leadership of Angus Lilley, who is the company’s global chief revenue growth officer. It is responsible for driving enterprise-wide revenue opportunities, including growth plans for current and future global brands, enterprise-wide innovation development, and enhancing consumer understanding across Treasury Wine.

Treasury Wine’s CEO, Tim Ford, believes that bringing the GRG team together with TPB will unlock future opportunities for the strong consumer brands within the Premium business. He commented:

When you consider our Premium portfolio, this is a unique offering with an unrivalled global footprint and brands that resonate strongly with consumers. Integrating our GRG capabilities within TPB, will enhance our ability to strengthen these brands, foster cutting-edge innovation and deepen our engagement with consumers and customer partners.

As part of the change, Peter Neilson, who is managing director of TPB, will leave Treasury Wine after 12 years with the business to pursue new career opportunities. Angus Lilley will assume the position of managing director of TPB. Ford adds:

We thank Peter for his significant contributions made to TWE during his time. His focused leadership has resulted in a robust portfolio of brands and strong market positions for TWE, and the TPB team to build on.

Should you invest?

Analysts at Goldman Sachs think the Treasury Wine share price is good value at current levels.

Last week, the broker reaffirmed its buy rating and $13.40 price target on the company’s shares. It said:

Our Buy rating of TWE is premised on accelerating double-digit EPS growth in FY24-26e driven by 1) continued global expansion of Penfolds especially post the removal of China import tariffs on Australian wine; our recent channel checks suggest positive reception to the returning Australian sourced Penfolds and we expect 50pct pre-tariff recovery by 2027; and 2) #1 luxury wine company in the US with recent acquisitions of Frank Family Vineyards and DAOU which have been growth and margin accretive, combined with a stable portfolio of Premium Brands. TWE is trading modestly below 5-year P/E average.

The post What is boosting the Treasury Wine share price on Thursday? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Sigma Healthcare Ltd (ASX: SIG) share price has plunged more than 6% in morning trade on Thursday following news that the Australian Competition and Consumer Commission (ACCC) has raised concerns over its proposed merger with Chemist Warehouse.

Sigma’s planned merger with the chemist giant — to be structured as a reverse takeover — has been the subject of ongoing debate since it was announced in December last year.

The Sigma share price has rallied some 50% since then, even with a pullback over the last three months. Here are the details of the ACCC’s response and what it means for investors.

Sigma Healthcare share price slides as ACCC speaks

Today, the ACCC announced its “preliminary concerns” over the proposed transaction. Investors have reacted swiftly, sending the Sigma share price down sharply in early trade.

According to ACCC commissioner Stephen Ridgeway, the merger represents a major structural change for the pharmacy sector.

He noted the competitive threat to independent pharmacies that might be caused by “the largest pharmacy chain by revenue merging with a key wholesaler”.

We have identified a range of preliminary competition concerns, including at the retail level and as a result of the proposed integration of the merged firm across the wholesale and retail level. We want to hear from interested parties, including rival pharmacies as we continue this review.

The ACCC’s other primary concern was that the merged entity would become “uniquely vertically integrated”. That means the new entity would own its entire supply chain.

This could potentially raise barriers for rivals entering or expanding in the market, leading to higher prices and reduced service quality for consumers.

Even still, the ACCC said its focus was on the acquisition’s impact on competition rather than the pros or cons of different business models.

“The key issue is whether or not the proposed acquisition weakens competition in the supply of pharmaceutical products,” the ACCC said.

What this means for the Sigma share price we will have to wait and see.

Details of Sigma and Chemist Warehouse merger

Sigma Healthcare is one of the largest wholesalers of prescription medicines in Australia. It also operates as a franchisor of pharmacies. Brands on its books include Amcal +, Discount Drug Stores, PharmaSave, and Guardian.

Chemist Warehouse, on the other hand, is a franchisor and wholesaler.

News of the deal sent the Sigma share price soaring last year.

The proposed acquisition would see Chemist Warehouse shareholders hold a majority 85.75% stake in the newly-listed ASX entity. Sigma shareholders would hold the remaining 14.25%.

The ACCC has not yet concluded the potential competitive impact of the merger. But it has called for submissions from interested parties by June 27 to gather further insights.

The Sigma share price is up nearly 13% this year to date, and has climbed 37% into the green the past 12 months. It reached a 52-week closing high of $1.31 in April.

The post Sigma share price dives 6% on Chemist Warehouse merger hurdle appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Scott Phillips.