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

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

Tuesday was a painful day for stock market investors, with the Dow Jones Industrial Average (DJINDICES: ^DJI) falling more than 1,275 points and the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) dropping 4% to 5%. Market participants often hope for at least a modest bounce after a tough day, but Wednesday morning didn’t suggest any such relief was forthcoming. Futures contracts on all three stock indexes were down slightly as of 8:15 a.m. ET.

Some investors in cryptocurrencies have believed that digital assets would be able to provide some valuable diversification in the event of a stock market decline. Unfortunately, that hasn’t been the case over the past couple of years, as the prices of Bitcoin (CRYPTO: BTC) and other popular cryptocurrencies have tended to track closely in line with the Nasdaq. Now, though, some digital investors are asking whether Bitcoin and its peers can regain the positive momentum that took them to all-time highs last year even if stocks stay mired in a bear market.

Crypto winter continues

Cryptocurrencies certainly haven’t escaped the rout that started on Tuesday. Bitcoin has fallen 11% in the past 24 hours and now stands just above the $20,000 mark. Ethereum (CRYPTO: ETH) is down almost 9% since this time Tuesday, falling back below $1,600 even as proponents of the smart-contract network point to the coming Merge event as a landmark moment for the digital asset.

Given the immediate cause of the sell-off across several asset classes, it’s not terribly surprising to see Bitcoin, Ethereum, and their crypto peers losing significant ground. August’s inflation reading of 0.1% didn’t seem like all that big a deal, but given that it came in the face of plunging gasoline prices, many were surprised not to see a modest drop. Moreover, as signs of more entrenched inflationary pressures appeared in different categories of goods and services, market participants believed the odds were better that the Federal Reserve would raise interest rates even higher to protect the economy from allowing inflation to become a long-term problem.

Bitcoin has at times hailed itself as a hedge against inflation, given the fixed supply of the digital asset. However, now that a large financial market has emerged surrounding Bitcoin and other cryptocurrencies, the dynamics that affect institutional investors now play a key role in price movements. In particular, when interest rates rise, those investors who rely on borrowed money in order to make leveraged investments in cryptocurrencies often have to pull back from their positions.

Can crypto break off from the stock market?

In that light, cryptocurrencies have in some ways suffered from their success in becoming mainstream assets. As regular investors become involved in the crypto markets, their behavior influences prices in the same way it influences stock prices.

However, it’s unfair to paint all cryptocurrencies with the same broad brushstroke. For Bitcoin and Ethereum, their notoriety and popularity make them more susceptible to broader financial market influences. But for smaller digital asset projects that are just getting started, fundamental aspects of whether newer cryptocurrencies can add value and provide useful applications for potential users can outweigh the influence of broad market trends.

Both Bitcoin and Ethereum would need to triple in price from current levels in order to set new all-time highs. Those abrupt upward cycles have happened numerous times in the past, so counting the pair of digital asset leaders out is ill advised. In order to break its connection to the stock market, though, the cryptocurrency world will once again have to persuade investors broadly that its vision of the future can overcome traditional macroeconomic challenges. That’s a tall order, but those who’ve bet against digital asset innovators in the past haven’t fared well over the long haul.

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

The post As stocks swoon, can crypto get its mojo back? appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin and Solana are sinking today
• Why Bitcoin plunged on Tuesday
• The Bitcoin price has tumbled 50% in 2022 but this expert says crypto ‘is here to stay’
• What’s supporting the Dogecoin price in September?
• Why Bitcoin and Solana jumped on Monday

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. 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.

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ASX healthcare shares have been strong performers over the years, driving a lot of the gains in the S&P/ASX 200 Index (ASX: XJO).

The broader ASX 200 index has climbed 20% over the last five years. But the S&P/ASX 200 Health Care Index (ASX: XHJ) has shot the lights out in comparison, pumping out an 88% gain.

Sticking with this healthcare theme, let’s square up two of the biggest Aussie healthcare success stories: CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH).

Compare the pair

Before I present a bull case for each of these ASX 200 healthcare stalwarts, here’s a quick summary of how they stack up across some headline metrics.

	CSL	Cochlear
Market capitalisation	$140 billion	$14 billion
FY22 revenue	US$10.1 billion (AU$14.9 billion)	AU$1.6 billion
FY22 revenue growth	2%	10%
FY22 underlying profit	US$2.3 billion (AU$3.4 billion)	AU$277 million
FY22 underlying profit growth	-5%	18%
Price-to-earnings ratio	41x	49x
Trailing dividend yield	1.1%	1.4%

The case to inject CSL shares into your portfolio

With roots in the Australian government and a history dating back to World War I, CSL now competes on the world stage as the fifth-largest global biotech company.

CSL generates the bulk of its earnings through its Behring division, which provides treatments for serious and rare diseases.

CSL’s other business, Seqirus, is smaller but no less impressive, standing as the second-largest flu vaccine maker in the world.

A recent high-profile acquisition will also see Vifor Pharma enter the fold, diversifying CSL’s footprint into the specialty pharmaceuticals business.

CSL offers an earnings profile that is both growing and defensive; a powerful combination. 

Prior to COVID, the company consistently delivered top-line growth almost like clockwork as the plasma therapeutics market grew and more people around the world gained access to CSL’s products.

What’s more, the company ploughs around US$1 billion each year into research and development, bolstering CSL’s market-leading position in innovation.

This R&D effort supports a healthy pipeline of new potential products that could drive further revenue growth in the future.

At the moment, CSL has nine late-stage R&D programs that it expects to complete between FY23 and FY26.

The highest-profile program is CSL112, a treatment to reduce the risk of recurrent cardiovascular events, such as heart attacks. It’s CSL’s largest program yet, with the phase 3 clinical trial enrolling more than 17,000 patients from roughly 1,000 medical centres around the world.

Why are CSL shares defensive?

Given the nature of CSL’s life-saving and life-extending products, demand typically holds up throughout every stage of the economic cycle.

What’s more, its plasma business can actually benefit from rising unemployment in the United States, where donors are paid.

On a per litre basis, the single-biggest cost for CSL Behring is donor fees to collect blood plasma. This plasma is a crucial component for manufacturing CSL’s treatments.

When unemployment rates rise, more people will likely look for alternative sources of income. And donating plasma can earn regular donors upwards of US$200 a month. 

With more people coming through the door to donate plasma, CSL’s average cost per litre of plasma collected reduces due to the fixed costs of running a centre.

Plus, as donor eagerness rises, CSL doesn’t have to compete as aggressively against other centres. In this way, the company doesn’t need to rely as heavily on extra financial incentives and bonuses to attract donors.

Why Cochlear shares could be a sound investment

The bull case for Cochlear shares is supported by positive industry dynamics and the potential for a greater market presence.

The World Health Organisation estimates there are more than 60 million people worldwide who experience severe, profound, or complete hearing loss.

However, the market remains largely underpenetrated. Less than 5% of the people that could benefit from an implantable hearing solution have received one.

What’s more, while Cochlear is a top dog in its field, its slice of the overall pie is muted.

The ASX 200 business has more than 60% market share of the global cochlear implant market. But this share dwindles to just 4% in the broader severe or higher hearing loss segment where hearing aids dominate. 

Cochlear implants vs hearing aids

Hearing aids and cochlear implants are both options for people suffering from severe or higher hearing loss. But there are clear distinctions between the two. And cochlear implants can deliver superior outcomes, especially for those with profound or complete hearing loss. 

Hearing aids are non-invasive and simply make sounds louder. In contrast, a cochlear implant bypasses damaged portions of the ear to deliver sound signals to the auditory nerve, which then directs the signals to the brain. 

A cochlear implant has two parts: an internal receiver, which is implanted under the skin behind the ear; and an external sound processor, which is worn like a hearing aid.

The beauty here, for both recipients and shareholders alike, is that Cochlear continues to roll out new sound processors that are compatible with prior generation implants. In this way, recipients are able to upgrade to the latest technology, all the while Cochlear collects more revenue from its existing user base.

Cochlear has sold more than 700,000 implants to date, representing a vast recipient base to upsell. 

The company typically launches a new product every four to five years. Its current flagship sound processor, Nucleus 7, was rolled out in 2017.

So, on cue, Cochlear has revealed it will launch the new Nucleus 8 processor towards the end of this year. The company remains hush on the details but this will propel revenue as recipients upgrade their devices.

Further supporting Cochlear shares are regulatory tailwinds as product indications broaden and funding reimbursement expands around the world.

Better ASX 200 healthcare buy

I believe there’s a compelling investment case for both of these ASX 200 healthcare shares.

In particular, I like the industry tailwinds supporting each company’s future growth runways. And I especially like their fortified, market-leading positions in their respective industries, where barriers to entry are also high.

But if I had to choose, I’d be leaning towards CSL shares.

With a long track record of delivering high returns on capital, industry-leading efficiency, a history of R&D success, and a more defensive earnings profile, I’d be happy to hold CSL shares as a long-term investment in my portfolio.

The post ASX 200 better buy: Cochlear or CSL shares? appeared first on The Motley Fool Australia.

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More reading

• The CSL share price dips as the ASX 200 dives on Wednesday
• Can the CSL share price regain its 52-week high in 2022?
• Experts name 2 blue chip ASX shares to buy that Warren Buffett would love
• The CSL dividend just got updated. How much will you be getting?
• The CSL share price is still trading just 10% above its COVID-crash low. Is it a buy?

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

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The Wesfarmers Ltd (ASX: WES) share price has trailed the S&P/ASX 200 Index (ASX: XJO) through 2022 so far. But does its underperformance leave it squarely in the buy basket?

Well, that depends on who you ask. However, one broker has tipped a near-20% upside for the stock.

The Wesfarmers share price last traded at $46.45, having plunged 4.25% alongside the majority of the market yesterday. That leaves the stock 22.6% lower than it was at the start of the year.

For comparison, the ASX 200 has dived 10% year to date.

Let’s take a look at what experts are tipping for the mammoth retail-focused conglomerate’s stock.

Is now the time to snap up Wesfarmers shares?

Brokers and fundies offer mixed opinions when it comes to predicting the future of the Wesfarmers share price.

Battling for the bears is Alto Capital’s Tony Locantro. He pointed to the company’s full-year earnings, noting its “strong share price amid economic headwinds” appears to represent a “profit-taking opportunity”, courtesy of The Bull.

The company’s after-tax profits slumped 1.2%, or 2.9% excluding significant items, last financial year to $2.35 billion as many of its crown jewel retail businesses struggled.

While Bunnings boasted $2.2 billion of pre-tax earnings – a 0.9% year-on-year increase – those of Kmart Group fell nearly 40% to $418 million and Officeworks’ dropped close to 15% to $181 million amid lockdowns in the first half.

On top of that, Wesfarmers declared a $1 dividend, boosting its full-year offerings 1.1% year-on-year to $1.80 per share.

Goldman Sachs is also sceptical of the company’s future. It has a sell rating and a $38.70 price target on the stock.

Meanwhile, in the bullish corner is broker Morgans. Analyst Alex Lu said the company’s earnings were “comfortably above expectations” in August.

Morgans has also dubbed Wesfarmers’ businesses “one of the highest quality retail portfolios in Australia”, as my Fool colleague James reports. The broker continued:

We see the pullback in the share price as a good entry point for longer term investors.

It has slapped Wesfarmers shares with a $55.60 price target and an add rating ­– representing a potential 19.69% upside.

Meanwhile, UBS has a buy rating and a $55 price target on the stock.

The post Wesfarmers shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

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More reading

• Wesfarmers share price drops 4%: Time to buy?
• Why this top broker is tipping 15% upside for the Wesfarmers share price
• How I’d invest $10,000 in ASX shares if I were saving for a house
• Brokers rate these ASX dividend shares as buys
• Buying Wesfarmers shares? Here’s why the company says Bunnings can continue to outperform

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 positions in and has recommended Goldman Sachs. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I like buying shares as cheaply as possible. The 2.6% fall of the S&P/ASX 300 Index (ASX: XKO) yesterday has opened up plenty of opportunities to buy some shares at a cheaper price that have long-term growth potential. I’m looking at the Temple & Webster Group Ltd (ASX: TPW) share price and believe it’s worth buying.

What does it do?

Temple & Webster is a large online retailer of furniture and homewares. Indeed, it sells more than 200,000 products from hundreds of different suppliers. Products are sent directly to customers by suppliers, enabling faster delivery times and reducing the need for the company to hold inventory, allowing for a larger product range. The business also has a private label range sourced from overseas suppliers.

Why is the Temple & Webster share price falling?

The Temple & Webster share price fell around 4% yesterday and it’s down almost 50% in 2022. A lot of that decline could be attributed to investor uncertainty relating to inflation and rising interest rates.

FY22 was a solid year for the business. Its revenue increased by 31% to $426.3 million. The earnings before interest, tax, depreciation and amortisation (EBITDA) margin was 3.8%, which was at the top end of its 2% to 4% target range.

That EBITDA margin includes an investment of $1.7 million in its new home improvement site, The Build. Temple & Webster points to a large, addressable market of $16 billion in the home improvement area. The expansion means customers can buy items like tools and equipment, gardening, paint, flooring, plumbing fixtures, and so on.

The Build is on track to achieve revenue of between $10 million to $15 million in the first 12 months of operation. Home improvement revenue across the company grew by 61% year over year, contributing 5% of FY22’s total revenue.

However, when the company gave its trading update for FY23, it said that the timing of lockdowns in FY22 will make year-over-year growth comparisons “volatile”. July trading was down 21% year over year, while August trading (to 14 August) was down 17%.

Why I’m optimistic about the Temple & Webster share price

Importantly, Temple & Webster said that its early FY23 trading was ahead of internal estimates. It’s expecting to return to double-digit revenue growth during FY23 once it has finished lapping lockdowns from the prior year.

I’m excited by the potential of the home improvement side of the business. I think investing in ‘The Build’ will pay off.

The ASX 300 share is also focused on growing its trade and commercial division, which saw revenue growth of 39% in FY22.

Its customer metrics for the long-term are looking very promising my opinion. In FY22, active customers grew by another 21% to 940,000, while revenue per active customer increased 6% — this was the eighth consecutive quarter of growth.

I believe that the ongoing adoption of digital shopping will be a useful tailwind for the business. In 2021, online market penetration of furniture and homewares was between 15% to 17% in Australia, compared to 25% to 27% in the US.

In the long-term, it’s expecting that its EBITDA margin can increase to more than 15% as it benefits from scale, repeat customer orders and investment. The fact that it’s “targeting an increase in our unit economics each year” is a positive sign.

With no debt and a strong growth outlook, I think the Temple & Webster share price looks attractive.

The post I think this exciting ASX 300 share is a buy in the sell-off appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• 2 ASX growth shares analysts rate as buys right now
• Top brokers name 3 ASX shares to buy next week
• Why did the Kogan share price leap 5% on Friday?
• ‘Material runway’: Goldman Sachs says Temple & Webster share price is a buy

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 positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Woolworths Group Ltd (ASX: WOW) share price hasn’t been spared from the current market rout.

Against a backdrop of soaring food inflation, Woolies shares have slipped 8.4% so far this year to sit at $35.23.

This has been enough to outperform the S&P/ASX 200 Index (ASX: XJO), which has backpedalled 10% since the start of the year.

But over the last month, Woolies shares have lagged the broader market. They’ve dropped by 7.7% compared to the ASX 200’s more palatable 3.3% fall.

So, what’s going on with Woolies shares? Let’s take a closer look.

Woolies’ FY22 results recap

Woolies delivered 9.2% revenue growth in FY22, with the core Australian food business growing its top line by 4.5%.

Earnings before interest and tax (EBIT) came in 2.7% lower across the group as Woolies battled store and supply chain disruptions throughout the year.

Commenting on current trading conditions, CEO Brad Banducci noted that the supermarket is seeing a gradual change in consumer behaviour as inflation puts pressure on household budgets. He noted:

While still very difficult to separate from the COVID-related impacts of the last two and a half years, we are seeing some customers trade down from beef into more affordable sources of protein and trade across from fresh vegetables into more affordable frozen and canned offerings.

In other news, Woolies’ acquisition of MyDeal.com.au Ltd (ASX: MYD) became legally effective yesterday.

The supermarket has picked up an 80% stake in the online marketplace at an enterprise value of $243 million.

MyDeal’s key management shareholders have retained a minority 20% stake, with MyDeal shares now suspended from trading. 

Have Woolworths shares got their mojo back?

David Wilson from First Sentier thinks so. In an episode of Livewire’s Buy Hold Sell, Wilson noted Woolies had a “terribly poor result” in the December half. 

But he thinks the tide could be turning for Woolies:

We think that they’ve actually got their mojo back, they’re taking out costs, they’re growing their market share, and they’re really well placed from an online point of view. So for us, it’s a buy.

What do brokers think about Woolies shares?

Wilson isn’t alone in his bullish view on Woolies shares.

After digesting Woolies’ FY22 results, analysts at Goldman Sachs reiterated their conviction buy rating on Woolies shares with an improved price target of $44.10. This implies potential upside of 25% over the next 12 months.

In a recent broker note, Goldman said it continues to prefer Woolworths shares as the top pick in the Australian consumer space. The broker highlighted Woolies’ digital and omnichannel advantage to drive further market share and margin gains.

The broker concluded:

Despite the softer topline environment, we believe that WOW’s reducing COVID costs, strong Cartology growth as well as careful execution will result in EBIT margin expansion.

Goldman believes the key downside risks for Woolies include worse Australian food volumes, an increase in competitive intensity, online sales underperformance, and poor management of cost inflation.

The post Have Woolworths shares ‘got their mojo back’? appeared first on The Motley Fool Australia.

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More reading

• Supermarket shakeup: Do Coles shares offer better dividends than Woolworths?
• Down 6% in a month, is September a good time to buy Woolworths shares?
• Why this top broker is tipping 23% upside for the Woolworths share price
• How do Endeavour’s dividends stack up against its old parent Woolworths?
• Brokers name 2 ASX 200 shares to buy for a retirement portfolio

Motley Fool contributor Cathryn Goh 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.

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

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

What happened

The market rout that drove the value of nearly all risk assets lower on Tuesday appears to have paused for stocks on Wednesday, but it’s continuing in the world of cryptocurrencies. The Bureau of Labor Statistics delivered its August consumer price index report Tuesday, and the inflation rate clocked in at a higher-than-expected 8.3% year over year. That was lower than July’s 8.5% result, but it still hit most major tokens hard. Continued selling pressure has resulted in declines in top tokens Bitcoin (CRYPTO: BTC) and Solana (CRYPTO: SOL) of 3.5% and 4.1%, respectively, over the past 24 hours, as of 11:15 a.m. ET Wednesday.

For investors in Terra Luna Classic (CRYPTO: LUNC), some disheartening token-specific news has driven a 21.6% decline over this same period. On Wednesday, a South Korean court issued arrest warrants  for Terraform Labs founder Do Kwon and five other involved individuals. It may be the last nail in the coffin for this embattled project, which had previously seen speculative buying pressure from traders.

So what

Nearly all talk about the potential for low-beta exposure to risk assets via cryptocurrencies is over. There has been an impressive degree of correlation between digital assets and equities over the past two years, which has been very unfavorable to crypto investors during this year’s sell-off. While this correlation has diminished from its all-time peak, generally speaking, the same macroeconomic forces that drive equities higher or lower appear to have significant influence over the price action of many top tokens.

Bitcoin and Solana are both attracting a significant amount of institutional investor interest. Accordingly, during this period of de-risking, these assets could continue to see outflows until the rhetoric around monetary policy shifts. In general, more expensive money means less liquidity searching for growth. For these high-upside, higher-risk assets, that could spell continued downward pressure, at least over the near term.

For investors in Terra’s ecosystem of tokens, word that arrest warrants have been issued is probably the last thing they wanted to hear. Whether one is involved in LUNC or other Terra-related assets, the advance of the regulatory probe to this degree is just the latest in a barrage of negative catalysts. Investors have reason to be concerned about the viability of the Terra ecosystem following this news, particularly given the turmoil within the Terra community.

Now what

Whether investors are considering quality crypto projects or more speculative options, it’s a tough time to be an investor right now. Macro headwinds abound, providing a bearish backdrop for all digital assets. And when it comes to those with token-specific issues such as LUNC, now does not seem like the time to throw good money after bad.

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

The post Why Bitcoin and Solana are sinking today appeared first on The Motley Fool Australia.

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More reading

• Why Bitcoin plunged on Tuesday
• Why Crypto stocks plunged today
• The Bitcoin price has tumbled 50% in 2022 but this expert says crypto ‘is here to stay’
• What’s supporting the Dogecoin price in September?
• Why Bitcoin and Solana jumped on Monday

Chris MacDonald has positions in Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Solana. 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.

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

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

What happened

Shares of Apple (NASDAQ: AAPL) climbed higher Wednesday, adding as much as 2.1%. As of the close, the stock was still up by 0.96%.

Strong presale data for the iPhone 14 no doubt boosted the stock, but not everyone is convinced. One Wall Street analyst is suggesting that the tech giant’s iPhone revenue will actually be lower in fiscal 2023, curtailing the stock’s gains.

So what

Apple investors have been flooded with reports of strong iPhone 14 presales, which have historically been a good indicator of continuing consumer demand for the device. Earlier this week, numerous analysts read the digital tea leaves and concluded that strong pre-order data suggests resilient demand for the iPhone, even in the face of macroeconomic headwinds.

Just yesterday, Evercore ISI analyst Amit Daryanani was the latest to jump on the bandwagon, suggesting that longer lead times pointed to robust demand for the latest version of Apple’s flagship device, according to The Fly. He was particularly bullish regarding strong user interest in the iPhone 14 Pro, Pro Max, and Plus, the higher-priced models.

But not everyone is convinced. Bernstein analyst Toni Sacconaghi is generally more cautious about Apple’s prospects. The analyst suggested iPhone revenue could fall between 3% and 4% next year, a far cry from analysts’ consensus estimates, which are calling for an increase of 2%. Sacconaghi worries that after two years of strong sales, upgrade adoption will slow and the remaining buyers will opt for lower-priced devices. It’s worth noting that the analyst has a market perform (hold) rating and a price target of $170, which still suggests gains of 11% for investors over the coming year.

Now what

It’s important to remember that this is mostly just “fun with numbers.” No one knows for sure how many iPhones Apple will sell in a given year or what the product mix will be.

That said, Apple reached an important new milestone in the second quarter, with the iPhone accounting for more than 50% of all smartphones used in the U.S., overtaking Alphabet‘s Android for the first time.

Given its increasing share, continuing strong demand, and dominance of the high-end smartphone market, Apple stock remains a buy.

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

The post Why Apple stock popped Wednesday appeared first on The Motley Fool Australia.

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• Why Apple stock popped on Monday
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet (A shares) and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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.

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Wanting some ASX small caps in your portfolio? If you are, check out the two listed below that Morgans rates as buys.

Here’s what the broker is saying about these small caps:

Acrow Formwork and Construction Services Ltd (ASX: ACF)

The first small cap ASX share that Morgans is tipping as a buy is Acrow Formwork and Construction Services. It is a leading provider of engineered formwork, scaffolding, and screen systems solutions as well as in-house engineering and industrial labour supply services to the construction sector.

Last month, Acrow released its full year results and revealed a 40% increase in revenue to $148.3 million and the doubling of its net profit after tax to $17.8 million.

Morgans was impressed and believes the company is well-placed for further growth. It also highlights that its shares trade on very low multiples despite this positive form. The broker commented:

ACF is a well-managed business with leverage to growing civil infrastructure activity over the long-term, especially on the east coast. We believe the valuation remains attractive (~6x FY23F PE and ~6.5% yield) with potential positive catalysts from further meaningful contract wins.

Morgans has an add rating and 80 cents price target on Acrow’s shares.

Mach7 Technologies Ltd (ASX: M7T)

Another small cap ASX share that the broker is a fan of is Mach7. It is a medical imaging systems provider that develops innovative image management and viewing solutions for healthcare organisations.

As with Acrow, it was in fine form in FY 2022. For the 12 months, Mach7 reported a 42% increase in revenue to $27.1 million and a 253% jump in EBITDA to $2.8 million.

The good news is that Morgans expects this solid growth to continue in the coming years. The broker commented:

Mach 7 is a provider of enterprise image management systems that allow hospitals to identify, connect and share image and patient care data. Revenue growth of at least 20% pa is expected over the next three years.

Morgans has an add rating and $1.34 price target on Mach7’s shares.

The post Broker names 2 small cap ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 small cap ASX shares to buy in September

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 positions in and has recommended MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Elvest Co portfolio manager Adrian Ezquerro explains how he launched a new small-cap fund at the bottom of the market this year.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Adrian Ezquerro: My name’s Adrian Ezquerro. I’ve been in the industry for a good period of time now and worked at Clime Investment Management for the best part of 15 years before branching out with Jonathan Wilson to establish Elvest Co this year. 

Elvest Co, the name itself points to our focus — it’s an abbreviation of ’emerging leaders investment company’. Everything that we do is focused on emerging leaders in small caps. 

Elvest Co, of course, is the manager of the Elvest Fund, so that’s our initial flagship fund and that’s a small cap Australian equities fund that basically invests in 20 to 40 companies that are outside the S&P/ASX 100 (ASX: XTO) at the time of initial inclusion.

Ultimately we’re just seeking to build a portfolio full of really high quality, undervalued emerging leaders with strong long term growth potential. I’ll probably also add that we have an approach that is based around fundamentals. 

When we’re assessing potential investments, we generally look for five key characteristics — emerging industry leadership, strong balance sheets, healthy cash generation, what we call aligned management team, so we invest alongside a lot of founder led or owner manager type businesses. 

And lastly we look for what we call large opportunity sets — so that basically means we’re looking for companies with really significant long-term growth potential.

MF: Would it be fair to say it’s been a tough time this year for small cap and emerging company investors like yourselves?

AE: Yeah, it’s certainly been a tough market for small caps. You can observe that small caps have fallen by even more than your large cap indices. And that’s particularly prevalent here in Australia and you can also see it with the performance of the Russell 2000 Index (RUSSELL: RUT) in the United States, so that’s replicated across geographies. 

In our view, of course, therein lies part of the opportunity and some of the context for that is, from our viewpoint at least, is that we were effectively out of market [at the] start of the year, so that was good luck more than anything else.

We launched the fund on 1 June and that was interesting in that we were launching a fund with 100% cash coming into a month that proved to be the second worst month since the GFC. It was down over 13% in June. In a sense, that provided us with an opportunity to, to a degree, deploy some cash into a depressed market and we’ve continued to do that with all the volatility we’ve seen. 

Having said that though, we’re still sitting on cash of close to 30%, so we feel we’re pretty well positioned to continue taking advantage of any drawdowns or significant volatility that may yet still come our way.

MF: That’s great. Many people would be, myself included, very envious that you had 100% cash in June. That’s great timing.

AE: Yeah, well I can’t take credit for that. I think that luck was on our side. But I think over time in markets, these things even themselves out and really, if you pick high quality companies and you’re sensible with your entry prices, then returns over time will take care of themselves.

MF: Where do you see the market heading in the near future?

AE: Well, it’s interesting, right? I wouldn’t say that we’re heavily macro driven but it would be foolish to ignore some of the headwinds that economies and markets are currently facing. I think it’s really well known, of course, that inflation has surged much higher in major economies and we’ve just seen surprisingly high [inflation] from the US and of course it’s impacted markets. 

In more recent times we’ve seen long bonds normalised. We’ve had a multi-decade bond rally. That’s now certainly over. We’ve got a period of interest rate normalisation. I think the one significant X factor in this calendar year, we’ve seen the invasion of Ukraine and of course that’s had flow-on effects for energy markets and it’s been a significant impost in terms of its impact on inflation and what that therefore means for consumers and businesses.

There are certainly some headwinds. To a significant extent that is reflected in equity pricing. But I think, looking ahead, there is a chance that we remain in a pretty choppy environment and that therefore it remains really important to focus on high quality companies that have high levels of profitability, margin, defendable business, and pricing power. 

At a portfolio level, as I’ve already said, I think it’s important to keep some dry powder as well so that you can deploy into these sorts of oppressed opportunities when you see good value on offer.

The post High quality ASX shares beat timing the market every time: fundie appeared first on The Motley Fool Australia.

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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 Scott Phillips.

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If you’re looking to boost your income portfolio this month, then you may want to look at the shares listed below.

Here’s why these ASX dividend shares could be worth considering right now:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share that analysts have named as a buy is the Charter Hall Social Infrastructure REIT.

It is a real estate investment trust that owns a portfolio of social infrastructure properties. These are properties that provide social and community services such as council buildings and early learning centres.

Analysts at Goldman Sachs are very positive on the company. They highlight the Charter Hall Social Infrastructure REIT’s solid like for like rental growth, 100% occupancy rate, and a weighted average lease expiry of 14.6 years.

The broker is expecting this strong form to continue and is forecasting dividends per share of 17.3 cents in FY 2023 and 18 cents in FY 2024. Based on its current share price of $3.45, this will mean yields of 5% and 5.2%, respectively.

Goldman currently has a conviction buy rating and $4.35 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that analysts have tipped as a buy is the HomeCo Daily Needs REIT.

It is a property company with a mandate to invest in convenience-based assets across the target sub-sectors of Neighbourhood Retail, Large Format Retail and Health & Services.

It has the aim of providing shareholders with consistent and growing distributions and appears well-placed to deliver on this according to analysts at Morgans.

Its analysts like the company partly due to its significant development pipeline. They note that this development pipeline is valued at over $500 million, which should underpin solid future growth.

As for dividends, the broker is forecasting dividends per share of 8.3 cents in FY 2023 and 8.7 cents in FY 2024. Based on the current HomeCo Daily Needs share price of $1.25, this will mean dividend yields of 6.6% and 7%, respectively.

Morgans has an add rating and $1.56 price target on its shares.

The post Experts say these high yield ASX dividend shares are buys appeared first on The Motley Fool Australia.

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More reading

• Why these 3 ASX shares could be in for a massive boost this month
• Boost your income with these ASX dividend shares: analysts
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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.

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