Tag: Motley Fool

BrainChip Holdings Ltd (ASX: BRN), like most tech companies in an early growth cycle, burns cash quarter to quarter.

The company announced it had spent 8.9% of its US$31.2 million total cash balance in its Q2 quarterly activities report posted on July 27. Meanwhile, cash receipts totalled $US1.2 million, up 500% from the previous quarter.

An influx of cash is a head start, but the question likely to be on most investors’ minds is, when will BrainChip generate earnings?

This is hard to say as a high-growth ASX tech stock in neuromorphic computing. Wall Street hasn’t taken a stab at answering this question either, with only one analyst rating the stock as a buy at the time of writing.

What we can do, though, is revise its recent commercialisation efforts as it progresses in the business cycle from startup to growth. These are signs of where the company is headed in the future and provide clues to when profitability will eventuate.

What did BrainChip announce?

Commercialisation was a key focus in its quarterly activities report, which was covered by my Foolish colleague Aaron.

The company made headway in developing its AkidaTM neuromorphic IP via several avenues, including technical scoping with several potential clients. Technical scoping is typically one of the first steps companies establish before the money exchanges hands, so this could suggest further deals are in the making.

More explicit progress was made by establishing commercial partnerships with tech companies Arm, SiFive, and Prophesee.

In a press release jointly published by SiFive and BrainChip, it was announced the companies had joined forces to offer processors that deliver BrainChip’s artificial intelligence and machine learning capabilities, known as edge computing.

BrainChip also started preliminary partnerships with AI companies Impulse and NVISO.

BrainChip share price snapshot

The BrainChip share price is up 30% year to date. On Friday, shares closed 1.9% lower at $1.03.

The company’s market capitalisation is roughly $1.81 billion.

The post When is ASX tech share BrainChip expected to become profitable? appeared first on The Motley Fool Australia.

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More reading

• Why is the BrainChip share price sinking today?
• Here are the top 10 ASX 200 shares today
• Brainchip share price powers up another 5% on Thursday
• Why is the BrainChip share price bouncing 6% higher today?
• This US investment house has made tens of millions from Brainchip. Guess which other ASX share it’s backing

Motley Fool contributor Matthew Farley 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 want to add some dividend shares to your portfolio, then you may want to check out the two listed below that brokers rate as buys.

Here’s what they are saying about these dividend shares:

HomeCo Daily Needs REIT (ASX: HDN)

According to a note out of Morgans, its analysts have retained their add rating and $1.56 price target on this convenience-based property company’s shares.

The broker was pleased with HomeCo Daily Needs REIT’s full year results for FY 2022 and believes the company is well-placed to build on this in the coming years. This is thanks to solid demand for its properties and its development pipeline.

Morgans is forecasting dividends of 8.3 cents per share in FY 2023 and 8.7 cents per share in FY 2024. Based on the current HomeCo Daily Needs REIT unit price of $1.29, this will mean yields of 6.4% and 6.7%, respectively.

Medibank Private Ltd (ASX: MPL)

A note out of Citi reveals that its analysts have retained their buy rating and lifted their price target on this private health insurer’s shares to $4.00.

Citi was pleased with Medibank’s full year results and particularly its private health insurance business. It expects the business’ positive performance to continue and is forecasting an outlook of largely stable margins paired with reasonable top line growth.

In addition, it notes that the Medibank Health business is targeting a profit growth rate of at least 15%, which should be supported by higher interest rates.

Overall, while the broker acknowledges that Medibank’s shares are not cheap, it feels that the company’s positive outlook makes them reasonable value at the current level.

Citi is also expecting Medibank’s shares to provide attractive yields in the near term. Its analysts are forecasting fully franked dividends of 15.9 cents per share in FY 2023 and 16.3 cents per share in FY 2024. Based on the current Medibank share price of $3.65, this will mean yields of 4.35% and 4.5%, respectively.

The post Brokers name 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Medibank share price dips despite dividend boost
• HomeCo share price slides despite 970% profit boost
• Medibank share price on watch amid ‘standout customer growth’
• How much have Medibank shares paid in dividends over the past 5 years?

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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The CSL Limited (ASX: CSL) share price had an eventful week.

Although the biotherapeutics giant’s shares recorded a small weekly gain, that’s only telling half the story.

Following the release of the company’s full year results, the CSL share price was down as much as 6% before staging a swift recovery.

Where next for the CSL share price?

The good news is that one leading broker believes the CSL share price is heading higher from here.

According to a note out of Morgans, its analysts have retained their add rating with a trimmed price target of $321.30.

Based on the current CSL share price of $294.67, this implies potential upside of 9% for investors over the next 12 months.

What did the broker say?

CSL’s FY 2022 results were a bit of a mixed bag according to Morgans. It commented:

FY22 results were slightly softer than expected, albeit in line with management’s assumptions, with net profit falling 6% in cc on 3% revenue growth. Seqirus was the standout on strong demand for influenza vaccines, while Behring profit fell as plasma-based products were constrained on tight supply and higher costs, although certain Specialty product surprised to the upside. Encouragingly, plasma collections are above pre-pandemic levels, and while industry wide challenges remain (eg staffing; increased costs), the worst appears behind us.

And while the company’s guidance “disappointed”, the broker highlights that “underlying growth is solid (11-14%) and excludes Vifor growth.”

Overall, Morgans acknowledges that there are still some near term challenges, but appears to believe the company is well-placed to overcome them and deliver strong growth in the future. It explained:

While near term challenges remain and plasma inventories will need to be rebuilt over time, strong plasma collection growth and ongoing demand across both Behring and Seqirus underpin strong growth and continued momentum.

The post Is the CSL share price in the buy zone? appeared first on The Motley Fool Australia.

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More reading

• Why I would invest $10,000 into these ASX shares for 10 years
• Brokers name 3 ASX shares to buy today
• Buy this ASX 200 company as its costs are actually falling: Firetrail
• Here are the top 10 ASX 200 shares today
• Why CSL, IPH, Renascor, and Treasury Wine shares are pushing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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 invest in the tech sector but aren’t sure which shares to buy, then you may want to consider exchange traded funds (ETFs).

That’s because there are a number of ETFs out there that allow investors to buy a slice of some of the world’s biggest and brightest tech companies.

Two ETFs that will allow you to achieve this are listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for tech investors to look at is the BetaShares Asia Technology Tigers ETF. This ETF gives investors exposure to some of the largest tech companies in the Asian market (excluding Japan).

BetaShares believes this is a good place for investors to put funds, noting that technological adoption in Asia is surpassing the West. Furthermore, with this trend tipped to continue in the future, this is expected to underpin strong growth in the sector over the next decade.

There are approximately 50 companies included in the fund including the likes of Alibaba, Infosys, JD.com, Meituan, Pinduoduo, Samsung, and Tencent.

In respect to the latter, Tencent is a multinational technology conglomerate and one of the largest companies in the world. It is best known for its communication and social platforms, Weixin (WeChat) and QQ, which connect over a billion users with each other.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ASX ETF for tech investors to look at is the BetaShares Global Cybersecurity ETF. As its name implies, this popular ETF gives investors exposure to the leading companies in the global cybersecurity sector.

The cybersecurity sector has been growing strongly in recent years. Pleasingly, due to increasing demand for cybersecurity services because of the growing threat of cyber attacks and the shift to the cloud, it has been tipped to continue doing so for a long time to come.

Included in the fund are global cybersecurity giants and emerging players from around the globe. Among the companies you’ll be buying a piece of are Accenture, Cisco, Cloudflare, Crowdstrike, Okta, and Splunk.

The post Love tech? Here are 2 excellent ETFs for ASX tech investors appeared first on The Motley Fool Australia.

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More reading

• 2 exciting ETFs for ASX investors to buy today
• Why the BetaShares ASIA ETF is 50% below its former glory
• 3 ETFs for ASX investors to buy right now
• 2 exciting ETFs for investors to buy in August
• Why I think these ASX tech shares are buys in August

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 BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. 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 Cleanaway Waste Management Ltd (ASX: CWY) share price is in focus after the company announced its latest acquisition.

Cleanaway has a market capitalisation of $5.6 billion at the time of writing. However, it’s about to get a bit bigger after the company announced a capital raising and a deal to expand its network.

Let’s look at what the company announced.

Global Renewable Holdings

Cleanaway has big plans with its ‘Blueprint 2030’ strategy, which includes medium-term opportunities to “deliver the blueprints under the strategic infrastructure growth and sustainable customer solutions pillars”. This starts with Global Renewables Holdings Pty Ltd (GRL).

GRL is a licensed composting facility that processes around a fifth of Sydney’s ‘red bin’ household waste at its strategically located Eastern Creek site and delivers around 30% of landfill diversion and “better carbon outcomes” compared to landfill.

The facility currently composts ‘organics’ from red bin household waste and will gradually transition to source separated food organics and garden organics feedstock to meet council customer needs.

Cleanaway is the exclusive contracted provider of waste to the GRL facility until 2032, with waste supply underpinned by contracts with surrounding councils, with which Cleanaway has long-term existing relationships.

Cleanaway said it’s committed to enhancing the facility over time, including an expected $40 million to $45 million update to enclose the compost maturation area.

What are the financial implications for Cleanaway shares?

Cleanaway has entered into a binding agreement and the overall acquisition price is $168.5 million.

The company said that GRL would add 5.2% to its earnings per share (EPS) on an FY22 basis based on the placement proceeds used to fund the purchase price and transaction costs associated with the acquisition.

Cleanaway said this provides the business with an opportunity to immediately internalise existing volumes and acquire “attractive” pro forma FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) of approximately $21.4 million.

The acquisition also eliminates an unfavourable contract provision for Cleanaway in relation to GRL where payments to GRL exceeded receipts from councils (this contract was acquired as part of the Suez acquisition).

Cleanaway also said this deal would allow it to leverage its geographically diverse network to capture organics share, with GRL and a further planned Lucas Heights facility providing Sydney-wide processing capability.

How is it going to pay for this?

Cleanaway is undertaking a fully underwritten placement of new Cleanaway shares to eligible institutional investors to raise $350 million.

The offer price is $2.50, which is a 7.7% discount to the last closing price of $2.71 per share.

This will result in around 140 million new shares being issued, representing 6.8% of its existing issue capital.

With the share purchase plan, eligible Cleanaway shareholders will be able to subscribe for up to $30,000 of new shares. It’s intended to raise up to $50 million.

Cleanaway share price snapshot

Cleanaway shares are currently halted at $2.71 each. They have dropped 14.5% this year to date, but are up almost 6% over the past 12 months.

The post Looking to buy Cleanaway shares? Here’s what you need to know about the company’s latest acquisition appeared first on The Motley Fool Australia.

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More reading

• Cleanaway share price halted amid results, $400m cap raise and acquisition
• ‘Outlook is bright’: Expert names ASX share to buy for long-term fortunes

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.

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Experts are constantly banging on about focusing on company fundamentals.

It’s wise advice, but it naïvely assumes a share market that is completely efficient. That is, everyone behaves rationally according to all the public information available.

Investors know from their experience just in 2022 how false this is.

Emotions have a huge impact on how and where ASX shares go. It might be painful for some to admit, but it’s true — because everyone participating is human.

To understand what goes on with stocks outside of company fundamentals, AMP Ltd (ASX: AMP) chief economist Dr Shane Oliver this week pointed out how investors can be more emotionally intelligent.

Recognise everyone else is irrational

The first step is to admit that share prices and investors do not behave rationally.

“Recognise that investment markets are not only driven by fundamentals, but also by the often-irrational and erratic behaviour of an unstable crowd of investors,” Oliver said on the AMP blog.

“The key here is to be aware of past market booms and busts so that when they arise in the future, you understand them and do not overreact.” 

By ‘overreact’, Oliver is referring to behaviour like selling everything during a market bust or piling onto “unstable bubbles”.

Recognise you are irrational, like everyone else

By natural extension, the second step is to acknowledge that you, yourself, are impacted by emotions.

“In other words, be aware of how you are influenced by lapses in your own logic and crowd influences,” said Oliver.

“For example, you could ask yourself: ‘Am I highly affected by recent developments? Am I too confident in my expectations? Can I bear a paper loss?’”

Pick a strategy and stick with it

The next action is to choose an appropriate investment methodology according to your own taste and appetites.

And hold on tight for the long term.

“To guard against emotional responses, choose an investment strategy which can withstand inevitable crises whilst remaining consistent with your financial objectives and risk tolerance,” said Oliver.

“Then stick to this even when surging share prices tempt you into a more aggressive approach, or when plunging values suck you into a defensive approach.”

If you must fiddle, go contrarian

The last piece of advice is to run in the opposite direction to the herd.

“If you are tempted to trade, do so on a contrarian basis,” said Oliver.

“Buy when the crowd is bearish, sell when it is bullish. Extremes of bullishness often signal eventual market tops, and extremes of bearishness often signal bottoms.”

Successful investing calls for “going against the crowd” at extreme times, he added, and monitoring investor sentiment research can assist. 

“But also recognise contrarian investing is not foolproof,” said Oliver.

“Just because the crowd looks irrationally bullish (or bearish) doesn’t mean it can’t get more so.”

The post 4 ways emotional intelligence can supercharge your ASX shares: expert appeared first on The Motley Fool Australia.

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More reading

• Up 12% in a month, is the AMP share price finally on the comeback trail?
• Why is the AMP share price having such a lousy start to the week?
• Looking to buy AMP shares? Read this first
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping

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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The Wesfarmers Ltd (ASX: WES) share price will be one to watch in the coming week. The S&P/ASX 200 Index (ASX: XJO) giant is set to release its financial year 2022 earnings next Friday.

Could now be the time to jump in on the retail-focused conglomerate behind such businesses as Bunnings, Kmart, Officeworks, and Priceline?

At Friday’s close, shares in Wesfarmers were going for $48.92 apiece, 0.74% higher than their previous closing price. Meanwhile, the ASX 200 lifted 0.02% on Friday.

So, what are brokers forecasting for the Wesfarmers share price? Let’s take a look.

Do Wesfarmers shares boast 20% upside ahead of earnings?

The Wesfarmers share price could be set for growth, with broker Morgans tipping a potential 20% upside.

The broker likes the company’s offerings, which it dubbed “one of the highest quality retail portfolios in Australia”, my Fool colleague James Mickleboro reports. It also thinks highly of Wesfarmers’ management team.

And it’s backed up its praises with equally high expectations. The broker has a $58.40 price target on Wesfarmers’ shares.

It has also tipped the company to pay out $1.65 per share of fully franked dividends in financial year 2022.

That presumably means it expects Wesfarmers’ final dividend to come in at 85 cents after the company handed investors 80 cents per share in March.

Looking further into the future, Morgans predicts Wesfarmers will pay out $1.81 per share in dividends this financial year.

The optimistic outlook likely comes as a relief for embattled investors. The retail conglomerate’s stock has tumbled 18% since the start of 2022. It has also dumped 26% over the last 12 months.

For comparison, the ASX 200 Index has also fallen 6% year to date and 5% since this time last year.

The post Is the Wesfarmers share price in the buy zone ahead of next week’s earnings result? appeared first on The Motley Fool Australia.

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More reading

• Why is the Wesfarmers share price smashing the ASX 200 today?
• Did you know you’re investing in lithium when you buy Wesfarmers shares?
• Do any ASX lithium shares pay dividends?
• ASX 200 better buy: Wesfarmers or Woolworths?
• 2 excellent ASX dividend shares experts rate as buys

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 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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ASX reporting season went into overdrive this week as a flock of S&P/ASX 200 Index (ASX: XJO) shares handed in their results.

With a flurry of news and ASX announcements, it can be hard keeping up.

So, here’s the lowdown on some of the biggest movers from ASX reporting season this week. 

You’ll find links to our relevant Foolish earnings coverage for further reading.

The ASX winners

The Nearmap Ltd (ASX: NEA) share price soared above the clouds this week, propelling 30%. While the aerial imaging company lifted the lid on its FY22 results, it was a takeover bid that had the market excited. 

The Temple & Webster Group Ltd (ASX: TPW) share price was also on fire, lighting up 30% on Tuesday before eventually running out of steam to post a 7% gain across the week. Investors cheered as the online furniture retailer delivered 31% revenue growth in FY22 while its earnings margin came in at the high range of guidance.

The IPH Ltd (ASX: IPH) share price also hit a home run, finishing the week 17% higher. The market appears pleased with the company’s global ambitions. Alongside its FY22 results, IPH announced a $387 million acquisition of Smart & Biggar, a leading Canadian intellectual property firm. This marks IPH’s first expansion beyond the Asia Pacific region.

The Brambles Limited (ASX: BXB) share price also ended the week in the winners’ column, pumping out a 12% gain. The logistics group shook off global supply chain challenges to deliver 9% sales growth in FY22, ahead of guidance, and boosted its final dividend.

Last but certainly not least, the BHP Group Ltd (ASX: BHP) share price punched in a 7% weekly rise, fortifying its crown as the ASX’s largest company. The Big Australian beat expectations in FY22 as strong cash flow performance led to a juicy final dividend of US$1.75 per share.

The ASX losers

While Temple & Webster soared, the pain continued for fellow ASX e-commerce share Redbubble Ltd (ASX: RBL). The Redbubble share price suffered a steep 40% intraday fall on Wednesday after marketplace revenue dropped 13% and earnings reversed in FY22.

The Pact Group Holdings Ltd (ASX: PGH) share price also found itself under pressure, packaging up a weekly loss of 19%. COVID and supply chain challenges contributed to a 25% fall in the company’s FY22 underlying profit. Pact Group also slashed its final dividend by 75%.

The week wasn’t kind to the TPG Telecom Ltd (ASX: TPG) share price either, descending 13%. The ASX telco reported soft first-half results, impacted by restructuring and rising cost pressures.

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price also had a week to forget, stumbling 11% as investors were unimpressed by the company’s FY22 results. The ASX bank’s commentary around its net interest margin may have spooked the market.

Finally, the Beach Energy Ltd (ASX: BPT) share price failed to fire, slipping 8% across the week. The company’s FY22 profits fell short of expectations and the ASX oil share warned investors that unit field operating costs would likely head north in FY23. 

Which ASX 200 shares are reporting next?

Gear up for another jam-packed week of ASX reporting season as a swarm of ASX 200 shares prepare to release their results.

According to our Foolish ASX reporting season calendar, some of the ASX blue-chip shares reporting next week include Wesfarmers Ltd (ASX: WES), Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Qantas Airways Limited (ASX: QAN).

The post ASX reporting season weekly wrap: Winners and losers appeared first on The Motley Fool Australia.

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More reading

• Worried about the iron ore price? Why the need for it ‘ain’t going anywhere’: broker
• Here are the top 10 ASX 200 shares today
• Is the AGL share price in the buy zone following the company’s latest results?
• Why AGL, Fisher & Paykel, Inghams, and TPG shares are sinking today
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Cathryn Goh has positions in REDBUBBLE FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nearmap Ltd., REDBUBBLE FPO, and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited, COLESGROUP DEF SET, Nearmap Ltd., and Wesfarmers Limited. The Motley Fool Australia has recommended IPH Ltd, TPG Telecom Limited, and 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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When it comes to investing, I have a tendency to look for ASX shares that I can buy and hold for a long period of time rather than trade in and out of positions.

This way, I can benefit from the power of compounding. This is what happens when you generate returns on top of returns. It explains how $10,000 can turn into $26,000 in 10 years if you average a 10% return per annum.

With that in mind, listed below are two ASX shares that I would invest $10,000 into for the long term. They are as follows:

CSL Limited (ASX: CSL)

The first ASX share that I would invest $10,000 into this month is CSL. It is one of the world’s leading biotherapeutics companies with a collection of world-class businesses that includes CSL Behring and Seqirus.

I’m a big fan of the company due to its high-quality portfolio of products, lucrative development pipeline, and huge investment into research and development (R&D). In respect to the latter, every year, CSL reinvests 10% to 12% of its revenue back into its R&D. This saw the company invest over US$1 billion into these activities in FY 2022, ensuring that it has a wide range of potentially lucrative and life-saving therapies destined for commercialisation in the coming years.

And while the company may not be out of the woods just yet with COVID-related margin pressures, management anticipates its margins bottoming during the first half of FY 2023. After which, the normalisation of trading conditions and the company’s exciting new Rika plasma collection technology are expected to support margin expansion and solid earnings growth once again.

All in all, I believe CSL’s shares could be a quality long-term option for investors.

Technology One Ltd (ASX: TNE)

Another ASX share that I think would be a quality buy-and-hold option right now is enterprise software company TechnologyOne.

I think it is one of the best tech shares on the Australian share market thanks to its high quality and sticky software, which is used by countless businesses and government agencies across Australia and the UK.

In respect to the stickiness of its software, TechnologyOne boasts an ultra-low churn rate of 0.09% of annual recurring revenue (ARR) and a net revenue retention (NRR) of 114%. This means that not only are TechnologyOne’s customers sticking around, it is squeezing more revenue from them each year.

Another positive is that the company is currently transitioning its customers to a software-as-a-service offering and ceasing support for legacy software. This shift to higher margin recurring revenues is expected to be supportive of stronger margins in the coming years.

This transition has been going very well and is expected to continue doing so. In fact, management is confident enough to forecast ARR of $500 million by FY 2026. This is almost double its current base ARR of $288 million.

And while TechnologyOne’s shares carry a premium valuation, I believe the company’s extremely positive outlook justifies this and would be a buyer of them for the long term at current levels.

The post Why I would invest $10,000 into these ASX shares for 10 years 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 positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended TechnologyOne 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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S&P/ASX 200 Index (ASX: XJO) shares representing building materials providers are in a bind at the moment.

Interest rates are steeply rising, meaning consumers will have less money for both renovations and constructing new housing.

That logically is not great for businesses that supply construction materials.

So many of those ASX 200 shares have been sold off in recent times, and that perhaps might have opened up a buying opportunity.

After all, if sentiment is so weak now, eventually interest rates will stop rising and activity will normalise.

Several experts have tipped fibre cement sheeting provider James Hardie Industries plc (ASX: JHX) as a prudent pick-up in recent times.

But a similar ASX company not often talked about is CSR Limited (ASX: CSR).

This week Fairmont Equities managing director Michael Gable explained why he believes CSR is ripe for buying at the moment.

Why ASX 200 share CSR can fight through lean times

Gable admitted there are risks for the building products business, but plenty of factors abound that could offset the impact of rising interest rates.

“On the positive side, the rate of decline in Australian housing starts (>20%) is unlikely to be as much as the declines evident in past cycles of -25% to -45%,” he wrote on the Fairmont blog.

“One of the factors supporting the lower-than-historical rate of decline is household formation… A recovery is expected in FY25, as population growth returns to full capacity.”

Management has noted how “multi-family” and ” non-residential” construction seemed to be picking up after postponements though the early years of the COVID-19 pandemic.

“Recovery in these volumes may help soften the anticipated impact from the decline in detached housing in FY24.”

Gable added that a lesser-known business arm of the ASX 200 share, the property division, is going gangbusters.

“The company has 457ha of existing land holdings that are leveraged to key western Sydney locations that are set to benefit from structural tailwinds,” he said.

“These include a new Western Sydney Airport, surging e-commerce activity and strong demand for distribution centres.”

This real estate business is increasingly holding up CSR’s stock price.

“While there is downside risk to the valuation for the building products division, overall group valuation is likely to be supported by the property division, which is now comprising a greater portion of the group’s valuation (currently accounting for ~1/3rd of the group enterprise value).”

The share price could be at the start of a rise

From the start of the year to June, CSR shares sank as much as 34%. But over the past couple of months, the stock has rallied by 20%.

Gable feels like it’s on a roll now.

“It broke higher in mid-July on good volume,” he said.

“So far we have CSR respecting the breakout as it continues to climb higher. Momentum looks good and the share price is likely to continue rallying.”

CSR will not report its numbers this month as its financial year ends in March.

The post This building materials ASX 200 share is a buy (not James Hardie): expert 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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