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The Aurizon Holdings Ltd (ASX: AZJ) share price is falling today on the back of the company’s FY22 results.

Aurizon shares are currently trading at $3.80, a 6.06% fall. In comparison, the S&P/ASX 200 Index (ASX: XJO) is falling 0.28% today.

Let’s take a look at what the freight operator reported today.

What did the company report?

Highlights of the results include:

• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.468 billion, down 1% on prior comparable period (pcp)
• Underlying net profit after tax (NPAT) down 2% on pcp to $525 million
• Statutory NPAT fell 15% to $513 million
• Revenue of $3.075 billion, up 2% on pcp
• Final fully-franked dividend of 10.9 cents per share, down 24% on pcp
• Free cash flow surged 13% to $664 million

What else happened in FY22?

Aurizon’s coal business delivered an EBITDA of $541 million, up 1% on the pcp. This was despite coal tonnages dropping 4% compared to 2021. A better yield on contracted tonnes and lower track access, train crew and maintenance costs contributed to this result.

The company’s network business EBITDA fell 6% on the pcp. Despite higher coal demand, volumes on the Central Queensland Coal Network slipped 1% to 206.5 million tonnes. Wet weather and COVID-19 contributed to this result.

Aurizon’s bulk business revenue dropped 7% to $130 million. Volumes were lower due to the impact of floods, COVID, and reduced production from some customers.

The company finalised the acquisition of One Rail Australia in July 2022. Aurizon predicts this will increase revenue and tonnages for the bulk business in the future.

Commenting on the outlook for One Rail, Aurizon CEO Andrew Harding said:

One Rail is a high performance business with a highly-capable workforce. The acquisition provides the
platform for the next phase of growth for Aurizon, as we aim to double earnings in our bulk business by 2030.

What did management say?

Further sharing his insight on the results, Harding added:

The company has delivered a solid operational and financial result despite a challenging year with the ongoing COVID-19 pandemic, major flooding events and customer-specific reductions in production impacting our volumes.

Group earnings have remained stable through continued strong operational performance and a number of revenue protection mechanisms that are in place. This underlines the strength and resilience of the Aurizon business, and a commitment to deliver shareholder returns.

The total dividend for FY2022 represents a yield of over 5%. Including this final dividend, Aurizon has returned to shareholders $4.8 billion over the past seven years through dividends and share buybacks.

What’s next?

Aurizon is forecasting an EBITDA of between $1.47 and $1.55 billion in the 2023 financial year. This includes 11 months of impact from the One Rail bulk business.

The company said sustaining capital expenditure is between $500 and $550 million.

Aurizon share price snapshot

The Aurizon share price has jumped nearly 9% in the year to date, but it has slipped 6.5% in the past year.

Aurizon has a market capitalisation of more than $7 billion based on today’s share price.

The post Aurizon share price slips as dividend is cut by 24% appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Aurizon share price sinks despite ‘transformative’ acquisition win
• Why Aurizon, Bega Cheese, Flight Centre, and Lake Resources shares are sinking

Motley Fool contributor Monica O’Shea 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 Aurizon Holdings 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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The OZ Minerals Limited (ASX: OZL) share price has shot higher to be the best performer in the S&P/ASX 200 Index (ASX: XJO) at the time of writing.

OZ Minerals shares are currently trading for $25.51 each, a 34.83% leap from their previous close of $18.92 a share.

It comes as BHP Group Ltd (ASX: BHP) has offered a takeover bid of $25 cash per OZ Minerals share.

BHP’s bid represents a premium of 32.1% compared to the last closing price of OZ Minerals shares last week.

According to OZ Minerals, BHP has accumulated an interest in OZ Minerals through derivative instruments, amounting to a holding of less than 5%.

After considering the offer, the OZ Minerals board decided the offer “significantly undervalues” the company and rejected it.

OZ Minerals pointed out the offer represents a premium of just 13.1% to the volume weighted average price for the last six months.

Management response

OZ Minerals managing director and CEO Andrew Cole said:

We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand particularly for the electrification and decarbonisation thematic and we have a long-life resource and reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.

OZ Minerals pointed out here is a “strong long-term outlook” for both the copper and nickel markets underpinned by increasing geological scarcity, global electrification, and accelerating decarbonisation. It says it’s highly leveraged to this and is exploring for more deposits.

OZ Minerals share price snapshot

Since the start of 2022, OZ Minerals shares are still down 9% despite the huge rise today.

The company has a current market capitalisation of approximately $8.5 billion.

The post The OZ Minerals share price is rocketing 35% after BHP bid appeared first on The Motley Fool Australia.

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More reading

• BHP share price lifts as $8.3b takeover bid rejected
• Is the Northern Star share price on the way back up?
• Could inflation now be fully priced in to ASX 200 shares?
• OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer
• Is Coles an underrated ASX 200 dividend share with potential?

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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Suncorp Group Ltd (ASX: SUN) share price is in the red in early trade on Monday after the insurer released its FY22 results. At the time of writing, Suncorp shares are trading 3.26% lower at $11.27 apiece.

It was a mixed set of results for Suncorp, with revenue increasing 14% year on year whilst natural hazards played havoc on the company’s bottom line.

Meanwhile, it also saw headwinds from volatility in the financial markets this year, resulting in a $190 million loss in its investment markets division, down from $453 million the prior year.

What’s next for Suncorp?

The company also recognised a 34% decrease in net profit after tax (NPAT) to $681 million. Chiefly, this reflects natural hazard (insurance-related) costs and volatile financial markets.

For instance, 35 separate weather events during the year resulted in a $101 million blowout to the group’s provision for natural hazards.

Suncorp also declared a 17 cents per share final dividend – well below the 46 cents that consensus analyst estimates had forecast.

It wasn’t all bad news, though. As The Motley Fool reported earlier today: “…as the company holds its fixed interest investments to maturity, the majority of these FY 2022 accounting losses are expected to unwind to profit over the coming periods.”

Suncorp also reiterated its FY23 earnings targets and forecasts a cost-to-income ratio of approximately 50% by the end of next financial year.

Despite this, investors seem less than impressed following the update and have pushed the share more than 3% lower from the open today.

The Suncorp share price now trades back in line with key support ranges formed since June, as seen on the chart below. Returns against the S&P/ASX 200 Financials Index (ASX: XFJ) this year to date are plotted as well.

Suncorp shares are down around 5% for the last 12 months, although they have pushed back 2% into the green this year to date.

The post Suncorp share price slides following softer-than-expected FY2022 results appeared first on The Motley Fool Australia.

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More reading

• Suncorp share price on watch after FY22 profit falls 34%
• 5 things to watch on the ASX 200 on Monday
• Why has the Suncorp share price gone backwards since the ANZ takeover news?
• Here are the top 10 ASX 200 shares today
• What might the ANZ deal mean for Bank of Queensland shareholders?

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.

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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.

E-commerce stocks aren’t getting much love these days. The ProShares Online Retail ETF is down 59% from highs set in February 2021. E-commerce giant Amazon (NASDAQ: AMZN) has done better a bit better but still has seen its stock price drop into correction territory. Shares of the tech giant are down 24.5% from all-time highs set last summer. Compare that with the 20.3% drop in the tech-focused Nasdaq-100, and you’ll see that investors are wary of tech growth stocks and the e-commerce sector specifically.

Amazon reported its second-quarter earnings on July 28, giving investors an update on the direction of its business moving forward in this volatile time. Let’s review the tech behemoth’s existing situation and see if it offers any clues on whether Amazon stock is a smart investment today.

After e-commerce blossomed at the start of the pandemic, a reopening economy has brought more consumers back into brick-and-mortar stores, putting pressure on online shopping platforms. And while Amazon has diversified its business over the years through categories like Amazon Web Services (AWS), Amazon Prime, and digital advertising, the company’s top line is still largely dominated by online retail.

How goes it for the e-commerce leader?

In its latest quarter, Amazon’s top line overall sales climbed 7.2% year over year to total $121.2 billion. On the bottom line, Amazon reported a rare net loss of $0.20 per share, marking the second consecutive quarter of being in the red. As is the case with many other e-commerce companies at the moment, the primary cause of the loss was ongoing macro headwinds, including high inflation related to sharp rises in fuel, energy, and transportation costs.

Sales in Q2 from Amazon’s e-commerce segment fell 4.3% year over year to $50.9 billion. E-commerce sales account for about 42% of total sales for the quarter. The drop can partially be attributed to tough comparisons to a strong Q2 in 2021. Even so, growth for the e-commerce leader was uneven, and it’ll likely take an improvement in the economic environment for Amazon to get growth levels back to their five-year norms. 

Its closely watched Amazon Web Services cloud platform saw sales surge 33.3% to $19.7 billion, while its subscription services and advertising services categories expanded 10.1% and 17.5%, respectively, up to $8.7 billion and $8.8 billion. It was a pleasant surprise to see its advertising segment perform so well, given that ad-driven tech companies like Snap and Meta Platforms have struggled of late.

For the full fiscal year, Wall Street analysts expect the company’s total revenue to increase 10.6% year over year to $519.5 billion, and its earnings per share to decline a whopping 80.9% to $0.62. In fiscal 2023, which is when year-over-year comparable metrics will come back to earth, analysts are forecasting top- and bottom-line growth of 15.8% and 303.2%, respectively.

Amazon management wasn’t inclined to offer an update of full-year guidance with this latest report, but it did discuss what it expects for the third quarter. Management said net sales in Q3 would total $127.5 billion at the midpoint and grow 15% compared to Q3 2021. The guidance was tempered by concerns about unfavorable foreign exchange rates. Operating income is expected to be positive and hit $1.75 billion at the midpoint, compared with $4.9 billion in Q3 2021. This guidance doesn’t account for business acquisitions, restructurings, or legal settlements, including the just-announced acquisition of Roomba robot vacuum maker iRobot for roughly $1.7 billion. 

What should investors do?

For investors with extended time horizons, Amazon stock remains a fail-safe long-term bet. Whenever the market falls out of love with a best-in-class stock, smart investors should interpret that as a clear buying opportunity. That’s what we’re watching unfold these past few months with Amazon — the e-commerce company has confronted a string of headwinds, all of which are primarily short-term in nature. Hence, long-term investors can profit from this current sell-off by accumulating shares of the e-commerce leader today. 

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

The post Should investors pounce on Amazon stock during the Nasdaq tech sell-off? appeared first on The Motley Fool Australia.

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More reading

• Amazon stock shrugged off bad news: Here’s what that means for investors
• Amazon share price surges 13% after hours on revenue beat
• The genius move Amazon shareholders have been hoping for
• Want to invest in management teams like Amazon’s? Here’s what to look for
• 2 important investing metrics you won’t find on a financial statement

Luke Meindl has no position in any of the stocks mentioned.  John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. 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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Shares of Sandfire Resources Ltd (ASX: SFR) are pushing north immediately from the open on Monday despite no company-specific news.

At the time of writing, the share is swapping hands more than 7% higher at $4.89 apiece.

In broad market moves the S&P/ASX 300 Metals and Mining Index (ASX: XMM) is also lifting around 125 basis points on the day.

What’s up with the Sandfire share price?

Despite the strengths exhibited across global commodity markets in 2022, copper has been one exception to the rule.

After a strong run in the 12 months to April, the price of copper then plummeted from a high of US$4.81 a pound and now trades at US$3.55/lbs, a more than 26% drop.

As seen on the chart below, the Sandfire share price tracks the price of copper very closely. This chart shows the relationship since November 2021.

It would come as little surprise, therefore, to see Sandfire shares spike with the news out of OZ Minerals Ltd (ASX: OZL)’s camp this morning.

As TMF reported earlier today, OZ has rejected a $25 per share takeover offer from the world’s largest mining company BHP Group Ltd (ASX: BHP).

The OZ board and shareholders believed the offer was too low and not reflective of the company’s copper and nickel assets, as well as the current end market.

With OZ’s rejection on grounds of market strength and copper’s asset value, the market has turned to this as a risk-on indicator with other copper miners like Sandfire.

Despite its gains today, the Sandfire share price still has to reverse a 25% loss incurred this year to date on the chart.

The post Why is the Sandfire share price leaping 7% on Monday? appeared first on The Motley Fool Australia.

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• Sandfire share price rallies as miner beats production guidance
• ‘We have clearly seen the peak’: Sector veteran gives earnings season warning for ASX mining shares
• These ASX 200 mining shares are getting buried. What’s happening?
• Here are 3 ASX 200 shares tumbling to new 52-week lows today

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.

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The Beach Energy Ltd (ASX: BPT) share price is heading north today.

During early morning trade, the energy producer’s shares are up 0.29% to $1.735.

For context, the S&P/ASX 200 Index (ASX: XJO) is in negative territory by 0.30% to 6,993.7 points.

What’s fuelling Beach Energy shares today?

Investors are bidding up the Beach Energy share price this morning after the company announced its latest deal.

In its release, Beach Energy advised it has entered into a liquefied natural gas (LNG) sale and purchase agreement (SPA) with BP Singapore.

Under the SPA, BP will be purchasing all 3.75 million tonnes of Beach Energy’s expected LNG volumes. This will come from the Waitsia Stage 2 project, with supply forecasted to commence in the second half of 2023 and flow for approximately 5 years.

Supply will be delivered on a Free on Board (FOB) basis from the North West Shelf facilities in Karratha, Western Australia. BP is a joint venture partner in NWS.

The price for the LNG contract is said to be linked to Brent crude oil and Japan Korea Marker price indices. While there is no restriction on upside price participation, there is a downside price protection mechanism. This is to safeguard any severe falls in LNG prices where commodity cycle prices become unstable.

Beach Energy CEO, Morné Engelbrecht touched on the deal, saying:

Signing of the LNG SPA with bp is a significant milestone in our delivery of material growth and another step closer to Beach becoming a supplier of LNG to the global market…

Once LNG sales commence, Beach will have further diversified its commodity pricing exposure. Beach’s oil and gas portfolio will provide exposure to Brent oil prices, spot LNG prices, east coast, west coast and New Zealand domestic gas prices, and oil-linked gas prices. This places Beach in an enviable position within the Australian energy sector.

Beach Energy share price snapshot

While the ASX 200 index has recorded losses in 2022, the Beach Energy share price has surged by almost 40%.

These gains have mostly come off the back of favourable trading conditions as energy prices continue to spike.

Beach Energy has a price-to-earnings (P/E) ratio of 9.84 and commands a market capitalisation of roughly $3.95 billion.

The post Beach Energy share price climbs on BP deal appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• How is the Beach Energy share price managing to hang tough despite falling oil prices?
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 BHP Group Ltd (ASX: BHP) share price is lifting amid news OZ Minerals Limited (ASX: OZL) turned down a takeover bid posted by the iron ore giant.

As The Motley Fool reported earlier, the $25 per share cash offer represented a 32.1% premium on OZ Minerals’ previous close. It also valued the copper miner at around $8.3 billion.

However, the acquisition target’s board found the bid undervalued the company and refused to recommend it to shareholders.

After opening slightly lower at $38.80, the BHP share price rose to trade at $39.09 in early morning trade. That’s 0.72% higher than it was at Friday’s close.

Let’s take a closer look at what’s going on with the S&P/ASX 200 Index (ASX: XJO) materials shares on Monday.

BHP share price lifts despite rejected takeover bid

The BHP share price is in the green this morning. Its gains come despite the company’s CEO Mike Henry saying he’s “disappointed” OZ Minerals’ board refused to entertain its “compelling” bid. Henry continued:

Our proposal represents compelling value and certainty for OZ Minerals shareholders in the face of a deteriorating external environment and increased OZL operational and growth related funding challenges.

OZ Minerals CEO and managing director Andrew Cole said BHP’s bid didn’t recognise the company’s “unique” copper and nickel assets. It also said it didn’t consider demand predicted to stem from global electrification and decarbonisation.

The acquisition target also said the offer was “highly opportunistic”. It was posted after the copper price and the OZ Minerals share price fell from recent peaks.

It was also noted that BHP has snapped up a stake of less than 5% in the copper giant.

While the BHP share price is trading slightly higher following the company’s rejection, that of OZ Minerals is leaping upwards. It has gained 35% to trade at $25.70 at the time of writing.

The post BHP share price lifts as $8.3b takeover bid rejected appeared first on The Motley Fool Australia.

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More reading

• OZ Minerals share price on watch after miner rejects BHP’s $25 per share takeover offer
• BHP share price has ‘drifted into attractive value territory’ with 25% upside: broker
• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.
• Which ASX 200 shares will prove to be dividend heavyweights this earnings season?
• Looking to buy BHP shares? Here’s how the miner is gearing up to secure its share of booming EV demand

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

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The Commonwealth Bank of Australia (ASX: CBA) share price is in the green in early morning trade, up 0.4%.

CBA shares closed on Friday trading at $101.41 and are currently trading for $101.82.

The other big bank shares are all heading in the other direction, dipping into the red, as witnessed by the 0.3% drop in the S&P/ASX 200 Financials Index (ASX: XFJ).

What’s influencing the CBA share price today?

Atop wider market forces, ASX investors are also scrutinising analysts’ forecasts on what to expect when the bank delivers its results for the 2022 financial year (FY22). Those will be reported this Wednesday.

While estimates vary, many analysts are expecting CBA to report strong results for the 12 months. This comes as the second half of FY22 has seen inflation levels soar and the Reserve Bank of Australia (RBA) ratchet up interest rates for the first time in a decade, taking them from 0.10% to the current 1.85%, with more hikes expected.

As for likely impacts on the CBA share price, Tribeca Investment Partners portfolio manager Jun Bei Liu said investors are likely to be more focused on what’s ahead than on metrics already largely priced.

According to Liu (quoted by The Sydney Moring Herald):

I think for the market, the issue is that all of these results are being pretty much in the rear view mirror. It’s really about the commentary about how they see the credit growth and some of those things going forward, what they see in the underlying market at this point, rather than what the result is indicating. That’s going to be very important.

Liu noted that at the current CBA share price, the bank trades at a premium to its competitors (CBA trades at a price-to-earnings (P/E) ratio of 19 times).

“Now clearly, there’s flight to quality. So, for this business to maintain its premium, it’s incredibly important for it to demonstrate leadership,” she said, adding the bank needs to demonstrate that “it’s above the system growth”.

“So, if they disappoint on some of those growth stats, the share price will come off quite meaningfully because it is at such a premium,” Liu said.

As for Goldman Sachs, the broker is forecasting a 9.7% increase in full-year cash earnings to $9.49 billion. It expects the full-year, fully franked dividend to come in at $3.80 per share, which would be an increase of 8.6% year on year.

Despite that relative strength for FY22, Goldman Sachs retains its sell rating with a $90.45 target for the CBA share price.

One-off profits and losses for FY22

In a non-price sensitive release this morning, meaning it’s unlikely to have a material impact on the CBA share price, the big bank updated investors on one-off items impacting its FY22 results.

On the plus side of the ledger, in FY22 CBA sold its 10% shareholding in the Bank of Hangzhou Co to Hangzhou Urban Construction & Investment Group Co and Hangzhou Communications Investment Group Co for a $516 million pre-tax gain. That’s recognised in its cash net profit before tax (NPAT) and increased the bank’s CET1 capital ratio by 0.35%.

CommBank announced the completion of the transaction on 30 June. The CBA share price edged higher on the day.

On the negative side of the ledger were one-off expense items of $445 million (pre-tax). That’s comprised of $389 million related to the acceleration of amortisation on capitalised software, along with $56 million relating to changes in CommBank’s operating model

CBA share price snapshot

The CBA share price has enjoyed a strong rebound since the 17 June lows of $87.26 per share and is now down 1% in 2022.

That compares to a year-to-date loss of 8% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Why is the CBA share price having such a strong start to the week? appeared first on The Motley Fool Australia.

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More reading

• Own CBA shares? Here’s what to expect from the bank’s FY22 results
• Which ASX 200 shares will prove to be dividend heavyweights this earnings season?
• First mover: CBA share price rises amid interest rate changes
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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 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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ASX cannabis share Incannex Healthcare Ltd (ASX: IHL) has caught a bid last week, reversing off 52-week lows to now trade 36% higher on the month.

Just after the open on Monday, Incannex is priced at 27.5 cents – not far off its yearly low of 19 cents on 1 August.

What’s boosting this ASX cannabis share?

Last week Incannex advised it had finalised the acquisition of APIRx Pharmaceuticals after the pair signed binding terms back in March this year.

CEO and managing director of Incannex, Joel Latham, said the company was “excited” to get the ball rolling on the deal.

“After extensive due diligence and corporate strategy assessments of the APIRx assets,” he said, “we are excited and readied to commence development activities over our newly acquired portfolio of drug candidates.”

As a result of the transaction, 22 additional clinical and pre-clinical projects have been transferred onto Incannex’s books.

The company says this represents an aggregate addressable market of US$400 billion per annum.

As a result, Incannex says it now has the “world’s largest portfolio of patented medicinal cannabinoid drug formulations and psychedelic treatment protocols”.

This involves an intellectual property portfolio covering 19 granted patents and 23 pending patents, the company says.

Incannex share price snapshot

Investors rallied behind the ASX cannabis share last week. They sent it surging back into the green, bouncing off its 52-week low in the process.

The Incannex share price has now jumped more than 36% in the first week of August. This brings total losses to the year back to 56%.

The post ‘World’s largest portfolio’: Why this ASX cannabis share is up 36% in August 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.

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Death is a life event that everyone goes through, yet not often thought about or spoken about in investment circles.

But there are ASX shares that provide exposure to the largest addressable market of all.

Wilson Asset Management senior analyst Shaun Weick, in a company video, named one recently that he rates as a buy.

“Propel Funeral Partners Ltd (ASX: PFP) is the second largest funeral home operator in Australia, with about 5% market share.”

It’s not a company often talked about, and Weick was sheepish in endorsing a death stock.

“This is one with fundamentals you don’t want to like, but they really do offer a pretty attractive recovery profile.”

Share price has doubled, but more to come

The Propel Funeral share price has more than doubled since the March 2020 COVID-19 panic selling trough.

But Weick thinks the journey upward is far from over.

“As people exit lockdown, we’re seeing flu rates skyrocketing at the moment,” he said.

“We think the organic growth profile of this business is re-accelerating.”

An ace up its sleeve is that the industry has pricing power to help it endure high inflation.

“The significant cost escalation we’re seeing through inflation out there, we think these guys have an ability to pass that through.”

Weick said that Propel has a “very strong” balance sheet, ready to pounce on opportunities that may come up.

“They’ve got over $300 million in capacity they can deploy into earnings and accretive acquisitions.”

The analyst can envisage Propel Funeral to grow enough to catch up with the market leader.

“Listed peer InvoCare Limited (ASX: IVC) is at about 20% market share,” he said.

“They’ve essentially tapped out with the ACCC, so we can see a pathway for Propel to essentially quadruple its footprint over time — so this is a strong buy.”

Busted for pretending to be smaller

Professional coverage is scarce on Propel, but at least Bell Potter agrees with Weick. That team rates the stock as a strong buy, according to CMC Markets. 

Last year, two Propel Funeral subsidiaries were fined by the competition watchdog for falsely advertising that they were “local and independently owned”.

The misleading words were trying to create an impression that the businesses were part of the local community, according to ACCC deputy chair at the time Delia Rickard.

“We think that it gives them an unfair advantage when local consumers are shopping.”

The post Set to ‘quadruple footprint’: Expert names taboo ASX share to buy 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 recommended Propel Funeral Partners 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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