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As covered here and here previously, Morgans has recently named the best ASX shares to buy this month.

To wrap things up, here are three more ASX shares that make its coveted list. Here’s why the broker is bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company makes the list again this month. Morgans is bullish on Aristocrat due to the company’s consistently strong revenue growth and belief that it can continue this trend in the future. It also believes that its shares are trading at an attractive level following a period of weakness. The broker explained:

It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments. Demand for its gaming machines and digital games is resilient to economic cycles. […] The underperformance [of its shares] means, however, that ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September.

Morgans has an add rating and $43.00 price target.

BHP Group Ltd (ASX: BHP)

Investors looking for mining sector exposure might want to consider this ASX share. Morgans is a fan of the Big Australian due to its diverse operations, strong balance sheet, and resilient dividend profile. Its analysts said:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct COVID-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

The broker has an add rating and $48.50 price target on BHP’s shares.

South32 Ltd (ASX: S32)

Another mining share that could be in the buy zone according to Morgans is South32. It rates the mining giant highly due to its portfolio transformation. Morgans feels this has positioned its well for growth and boosted its ESG credentials. It explained:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

Morgans has an add rating and $6.00 price target on the company’s shares.

The post Broker names 3 of the best ASX shares to buy in August appeared first on The Motley Fool Australia.

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More reading

• Is the iron ore price entering a bear market?
• Why did the BHP share price slump 6% in July when the ASX 200 leapt higher?
• Why is the Fortescue share price sliding on Tuesday?
• These ASX dividend shares have been named as buys for income investors
• Top analysts say investors should buy these quality ASX shares

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 positions in and has recommended Bendigo and Adelaide Bank 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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There are plenty of ASX shares that have seen their prices plummet this year. 

So it’s an excellent time for buying up some bargains. 

But investors do need to be selective.

They need to think about whether a particular stock is cheap for legitimate reasons or if the sell-off has been excessive.

It is crucial to avoid the cognitive trap of anchoring. That is, thinking a stock could rise from $2 to $10 just because it previously reached a high of $10.

Shares have no memory. The current and future performance of the underlying business is all that matters. 

Fortunately for The Motley Fool readers, one expert has nominated two ASX shares to buy that he believes are cheaper than they should be.

‘Focus on increasing profitability’

With the Reserve Bank just raising interest rates four consecutive months, it’s a tough time for lenders.

But Wilsons investment advisor Peter Moran told The Bull he feels like Plenti Group Ltd (ASX: PLT) has much going for it.

“The online lender has generated solid loan growth in recent years, driven by its personal and automotive lending divisions.”

Plenti shares have halved in value so far in 2022.

Moran admitted conditions have been challenging for the business, but reckons it is adapting.

“Plenti’s level of new originations in the first quarter of fiscal year 2023 fell by 10% on the prior quarter,” he said.

“However, this reflects its focus on increasing profitability at a time of rising interest rates.”

Analyst coverage is sparse for the small cap. However, according to CMC Markets, at least Shaw and Partners agrees with Wilsons that Plenti shares are a buy at the moment.

Sell-off of this stock has been ‘overdone’

Silk Laser Australia Ltd (ASX: SLA) shareholders have also had a stressful time, watching their investment halve since October.

Moran reckons the stock price weakness doesn’t fairly reflect its prospects.

“The share price of this laser clinic operator reflects a weak outlook, but we believe it’s been overdone,” he said.

“Although consumer spending is likely to fall in response to higher interest rates, we expect personal service providers, such as Silk, to benefit as consumers focus on what’s most important to them.”

Will customers of the cosmetic services provider stay loyal through an economic downturn?

At least a couple of Moran’s peers agree that they will. Two analysts surveyed on CMC Markets rate the stock as a buy.

Silk Laser’s last update in April pleased investors, pushing the stock 12% higher that morning. It will report its full-year results on 24 August.

The post 2 ASX shares to buy that have halved this year appeared first on The Motley Fool Australia.

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More reading

• Broker names 3 of the best ASX shares to buy in August
• Why Citi just became even more bullish on the CSL share price
• Buy this ASX tech share with 170% upside: expert
• Experts name 2 quality ASX dividend shares to buy with 5%+ yields
• ‘Forgotten gem’: 2 mid-cap ASX shares this fundie loves

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 recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia 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 CSL Limited (ASX: CSL) share price could be great value at current levels.

That’s the view of one leading broker, which has become even more bullish on the biotherapeutics giant’s shares this week.

What is the broker saying about the CSL share price?

According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on the company’s shares to $345.

Based on the current CSL share price of $296.85, this implies potential upside of 16% for investors over the next 12 months.

Why is Citi bullish?

Citi has become even more bullish on CSL following the release of results from industry rivals Grifols and Takeda. Its analysts note that these results are pointing to major improvements in trading conditions for the plasma market.

In fact, everything appears to be falling into place with demand and pricing strengthening and donor costs softening. It is partly for this reason that CSL is the broker’s top ANZ healthcare pick.

Citi explained:

Results from Grifols (June HY) and Takeda (June Q) show continued improvement overall in the operating environment for the plasma industry – this is as we anticipated and supportive of our CSL forecasts. The key points from the results were: 1) Demand is very strong, and prices are up mid-single digit, showcasing the pricing power of plasma companies; 2) Plasma collections are now well above pre-covid levels; 3) Plasma donor fees are coming down, helping margins.

CSL is our top pick – Australia/NZ Healthcare.

Outside this, the broker expects “the settlement of the Vifor deal, and a positive outlook on plasma collection at the FY22 result will continue to see the share price outperform over the next 12 months.”

All in all, Citi appears to believe that this could make now an opportune time to snap up CSL shares before it is too late.

The post Why Citi just became even more bullish on the CSL share price appeared first on The Motley Fool Australia.

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More reading

• What’s going on with the CSL share price on Tuesday?
• 5 things to do during ASX results season
• Leading brokers name 3 ASX shares to buy today
• Brokers name 3 ASX shares to buy today
• Are growth shares back?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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Regular readers would be well aware that ASX technology shares have suffered greatly this year.

The S&P/ASX All Technology Index (ASX: XTX) has plunged 28% year-to-date, but the smaller companies have seen their valuations shrink even more.

One such business is human resources and payroll software provider Elmo Software Ltd (ASX: ELO).

The stock has lost almost 40% so far this year, and it has halved in value if you go back to November.

In fact, it has never been able to touch its pre-COVID high.

“Software service provider Elmo Software is a $244 million software service provider whose numbers look to be improving,” said Shaw and Partners portfolio manager James Gerrish in a Market Matters Q&A.

“But the market’s clearly not convinced as the stock [is] struggling to regain half of this year’s losses, let [alone] the drop since early 2020.”

Investment phase over, break-even coming soon

Gerrish is right in that Elmo’s finances are on the way up.

Just last week, the software company provided an update that saw revenue up 30% for the 2022 financial year and positive guidance for 2023.

And importantly during this climate of rising interest rates, Elmo management declared it would reach break-even for its operational cash flow during the current financial year.

“The investment phase has been materially completed and the existing cost base will be leveraged through FY23,” said chief executive Danny Lessem.

“We are now experiencing the benefits of scale as a result of the many years of growth and investment into the product and team.”

The stock price did enjoy a nice burst upwards of 17% that morning.

Going for cheap compared to rivals

However, in the current volatile climate, it’s difficult working out how much further the market would punish growth and tech stocks.

“As we’ve seen over the last week with the buy now, pay later space, when these out[-of-]favour stocks bounce it can be hard and sharp,” said Gerrish.

“But picking exactly how far they will ultimately fall is more guesswork than science — but it does look like ELO is looking for a low.”

His analyst Jules Cooper reiterated the buy recommendation from the Market Matters team. He put a price target of around $7.60, which is a juicy 171% gain from the current level.

“Elmo continues to represent good value trading on an FY22 EV/revenue multiple of 2.8x vs US peers such as Paycom Software Inc (NYSE: PAYC) and Paycor HCM Inc (NASDAQ: PYCR) trading on multiples of 14.6x (Dec 2022) and 10.1x (Jun 2022) respectively.”

Cooper’s peers broadly agree. Five out of six analysts surveyed on CMC Markets currently rate the stock as a buy.

The post Buy this ASX tech share with 170% upside: expert appeared first on The Motley Fool Australia.

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More reading

• Elmo share price soars on 30% revenue boost and optimistic FY23 guidance

Motley Fool contributor Tony Yoo has positions in Elmo Software. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Elmo Software. The Motley Fool Australia has positions in and has recommended Elmo Software. 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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Are you looking for dividends shares to buy to boost your income portfolio?

If you are, you may want to check out the two listed below that have been rated as buys.

Here’s what you need to know about these ASX dividend shares:

Centuria Industrial REIT (ASX: CIP)

Centuria Industrial could be a dividend share to buy.

It is a property company with a focus on the booming industrial property market. This is an area in strong demand from end users due to structural drivers. It is for this reason that Centuria Industrial has been on form again in FY 2022, delivering 10% rental growth and an occupancy rate of almost 100%. 

Ord Minnett has been pleased with its performance and is positive on its outlook. As a result, it recently put a buy rating and $3.80 price target on its shares.

As for dividends, the broker is forecasting a 17 cents per share distribution in FY 2022 and a 16 cents per share distribution in FY 2023. Based on the current Centuria Industrial share price of $2.99, this will mean yields of 5.7% and 5.35%, respectively

HomeCo Daily Needs REIT (ASX: HDN)

HomeCo Daily Needs REIT could be another ASX dividend share to buy.

It is also a property company but with a focus on neighbourhood retail, health and services, and large format retail.

The team at Goldman Sachs are very positive on the company. The broker believes the company is well positioned to benefit from the structural shift to omni-channel retailing and sees medium-term growth opportunities from development and asset optimisation.

It is for this reason that Goldman currently has a buy rating and $1.65 price target on its shares.

In addition, the broker sees some big dividend yields on the horizon. Goldman is forecasting dividends per share of 8 cents in FY 2022 and 9 cents in FY 2023. Based on the current HomeCo Daily Needs share price of $1.36, this will mean dividend yields of 5.9% and 6.6%, respectively.

The post Experts name 2 quality ASX dividend shares to buy with 5%+ yields appeared first on The Motley Fool Australia.

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More reading

• Experts rate these high yield ASX dividend shares as buys
• Brokers name 2 excellent ASX dividend shares to buy now
• Why I think these 2 ASX dividend shares are ideal for income investors
• Here are 2 ASX dividend shares that brokers rate as buys
• Analysts name 2 ASX dividend shares to buy with 5%+ yields

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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In volatile times such as 2022, cash flow is king.

Rising interest rates means borrowing money becomes more expensive. So, naturally, if you can generate capital from within the business, it makes for a smoother path ahead.

Spheria Opportunities Fund portfolio manager Marcus Burns told a conference recently that his fund seeks mid- and small-cap ASX shares that precisely fit this bill.

“We do believe balance sheets are really important.”

The era of near-zero interest rates encouraged a grow-at-all-costs mentality that produced many false idols.

“For a period of time no one really cared about debt because it was so cheap,” he said.

“And all the pundits tell [businesses] to invest heavily, gear up the business… That’s great in theory until you have to raise money, because [now] debt’s risen in terms of cost.”

As examples, Burns presented two of his fund’s holdings that he has high hopes for.

Usually expensive market leader selling for cheap right now

Online real estate classifieds site provider REA Group Limited (ASX: REA) is one that Burns admitted he’s bought and sold in the past, and has recently rebought.

The portfolio manager pointed out REA’s “very good history” of cash flow management.

“Something like 96% cash flow conversion, which is extremely strong,” he said.

“Everyone knows the business is a market leader. The only negative about the stock is that it does get expensive occasionally.”

The share price has cooled off 27% year-to-date.

“We’ve added it back into the portfolio at a decent weight.”

Burns is not the only fan of REA shares.

“Combined with its strong pricing power and new acquisitions and revenue streams, the company has been tipped to continue growing at a solid rate for many years to come by the team at Goldman Sachs,” reported The Motley Fool’s James Mickleboro last week.

“In light of this, the broker currently has a buy rating and $164.00 price target on REA’s shares.”

That’s an upside in excess of 30% from the current level.

REA Group is due to report its preliminary numbers on Friday.

Showed tremendous resilience through the pandemic

Burns’ team bought into jewellery retailer Michael Hill International Ltd (ASX: MHJ) after a change in management.

“CEO Daniel Bracken came across about two years ago and he’s executed an incredible internal turnaround,” said Burns.

“Loyalty programs, putting much more online, got rid of high-low pricing… which has given a big fillip to the revenue growth.”

And of course, Michael Hill’s cash flow has been exceptional in recent times.

“Their cash flow conversion is very strong, particularly in [financial year] 2021 when massive amounts of free cash were generated by the management team, despite the fact that 23 or 24 of the trading days were closed,” said Burns.

“So they weren’t a COVID beneficiary at all… so it traded very well during that period.”

The Michael Hill share price has dropped about 28% so far this year, but Burns feels like “the forgotten gem” is well set for future growth.

“Balance sheet’s net cash of to the tune of almost $100 million, trades at about 4 times EBIT,” said Burns.

“So even though we’re going through a potential consumer downturn, and people are worried about spending, [the shares are] still trading on extremely low levels despite the fact that [the business is] trading very strongly.”

Michael Hill is scheduled to report its preliminary numbers on 22 August.

The post ‘Forgotten gem’: 2 mid-cap ASX shares this fundie loves appeared first on The Motley Fool Australia.

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More reading

• 2 blue chip ASX 200 shares analysts rate as buys
• Why I think the REA share price is a bargain buy right now
• Here are the top 10 ASX shares today
• 3 blue chip ASX 200 shares experts say are buys
• Why cheap hamburgers could give beginner ASX share investors food for thought

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 REA Group 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) fought back from a tough start to record the smallest of gains. The benchmark index rose 5.1 points to 6,998.1 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to have a subdued day on Wednesday following a poor night of trade in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower this morning. In late trade on Wall Street, the Dow Jones is down 1.1%, the S&P 500 has dropped 0.5% and the NASDAQ is trading a fraction lower.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a better day after oil prices rebounded overnight. According to Bloomberg, the WTI crude oil price is up 0.35% to US$94.22 a barrel and the Brent crude oil price has risen 0.2% to US$101.26 a barrel. This was driven by supply concerns ahead of the OPEC meeting.

Virgin Money UK Q3 update

The Virgin Money UK (ASX: VUK) share price could have a decent day. The UK based bank’s shares pushed higher on the LSE overnight after investors responded positively to its third quarter update. That update revealed that its net interest margin improved to 187 basis points. This reflects higher rates, deposit spreads, and higher yielding lending mix, which were offset by ongoing mortgage spread pressure.

Gold price drops

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the slide today after the gold price traded lower overnight. According to CNBC, the spot gold price is down 0.45% to US$1,779 an ounce. The precious metal dropped despite increasing recession fears.

Pinnacle results

The Pinnacle Investment Management Group Ltd (ASX: PNI) share price will be on watch today when the investment company releases its full-year results. According to a note out of Morgans, its analysts are expecting the company to deliver FY 2022 net profit after tax of $75.3 million, up 12.3% on the prior corresponding period.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Here’s why the next bull market may have already begun
• 3 ASX 200 shares rocking new, multi-year highs on Tuesday
• Here are the top 10 ASX 200 shares today
• Why is the Santos share price lagging the ASX 200 on Tuesday?
• ASX 200 jumps higher as RBA lifts interest rates by another 0.50%

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 PINNACLE FPO. The Motley Fool Australia has positions in and has recommended PINNACLE 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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If you’re looking for an easy way to build a diverse portfolio, then exchange traded funds (ETFs) could be the answer.

That’s because ETFs allow investors to invest in a large number of shares through just a single investment, providing instant diversification in some cases.

With that in mind, listed below are three ETFs that could be good options for investors. Here’s what you need to know about them:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF to look at is the BetaShares Global Energy Companies ETF. This ETF provides investors with access to the leading players in the energy sector. And given how energy prices are very strong right now, it could be a great place to have some investment exposure. This ETF includes the likes of BP, Chevron, ExxonMobil, and Royal Dutch Shell. The former has just released its quarterly update and revealed a profit of US$8.45 billion. This was BP’s second largest quarterly profit in its history and followed a record profit from Shell last week.

iShares S&P 500 ETF (ASX: IVV)

Another ETF for investors to consider this month is the iShares S&P 500 ETF. This popular ETF could be a great way to diversify a portfolio because it gives investors access to a massive 500 of the top listed U.S. companies. In addition, iShares notes that the fund offers long-term growth opportunities for a portfolio. This is thanks to the inclusion of high quality companies such as Amazon, Apple, Disney, Facebook, JP Morgan, Johnson & Johnson, Microsoft, Tesla, and Visa.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

A final ETF for investors to look at is the Vanguard MSCI Index International Shares ETF. When it comes to diversification, this ETF has it in spates. That’s because the Vanguard MSCI Index International Shares ETF allows investors to invest in approximately ~1,500 of the world’s largest listed companies. This means you’ll be owning many of the world’s biggest and brightest companies such as Amazon, Apple, AstraZeneca, Johnson & Johnson, JP Morgan, Nestle, Procter & Gamble, Roche, and Visa.

The post 3 wonderful ETFs for ASX investors to buy today appeared first on The Motley Fool Australia.

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More reading

• Is the Vanguard VGS ETF a good idea for dividends?
• 3 quality ETFs for ASX investors in July
• 3 popular ASX ETFs for investors to buy
• Is VGS the best international shares ETF on the ASX?
• 3 highly rated ETFs for ASX investors to buy now

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 BetaShares Global Energy Companies ETF – Currency Hedged and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF and iShares Trust – iShares Core S&P 500 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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NIB Holdings Limited (ASX: NHF) shares have fallen slightly over the past month, but what are their future prospects?

The NIB share price has slipped 0.41% in the last month, closing at $7.33 on Tuesday. That was 2.37% higher on the day.

So let’s check what could be ahead for shares in the healthcare insurer.

What’s ahead for private insurance

UBS has recently highlighted how more Australians see the benefit of private health insurance despite the “ongoing increase in out-of-pocket expenses”.

However, UBS analyst Scott Russell is predicting customers will pay more attention to monthly premiums “under tighter household budgets”. In a note cited by The Australian, analyst Scott Russell said:

Switching is inevitable and we note the typical profile is younger, less than 35, and in lower/middle income bands; many of these are customers of nib and ahm – lower value for money – and appear to be eyeing Medibank, Bupa and HBF brands.

But despite the risk of Australians changing health insurers, Russell still sees upside in the NIB share price. He has lifted the company’s price target from $7.10 to $7.70. That’s 8% more than the current share price.

Russell predicts NIB’s earnings per share (EPS) could jump by 11 to 22% in FY23, claiming the company “enjoys similar tailwinds” to Medibank Private Ltd (ASX: MPL), The Australian reported.

The analyst has also upgraded Medibank Private to a buy rating with a $3.90 price target. That’s 11% more than the company’s current share price of $3.50.

NIB will report its full-year results on 22 August.

Share price snapshot

NIB shares have climbed 2% in the past year and are up nearly 5% year to date.

For perspective, the  S&P/ASX 200 Financials Index (ASX: XFJ) has lost 2.6% so far in 2022.

NIB has a market capitalisation of about $3.4 billion based on the current share price.

The post What could a tighter household budget mean for NIB shares? appeared first on The Motley Fool Australia.

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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 NIB 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 Bapcor Ltd (ASX: BAP) share price outperformed the S&P/ASX 200 Index (ASX: XJO) on Tuesday. At the end of the day, Bapcor shares finished at $6.71 each, 1.36% higher.  

Bapcor outperformed the S&P/ASX 200 Index (ASX: XJO) by 1.29% today.

Bapcor is a car parts, accessories, and services provider operating the Autobarn, Autopro, and Burson chains across Australia, New Zealand, and Thailand.

New CEO locked in but is it the right decision?

Since the acrimonious departure of the former CEO and Managing Director Darryl Abotomey in December 2021, the Bapcor share price has fallen by 3%. 

Bapcor’s then CFO Noel Meehan was appointed as Acting CEO. Today, Bapcor announced the appointment of Meehan as CEO and managing director effective from 1 September 2022.

Bapcor chair, Margaret Haseltine said in today’s release:

The Board has observed Noel in the role of CEO since 8 February 2022 and during this, he has secured the engagement of new key executives and has shown strong leadership by establishing a clear vision and strategic direction for Bapcor.

Appointing an internal candidate can foster confidence across the management team and potentially offers a smooth transition given Meehan’s prior experience. However, Meehan only came onboard as CFO in July 2020 and does not appear to possess industry experience based on his profile on the company website. 

I think it’s prudent to monitor Meehan’s execution of the strategic objectives, which centre around growing the network, capitalising on operational efficiencies, expanding the product range, and penetrating the Asia market as outlined in the HY22 results announcement.

Furthermore, the Bapcor FY21 annual report shows Meehan only held a small parcel of Bapcor shares in the company. Further details of Meehan’s remuneration package will hopefully shed light on the strength of alignment with shareholders. 

Could the reshuffle present an investment opportunity?

Meehan’s formal appointment as CEO coincides with the retirement of Therese Ryan as an independent non-executive director effective from 30 September 2022. 

Ryan has been a director since 2014, so her departure could be viewed by some as leaving an experience gap on the board. For reference, the Bapcor share price has increased around 246% since 2014.

Bapcor is undergoing an unusual level of personnel turnover at the higher ranks. This could provide investment opportunities as the market may view such events in a negative light. However, new management and directors could provide a much-needed breath of fresh air and direction. 

One way to evaluate whether Bapcor has the right leaders to steer the ship is to closely monitor key milestones against what management has promised. 

So, make sure to keep your eyes peeled for Motley Fool’s coverage of Bapcor’s financial year-end results. 

The post Why did the Bapcor share price outpace the ASX 200 on Tuesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Raymond Jang has no position in any of the stocks mentioned. 

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