Tag: Motley Fool

If you’re a fan of growth shares, then you might want to look closely at the three shares listed below.

Here’s why these could be growth shares to buy:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is leading appliance manufacturer Breville. Thanks to acquisitions and its ongoing investment in product development, the company’s portfolio has been resonating well with consumers for many years. Together with its international expansion, this has underpinned solid sales and earnings growth over the last decade. Pleasingly, the team at Morgans expect this positive trend to continue. They are forecasting double-digit sales growth over the next few years.

Morgans currently has an add rating and $25.00 price target on its shares.

Megaport Ltd (ASX: MP1)

Another ASX growth share that could be a buy is Megaport. It is a leading cloud connectivity and networking solutions provider with operations across a large number of data centres globally. Goldman Sachs is tipping Megaport to grow rapidly in the coming years thanks to its first mover advantage in an industry benefiting from the long-term structural tailwinds of public cloud adoption (and multi-cloud usage) and the transition towards Networking as a Service (NaaS). The broker estimates that these tailwinds currently provide it with a $129 billion per annum opportunity across its current geographies.

Goldman has a buy rating and $9.60 price target on its shares. Elsewhere, it is worth highlighting that UBS has a buy rating and significantly higher price target of $17.60.

ResMed Inc. (ASX: RMD)

A final growth share to look at is ResMed. It is a sleep treatment focused medical device company which has been tipped to continue its strong growth long into the future. This is expected to be underpinned by ResMed’s world class products, significant and growing market opportunity, and its increasingly important digital platform. The latter has seen ResMed develop a patient-centric, connected-care digital platform which the team at Morgans notes is addressing the main pinch points across the healthcare value chain.

Morgans is very positive on the company’s future and has an add rating and $37.95 price target on its shares.

The post Here are 3 stellar ASX growth shares analysts are tipping as buys appeared first on The Motley Fool Australia.

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More reading

• These were the best performing ASX 200 shares in July
• Here are the top 10 ASX 200 shares today
• ASX 200 midday update: Rio Tinto drops, tech shares jump, Macquarie impresses
• Up 50% this month, is it too late to buy Megaport shares?
• 2 outstanding ASX growth shares brokers rate as buys

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 MEGAPORT FPO and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended MEGAPORT 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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Pilbara Minerals Ltd (ASX: PLS) outlined its strategy to profit from the entire lithium supply chain in an on-site presentation at its 100%-owned Pilgangoora Project in Western Australia on Friday.

In its presentation, Pilbara Minerals said it was “positioning to capture value throughout the entire lithium raw material and chemical supply chain”.

The company has a strategic plan to become a “fully integrated battery grade lithium hydroxide producer”.

Tesla Inc (NASDAQ: TSLA) CEO and electric vehicles pioneer Elon Musk recently described lithium processing as “a licence to print money” with “software margins”.

At market close, the Pilbara Minerals share price finished up 1.47% to $2.77 today.

What’s the plan?

Pilbara Minerals told investors today that it saw three components to the lithium supply chain.

The upstream component refers to the spodumene concentrate Pilbara already extracts from the ground. The current process is “carbon intensive”, with only 5% to 6% lithium oxide in the raw course material dug out of the dirt. More than 90% of the export mass shipped to customers contains aluminosilicates.

The proposed midstream component would reduce the carbon intensity and completely remove the aluminosilicates. The refining process would create lithium salts with 35%-plus lithium oxide. The aluminosilicates would remain on-site at the mine.

The proposed downstream component involves further refining to create lithium fine chemicals.

Developments send share price higher

Investors appear to be excited about Pilbara Minerals plans for expansion along the full lithium supply chain.

In the June quarter, Pilbara signed a binding memorandum of understanding with Australian technology company Calix Ltd (ASX: CXL) for a joint venture relating to the midstream process.

The JV involves the development of a demonstration plant and potential future commercialisation of Calix refining technology at Pilgangoora.

The Federal Government awarded a $20 million Modern Manufacturing Initiative Grant to help fund the project. Investors gave the Pilbara Minerals share price a 5% boost on the day of the announcement.

Pilbara Minerals is working on the downstream component through a joint venture with South Korean company POSCO.

In the June quarter, detailed engineering, procurement, site preparation and road works began on constructing a 43,000tpa LHM primary lithium hydroxide chemical processing facility in Gwangyang.

Investors reacted positively to the JV announcement on 26 October 2021. They sent Pilbara Minerals shares 8% northwards on the day.

In addition, the Pilbara Minerals share price surged 6% yesterday. This was on the back of a 50% boost to production, as outlined in the company’s June quarterly activities report.

Pilbara Minerals share price snapshot

Pilbara Minerals is a leading ASX lithium share whose share price has exploded 736% over two years.

Its Pilgangoora operation is the world’s largest independent hard-rock lithium mine. Two processing plants on-site — Pilgan and Ngungaju — produce spodumene and tantalite concentrate.

The post Is the Pilbara Minerals value-add lithium strategy worth its salt? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Pilbara Minerals share price lifts amid 50% quarterly production boost
• Here are the 3 most traded ASX 200 shares on Thursday
• Broker gives its verdict on the Pilbara Minerals share price
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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

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If you’re wanting to boost your income with some dividend shares, then you might want to consider the two listed below that have been named as buys by Goldman Sachs.

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

Elders Ltd (ASX: ELD)

The first ASX dividend share that Goldman Sachs is bullish on is Elders. It is an agribusiness company that provides a range of services to rural and regional customers across the Australia/New Zealand region.

After going through a difficult period, Elders has bounced back strongly and delivered solid earnings growth in the last couple of years. This has continue in FY 2022, with the company reporting an 80% increase in first-half EBIT to $132.8 million.

In response to this, Goldman Sachs put a buy rating and $21.00 price target on its shares. It also likes Elders due to its “strong track record; good industry structure; potential for positive earnings surprise; and an attractive valuation.”

As for dividends, Goldman is forecasting dividends per share of 50 cents in FY 2022 and 53 cents in FY 2023. Based on the current Elders share price of $11.28, this implies attractive yields of 4.4% and 4.7%, respectively.

Woolworths Group Ltd (ASX: WOW)

Another ASX dividend share that Goldman rates highly is Woolworths. It is of course the retail giant behind the eponymous supermarket chain. In addition, it owns Big W, Countdown, and the Everyday Rewards loyalty program.

Combined, the broker believes that Woolworths is well-placed for solid sales and profit growth through to FY 2024. It recently commented:

We forecast [a sales] CAGR of 6.6% and underlying NPAT of 14.1% over FY22-24e, with key driver being market share gain of AU Foods business at comp sales growth of FY23/24 8.8% and 6.6% respectively driven by effective cost-price pass through and additional mix improvement with relatively stable volume growth.

In respect to dividends, Goldman Sachs is forecasting fully franked dividends per share of 96 cents in FY 2022 and $1.18 in FY 2023. Based on the current Woolworths share price of $37.52, this will mean yields of 2.6% and 3.2%, respectively.

Goldman has a buy rating and $40.50 price target on its shares.

The post Broker names 2 ASX dividend shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• These were the worst performing ASX 200 shares in July
• Own Woolworths shares? Here’s what a top broker is saying about its latest acquisition
• Why the Woolworths share price will be on watch today
• Top brokers name 3 ASX shares to buy next week
• Analysts rate these ASX 200 blue chip shares as buys

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 recommended Elders 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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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.

Have you noticed that Apple‘s (NASDAQ: AAPL) stock is almost always priced somewhere between $100 and $500, and yet the company has consistently delivered tremendous returns for its shareholders over the years?

Why isn’t the stock price higher?

This is because Apple has repeatedly split its stock whenever the price ran up beyond a certain price. In a stock split, a company divides existing shares in order to lower the price per share. Imagine a pizza that has been cut into six slices. If you were to cut each slice in half to make 12 slices, the pizza itself wouldn’t get any bigger; you’d just have two smaller slices for each original slice. 

That’s how stock splits work.

The main reason a company would want to split its stock is to make the share price more affordable to everyday investors and, in turn, boost liquidity.  

But since we know the stock split itself doesn’t change the size of the pizza (i.e., the market capitalization of the company), should you consider buying companies after a recent split? 

Here are two reasons to buy stocks after a split and one reason not to.

1. You liked the company before the split was announced

The main reason to consider buying a stock after a split is announced is because you already liked the company prior to the split. A stock split is not an investment thesis.

It could, however, be perceived as an indication of a strong company since businesses don’t typically split their stock when the share price has been crashing.

But overall, the stock split itself should not be the motivation for the purchase because it doesn’t impact the intrinsic value of the company.

For example, if you’re considering buying Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) after its recent 20-for-1 stock split, the reasoning should be that the company has a nearly impenetrable moat due to its strong network effects and dominant brand recognition, or something similar.

You shouldn’t buy the stock because you believe the split will somehow make the company stronger in any material way.

There is data to suggest splits can move the stock price upward over the short term, but for long-term investors, this shouldn’t be viewed as a reason for buying.

2. You’ve done your research

The main issue with using stock splits as a catalyst for buying is it may lead you to buy a stock you’ve done little to no research on.

Stock research ought to be the foundation of your conviction, so if you’re considering buying a stock after a split announcement, be sure you’ve done your homework.

For example, investors may be tempted to buy GameStop (NYSE: GME) after its recent 4-for-1 split. But if you’re basing your purchase on the split alone, you’d be buying a wildly unprofitable company that has seen its stock completely disconnect from the underlying business due to its reputation as a meme stock.

In simpler terms, if you’re buying GameStop because of the recent stock split, you’d be buying an extremely risky asset that appears to be moving mostly on speculation rather than business execution.

The dividing up of shares does not magically improve the prospects of the business, so if you’re buying a stock split, make sure you’ve done adequate research, which has led you to believe the company is a quality business trading at a reasonable price.

Don’t buy the stock thinking the split will add long-term value

Let’s all say this together: Stock splits have zero impact on the underlying business.

Splits neither improve nor deteriorate the long-term potential returns of stocks. They might drive a short-term movement in the price, but they do not have any material influence over the long term.

Therefore, you should never buy a stock solely because the company announced a split. If you’re considering buying a stock before or after a split, make sure you’ve done your research and developed a solid thesis for why you believe the business will outperform. 

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

The post 2 reasons to buy stock splits (and 1 reason not to) appeared first on The Motley Fool Australia.

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More reading

• Is it safer to pull your money out of the stock market or keep investing for now?
• Here are 2 ASX ETFs I would buy for 2022 and beyond
• Why this ASX 200 giant ‘looks attractive’ right now: expert
• These were the best performing ASX 200 shares in July
• ‘Raises a whole lot of issues’: Which ASX 200 banks are still funding new fossil fuel projects?

Mark Blank has no position in any of the stocks mentioned. Suzanne Frey, an executive at Alphabet, 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 Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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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.

If you’re uneasy about the stock market’s foreseeable future, you’re not alone. The rebound effort that’s been underway since mid-June has been tentative at best. And this week’s warning from Walmart about its second-quarter earnings, in addition to IBM‘s currency-prompted caution, could further rattle already-wobbly stocks. It’s an inauspicious start to earnings season.

But before bailing out of stocks in an effort to steer clear of any renewed bearishness, wait. As much downside risk as there seems to be ahead, there’s at least as much risk of missing out on important upside.

The little things add up

After tumbling a total of 24% between January’s high and last month’s low, the S&P 500 Index (SP: .INX)’s 7% rebound in the meantime feels like a gift: a chance to get out with smaller losses than most of us were nursing just a few weeks back. The chance of more downside feels palpable, too, particularly given that summer is usually a slow, bearish time of year for stocks. Rekindled worries of a full-blown recession only bolster the bearish case.

There’s a funny quirk you need to understand about the stock market, though: It’s not always backward-looking. Sometimes it’s forward-thinking, pricing in renewed economic growth that isn’t always easy to see, or perhaps hasn’t even materialized yet. And more than that, some of the biggest forward-thinking gains take shape when you least expect them to. The effort to steer clear of the market’s setbacks can often leave you out of those moves.

Mutual fund company Hartford dug through mountains of data to find some eye-opening truths about the stock market’s biggest daily gains. Over the past couple of decades, about half of them took shape in the midst of bear markets.

That doesn’t necessarily prevent you from suffering setbacks in the days immediately before and after those big winners. Given that nobody sees these rallies coming, though, it does show that trying to sidestep downside could end up costing you — particularly if you’re hopping in and out of stocks while on the way down.

And the cost can be higher than you might ever expect.

Numbers crunched by stock speculator Peter Tuchman — a trader on the floor of the NYSE who is one of its most-photographed participants — indicate that between 2000 and 2019, missing the market’s 10 biggest daily gains would have cut your annual returns by about half relative to simply remaining invested during that stretch. Missing out on the best 20 days would wind your returns back to almost nil.

There’s an upside to steering clear of the stock market’s worst daily performance, of course. Just avoiding the 20 worst days during that 20-year stretch would have more than doubled your returns from simply buying and holding. Again though, if you want to capture all of that upside while also avoiding the market’s major downside moves, your timing has to be perfect. And nobody’s is.

Research done by brokerage firm Edward Jones will help you use a stick-with-it, leave-it-alone approach. The company has found that of the past five transitions from a bear market to a bull market, the S&P 500 rallied an average of 25% in the first three months following the day the pivot, or bottom, was reached.

The moral of the story? Just stand pat, take your occasional lumps, and trust that in time your patience will pay off. If your market timing isn’t absolutely perfect all the time, the odds are still stacked dramatically against you.

The real danger is in missing out

In answer to the headline’s question, it’s safer to keep investing right now than it is to pull your money out of the stock market — but not for the reason you might think. Sticking with stocks is the safer play at this time because the real danger is missing out on gains nobody sees coming.

Have confidence that time (and not even that much time) will take care of your bottom line, even in the current environment where it feels like the misery might never end. Eventually, it always does.

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

The post Is it safer to pull your money out of the stock market or keep investing for now? appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX ETFs I would buy for 2022 and beyond
• Why this ASX 200 giant ‘looks attractive’ right now: expert
• These were the best performing ASX 200 shares in July
• ‘Raises a whole lot of issues’: Which ASX 200 banks are still funding new fossil fuel projects?
• These were the worst performing ASX 200 shares in July

James Brumley 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 Walmart Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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With all of the volatility that ASX shares have experienced in recent months, it can be a bit off-putting choosing investments these days. That’s why taking a look at exchange-traded funds (ETFs) to add to one’s portfolio might be a good idea. ETFs are an easy way of investing in a whole basket of shares rather than just one individual company.

As such, they can be a useful way to gain exposure to specific markets or trends that might be more difficult to individually select shares in.

So here are two ASX ETFs that I think would be a worthy addition to any long-term ASX investor’s portfolio right now.

2 ASX ETFs that I would buy for 2022 and beyond

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This ETF from provider VanEck is a relatively new one, having only started ASX life back in 2020. ESPO has struggled for most of its ASX life.

It remains down by an average of 6.71% per annum since its inception in September 2020, including by a painful 20% over the past 12 months. But I think it is very doubtful that the gaming and esports markets are going to stop growing anytime soon, given the popularity these pursuits have with younger generations.

Further, many of the companies that this ETF holds are of top-tier quality. They include names like NVIDIA, Activision Blizzard, Tencent Holdings and Nintendo. As such, I think this ETF would be a compelling choice for any investor with patience and a long-term horizon today.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Our second ETF to check out today is far broader.

NDQ is an index fund that covers the largest 100 companies on the US’s NASDAQ stock exchange. The NASDAQ typically houses the US’s newer, tech-focused shares.

As such, you’ll find most of the dominant tech titans like Apple, Amazon.com and Alphabet here, as well as other well-known household names like Adobe, Netflix and PayPay.

The BetaShares NASDAQ 100 ETF has a long history of delivering impressive performance figures. As of 30 June, it has averaged an annual return of 18.22% per annum over the past five years. That’s despite NDQ losing a painful 25.4% of its value over the first six months of 2022.

As such, this ETF could be another compelling buying opportunity today for an investor with a long-term horizon.

The post Here are 2 ASX ETFs I would buy for 2022 and beyond appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ETFs for ASX investors in August
• Is the NDQ ETF a no-brainer buy right now?
• 3 quality ETFs for ASX investors in July
• 3 high quality ETFs for ASX investors to buy today
• Why I think these 2 ASX shares are steals

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Adobe Inc., Alphabet (A shares), Amazon, Apple, PayPal, Netflix and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Activision Blizzard, Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Netflix, Nvidia, and PayPal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Activision Blizzard, Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Nvidia, PayPal Holdings, and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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As the prospect of an economic downturn sends chills through share markets, it’s worth thinking about what goods and services are essential to Australians.

After all, when consumers have less to spend, discretionary items are the first to be cut. If a service or product is important enough, then the customer will do their best to set aside some cash for it. 

For Wilsons head of investment strategy David Cassidy, access to the internet has now become a utility.

This is why he likes the look of Telstra Corporation Ltd (ASX: TLS) shares at the moment.

“In the modern world, digital connectivity is all but essential,” Cassidy said in a memo to clients.

“This helps support consistent user demand for mobile and fixed network plans from leading telcos such as Telstra through the cycle, while the company’s owned infrastructure (eg fibre, ducts, mobile towers) provides annuity-like cash flows that are even more predictable.”

Unlocking valuable infrastructure

In recent times investors have shown tremendous interest in infrastructure assets. 

Telstra is trying to take advantage of this by separating out its infrastructure side from the consumer-facing business, according to Cassidy.

“This will position the company to realise shareholder value that has been hidden in the previous amalgamated structure, given the strong institutional investor demand for strategic infrastructure assets, which typically command substantially higher earnings multiples as pure play investments.”

The S&P/ASX 200 Index (ASX: XJO) telco has already sold off its mobile towers for $2.8 billion, which was the equivalent of an enterprise-value-to-EBITDA multiple of 28.

“[That’s] a substantial premium to Telstra’s current trading multiple of ~7.9x,” said Cassidy.

“Around 50% of the net proceeds of the deal were returned directly to shareholders.”

The “next logical candidate” for spinning off is InfraCo Fixed, which generates more than six times the earnings of the mobile towers.

“We believe the capital raised by future asset divestments will help to underwrite Telstra’s ordinary dividend payments while delivering incremental value to shareholders by funding large capital management initiatives like special dividends and share buybacks.”

Telstra shares are cheap right now

The Wilsons team prefers to analyse Telstra’s valuation using cash earnings over statutory earnings.

Cassidy explained this is “because the company’s CAPEX is expected to be structurally lower than its depreciation and amortisation over the medium-term, given historically higher CAPEX and the mix of asset lives”. 

“Therefore, cash flow provides the best measure of Telstra’s underlying performance and is likely to remain ahead of accounting earnings.”

Using this metric, Telstra shares are trading on a 12-month forward enterprise-value-to-EBITDA ratio of 7.9 and a price-to-equity-free-cash-flow multiple of 16.4.

“This looks attractive relative to other ASX defensives, and given the expected recovery in the company’s earnings and the significant intrinsic value embedded within its infrastructure assets that is likely to be unlocked over the medium term.”

Telstra shares have lost more than 7% year-to-date and currently pay out a 2.8% dividend yield.

The post Why this ASX 200 giant ‘looks attractive’ right now: expert appeared first on The Motley Fool Australia.

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More reading

• These were the best performing ASX 200 shares in July
• These were the worst performing ASX 200 shares in July
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Santos share price beating the ASX 200 on Friday?

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 positions in and has recommended Telstra Corporation 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 S&P/ASX 200 Index (ASX: XJO) was back on form at last in July. During the month, the benchmark index rose 5.7% to end at 6,945.2 points.

While a good number of shares rose with the market, some climbed more than most. Here’s why these were the best performing ASX 200 shares in July:

Zip Co Ltd (ASX: ZIP)

The Zip share price was the best performer on the ASX 200 last month with a massive 159% gain. Investors were buying this buy now pay later provider’s shares after it scrapped its merger with rival Sezzle Ltd (ASX: SZL). Management believes that it will help the company become profitable sooner. This went down well with investors who were scrambling to buy its beaten down shares. Though, it is worth noting that the Zip share price is still down 83% over the last 12 months even after this gain.

Megaport Ltd (ASX: MP1)

The Megaport share price was some way behind as the next best performer despite recording a very strong gain of 78%. As well as getting a lift from a rebounding tech sector, the release of a strong quarterly update got investors excited. Megaport reported a 13% increase in monthly recurring revenue (MRR) to $10.7 million and its first quarterly operating profit of $1 million.

St Barbara Ltd (ASX: SBM)

The St Barbara share price was on form and stormed 50% higher last month. This followed a decent quarterly update from the gold miner and news that it could be looking to bolster its business with M&A activity. St Barbara confirmed that it is in talks with gold explorer Genesis Minerals Ltd (ASX: GMD) about a potential merger. The gold miner sees possible synergies in the Leonora region of Western Australia.

Austal Ltd (ASX: ASB)

The Austal share price was a strong performer and sailed 49% higher during July. A good portion of this gain came at the start of the month following the release of a very positive announcement relating to a major contract win in the United States. According to the release, the shipbuilder has been awarded a contract with a potential value of US$3.3 billion (A$4.35 billion) for the detail design and construction of up to 11 Offshore Patrol Cutters for the United States Coast Guard.

The post These were the best performing ASX 200 shares in July appeared first on The Motley Fool Australia.

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More reading

• These were the worst performing ASX 200 shares in July
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Santos share price beating the ASX 200 on Friday?
• Why BrainChip, Fortescue, PointsBet, and Zip shares are dropping

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 Austal Limited, MEGAPORT FPO, and ZIPCOLTD FPO. The Motley Fool Australia has recommended MEGAPORT 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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The S&P/ASX 200 Index (ASX: XJO) bank shares are facing increasing public scrutiny about funding fossil fuel projects.

There are a number of ASX 200 bank shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

Of course, there are a number of other banks in the ASX 200 including Macquarie Group Ltd (ASX: MQG), Suncorp Group Ltd (ASX: SUN), Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN).

In an article in The Age, the big four banks have been put under the spotlight as they continue to be open to funding fossil fuel operations.

Why Westpac is in the news

Earlier this week, Westpac outlined a market update on progress of “important business priorities”.

The ASX 200 bank share outlined the principles underpinning its current thoughts.

It set “1.5C aligned targets” where underpinning data and methodologies were sufficient. It referenced science-based scenarios from credible sources. The ASX 200 bank share referenced industry guidelines and sector approaches. It also said that targets will continue to evolve with new or changing science, methodologies and technology.

Westpac said that there will be zero lending to companies where more than 5% of their revenue comes directly from thermal coal mining by 2030. It’s going to manage its portfolio to reduce its lending exposures to zero by 2030.

With companies involved in oil and gas exploration, extraction and drilling, Westpac said it’s aiming for a 23% reduction in scope 1, 2 and 3 absolute financed emissions by 2030, relative to a 2021 baseline. It will only consider directly financing greenfield oil and gas projects that are in accordance with the International Energy Agency’s net zero by 2050 scenario, or circumstances, where the Australia and New Zealand government and regulations determine, or take a formal public position, that supply from the asset being financed is necessary for national energy security.

Westpac also wants to see a reduction in emissions from cement production and power generation.

With these reduction targets, Westpac can encourage borrowers to reduce emissions.

However, not everyone thinks this goes far enough.

For example, The Age quoted the head of ethics research at Australian Ethical Investment Ltd (ASX: AEF), Dr Stuart Palmer. The ethics-focused fund manager does own Westpac shares. Palmer said that the bank’s policy was based on credible climate scenarios, but continuing with corporate lending to oil and gas clients until 2025 was a big gap. He said:

That’s too long. What the requirements will be for those plans raises a whole lot of issues.

NAB and others

The Age also noted that it has just announced a new chief climate officer role. NAB is reportedly the only ASX 200 bank share to place a cap of US$2.6 billion on oil and gas lending. NAB’s policy has directly banned financing greenfield gas extraction projects unless the government declares a new project “crucial” to national energy security. This was seen by some environmental campaigners as “massive loopholes” for expansion, according to the newspaper.

NAB CEO Ross McEwan said:

Gas is a transitioning fuel. We haven’t, to date, put any money in because we’ve been asked to from a security source. We remain of the position that we have got a cap on our portfolio and we’re putting the vast majority of our money into renewables.

It was also noted that ANZ and CBA are both open to new oil and gas projects.

The post ‘Raises a whole lot of issues’: Which ASX 200 banks are still funding new fossil fuel projects? appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 bank has been revealed as the world’s longest dividend-paying share
• The NAB share price is up 20% from its YTD low. Is now the time to buy?
• Why this ASX investment company dumped NAB for Westpac shares
• Westpac share price on watch following market update
• Should investors buy NAB shares for the dividends? Here’s what I think

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and Westpac Banking Corporation. 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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It certainly was a great month for the S&P/ASX 200 Index (ASX: XJO). Over the period, the benchmark index rose a massive 5.7% to end at 6,945.2 points.

Unfortunately, not all shares climbed with the market. Here’s why these were the worst performing ASX 200 shares in July:

EML Payments Ltd (ASX: EML)

The EML share price was the worst performer on the ASX 200 last month with a 14.6% decline. This was driven by the surprise exit of its CEO and an update on its European operations. In respect to the latter, the payments company revealed that the Central Bank of Ireland has not approved the remediation programme for its European operations. The bank identified “shortcomings” in components of the programme, principally the sequencing and approach taken to the risk assessment of its distributors, corporates and customers.

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price was out of form and dropped 11% in July. This was driven largely by weakness in the iron ore price amid concerns over Chinese demand. The latter was not helped by news that Chinese authorities have officially established a new, nationalised iron-ore company called China Mineral Resources Group.

Graincorp Ltd (ASX: GNC)

The Graincorp share price was a poor performer and fell 10.4% last month. This was despite there being no real news out of the company. Though, it is worth noting that the grain exporter’s shares traded ex-dividend in July for its latest payout. In addition, with its shares still up over 60% since this time last year, it’s possible that some profit taking was happening.

Elders Ltd (ASX: ELD)

The Elders share price also dropped 10.4% in July. Once again, this was despite there being no news out of the agribusiness company. Some investors may have been rotating out of the agricultural sector into the rebounding tech sector last month.

The post These were the worst performing ASX 200 shares in July appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX All Ords shares having a stellar end to the week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Santos share price beating the ASX 200 on Friday?
• Is the ANZ share price an ASX banking buy for the next 12 months?

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 EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool Australia has recommended Elders 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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