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The Lynas Rare Earths Ltd (ASX: LYC) share price is starting the week positively following the release of the rare earth producer’s fourth-quarter update.

In early trade, the Lynas share price is up 3% to $8.30.

Lynas share price higher after fourth-quarter update

• Quarterly sales revenue down 10.3% quarter on quarter to $294.5 million
• Sales receipts up 34% to a record $351 million
• Total REO production down 26.2% to 3,650 tonnes
• Closing cash balance of $965.6 million

What happened during the quarter?

For the three months ended 30 June, Lynas was on form and delivered record sales receipts of $351 million.

The key driver of its record sales were strong rare earth prices. The release notes that the NdPr price was between 70% and 80% higher than at the same time last year. The average China Domestic Price for NdPr during the quarter was US$120/kg.

Complementing this was strong demand for Lynas’ products during the quarter, with the majority of its products sold to buyers outside China.

And while its sales revenue was down quarter on quarter, it was still the second highest quarterly result at $294.5 million. Management advised that this was despite its production being slightly lower due to water shortages in Malaysia.

Lynas has implemented a number of mitigating strategies, but the ongoing water shortages from its commercial supplier resulted in several complete or partial temporary production halts during the quarter.

Pleasingly, a process modification has been designed with the objective of decreasing its fresh water consumption by 40%. This modification will be implemented during the July quarter and is expected to substantially reduce Lynas Malaysia’s exposure to water supply issues.

Management commentary

Lynas CEO, Amanda Lacaze, was pleased with the company’s performance during the final quarter. She said:

I am pleased to report a very strong final quarter for Financial Year 2022 (FY22). Lynas has continued to realise the benefits of robust market pricing and demand despite continued challenges in the external environment. Our year end cash balance of $965.6m provides a confident basis for funding continued growth as demand grows.

Record sales receipts of A$351m were achieved in the quarter. Sales revenue of A$294.5m was the 2nd highest quarterly result recorded reflecting slightly lower production primarily due to water shortages in Malaysia.

The post Lynas share price higher following record Q4 sales appeared first on The Motley Fool Australia.

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More reading

• Odd one out: Lynas share price inches ahead while miners drill down
• Here are the top 10 ASX shares today
• Could this be why the Lynas share price is rallying 6% today?
• The Lynas share price soared 53% in the 2022 financial year. Here’s what happened
• Why did the Lynas Rare Earths share price tumble in June?

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

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The Suncorp Group Ltd (ASX: SUN) share price is on watch this morning after the company announced its plan to sell its banking business to Australia New Zealand Banking Group Ltd (ASX: ANZ) for close to $5 billion.

The sale will see the S&P/ASX 200 Index (ASX: XJO) financial services company focusing entirely on its insurance business.

Suncorp has also reconfirmed its previously announced financial year 2023 targets across all its businesses.

As of Friday’s close, the Suncorp share price is $11.10.

Let’s take a closer look at the major sale announced to the market this morning.

Suncorp share price on watch amid bank sale

The Suncorp share price could be in for a big day after the company announced its banking division is expected to be snapped by ANZ for $4.9 billion. The price tag represents $1.3 billion more than the business’ net tangle assets.

Suncorp expects to rake in $4.1 billion in net proceeds from the sale – representing $3.21 per share. The company plans to return most of the funds to shareholders.

ANZ will also pay Suncorp at least $50 million to continue using the Suncorp Bank brand for five years following the sale. Under the deal, ANZ can extend the branding deal for a maximum of two years at a cost of $10 million each year.

Any transaction is still a way off, however. The companies don’t expect the sale to be finalised for around 12 months.

The transaction is subject to regulatory approvals from the Federal Treasurer and the Australian Competition and Consumer Commission (ACCC), as well as certain amendments to the State Financial Institutions and Metway Merger Act 1996.

Suncorp CEO Steve Johnston commented on the news that could move the company’s share price today, saying:

As a dedicated insurance business we will be singularly focused on meeting the needs of our customers and communities at a time when the value of insurance has never been greater.

By combining with a larger banking group, Suncorp Bank will be well positioned for the future. Customers will see benefits including access to a wider range of products and services, and career opportunities will be enhanced for our people. ANZ is committed to growing its presence in Queensland and I am pleased about the commitments they are making to our customers and employees.

The Suncorp share price is currently around 3.5% lower than it was at the start of the year.

The post Suncorp share price in focus amid $5b bank sale appeared first on The Motley Fool Australia.

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More reading

• ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise
• 5 things to watch on the ASX 200 on Monday
• Setting the pace: Why ASX 200 bank shares are feeling the pinch on Friday
• What’s the outlook for the ANZ share price in 2023?
• Analysts name 2 ASX dividend shares to buy with 5%+ yields

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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If you’re searching for some dividend shares to buy, then you may want to look at the two listed below.

Both these dividend shares have recently been rated as buys by experts and tipped to provide attractive dividend yields. Here’s what you need to know about them:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT.

It is a real estate investment trust with a focus on social infrastructure properties such as bus depots, police and justice services facilities, and childcare centres. Demand has been very strong for these properties with end users. So much so, at the last count the company had a 100% occupancy rate and a weighted average lease expiry of 14.6 years.

Goldman Sachs has been pleased with the company’s performance and currently has a conviction buy rating and $4.24 price target on its shares

The broker is also expecting some generous dividends in the coming years. It is forecasting dividends per share of 17.2 cents in FY 2022 and 18.3 cents in FY 2023. Based on its current share price of $3.59, this implies yields of 4.8% and 5.1%, respectively.

Macquarie Group Ltd (ASX: MQG)

Another ASX dividend share that has been rated as a buy is this investment bank.

Macquarie has been a very strong performer again this year thanks to growth across the business. It recently released its full-year results for FY 2022 and revealed a 56% increase in net profit after tax of $4.7 billion.

This went down well with the team at Morgans. And while the broker suspects that it will be hard to top this in FY 2023, it remains very positive on the long term due to the company’s exposure to structural growth markets. As a result, it has put an add rating and $215.00 price target on the bank’s shares.

In respect to dividends, its analysts are forecasting a $7.07 per share dividend in FY 2023 and then $7.47 per share dividend in FY 2024. Based on the current Macquarie share price of $167.99, this will mean yields of 4.2% and 4.45%, respectively.

The post Experts name 2 top ASX dividend shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• Top ASX dividend shares to buy in July 2022
• Macquarie shares ‘a clear beneficiary’ of global green energy push: fundie
• Surprise US inflation pumps the brakes on ASX 200 bank shares
• What’s the outlook in FY23 for ASX 200 bank shares?
• $264 million! The 10 highest-paid CEOs on the ASX

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 Macquarie 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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With interest rates in the middle of a rising part of the cycle, growth shares are now seen as a “dirty word”.

That’s according to Montgomery Small Companies Fund portfolio manager Gary Rollo, who says this merely presents a chance to buy quality companies for cheap.

“It creates opportunities to invest in businesses whose share price decline is due to changing sentiment rather than deteriorating fundamentals,” he wrote on the Montgomery blog.

“In this climate, one company we think deserves investor attention is Symbio Holdings Ltd (ASX: SYM).”

Symbio is a telecommunications provider that makes cloud- and software-based technology such as communications-platform-as-a-sevice (CPaaS).

The company’s stock has lost about half of its value since November.

“To be honest, I don’t think it was expensive before the pullback,” said Rollo.

“But getting re-classified as a tech company in late 2021 seems to have been a red flag for some investors.”

Symbio doesn’t just provide vanilla voice and video calling solutions. Rollo expanded on a couple of use-cases that show off its software magic.

“When you are trying to find your ride-share driver, you don’t want them to have your number and vice versa, but you do want to place a call to find out where that driver is. Symbio’s software helps do that,” he said.

“When Zoom needs to offer voice access to a video call conference it needs to be able to seamlessly join that call to its Zoom stream and have the audio terminate on the traditional telecom network. In Australia, Symbio’s software helps do that.”

A 15-times growth opportunity

As for that dirty word “growth”, Rollo remarkably pointed out that even if the business did not expand at all from here, it would still return in excess of 10% per year from the current share price. 

But that’s not why the Montgomery team has bought Symbio shares.

Rollo explained that they’ve bought in because its “medium-term growth strategy looks plausible”.

“Symbio is a dominant provider of CPaaS services in Australia, and has an enviable client list of global technology and consumer facing growth businesses,” he said.

“In other markets in Asia, it’s not so straightforward for these customers to turn up and gain access to the local telecom markets, and those customers want a Symbio-like player in those markets.”

The company has explicitly stated Singapore, Malaysia, Taiwan, Japan, South Korea and Vietnam as six markets it would enter over the 2022 to 2025 period.

“Management’s 2030 vision is for 100 million phone numbers,” said Rollo.

“This compares to 6.4 million numbers Symbio hosts in its Australian CPaaS today. That’s a giant shift in [the] addressable market.”

Rollo pointed out how the unit economics of this is “compelling” as Symbio’s offerings are entirely software-based. That software is already built, so scaling will hardly cost anything.

“In more ‘normal’ markets you would expect to pay for the underlying growth you are getting today and you would put some option value for the Asian growth strategy,” said Rollo.

“[If] Symbio’s Asian growth strategy succeeds, [it] is worth many many multiples of the current share price if it gets delivered.”

The post ‘Compelling’ ASX tech share that could grow its user base 1,500% appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 top ASX dividend shares to buy right now
• ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise
• 2 ASX shares in a sector ready for a massive comeback
• Chicken and chips: Experts name 3 ASX shares to buy right now
• 5 things to watch on the ASX 200 on Monday

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 positions in and has recommended Symbio Holdings Limited. The Motley Fool Australia has positions in and has recommended Symbio 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price won’t be going anywhere today.

This morning the banking giant requested a trading halt ahead of a blockbuster acquisition.

Why is the ANZ share price halted?

The ANZ share price has been halted this morning while the bank undertakes a capital raising to fund the acquisition of the banking operations of Suncorp Group Ltd (ASX: SUN) for $4.9 billion.

According to the release, ANZ is aiming to raise $3.5 billion through a fully underwritten 1 for 15 pro rata accelerated renounceable entitlement offer.

These funds will be raised at $18.00 per new share, which represents a 12.7% discount to the ANZ share price at Friday’s close.

The purchase price of $4.9 billion represents a PE of 13.8x pre synergies or 9.3x post full run-rate synergies. The acquistion is expected to be earnings per share neutral pre synergies and low single digit earnings per share accretive including full run-rate synergies on a pro forma FY 2023 basis.

Why acquire Suncorp Bank?

A decade after first attempting to acquire Suncorp Bank, ANZ has sealed a deal which it believes will accelerate the growth of its retail and commercial businesses while also improving the geographic balance of its business in Australia.

The release notes that the acquisition includes $47 billion of home loans with strong risk profile, $45 billion in high-quality deposits, and $11 billion in commercial loans.

ANZ will initially operate Suncorp Bank under its existing Authorised Deposit-taking Institution licence and there will be no changes to the total number of Suncorp Bank branches in Queensland or employee numbers for at least three years from completion.

It will continue to be led by current CEO, Clive van Horen

‘A cornerstone investment’

ANZ’s chief executive officer, Shayne Elliott, spoke very positively about the acquisition. He said:

The acquisition of Suncorp Bank will be a cornerstone investment for ANZ and a vote of confidence in the future of Queensland. With much of the work to simplify and strengthen the bank completed, and our digital transformation well-progressed, we are now in a position to invest in and reshape our Australian business. This will result in a stronger more balanced bank for customers and shareholders.

We have admired the transformation that has occurred under the leadership of Steve Johnston and Clive van Horen and believe Suncorp Bank is a natural fit with ANZ given its culture, risk appetite and customer focus. ANZ has licenced the Suncorp Bank brand for five to seven years and we are committed to maintaining its current branch footprint in Queensland for at least three years post completion. This is a growth strategy for ANZ and we will continue to invest in Suncorp Bank and in Queensland for the benefit of all stakeholders.

Trading update

In other news, ANZ has released its third quarter update and revealed that had a solid three months.

ANZ advised that strong lending and margin momentum was evident across all major businesses in the quarter, with revenue up 5%. Deposits were flat excluding foreign exchange impacts.

Pleasingly, the bank’s group net interest margin (NIM) increased 3 basis points. This was largely driven by the impact of rising rates, partly offset by intense price competition in the home lending portfolios in Australia and New Zealand.

With interest rates projected to increase further in coming months, management is expecting this to be supportive for margins in the fourth quarter.

The post ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Setting the pace: Why ASX 200 bank shares are feeling the pinch on Friday
• What’s the outlook for the ANZ share price in 2023?
• Analysts name 2 ASX dividend shares to buy with 5%+ yields
• Why might ASX-listed ANZ want to snap up MYOB?

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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Even before interest rates rose 125 basis points over the last couple of months, the fear of rate hikes had already infected many sectors.

Perhaps one sector that is the most directly impacted is real estate.

Interest rate rises increase mortgage repayments, which dampen demand and property prices.

Now one of the hottest real estate markets in the world, Sydney, is set for a 20% fall in house prices.

Not only this, the COVID-19 pandemic has meant commercial real estate has also taken a beating as many workers stick to using their homes as offices.

All this has meant that ASX shares in real estate investment trusts (REITs) have taken a brutal hit in 2022.

In fact, the S&P/ASX 200 A-REIT (ASX: XPJ) has dropped almost 23% since the start of the year.

REITs set for a stunning comeback

Inflation is still running rampant and the US Federal Reserve is set to deliver super-sized rate increases in the coming months. 

The Reserve Bank of Australia is sure to follow, in order to fix Australia’s own inflation and not devalue the local dollar excessively against the greenback.

Despite this prospect, Wilsons head of investment strategy David Cassidy feels real estate shares could turn it around soon.

“We tend to believe the REIT sector’s underperformance should be coming to an end given that bond yields have started to stabilise, market focus will shift to the defensive aspects of REITs, [and] valuations are generally supportive.”

He said in a Wilsons memo that high inflation could ironically benefit landlords, if rents rise faster than financing and labour costs.

“This would result in greater top-line revenue, which may in turn be reflected in higher cash flows.”

Cassidy warned, though, that REITs with genuine pricing power are the ones providing space in “in-demand, fast-growing sectors, such as distribution warehouses, data centres, and life science facilities”.

“These specialty sectors will likely exhibit the most significant pricing power, which will still give them an attractive growth profile relative to traditional sectors like office and retail,” he said.

“We believe the logistics sector offers the best prospects for rental growth, consistent with consensus expectations.”

Two ASX shares with excellent long-term prospects 

Cassidy named Goodman Group (ASX: GMG) and Healthco Healthcare and Wellness REIT (ASX: HCW) as ASX shares his team is focused on.

Warehouse and fulfilment centre provider Goodman is banking on the long-term transition to the digital economy.

“Continued growth in e-commerce drives strong demand for modern, well-located, urban infill logistics sites,” said Cassidy.

“Supply of such sites is relatively scarce and barriers to entry are high.”

A 30% cooling of the Goodman share price year-to-date has made it more appetising for buyers too.

“In our view, Goodman’s valuation is currently attractive with the group trading at a forward price-to-earnings multiple of ~20.6x, which is favourable in the context of management’s guided +23% EPS growth for FY22 and a mid-double-digit EPS growth expected over the medium-term.”

The Healthco REIT is a landlord for sites like private hospitals, gyms, childcare centres, aged-care facilities, and life sciences research facilities.

Those clients generally sign long leases — on average 10 years — and pay for their own ongoing property expenses.

Cassidy likes this tenant profile through an economic downturn.

“Healthco maintains a defensive earnings profile through the cycle given tenant demand is consistent and non-discretionary in nature, and mostly government-supported.”

Healthco shares have lost around 35% so far in 2022, making for a mouth-watering entry point at the moment.

“HCW currently trades at a compelling ~25% discount to its $647 million portfolio valuation and NTA [net tangible assets] per unit of $2.02 as of 30 June 2022, and offers a forward dividend yield of 5.6%.”

The post 2 ASX shares in a sector ready for a massive comeback appeared first on The Motley Fool Australia.

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More reading

• Why experts are tipping these ASX 200 shares as buys
• $264 million! The 10 highest-paid CEOs on the ASX
• The Goodman share price went through a big rollercoaster in FY22
• 2 bargain ASX shares with good times ahead: expert
• Why did the Goodman share price suffer a sell-off in June?

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

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It’s a confusing time to buy shares right now.

Even after a 125 basis point rise in the past couple of months, the Reserve Bank is poised to deliver another super-sized hike in August.

Will such drama trigger a recession?

At the very least the economy will slow down considerably, which is exactly what the central bank wants in order to bring inflation down.

If all this is causing you a headache, perhaps it’s prudent to look at what ASX shares the experts are buying.

Here are three tips from two professional investors:

‘Wide economic moat’

James Hardie Industries plc (ASX: JHX) shares have lost a painful 39% so far this year.

But Bell Potter Securities investment advisor Christopher Watt likes the long-term outlook.

“This building materials company mostly services the residential construction industry with its flagship fibre cement range,” he told The Bull.

“James Hardie’s wide economic moat should protect its ability to earn above its cost of capital over the economic cycle.”

Watt’s peers agree, with 12 out of 14 analysts surveyed on CMC Markets currently rating the ASX share as a buy.

“Despite a challenging macroeconomic backdrop, we view James Hardie as an attractive long-term value proposition.”

‘A strong fiscal year 2022 result’

Recession or not, who doesn’t love a bucket of Kentucky Fried Chicken?

The quick-service restaurant industry enjoyed great patronage over the COVID-19 lockdown era and usually shows resilience through economic downturns.

Spotee Connect executive chair Elio D’Amato has noticed that shares for the franchisor of KFC in Australia, Collins Foods Ltd (ASX: CKF), have bounced back from a June trough.

The ASX share fell nearly 40% year-to-date until 17 June, but has since gained more than 19.4%.

“The KFC operator delivered a strong fiscal year 2022 result,” he said.

“It grew group revenue by 11.1% on last year’s prior corresponding period. Earnings per share grew by 24.9% and its fully franked dividend was up by 17.4%.”

Collins Foods also runs KFC and Taco Bell franchises in other countries too.

“The European business is reporting same-store sales growth of 12% in the first seven weeks of the new financial year.”

‘A high-quality technology story’

What goes well with chicken? Chips.

While there is no ASX-listed share specialising in fried potato, Altium Limited (ASX: ALU) is an important player in the computer chip industry.

The Australian company makes software that allows chipmakers to design printed circuit boards (PCBs).

Like most technology stocks, Altium shares have deflated considerably this year, losing around 34%.

Despite this, Watt likes the long-term narrative.

“Altium is a high-quality technology story,” he said.

“[It] has been steadily increasing its recurring revenue base over the past decade, with a shift to subscriptions.”

With the valuation down so much this year, Altium could also attract some corporate interest.

“In our view, Altium is also a potential takeover target,” he said.

“US engineering software giant Autodesk Inc (NASDAQ: ADSK) lodged an indicative bid at $38.50 a share, but the deal failed to materialise last year.”

The post Chicken and chips: Experts name 3 ASX shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• 2 top ASX 200 shares brokers rate as buys
• Why Collins Foods, GQG, Magellan, and SkyCity shares are dropping
• Here’s why the Collins Food share price is sinking on Friday
• A high-quality ASX 200 share to capitalise on market volatility: fundie
• Why I think these 2 ASX All Ords shares are at bargain prices in July

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 positions in and has recommended Altium, Autodesk, and Collins Foods Limited. The Motley Fool Australia has recommended Autodesk and Collins Foods 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 Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a sizeable decline. The benchmark index fell 0.7% to 6,605.6 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to start the week in a positive fashion after a very strong night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 57 points or 0.9% higher this morning. On Wall Street, the Dow Jones was up 2.15%, the S&P 500 rose 1.9%, and the NASDAQ climbed 1.8%.

Oil prices storm higher

Energy producers Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a good start to the week after oil prices stormed higher on Friday. According to Bloomberg, the WTI crude oil price rose 1.9% to US$97.59 a barrel and the Brent crude oil price climbed 2.1% to US$101.16 a barrel. However, this couldn’t stop oil prices recording a large weekly decline amid recession fears.

ANZ rumoured to be buying Suncorp Bank

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price will be in focus today as M&A rumours continue to swirl. As well as being in talks to acquire MYOB, ANZ is rumoured to be interested in acquiring the banking operations of Suncorp Group Ltd (ASX: SUN) for somewhere in the region of $5 billion. A capital raising to fund the deal is expected to be announced this morning.

Gold price edges lower

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a subdued start to the week after the gold price edged lower on Friday night. According to CNBC, the spot gold price was down 0.1% to US$1,708.17 an ounce. This meant the gold price recorded its fifth successive weekly decline. Demand for the precious metal is fading as interest rates rise.

Rio Tinto named as a buy

The Rio Tinto Limited (ASX: RIO) share price could be great value according to a note out of Goldman Sachs. In response to its quarterly update, the broker has retained its buy rating with a slightly trimmed price target of $124.10. It said: “Despite challenges in 1H22, we see RIO returning to production growth in 2H22 with +6% in Cu Eq prod growth in 2023E driven by the Gudai-Darri iron ore mine and a rebound in mined copper volumes.”

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

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 fund manager Wilson Asset Management (WAM) has recently identified some S&P/ASX 200 Index (ASX: XJO) blue-chip shares that it owns (or owned) in one of its main portfolios.

WAM operates several listed investment companies (LICs). Two of these LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) that looks at the larger businesses on the ASX, often referred to as ASX blue-chip shares.

WAM says WAM Leaders actively invests in the highest quality Australian companies. But does WAM have a good reputation for picking stocks?

The WAM Leaders portfolio has delivered gross returns (before fees, expenses, and taxes) of 14% per annum since its inception in May 2016. This compares to the S&P/ASX 200 Accumulation Index average return of 7.4%.

These are the ASX 200 blue-chip shares that WAM outlines in its recent monthly update.

Telstra Corporation Ltd (ASX: TLS)

The fund manager described Telstra as Australia’s leading telecommunications service provider to consumers, businesses and government.

Telstra has been in the WAM Leaders portfolio for a while because of the defensive nature of its existing earnings, an improvement in the growth of its subscribers, mobile price increases and a recovery of roaming revenue. The fund manager called Telstra a “compelling investment” in the current market.

WAM also pointed to the recent landmark network sharing agreement between Telstra and TPG Telecom Ltd (ASX: TPG) with payments to Telstra of over $1.6 billion over the next decade. The fund manager views that deal as a further positive indicator for industry rationality and returns for the ASX 200 blue-chip share.

Lendlease Group (ASX: LLC)

The fund manager described Lendlease as a global real estate business with development, construction and investment operations.

WAM decided to add to its Lendlease holdings “opportunistically” after recent declines of the Lendlease share price.

The view of the investment team is that the sell-off of Lendlease shares has been “overdone” and noted it was trading below the level of the COVID-19 crash during March 2020.

The ASX real estate sector has been hit hard over the last six months. WAM said this was unsurprising considering the impact of bond yields on asset value and the “cyclical nature of development pipelines and office and retail rents”.

But, WAM thinks that the underlying value of Lendlease is higher than what the business is trading at. Why? This view is due to the company “being 90% hedged to interest rate increases, its continued execution of its restructure program and its robust growth profile over the coming years, targeting $8 billion in annual production by FY24.”

However, the fund manager did note there are risks with this ASX 200 blue-chip share. The margin profile, with elevated construction costs, is one to watch.

But, WAM believes that the company’s “dominant market position will stand the company in good stead compared against its smaller peers and risks associated with the company’s margin profile are already priced into current expectations.”

The post This fund manager just bought more of these 2 ASX 200 blue-chip shares appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink
• Telstra share price higher on Digicel Pacific acquisition completion
• How much has the Telstra share price paid in dividends over the last 5 years?
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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 positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom 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 Australian share market is home to plenty of companies with the potential to grow strongly in the coming years.

Two such shares are listed below. Here’s why analysts rate them as growth shares to buy:

Nitro Software Ltd (ASX: NTO)

The first ASX growth share that analysts rate highly is Nitro. It is a software company that provides businesses of all size with integrated PDF productivity and eSignature tools.

Goldman Sachs is very positive on the company and believes it has significant long term growth potential. And with its shares falling heavily this year, it feels they are trading at a discount for investors.

The broker commented:

We appreciate that a material re-rate likely requires a change in sentiment towards unprofitable tech companies, however we think NTO screens attractively relative to tech peers and on a longer-term view. Our focus now shifts to NTO’s execution on its pipeline of new business and e-sign cross-sell opportunities, with concerns over balance sheet now eased. We see NTO as an attractive long-term growth opportunity at a discounted valuation.

Goldman Sachs has a buy rating and $2.35 price target on the company’s shares.

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX growth share to look at is wine giant Treasury Wine. It is the company behind the 19 Crimes, Penfolds, and Wolf Blass brands, to name just three.

The team at Morgans are feeling very bullish right now. Particularly with its shares trading at an attractive level compared to its global wine sector peers. Morgans explained:

TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The foundations are now in place for TWE to deliver strong earnings growth from the 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.

The broker has an add rating and $13.93 price target on the company’s shares.

The post Analysts have named these top growth shares as buys appeared first on The Motley Fool Australia.

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More reading

• Here’s why analysts are tipping these ASX growth shares as buys
• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Has the Treasury Wines dividend been worthwhile since 2017?
• Broker names 2 blue chip ASX 200 shares to buy this month
• Here’s why experts are tipping these ASX growth 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 Nitro Software Limited and Treasury Wine Estates 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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