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S&P/ASX 200 Index (ASX: XJO) shares, like the rest of the market, have seen plenty of volatility this year.

Even among the venerable blue chips, share price swings of 10% or more in a week have not been uncommon in 2022.

While that can add some angst for those investors checking the daily performance of their ASX 200 share portfolios, it can also throw up some opportunities.

Asked what investments he’s made to capitalise on the recent volatility, Matt Williams, portfolio manager at Airlie Funds Management, named building materials company James Hardie Industries PLC (ASX: JHX).

ASX 200 share trading on a very attractive multiple

According to Williams (quoted by The Australian Financial Review):

We’ve added to our James Hardie position. It’s a rare high-quality global company that has such a strong position in its markets and achieves high returns on capital, yet it’s trading on a very attractive multiple.

At the current share price of $35.61, James Hardie trades at a price-to-earnings (P/E) ratio of 21 times.

Williams also sees a lot of longer-term growth potential for this ASX 200 share:

The market is concerned about the US housing cycle, but I’d be very surprised if in three to five years this company is not in a lot stronger position and the share price a lot higher due to its continued penetration into the housing siding market.

Then there are the strong profit margins.

“Every other building materials company in the world would kill to earn the 20% plus margins and 20% plus return on capital that Hardies produces,” Williams said.

James Hardie snapshot

James Hardie has a market cap of $15.1 billion. The ASX 200 share pays a trailing dividend yield of 2.0%, unfranked.

This year has been a tough one for the James Hardie share price, down 41% since the opening bell on 4 January. That compares to the 12% loss posted by the ASX 200.

Longer term, James Hardie shares are up 54% over the past five years.

The post A high-quality ASX 200 share to capitalise on market volatility: fundie appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX shares today
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• ‘Global leader at attractive prices’: expert names 2 ASX shares to buy now
• Why the James Hardie share price has ‘fallen far enough’: fundie

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

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The Vanguard Australian Shares Index ETF (ASX: VAS) went through a lot of volatility during the 2022 financial year.

The VAS exchange-traded fund reached a new all-time high during FY22. It hit $97.75 in mid-August 2021 and got close to that level a couple of times over the financial year.

However, it finished the year down by just over 10% as it dropped quickly in June 2022.

For readers that don’t know, the Vanguard Australian Shares Index ETF tracks the S&P/ASX 300 Index (ASX: XKO). That means the VAS ETF attempts to deliver the same returns as the ASX 300. It’s one of the biggest index funds in Australia.

What ASX shares are in the VAS ETF?

As you might have already guessed, this ETF has 300 positions. But, let’s look at the 10 largest holdings in the portfolio. At the end of May 2022, these were the 10 biggest allocations:

BHP Group Ltd (ASX: BHP) – 10.2% of the portfolio

Commonwealth Bank of Australia (ASX: CBA) – 8.1%

CSL Limited (ASX: CSL) – 5.9%

National Australia Bank Ltd (ASX: NAB) – 4.6%

Westpac Banking Corp (ASX: WBC) – 3.8%

Australia and New Zealand Banking Group Ltd (ASX: ANZ) – 3.2%

Macquarie Group Ltd (ASX: MQG) – 3%

Wesfarmers Ltd (ASX: WES) – 2.4%

Telstra Corporation Ltd (ASX: TLS) – 2.1%

Transurban Group (ASX: TCL) – 2%

As the investments with the biggest allocations in the Vanguard Australian Shares Index ETF, these are the ones that have the biggest influence on the returns of the fund.

An ETF simply tracks the underlying performance of the holdings. If that group of shares collectively goes down in value, then the ETF will go down as well.

What this means is that the VAS ETF dropped around 10% over FY22 because the ASX 300 collectively fell during FY22.

What happened in FY22?

There were periods of strength for the ASX 300 in the 2022 financial year, particularly in the first few months and in March and April 2022 when the iron ore price was relatively strong. This helped the earnings and share prices of names like BHP, Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO).

We have also seen periods of collective strength for the big four ASX bank shares where profitability was improving, dividends were rising and the outlook appeared very healthy. We also saw share buybacks from the big banks. But now there are concerns of rising bad debts amid higher interest rates.

The year ended with a whimper as it dropped by around 9% in June 2022. That market reaction came amid rising inflation and interest rates. The Reserve Bank of Australia (RBA) increased the interest rate by 50 basis points (or 0.5%).

Why do interest rates matter? Ray Dalio, the billionaire founder of Bridgewater Associates, once said: “It all comes down to interest rates. As an investor, all you’re doing is putting up a lump sum payment for a future cash flow.”

The post The Vanguard Australian Shares Index ETF hit an all-time high in FY22 … and finished down more than 10% appeared first on The Motley Fool Australia.

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More reading

• How did the Vanguard Australian Shares Index ETF perform in June?
• Down 15% in 2022, is it time to jump on Vanguard Australian Shares Index ETF?
• Is VAS a better investment than an ASX dividend ETF?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited 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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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.

Stock market headlines aren’t pretty right now. The S&P 500 Index (SP: .INX) experienced its worst first half of the year since 1970. It is in a full-blown bear market and with lingering economic issues, things could get worse before they get better. It can be difficult for investors to navigate these stressful times.

However, the basic game plan shouldn’t change for those focused on the long term. Let’s look at two steps that long-term investors can take to sail through this challenging period.

1. Avoid panic selling

When the going gets rough, it can be tempting to resort to panic selling (that is, offloading shares of companies you own in anticipation of a coming stock decline). This tendency is a bit understandable. If markets are going to keep falling, perhaps it’s best to limit your losses. But it is not a wise strategy, at least not for those focused on the long game.

Market downturns don’t last forever and, on average, bull markets tend to last longer than bear markets. That’s why holding onto shares of excellent companies even through the worst market crash is worth it. Here is some evidence. The S&P 500 bottomed out in March 2020 following the coronavirus-induced bear market. Since then, the index is up by 71% — even after its recent slide.

^SPX data by YCharts

However, reassessing your investments can be great when a bear market hits. Has the investment thesis of any of your holdings fundamentally changed for the worse? If so, it might be worth considering selling. If not, dumping your shares is the opposite of a good idea. If anything, a bear market is a good time to purchase more shares of the excellent companies you own. This brings us to our second point.

2. Pick up bargain stocks 

Market crashes don’t discriminate. Even companies performing exceptionally well or those with excellent prospects often end up being pulled down by the rest. The result: You can find plenty of great stocks that have been thrown in the discount bin. And once the market does recover, you will reap the benefits.

Let’s look at a company that looks too cheap to ignore at current levels: Teladoc (NYSE: TDOC). True, the telemedicine specialist has had its share of troubles. That includes the company’s massive $6.7 billion net loss in the first quarter, although it was due to a non-cash impairment charge related to its 2020 acquisition of Livongo Health. Teladoc overpaid for this acquisition.

Despite this and other issues, Teladoc looks far too cheap as its shares have now fallen below their pre-pandemic levels. That makes little sense, considering the company’s standing in the telemedicine industry and its progress during the pandemic. In all likelihood, telemedicine is here to stay.

The technology is convenient for physicians and patients and helps the latter save money. The flexibility of telehealth services can also allow healthcare providers to attend to more patients overall. All these benefits should lead to greater utilization of telemedicine in the coming years.

Teladoc has already built a network of physicians offering hundreds of sub-specialties, along with more than 11,000 associated care locations. Plus, more than 50% of the Fortune 500 companies and some of the largest health insurers are on its client list. Meanwhile, the company’s business keeps growing.

In the first quarter, Teladoc’s revenue increased by 25% year over year to $565.4 million, while its total visits jumped by 35% to 4.5 million. Average revenue per U.S. member and total paid memberships were also on the rise. Despite the red ink on the bottom line, Teladoc continues to make headway in the telemedicine market.

And given that the industry seems to have a bright future, Teladoc is an excellent healthcare stock to consider buying on the dip. 

Keep your eyes on the prize

Bear markets can be stressful, but a disciplined and patient approach can help you get through them. Reassessing your investments and taking advantage of others’ decisions to panic sell are great moves to consider in these troubling times. In five years, the market will almost certainly be substantially up from its current levels, and those who held on will be glad they did.

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

The post 2 things investors should do in a bear market appeared first on The Motley Fool Australia.

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More reading

• Should you buy growth stocks right now?

Prosper Junior Bakiny has positions in Teladoc Health. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Teladoc Health. 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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The Northern Star Resources Ltd (ASX: NST) share price failed to generate positive returns for shareholders in FY22.

The price of gold recorded severe volatility throughout the financial year which heavily weighed on the ASX gold miner’s shares.

At 30 June 2021, the Northern Star share price closed at $9.78. The same time this year saw the share price close at $6.84, representing a fall of around 30% over the 12 months.

In comparison, the share price of fellow miner Newcrest Mining Ltd (ASX: NCM) lost 17% across the same time frame.

Let’s take a look at what dragged down Northern Star shares in FY22.

What happened to Northern Star during FY22?

There are a couple of likely reasons why the Northern Star share price fell into a hole during FY22.

After trading sideways from July 2021 to January 2022, the Russian war in Ukraine in the following month sparked a commodity boom.

Gold prices accelerated above the psychological US$2,000 barrier and drove Northern Star shares to a 52-week high of $11.59 in mid-April.

However, strong inflationary movements and lower than forecasted GDP readings appear to have soured investor appetite shortly after.

The price of the yellow metal soon went on to trade below US$1,750 an ounce – a level not seen since September 2021.

Higher interest rates tend to drag down the price of precious metals, and investors traditionally switch their focus to government bonds.

With major central banks around the world increasing interest rates, this has put selling pressure on Northern Star shares.

Last week, the gold miner’s shares touched a multi-year low of $6.78 before recovering some lost ground.

Its shares are at $6.93 as of Thursday’s market close.

The company also disappointed market expectations with its March quarterly update.

Management blamed the result on tough trading conditions against an overall challenging operating backdrop.

Nonetheless, several brokers remain bullish on Northern Star shares given its strong fundamentals and current valuation.

Northern Star share price snapshot

A gloomy economic outlook due to soaring inflation levels and interest rate hikes has led the Northern Star share price to tumble 26% in 2022.

The S&P/ASX 200 Resources Index (ASX: XJR) has also headed south but has posted a smaller loss of around 4% year to date.

The sector represents 48 of the largest S&P/ASX 200 Index (ASX: XJO) companies in the energy, metals and mining industry.

Northern Star has a price-to-earnings (P/E) ratio of 6.31 and commands a market capitalisation of roughly $8.04 billion.

The post Why did the Northern Star share price lose its shine in FY22? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• What’s the outlook for ASX 200 dividend shares in FY23?
• Could rising rates hurt ASX 200 bank shares in the longer run?
• It’s been a crazy year for Core Lithium shares so far. What’s next?
• Here are the top 10 ASX shares today

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. 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 wondering where to invest during these uncertain times, then the exchange traded funds (ETFs) listed below could be worth considering.

Both have just been rated as buys by analysts and tipped as top options in the current environment. Here’s what you need to know:

ETFS S&P 500 High Yield Low Volatility ETF (ASX: ZYUS)

The first ETF for investors to consider is the ETFS S&P 500 High Yield Low Volatility ETF.

This ETF aims to provide investors with a return that tracks the performance of the S&P 500 Low Volatility High Dividend Index. This index is designed to provide exposure to 50 high-yielding, low volatility stocks from the S&P 500 while meeting diversification and tradability requirements.

Among its holdings are IBM, Kinder Morgan, Kraft Heinz, Philip Morris, and Verizon.

Felicity Thomas from Shaw and Partners is a fan of this ETF. She told Livewire:

I really like ETF Securities High Yield Low Volatility ETF. Essentially, I really like their methodology. They look at the top 75 high-quality businesses and they only take 10 high-yielding companies per sector, and they remove the 25 most volatile. It’s got names like Kraft, IBM, and Verizon and also pays a quality distribution. And I think everyone’s looking for defensive yield at the moment.

VanEck Vectors MSCI World ex Australia Quality ETF (ASX: QUAL)

Another ETF for investors to look at is the VanEck Vectors MSCI World ex Australia Quality ETF. It provides investors with access to a portfolio of high quality shares outside Australia.

To be included in the ETF these companies need to pass certain criteria such as having low leverage, high growth rates, and high returns on equity. Companies that have made it into the fund include Apple, Microsoft, Nike, and Nvidia.

Apt Wealth’s Sarah Gonzales is very positive on the ETF and named it as her top pick right now. She told Livewire:

My preferred ETF is the VanEck MSCI International Quality ETF. I think it provides exposure to that quality factor, which tends to outperform in market downturns. It does focus on factors like return and equity, year-on-year growth of earnings and also levels of debt. These are proxies for profitability, earnings variability, and the level of debt of companies. Particularly if we are going into a recession,  I think these are really the factors that I think we should focus on.

The post Here are 2 buy-rated ASX ETFs for casting a wider net during uncertainty appeared first on The Motley Fool Australia.

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More reading

• Here are 2 high quality ETFs analysts rate as buys
• Are these 2 high quality ETFs in the buy zone this month?

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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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.

During the peak pandemic years, e-commerce stocks could do no wrong. Now, they are entirely out of favor with the market. However, does this weakness present a buying opportunity?

Some of the top e-commerce stocks on my checklist are Amazon (NASDAQ: AMZN), MercadoLibre (NASDAQ: MELI), Shopify (NYSE: SHOP), and Etsy (NASDAQ: ETSY). Each is down significantly from their record highs. While all might be solid companies, are their stocks a buy? Let’s find out.

The businesses

Each company operates in its own market niche:

• Amazon is the world’s largest e-retailer and sells practically anything you could ever want. It also has a growing cloud computing business that diversifies the company.
• MercadoLibre is focused on Latin America and has an e-commerce platform, digital payments business, shipping logistics division, and consumer credit arm.
• Shopify isn’t a direct e-commerce play, but it provides the software necessary for businesses to launch their e-commerce store.
• Etsy’s site offers products that are often customizable and typically sold by individuals with a relatively small operation.   

All four companies saw massive sales growth during the pandemic, but only one has maintained its growth rate through 2022.

AMZN Revenue (Quarterly YoY Growth) data by YCharts

When the other businesses’ sales growth fell dramatically, MercadoLibre’s stayed steady at 63%. This was primarily due to 113% year-over-year (YOY) growth of its fintech revenue during the first quarter. However, its commerce revenue still grew a respectable 44% (which was higher than any of the other companies).

Both Amazon and Etsy had abysmal first quarters, and it won’t get better for Etsy. Management projects Q2 sales to rise 7% at the midpoint, a metric that a weakening consumer could impact. Most of Etsy’s goods are discretionary and nonessential during tough times. But this sentiment may be baked into the stock, which trades for 20 times free cash flow.

Amazon was propped up by its Amazon Web Services (AWS) cloud computing division in the first quarter as its sales rose 37% over the year-ago period. However, North American commerce sales only rose 8%, while international sales fell 6%. Additionally, Amazon’s free cash flow slid further into negative territory, with Amazon burning an astounding $29 billion during the quarter.

Etsy and Amazon both had horrendous quarters, and besides AWS, there doesn’t seem to be a light at the end of the tunnel. But what about Shopify?

Those who may not have checked on Shopify’s stock lately may be wondering, “Why is this stock priced so low?”

As of June 28, Shopify split its stock 10-for-1, which means each share is now worth a tenth of what it used to, but investors who held the stock received nine additional shares to make up for the split.

As for the business, Shopify’s sales grew a steady 22%. This rise was driven by a 29% increase in its merchant solutions segment, which takes a cut of each item sold through Shopify’s platform. Because Shopify merchants have to pay a monthly fee to use its software, the company should be able to maintain a solid chunk of its business regardless of how the consumer is doing. However, it could see a material slowdown due to the weakening consumer because its merchant solutions made up 72% of Q1 revenue. 

Business outlook

Looking forward, it’s hard to get excited about Etsy’s growth prospects. It operates in a niche that thrives when the consumer is flush with cash — something we are not experiencing currently. Amazon’s only bright spot is AWS, which has massive tailwinds behind it. As for the e-commerce business, it’s almost too big to grow rapidly anymore.

Shopify has a long way to go before fully deploying its vision for a complete e-commerce solution, but many stores have already taken the leap from brick-and-mortar to online with Shopify. Now, Shopify’s growth will be driven by the growth of its clients, which could still be significant.

MercadoLibre has by far the best outlook. With its fintech divisions, there seems to be no sign of slowing down. Additionally, only about 4.9% of total retail sales occur online in Latin America versus 16.1% in the U.S. Latin America is home to more than 650 million people, giving MercadoLibre a vast growth runway.

Stock valuations

Comparing each stock directly from a price-to-sales ratio standpoint is dangerous as each has a different margin profile. However, examining where the stocks have traded historically can give investors insight into how cheap they are.

AMZN PS Ratio data by YCharts

From this chart, Amazon is returning to valuation levels last seen in 2016. On the flip side, MercadoLibre is valued the same as it was at the depths of the Great Recession. MercadoLibre isn’t nearly as in trouble as it was in 2009 when the financial system was on the brink of collapsing. However, that is how the market values it. 

Both Shopify and Etsy are much younger, so investors don’t have as much of a historical record on which to base their analysis.

SHOP PS Ratio data by YCharts

These two are returning to lows reached in 2016. However, growth prospects were greater back then because e-commerce wasn’t as developed. Now that the largest e-commerce catalyst that will likely ever occur has subsided, the future growth story isn’t as bright for Shopify or Etsy, leading to a lower valuation.

It’s hard to ignore how superior MercadoLibre appears to be as an investment. It’s growing the fastest, has a sizable market available, and is valued cheaply. That’s not to say it is risk-free since operating in Latin America can be tumultuous with governments and economies.

However, with its wide footprint, it should be able to weather almost any storm it experiences. So of the four, MercadoLibre is my top e-commerce stock to buy, and it really isn’t close.

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

The post Which e-commerce company is the best buy during this bear market? appeared first on The Motley Fool Australia.

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More reading

• 1 green flag for Amazon stock
• Why Amazon shares fell 12% in June
• Why Amazon stock rose while the market slept on Wednesday
• Why are ASX tech shares struggling today?
• 2 monster Warren Buffett stock-split stocks to buy right now

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Etsy, MercadoLibre, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Etsy, MercadoLibre, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Chalice Mining Ltd (ASX: CHN) share price was a strong performer on Thursday.

The mineral exploration company’s shares stormed almost 7% higher to end the day at $4.00.

The catalyst for this was the release of positive drilling results from the Dampier target.

Can the Chalice Mining share price keep rising?

The good news for investors is that one leading broker believes the Chalice Mining share price can keep rising… and rising.

According to a note out of Bell Potter, its analysts have retained their speculative buy rating and $11.10 price target on the company’s shares.

Based on the current Chalice Mining share price, this implies potential upside of 178% over the next 12 months.

What did the broker say?

Bell Potter was very pleased with the drilling results from the Dampier target. It highlights that these results are similar to the enormous Gonneville deposit and paint a very positive picture of its Julimar project. The broker said:

These results are a very exciting development for CHN and are the strongest indication yet of further mineralisation at Julimar and for potential repeats of the Gonneville deposit. The mineralisation style is almost identical to Gonneville and the drilling has provided additional information that has enabled CHN to prioritise multiple targets.

The step-out (~10km) from the Gonneville deposit and the continuity of ~350m strike and over ~250m dip for the initial three holes is highly encouraging for the prospectivity of the entire Julimar Complex.

All in all, the broker believes this update as a big positive and continues to see significant value in its shares. Bell Potter concludes:

With this latest update, we see the likelihood of further positive catalysts emerging on exploration success. Our valuation remains unchanged at $11.10/sh and we retain our Speculative Buy recommendation.

The post Top broker says the Chalice Mining share price can rise almost 200% appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• Why Chalice Mining, Damstra, Link, and Pinnacle shares are storming higher
• ASX 200 midday update: Chalice Mining jumps, Zip sinks on bearish broker note
• Chalice Mining share price leaps 13% on new exploration results

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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It’s extremely rare to see the analyst community unanimously favour a particular stock.

Much like the retail investor population, each professional also has their own style, taste and strategy. So what looks attractive to one analyst may not fit the criteria for another.

But if there’s anything close to a unanimously loved ASX share right now, it’s CSL Limited (ASX: CSL).

According to CMC Markets, 12 out of 13 analysts currently rate the biotechnology stock as a buy. 

Ten of those 12 go as far as recommending it as a strong buy.

Fallen star could represent a bargain

Over the 2022 financial year, the CSL share price lost 5.5%. It’s still a long way from its pre-COVID high.

Perhaps this represents great value to the analysts, who have seen CSL make many people wealthy over the long term.

The share price closed Thursday at $287.

According to The Motley Fool’s James Mickelboro, the team at Citi reckons there’s massive upside, slapping on a price target of $330.

“US CMS data indicates continued price increases in immunoglobulin products. This is consistent with our expectation, as donor fees continue to remain elevated,” Citi’s notes read.

“With plasma collections now back to pre-pandemic levels, we expect the market to shift its focus to the strong underlying plasma product demand.”

Reporting season could surprise

The biggest influence on the CSL share price over the last financial year, aside from the ongoing COVID-19 pandemic, was the acquisition of European pharmaceutical company Vifor Pharma towards the end of last year.

At the time experts were divided over whether the deal was a positive one for CSL.

But now that the dust has settled, there doesn’t seem to be as much angst about the $17.2 billion takeover.

With August reporting season coming up, Switzer Financial Group director Paul Rickard this week noted that healthcare companies like CSL tend to have a track record of “surprising on the upside”.

“The lower Australian dollar is helping as well,” he told Switzer TV Investing.

The post Why analysts love this ASX share that lost investors 5.5% in FY22 appeared first on The Motley Fool Australia.

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More reading

• 4 ‘quality’ ASX shares to buy in scary times: expert
• Analysts name 2 ASX 200 blue chip shares to buy
• Here’s how ASX healthcare shares performed in FY22
• Beating the benchmark: Why this broker is betting on the CSL share price for outperformance
• Here’s what happened to the CSL share price in June

Motley Fool contributor Tony Yoo has positions in CSL Ltd. 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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The Pro Medicus Limited (ASX: PME) share price will be on watch on Friday.

This follows the release of a positive broker note out of Goldman Sachs this morning.

What is Goldman Sachs saying about Pro Medicus’ shares?

According to the note, the broker has taken its sell rating off the health imaging technology company’s shares.

Goldman has upgraded Pro Medicus to a neutral rating with an improved price target of $42.60.

And while this is still lower than the current Pro Medicus share price of $45.19, the broker spoke very positively about the company’s outlook and artificial intelligence (AI) opportunity.

What did the broker say?

Goldman Sachs highlights that over the last decade there has been a lot written about the various benefits and applications of AI in radiology. At long last, the broker believes that the technology is finally approaching a tipping point in adoption.

This could be good news for Pro Medicus, as Goldman Sachs believes it is the company that could benefit most from this technology. And while it acknowledges that it is still early days, the broker sees a big opportunity for the company.

Goldman explained:

Although still early days, we believe PME is better positioned than most to commercialise AI, as integration with its established Visage 7 Viewer provides a strong differentiation to the competition. However, competition is likely to be intense, with multiple players vying for platform share, and hence any sustained success is very far from assured.

Whilst revenue contribution is still subject to various uncertainties, PME is now generating revenue from its breast density AI algorithm, and hence we feel it is now necessary to at least attempt to recognise what could be a meaningful growth driver through the mid/long-term. Based on our current assumptions, AI could be +3-9% accretive to our revenue forecasts in FY24-26E.

The post Why Goldman Sachs just upgraded Pro Medicus shares appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• What on earth happened to ASX 200 tech shares in June?
• The Pro Medicus share price is down 30% in 2022. Is it a buy?
• Here are the top 10 ASX shares today

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 Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Investing in ASX shares in 2022 has not been for the faint-hearted.

Inflation and interest rate worries have paralysed the market for the whole year, while Russia’s war in Ukraine and surging energy prices have just poured petrol on the volatility fire.

Now, as Australians and Americans face higher mortgage repayments, there are fears that economies will fall into recession — and that it’s a sacrifice central banks are willing to accept to stop high inflation becoming entrenched.

Scary times.

In such turbulence Switzer Financial Group director Paul Rickard suggests that buying into the “safer” reliable companies might be an idea.

“[Buying] the stock that was $10 and is now 50 cents, hoping that’s going to rebound, that’s a high-risk strategy for me,” he told Switzer TV Investing.

“I’d rather stick to a couple of quality companies. And there are a couple out there that I think are showing reasonable rounding-type behaviour and are trading okay.”

The company to boom when the economy recovers

Rickard’s first pick is investment bank Macquarie Group Ltd (ASX: MQG).

He noted the stock has come up about 7% off its low in mid-June, which is impressive resilience considering the rest of the ASX has plunged in that time.

“The other reason why I like Macquarie is you know it’s got a great underlying business. You know that there are some pretty smart operators in Macquarie.”

According to Rickard, the firm has a “good mix” of market-exposed investments and its fast-growing retail banking business.

Like most investment banks, Macquarie does have some downside if the economy plunges into a recession or even a severe slowdown.

But beyond that there is plenty of upside.

“If the economy recovers and activity picks up… I’d say Macquarie’s a big beneficiary.”

A reliable trio from a growing sector

Healthcare is a sector that Rickard favours at the moment.

He noted that in the US healthcare is often seen as a defensive sector, while Australia’s product-focused companies give the industry a growth flavour.

And certainly with the current market sentiment so hostile towards technology, Rickard feels like growth shares in health could benefit.

“Companies like CSL Limited (ASX: CSL), Resmed CDI (ASX: RMD) and Cochlear Limited (ASX: COH)… I think there’s good value there,” he said.

“Again, they’re all stocks that aren’t going down and, if anything, companies like Resmed and Cochlear have been creeping up, as has CSL.”

With reporting season coming up next month, Rickard said that these companies have a history of “surprising on the upside”.

“The lower Australian dollar is helping as well.”

The post 4 ‘quality’ ASX shares to buy in scary times: expert appeared first on The Motley Fool Australia.

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More reading

• I’m sticking by this ‘quality’ ASX share that’s fallen 20%: expert
• Analysts name 2 ASX 200 blue chip shares to buy
• Here’s how ASX healthcare shares performed in FY22
• Why Macquarie shares could be a ‘quality cyclical at a discounted price’: expert
• Why are ASX 200 bank shares responding positively to higher interest rates?

Motley Fool contributor Tony Yoo has positions in CSL Ltd., Cochlear Ltd., Macquarie Group Limited, and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd., Cochlear Ltd., 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 Cochlear Ltd. and 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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