Tag: Motley Fool

The Zip Co Ltd (ASX: ZIP) share price was the worst performer on the ASX 200 index during the 2022 financial year.

Over the 12 months, the buy now pay later (BNPL) provider’s shares dropped from $7.57 all the way down to just 45 cents.

That represents a very disappointing 94% decline from top to bottom.

Why was the Zip share price sold off in FY 2022?

After going sideways for the first few months of the financial year, the Zip share price started its long slide in late October.

This followed the release of its first quarter update. While the initial reaction to this update was positive, it didn’t take long for cracks in investor sentiment to show.

Although Zip continued to deliver strong top line growth, its transaction per customer metric in the United States disappointed the market. Combined with slowing customer growth following its rebrand in the key market, this sparked fears that Zip could have a significant number of inactive customers on its books that will eventually drop off.

The next lowlight for the Zip share price came after the eventual release of its half year results in February. Those results were delayed so that the company could also launch a ~$200 million capital raising relating to the acquisition of smaller rival Sezzle Inc (ASX: SZL).

However, this capital raising was not being used to fund the acquisition of Sezzle, but rather to support the two businesses post-acquisition.

Management explained that the proceeds would be used to “strengthen its balance sheet and positions Zip for sustainable growth by providing more capital runway to execute on the potential synergies from its proposed acquisition.”

However, retail investors weren’t biting. The company successfully raised approximately $150 million from institutional investors at a big discount to the prevailing Zip share price, but only $24 million of the $50 million sought from retail investors. Concerns over the price Zip was essentially paying to acquire Sezzle’s customers didn’t help. Especially given potential customer overlaps.

Those that didn’t take part may well be thanking their lucky stars now considering how much the Zip share price has fallen since then.

What else?

There are a number of other factors that have weighed heavily on its shares over the last 12 months.

This includes rising interest rates, the market’s aversion to loss-making companies, weakness in the tech sector, rising bad debts, recession concerns, and an increase in competition.

The latter includes the arrival of tech giant Apple in the space with the launch of its BNPL service.

Apple’s BNPL service works with any merchant that already supports Apple Pay and does not require a new payments terminal. Furthermore, consumers can use the service even if the merchant doesn’t actively offer BNPL.

Here’s hoping the next 12 months are better for shareholders.

The post The Zip share price lost 94% of its value in FY22 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What on earth happened to ASX 200 tech shares in June?
• Why Austal, Mesoblast, Regis Resources, and Zip shares are charging higher
• Why is the Zip share price jumping 11% today?
• Why did the Zip share price crash more than 50% in June?
• June was a terrible month for ASX BNPL shares. Here’s why

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 ZIPCOLTD FPO. 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.

from The Motley Fool Australia https://ift.tt/B3vKJFX

The Magellan Financial Group Ltd (ASX: MFG) share price fell by more than 17% in June. Ouch.

That came after a series of declines over many of the previous months.

Don’t forget that Magellan is, or was, one of the biggest fund managers in Australia. So, movements in its total funds under management (FUM) can impact revenue, profit potential and investor sentiment.

With Magellan managing many billions of dollars of funds, if share markets fall, then the amount of funds it manages goes down. There’s also a potential risk that investors using Magellan’s investment services could get nervous about falling markets and take their money out of the fund manager.

Let’s look at the company’s latest update.

Latest FUM update

The company announced its May 2022 monthly FUM update at the start of June.

At 31 May 2022, Magellan’s total FUM fell to $65 billion, down from $68.6 billion at the end of April 2022. There was a reduction of both its retail and institutionally managed FUM, down to $23.6 billion and $41.4 billion, respectively.

Its global shares investment strategy saw FUM fall by almost $3 billion to $35.2 billion, infrastructure shares saw flat FUM of $20.7 billion, while Australian shares saw a reduction of $800 million to $9.1 billion.

Quite a lot of the FUM decline for the global shares strategy came from declines for the investment funds. For example, the Magellan Global Fund Open Class (ASX: MGOC), a $10 billion fund, saw a net return of negative 2.2% for May 2022.

The benchmark that the Magellan Global Fund tracks, the MSCI World Net Total Return Index (which tracks the global share market), suffered a 0.9% drop. So, while global shares declined, the Magellan Global Fund fell by more.

Interest rates and inflation

Magellan also has to contend with a rapidly changing investment environment.

Inflation is elevated in many countries, including the United States and Australia. Central banks are increasing interest rates to try to bring inflation under control. This could be one of the factors hurting the Magellan share price.

While interest rates returning to a more normal level was likely to happen eventually – emergency support settings don’t usually last forever – the rate of interest hikes may have surprised many investors.

Time will tell what happens next with the global share market, but it may make it harder for Magellan to attract more FUM or achieve good returns if these difficult investment conditions continue.

Hamish Douglass to resume work

Magellan also announced on 9 June 2022 that Magellan co-founder Hamish Douglass will resume work in a new consultancy role on 1 October 2022. He is tasked with providing investment insights, including geopolitical and macroeconomic views.

But, he will no longer be a permanent member of Magellan’s staff.

Magellan share price snapshot

Since the beginning of 2022, Magellan shares have dropped around 35%.

The post Why did the Magellan share price fall 17% in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 midday update: Suncorp’s update, Magellan sinks
• Down 70% in one year: Is the Magellan share price a turnaround buy?
• War on funds: What’s going on with Magellan shares and other ASX-listed fund managers?
• These were the worst performing ASX 200 shares last week
• Why Block, Evolution, Fortescue, and Magellan shares are sinking today

Motley Fool contributor Tristan Harrison has positions in Magellan Financial Group. 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.

from The Motley Fool Australia https://ift.tt/ipb7e9h

The RPMGlobal Holdings Ltd (ASX: RUL) share price is rebounding today after tanking more than 6% the past three consecutive trading days.

This comes after the mining software company announced a sales update for the 2022 financial year.

At the time of writing, RPMGlobal shares are up 4.43% to $1.65 each after reaching a high of $1.70 apiece this morning.

How is RPMGlobal performing?

Investors are bidding up the RPMGlobal share price as investors digest the company’s latest financial performance report.

In an announcement today, RPMGlobal revealed that trading conditions continued to be positive, bringing an overall stronger FY22 result.

As such, total contracted value (TCV) from its software license sales topped $55.9 million for the 12 months ending 30 June. This represents an increase of $5.6 million from the company’s previous market update on 27 June.

Furthermore, RPMGlobal stated that perpetual software licenses revenue came to $1.8 million, despite less one-off product licenses sold in FY22. This is opposed to the $5.2 million that was achieved in the previous corresponding period.

Despite that fall, revenue from recurring subscription license sales improved by $6.4 million to $54.1 million in FY22.

The company noted the successful transition from perpetual license sales to subscription license sales over the past 12 months.

Lastly, annually recurring revenue (ARR) from software subscriptions totalled $32.8 million, up $10.9 million from the start of FY22.

Management advised that there is now $95.5 million in pre-contracted non-cancellable software subscription revenue. This is 45% higher than the $65.7 million recorded from the same time last year.

Investors might want to keep a close eye on RPMGlobal shares as the company expects to release its FY22 audited results next month.

RPMGlobal share price summary

Regardless of today’s positive outcome, the RPMGlobal share price has struggled to take off over the last 12 months.

The company’s shares have mostly traded sideways to register a loss of 9% for the period.

Although, when looking year to date, RPMGlobal shares are down 23% due to a broader market decline across the ASX.

Based on its current share price, RPMGlobal has a market capitalisation of roughly $383 million.

The post RPMGlobal share price strengthens 5% on software sales improvement appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• RPMGlobal share price jumps higher after breaking the $50 million contract barrier
• What I love about these 2 ASX growth shares

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

from The Motley Fool Australia https://ift.tt/hqZsMpU

Hoping to bag the next dividend payment from Graincorp Ltd (ASX: GNC) shares? Well, you’ve come to the right place. Grancorp shares are having a steady start to the trading week so far this Monday. The ASX 200 agricultural company is marginally lower at $9.49 a share at the time of writing, down 0.52%.

Still, this puts Graincorp shares at a gain of 16% for 2022 so far and an even more impressive rise of around 89% over the past 12 months.

But Graincorp shares are probably going to go backwards this week – on Wednesday to be precise. That’s when Grancorp is scheduled to trade ex-dividend.

When a company announces a dividend, it must also announce the date when new shareholders have to own the shares by to receive the payout. This date is known as the ex-dividend date. So even though Graincorp won’t be paying out its next dividend until 21 July, any investor who wishes to receive it must own Grancorp shares by this Wednesday.

But because any new shareholders who buy Graincorp shares after Wednesday won’t be eligible to receive the payment, the company’s shares will likely drop in value upon market open that day to reflect this. This is normally what happens when a share trades ex-dividend. So expect a fall in the Graincorp share price this Wednesday.

What can investors expect from the Graincorp dividend?

So what is Grancorp’s latest dividend worth? Well, this latest dividend will come in two parts. The first is the ordinary interim dividend. This payment will be worth 12 cents per share and will come fully franked.  This represents a healthy rise from Graincorp’s last interim dividend which came to eight cents per share.

The second is a special dividend, also worth 12 cents a share and fully franked. The special dividend was announced back in May and reflects the company’s bumper 382% rise in net profits after tax (NPAT) to $246 million over the six months to 31 March 2022.

So investors can look forward to a total dividend payment worth 24 cents per share, fully franked, on 21 July.

Since Graincorp’s last payment was the final dividend of 10 cents per share that investors received back in December, the company will have a trailing yield of 2.27%, not including the special dividend. It will be 3.51% including the special dividend on 21 July when these dividends hit shareholders’ bank accounts.

The post Hoping to bag the next Graincorp dividend? Read this appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 midday update: Suncorp’s update, Magellan sinks
• South32 crashes into bear market in June as recession fears bite
• 5 things to watch on the ASX 200 on Monday
• The Xero share price lost 14% last month. Here’s the tea
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen 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.

from The Motley Fool Australia https://ift.tt/RhIok3U

The Novonix Ltd (ASX: NVX) share price is trading more than 1% higher on Monday on no news.

At the time of writing, shares in the battery tech company are swapping hands at $2.26 apiece, as investors begin the first week of July trade on the ASX.

In broad market moves, the S&P/ASX All Technology Index (ASX: XTX) is pushing 1.25% higher at midday on Monday.

What’s up with Novonix shares?

Investors punished Novonix last month alongside many other tech names as the growth/tech trade of 2021 completely unravels.

Those names within the ‘growth’ basket have incurred heavy losses in 2022, coming off two years of capital gains and lofty valuations.

The tech-heavy Nasdaq Composite is off to its worst half-year on record. Meanwhile, investors continue to unload risk assets including ‘risker’ portions of the share market.

Looming threats of higher interest rates, surging inflation and supply chain headwinds have also plagued tech stocks in 2022.

These macroeconomic headwinds have compressed share prices for both tech and growth companies across the globe in the first half of 2022.

Valuations of these kinds of shares are heavily tied to growth of the economy, cash flows into the future, and ability to scale up production.

Each of these factors is directly impacted by the macro-headwinds described above.

With the stage set, investors have now moved to position themselves to best absorb these pressures. Meaning tech shares might continue to get shunned.

All of this activity has infiltrated the Novonix share price, prompting investors to unload their positions.

Novonix snapshot

In the last 12 months, Novonix has slipped more than 5% into the red. Year to date the picture is worse, with Novonix shares losing 75% of their value.

At the current share price, Novonix has a market capitalisation of around $1 billion.

The post Why did the Novonix share price slide nearly 36% in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These were the worst performing ASX 200 shares in June
• Novonix share price down 6% on Tuesday, what’s happening?
• Wow! Novonix share price rebounds off a 52-week low to surge 11%
• Why is the Novonix share price plunging 6% on Wednesday?
• Why is the Novonix share price charging 7% higher today?

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

from The Motley Fool Australia https://ift.tt/6lbv50G

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.

Are you feeling beaten down by the stock market? You’re not alone. The stock market experienced its worst first half of a year in more than five decades. Very few investors have been able to defy gravity as both the Nasdaq Composite Index and S&P 500 entered bear markets. 

Even if you’re down, you absolutely don’t have to be out. The next six months could be critical in helping you build the foundation for wealth over the long run. And you don’t have to come up with a game plan on your own. Here are three things the world’s smartest investors will do in the second half of 2022 to beat the market.

1. Stay calm

Will the stock market remain volatile throughout the rest of the year? Probably so. There are multiple factors that could cause big price swings. Perhaps the biggest question mark is whether or not the U.S. economy enters into a recession.   

Just because the market could be volatile doesn’t mean that you should be. The world’s best investors know the importance of staying calm when stocks go through tumultuous periods.

Jack Bogle, the mutual fund pioneer who ranks among the most influential investors of all time, told CNBC in 2018 that investors should always “stay the course.” He warned that “your emotions will defeat you totally” if you try to move in and out of the market. Bogle passed away in 2019, but his advice still rings true.

2. Invest selectively

Another iconic investor, Warren Buffett, once famously stated, “Be fearful when others are greedy and greedy when others are fearful.” Unsurprisingly, Buffett has led Berkshire Hathaway to buy more stocks in recent months than the giant conglomerate has done in a while.

However, Buffett hasn’t been indiscriminately greedy. He has bought 16 stocks so far in 2022, and many of them are value stocks. For example, Berkshire initiated a large position in HP (NYSE: HPQ). The technology stock trades at less than eight times expected earnings.

Buffett has focused on winning sectors, as well — especially energy. Chevron (NYSE: CVX) now ranks as Berkshire’s fourth-largest holding. It’s been a huge winner for Buffett, with shares soaring more than 20% year to date despite a recent pullback.

Berkshire has also scooped up a boatload of shares of another energy stock, Occidental Petroleum (NYSE: OXY). It now owns a 16.4% stake in Oxy, leading some to speculate that Buffett might even want to acquire the oil and gas producer.

Should you buy HP, Chevron, and Oxy just because Buffett did? No. But it does make sense to have the same mindset as the legendary investor. View market downturns as opportunities to buy shares of well-run companies at a discount. Focus on the sectors that are most likely to be winners. Invest — but do so selectively.

3. Focus on the long term

I know it’s a cliché, but it’s important to focus on the long term. It’s hard, if not impossible, to think of any great investors who only have a short-term outlook.

Pershing Square Holdings CEO Bill Ackman has been tremendously successful through the years. The hedge-fund manager’s net worth totals $2.8 billion, according to Forbes. He stated in a recent investor call something that’s especially worthy of note:

We are not a trading firm trying to position ourselves so that we are going to outperform the market in six months, nine months, even 12 months. What we do is, we look to find businesses that we think we can own for years, in some cases, decades or more.

This echoes Buffett’s words in his most recent letter to Berkshire Hathaway shareholders. He wrote, referring to himself and his longtime business partner Charlie Munger:

Whatever our form of ownership, our goal is to have meaningful investments in businesses with both durable economic advantages and a first-class CEO. Please note particularly that we own stocks based upon our expectations about their long-term business performance and not because we view them as vehicles for timely market moves. That point is crucial: Charlie and I are not stock-pickers; we are business-pickers.

Investors who aren’t billionaires would do well to have the same focus as Ackman and Buffett. Sure, buying stocks for the long term won’t guarantee that you’ll beat the market in the second half of this year. But buying stocks in the second half of 2022 with a long-term outlook will likely significantly increase your prospects of beating the market over the next decade and beyond. 

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

The post 3 things the world’s smartest investors will do in the second half of 2022 to beat the market appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why did the Novonix share price slide nearly 36% in June?
• Down 10% in a month, could Boral shares be a buy?
• How did ASX 200 retail shares perform in June?
• Why did the Wesfarmers share price tumble 11% in June?
• Why did the Vulcan Energy share price crater 28% in June?

Keith Speights has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares) and HP. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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.

from The Motley Fool Australia https://ift.tt/owv2JgM

The Boral Ltd (ASX: BLD) share price is on the rise on Monday. At the time of writing, Boral shares are trading 2.33% higher at $2.63 apiece on no news.

Boral had a choppy month on the charts in June and traded 10% down in that time. This came as commodity market volatility weighed on the company’s performance, among others.

In broader market moves this morning, the S&P/ASX 200 Materials Index (ASX: XJO) has climbed 0.32% at the time of writing after also tumbling lower in June.

Returns for both Boral and its home sector since March are plotted below:

Is the Boral share price a buy?

The Boral share price has been on the downtrend for some time. It’s fallen from a high of $3.58 on 28 April and has glided lower since.

Early in June, it was the surging price of oil that was pinching gains from the company’s shares. At the time, Boral chair Ryan Stokes noted the company wasn’t immune to rising energy costs.

Also last month, the company announced Vik Bansal as its new CEO and managing director.

The former head of waste management giant Cleanaway and current head of InfraBuild, Bansal’s new position becomes effective on 5 December 2022.

Nevertheless, analysts at Macquarie reckon there could be an opportunity in Boral. They’ve baked considerable upside in their valuation of the company.

They’ve rated Boral a buy with a valuation of $4.05 a share. That’s around 54% potential return on the current share price.

Despite pressures from a cooling house market, rising input costs, and industry risks, the Macquarie team also says there could be “alternative growth potential” and are constructive on Boral’s “infrastructure exposure”.

That kind of upside is welcome news for the Boral share price. Over the past 12 months, the company’s shares have collapsed 64% into the red.

The post Down 10% in a month, could Boral shares be a buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why this top broker sees 50%+ upside to the Boral share price
• Why is the Boral share price sinking on Thursday?
• Why Atlas Arteria, Boral, Fonterra, and Paladin Energy shares are pushing higher
• ASX 200 midday update: Boral rockets, big four banks tumble
• Boral share price charges higher amid controversial CEO appointment

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

from The Motley Fool Australia https://ift.tt/C4p3jKh

Last month was a shocker for many S&P/ASX 200 Index (ASX: XJO) retail shares. Here’s how some of the market’s biggest retailers performed in June:

• Wesfarmers Ltd (ASX: WES) – fell 11%
• Harvey Norman Holdings Limited (ASX: HVN) – fell 15%
• JB Hi-Fi Limited (ASX: JBH) ­– fell 16%
• Premier Investments Limited (ASX: PMV) – fell 14%
• Super Retail Group Ltd (ASX: SUL) – fell 10%

For context, the ASX 200 slipped 8.9% last month. Interestingly, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) outperformed slightly, falling just 7.3%.

So, what might have dragged these ASX 200 retail shares lower last month? Let’s take a look.

What went wrong for ASX 200 retail shares in June?

Many major ASX 200 retail shares underperformed in June amid rising interest rates.

The Reserve Bank of Australia (RBA) upped the benchmark interest rate by 0.5% for the second consecutive month in early June. That saw Australia’s interest rate sitting at 0.85%.

Additionally, RBA Governor Philip Rowe noted further hikes can be expected through the rest of 2022 as the regulator bears down on inflation.

Of course, rising rates generally slow the economy and leave consumers’ pockets feeling lighter. Thus, rate hikes may reduce Australians’ retail spending.

Indeed, National Retail Association CEO Dominique Lamb dubbed the RBA’s move “heavy-handed” last month, saying:

Many retailers are watching consumer confidence rapidly slipping [amid] a raft of increasing costs and external factors such as the cost of fuel, power … increasing wages, and supply chain issues.

But last month’s tumble didn’t mark a turn-around for ASX 200 retail giants. They’ve struggled through most of 2022 so far.

Shares in Wesfarmers – the conglomerate behind Bunnings, Kmart, and Officeworks – have slipped 30% year-to-date. Harvey Norman and JB Hi-Fi’s stock have also slumped 23% and 19% respectively.

Meanwhile, stock in Super Retail Group – the owner of the likes of BCF and Supercheap Auto ­– and Premier Investments – behind brands such as Smiggle, Peter Alexander, Just Jeans, and Dotti – have slipped 31% and 35% respectively.

The post How did ASX 200 retail shares perform in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why did the Wesfarmers share price tumble 11% in June?
• What’s the outlook for Wesfarmers shares in July?
• Experts name 2 ASX dividend shares to buy next week
• Broker names 3 of the best ASX shares to buy in July
• Embattled ASX 200 retail shares primed for a comeback: experts

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 positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/gqRPCza

The Wesfarmers Ltd (ASX: WES) share price suffered last month amid rising interest rates and an update on the company’s strategy.

The Wesfarmers share price ended June 11.19% lower than it closed May, trading at $41.91.

For context, the S&P/ASX 200 Index (ASX: XJO) slipped 8.9% last month while Wesfarmers’ home sector – the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) – fell 7.3%.

Let’s take a look at what might have weighed on the ASX 200 retail-focused conglomerate behind the likes of Bunnings, Kmart, and Officeworks in June.

What dragged on the Wesfarmers share price in June?

The Wesfarmers share price continued its multi-month downturn in June, tumbling another 11%. That saw it trading 30% lower than it was at the start of 2022 as of the end of last month.

And rising interest rates and inflation are likely among the biggest weights on the stock this year.

Consumer discretionary shares were among those hardest hit when the Reserve Bank of Australia announced another rate rise in June. That saw the benchmark interest rate rise 0.5% to 0.85%.

RBA Governor Philip Lowe also flagged the possibility of further rate hikes this year.

The move will likely see Australians’ pockets feeling lighter and could spur a shift away from retail spending. That, in turn, could have damped sentiment for Wesfarmers shares.

The market also heard news from Wesfarmers last month. The company conducted a strategy briefing on 2 June.

An accompanying presentation outlines the company’s plans to expand its e-commerce offerings, Bunnings, API, and WesCEF.

The latter’s growth will be bolstered by additional spending on the company’s Mt Holland lithium project.

Wesfarmers also noted its inventory levels are higher than normal. That’s due to stockpiling in the face of supply chain disruptions during the first half.

It also looked to reassure the market of its ability to weather the current inflationary storm, saying:

Wesfarmers’ retail divisions are well equipped to manage inflationary pressures and view this as an opportunity to profitably grow share while extending value credentials.

The post Why did the Wesfarmers share price tumble 11% in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• What’s the outlook for Wesfarmers shares in July?
• Experts name 2 ASX dividend shares to buy next week
• Broker names 3 of the best ASX shares to buy in July
• How does the Woolworths dividend compare to Wesfarmers over the last 5 years?
• Why I think the current Wesfarmers share price is a steal

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

from The Motley Fool Australia https://ift.tt/pKUkvy7

The Vulcan Energy Resources Ltd (ASX: VUL) share price had a difficult time in June, trading lower and lower as the month went on.

Investors pushed the Vulcan share price of $7.52 on 1 June to a low of $5 by 17 June. It had recovered slightly by month’s end but finished 28% down.

What’s up with the Vulcan share price?

Vulcan started the month poorly amid a bearish note from Goldman Sachs on its outlook for the lithium industry.

Goldman reckons battery metals’ have likely peaked and that prices could reverse at pace.

The research sent lithium shares spiralling in early June, despite no change to company forecasts.

Vulcan was hit hard on the chart alongside its peers with exposure to the sector.

The share continued to track lower and by 14 June had reached 52-week lows as inflation data and interest-rate pressures began to weigh on ASX shares.

By month’s end, the trend had set in and sentiment had no doubt turned bearish, in lockstep with the tone in just about all markets. Weakness in the United States also appeared to have an impact.

On 29 June investors were selling down the Vulcan share price “amid broad market weakness following a poor night of trade on Wall Street,” The Motley Fool reported.

Vulcan is a “higher risk share,” The Motley Fool says, and investors are lowering “their risk appetite following a resurgence in recession fears”.

In the last 12 months, the Vulcan share price has collapsed more than 31% into the red.

The post Why did the Vulcan Energy share price crater 28% in June? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Down 8%, why is the Vulcan Energy share price burning away today?
• How is the Vulcan share price performing against its sector this month?
• 3 ASX All Ordinaries shares going gangbusters on Friday
• Why Betmakers, Block, Lake Resources, and Vulcan shares are racing higher
• ASX 200 midday update: Qantas’ market update, lithium shares rebound

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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.

from The Motley Fool Australia https://ift.tt/CmcLSX4