Tag: Motley Fool

The Telstra Corporation Ltd (ASX: TLS) share price may be an opportunity in July 2022, according to experts.

As Australia’s largest telecommunications business, Telstra hasn’t escaped some of the volatility seen across the ASX share market.

Since the start of 2022, Telstra shares have fallen by around 9%. The broker Ord Minnett thinks Telstra can regain this lost ground, and more, over the next 12 months.

Latest views on the Telstra share price

The broker Ord Minnett recently slightly reduced its price target for Telstra to $4.65. A price target is where it thinks the share price could be in 12 months.

If the Telstra share price was to reach $4.65, that would equate to a rise of around 21% from the current price of $3.85.

The broker Morgan Stanley has a price target of $4.60 on Telstra shares. That implies a possible rise of around 19%.

This broker suggests the strength shown by T-Mobile (a 5G leader in the US) is good news for Telstra as fixed wireless broadband captures household attention quicker than anticipated. Telstra is seen as the 5G leader in Australia.

Profit growth initiatives

Telstra is doing several different things to try to grow profit for shareholders.

The telco has just launched its T25 strategy, aiming to deliver growth, “exceptional customer experiences”, and continued network and tech leadership.

It wants to be the 5G market leader, so it’s extending its 5G network coverage to 95% of the population. Telstra has identified $500 million of net fixed costs to cut between FY23 to FY25.

It hopes to grow underlying earnings before interest, tax, depreciation and amortisation (EBITDA) at a compound annual growth rate (CAGR) in the mid-single digits while growing underlying earnings per share (EPS) at a CAGR in the high-teens to FY25.

Telstra also plans to maximise its fully franked dividend for shareholders and grow it over time. Dividend growth could be helpful for the Telstra share price.

Another move by Telstra to try to grow and diversify its earnings was the acquisition of Digicel Pacific, which is a market leader in several Pacific island nations.

The upfront cost to buy this business was US$1.6 billion, although Telstra is only contributing US$270 million of equity. The Australian government will provide the rest of the funding through non-recourse debt facilities and equity-like securities.

Telstra said the overall Digicel Pacific business made US$233 million of EBITDA in the financial year to 31 March 2021.

One of the final things Telstra is doing that could help earnings in the shorter and longer term is increasing prices. The company said it would increase prices in line with CPI inflation in July and could raise prices annually from now on.

As the price increase implementation happens, investors may factor that into their thoughts.

Telstra share price snapshot

Despite the recent decline, the Telstra share price has risen 2% over the past year. It was relatively flat in June, down by 0.8%.

The post Could July be a good month for the Telstra share price? appeared first on The Motley Fool Australia.

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More reading

• Telstra share price slides as Optus exec ramps up calls for TPG deal to be canned
• 4 ASX dividend shares to buy that aren’t banks or miners: expert
• Here are 2 top ASX 200 dividend shares to buy right now according to experts
• What are brokers saying about the Telstra share price?
• Optus plea to ACCC doing little to these ASX 200 telco shares today

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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As was largely expected, the AVZ Minerals Ltd (ASX: AVZ) share price won’t be returning to trade on Friday.

The lithium developer’s shares have been suspended from trade since 9 May and will remain that way for a little longer.

What’s the latest on the AVZ Minerals share price?

This time last month, the company requested that the suspension of its shares be extended until 1 July while it sorted out an ownership dispute relating to the Manono Lithium Project.

However, with this dispute still unresolved, the company was not ready to let the AVZ share price return to action.

Though, the end is potentially in sight now. Rather than requesting another full month of suspension, the company has optimistically named 15 July as its return date this time around.

It commented:

AVZ Minerals Limited refers to the Company’s request for an extension to its voluntary suspension dated 1 June 2022, in relation to the finalisation and release of an announcement with respect to its mining and exploration rights for the Manono Lithium and Tin Project (Manono Project).

The Company advises that it is encouraged with the progress being made with its discussions with the DRC Government, although the subject of the initial trading halt request remains incomplete.

Accordingly, the Company requests a further extension to the voluntary suspension until the commencement of trade on 15 July 2022 or an earlier announcement to the market regarding its mining and exploration rights for the Manono Project.

Why are its shares suspended?

The AVZ share price is out of action while it battles proceeding relating to the “meritless claim that La Congolaise D’Exploitation Miniere SA (Cominière) has transferred a 15% interest in Dathcom Mining SA (Dathcom) to Jin Cheng.” Dathcom is the owner of the mining licence for the Manono Lithium Project.

Last month, AVZ commented on the matter. It said:

AVZ confirms that Cominière breached the preemptive rights of AVZI under the Shareholders Agreement by purporting to transfer a 15% interest to Jin Cheng, making it invalid and of no force or effect.

The Company has considered Jin Cheng’s claims in detail and considers them to be spurious in nature, without merit, containing fundamental and material errors, and having no substance or foundation in fact or law. The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect its and Dathcom’s interests.

Time will tell how the court views these claims and ultimately how much of the project AVZ ends up owning. There are fears it could be as little as 36%.

The post AVZ share price remains suspended, but a return is in sight appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Will AVZ Minerals shares finally return to trade this week?
• 3 ASX All Ordinaries shares that have surged 300% in the past year
• AVZ share price suspension: What is the Manono Lithium Project they are fighting over?

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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A new financial year is here so what better time to look at your portfolio and make some changes.

But which shares should you buy? Analysts at Bell Potter are lending a helping hand by picking out the best shares to buy in FY 2023.

Listed below are three ASX 200 shares the broker rates as buys for the new financial year. They are as follows:

Costa Group Holdings Ltd (ASX: CGC)

The first ASX 200 share that Bell Potter believes could be a top option in FY 2023 is Costa. It is Australia’s largest horticulture company with ~7,300 hectares of farming assets across five key categories and three regional hubs.

Bell Potter has a buy rating and $3.75 price target on the company’s shares. This compares to the current Costa share price of $2.86. It commented:

CGC has deployed ~$540m of capital since CY19 through the acquisition of citrus properties, development of berry acreage in Morocco and China and investment in mushroom and tomato capacity. A return on this investment is expected to be the main driver of earnings through to CY23e. In addition we are seeing favourable YTD pricing trends across the majority of CGC’s product portfolio which provides insulation against inflationary cost pressures.

Liontown Resources Limited (ASX: LTR)

Bell Potter remains positive on the battery minerals space due to its belief that the supply side is facing significant hurdles in respect to meeting increasing demand. So, with Liontown already signing offtake agreements with the likes of Tesla, it expects the company to profit greatly when production commences in 2024.

Bell Potter currently has a speculative buy rating and $3.06 price target on the ASX 200 lithium share. This compares favourably to the current Liontown share price of $1.06. It said:

Kathleen Valley is expected to commence production in 2024 and ultimately ramp-up production to 550ktpa SC6 by 2026. Key catalysts are now final project scope and costings, FID [now approved] and commencing project development.

TechnologyOne Ltd (ASX: TNE)

Another ASX 200 share that Bell Potter rates as a buy in FY 2023 is TechnologyOne. While the broker expects the tech sector to remain under pressure as rates rise, it believes stocks “with reasonable cash flows/earnings […] will continue to perform well – even in a rising interest rate environment.”

Bell Potter has a buy rating and $12.50 price target on the company’s shares. This compares to the latest TechnologyOne share price of $10.71. The broker commented:

The migration [to a fully integrated SaaS solution] is now around three quarters complete and Technology One is starting to reap the benefits of greater recurring revenue and a higher margin. This combination will in our view drive double digit earnings growth for years to come and, as the migration of customers approaches 100%, we expect the multiple to rerate to that of a pure SaaS company.

The post Top broker names 3 of the best ASX 200 shares to buy in FY23 appeared first on The Motley Fool Australia.

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More reading

• Experts say these ASX 200 growth shares are buys with 20%+ upside
• Why have ASX lithium shares had such a lousy month in June?
• Top broker says the Liontown share price can rise 150%
• 5 things to watch on the ASX 200 on Thursday
• 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended COSTA GRP FPO and TechnologyOne 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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Australia and New Zealand Banking Group Ltd (ASX: ANZ) shareholders should check their bank accounts today. The banking giant has paid out its biggest interim dividend since COVID-19.

In case you weren’t aware, ANZ is rewarding investors with a fully franked dividend of 72 cents per share.

At Thursday’s market close, the ANZ share price finished 2.65% lower at $22.03.

For context, the S&P/ASX 200 Index (ASX: XJO) also tumbled yesterday, down 1.97% to 6,568.1 points.

Let’s take a look at all the details regarding the ANZ dividend.

ANZ’s latest dividend leaves the vault

In May, the big four bank reported growth across key metrics in its half-year results for the 2022 financial year.

In summary, cash earnings from continuing operations rose 4% to $3,113 million over the prior corresponding period. This was driven by the strong performance of its Australia retail and commercial segment and its New Zealand segment.

Evidently, this offset the bank’s weakened margins from its institutional segment, which recorded a 23% decline in cash earnings to $730 million.

Management noted that the economic environment is likely to be very different as it continues to adjust its risk appetite.

Nonetheless, the board elected to increase its interim dividend by 2.9% from the 70 cents per share in H1 FY21.

Based on today’s price, the current ANZ dividend yield is 6.42%.

ANZ share price snapshot

Over the past 12 months, the ANZ share price has fallen by roughly 21%. It is also down 20% over the past 12 months.

Notably, its shares hit a 52-week low of $20.95 on 17 June before quickly rebounding in the days after.

ANZ has a price-to-earnings (P/E) ratio of 9.98 and a market capitalisation of roughly $63.23 billion.

The post ANZ rewards shareholders with its latest dividend. Here are the details appeared first on The Motley Fool Australia.

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More reading

• What’s in store for the ANZ share price in July?
• Volt gets packing as ASX 200 bank shares prove to be a formidable force
• Why is the ANZ share price outperforming the ASX 200 today?
• ASX 200 bank ANZ turns to crypto for carbon credit settlement
• CBA share price leads the big four as banks outperform ASX 200 on Monday

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 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 Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price fell by 8.4% in June 2022. That compares to a decline of 8.9% for the S&P/ASX 200 Index (ASX: XJO).

So what contributed to such a tough run?

Last month, one of the biggest headline-grabbers was the Reserve Bank of Australia (RBA) increasing the interest rate by 50 basis points, or 0.5%.

The RBA wants to get on top of inflation and slow it down. However, the size of the increase was more than some in the market expected.

The RBA is currently expecting inflation to peak at around 7% in the quarter for the three months to 31 December 2022. Interest rates are also tipped to go higher in the coming months.

Interest rates can have a significant impact on valuation. In theory, higher interest rates are meant to pull down the valuation of assets.

Specific headwinds for the Soul Pattinson share price

For readers who haven’t heard of Soul Pattinson, it’s an investment conglomerate. It owns a portfolio of investments in ASX shares, private businesses, and other assets.

Therefore, if the underlying value of Soul Pattinson’s portfolio goes down, it may seem logical for the Soul Pattinson share price to decline as well.

Let’s look at how some of the company’s biggest investments performed in June.

At 31 January 2022 (the FY22 first-half ending date), the total (pre-tax) net asset value at Soul Pattinson was around $9 billion. This has reduced since then, but we can use it as an indication as to which shares may be having the largest effect on the underlying value.

At 31 January 2022, Brickworks Limited (ASX: BKW) was the biggest position in the portfolio, worth $1.48 billion. In June, Brickworks shares fell around 11%.

The TPG Telecom Ltd (ASX: TPG) shareholding was worth $1.4 billion at the end of the Soul Pattinson FY22 first half. TPG shares climbed almost 4% in June.

Its holding of New Hope Corporation Limited (ASX: NHC) shares was worth $753 million at the HY22 ending date. New Hope shares fell 6.75% in June.

Soul Pattinson’s stake in Macquarie Group Ltd (ASX: MQG) shares was worth $338.5 million at 31 January 2022. Macquarie shares sunk 11.5% in June.

Commonwealth Bank of Australia (ASX: CBA) shares in the investment conglomerate’s portfolio were worth $335 million at the end of HY22. CBA dropped 13.4% in June.

Resource giant BHP Group Ltd (ASX: BHP) shares were worth $244 million in FY22. BHP suffered a 7.5% decline in June.

The last one I’ll highlight was Tuas Ltd (ASX: TUA), which had a $225.7 million weighting at 31 January 2022 in the portfolio. The Tuas share price fell 16% in June.

As readers can see, most of its biggest holdings fell substantially over June, reducing the underlying value of the Soul Pattinson portfolio.

Soul Pattinson share price snapshot

Since the beginning of 2022, the investment conglomerate has dropped around 20%. It is also down almost 30% over the past 12 months.

The post Why did the Soul Pattinson share price go backwards in June? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• These were the best performing ASX 200 shares in June
• These were the worst performing ASX 200 shares in June
• ASX 200 healthcare shares provided some pain relief today. Here’s why
• Own Soul Patts shares? Here’s how much of its portfolio is exposed to coal

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Macquarie Group Limited and 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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Looking for dividend shares to buy this month? If you are, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares are rated as buys:

National Australia Bank Ltd (ASX: NAB)

The first ASX dividend share that could be in the buy zone in July is banking giant NAB. Particularly given recent market volatility, which has dragged its shares notably lower.

One broker that sees a lot of value in the NAB share price following the recent weakness is Goldman Sachs. Its analysts recently reiterated their conviction buy rating with an improved price target of $34.26.

Goldman believes NAB’s balance sheet mix provides the best exposure to the domestic system growth over the next 12 to 18 months.

As for dividends, the broker is forecasting a $1.51 per share dividend in FY 2022 and then a $1.68 per share dividend in FY 2023. Based on the current NAB share price of $27.39, this will mean fully franked yields of 5.5% and 6.1%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share that could be a top option for income investors in July is Transurban.

The leading toll road operator appears well-placed for growth thanks to its portfolio of important roads and its pipeline of development projects.

In addition, analysts at Morgans are very positive on Transurban due to its exposure to regional population and employment growth and urbanisation. In light of this, Morgans has put at add rating and $14.42 price target on its shares.

The broker is also forecasting a rebound in dividends in the coming years. It expects dividends per share of 37 cents in FY 2022 and then 60 cents in FY 2023. Based on the current Transurban share price, this implies yields of 2.6% and 4.2%, respectively.

The post 2 excellent ASX dividend shares that analysts rate as buys in July appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 shares with enough pricing power to battle inflation: Expert
• Can investors bank on the NAB share price in July?
• Volt gets packing as ASX 200 bank shares prove to be a formidable force
• In the green: Why the NAB share price is rising on Wednesday
• Why is the Transurban share price languishing 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 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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I think the current Lovisa Holdings Ltd (ASX: LOV) share price could make it an attractive ASX dividend share for the longer term.

For readers that haven’t heard of Lovisa before, it’s an ASX retail share that sells affordable jewellery, which is generally targeted at younger shoppers. While it does have an Australian retail network, the company has turned into a global force and it has plans for a lot of growth in the long term.

But, with the company’s growth plans, I think it has plenty of potential to deliver good dividends over time if it continues to pay out a reasonably high level of profit as a dividend.

Dividend projections

Let’s look at how big the Lovisa dividend yield could be over the next couple of financial years.

According to CMC, Lovisa could pay a grossed-up dividend yield of 4.9% in FY22 and 4.85% in FY23. By FY24, CMC’s numbers indicate it could be 5.75%.

Some brokers are expecting even bigger dividends in FY23. UBS has pencilled in a 5% grossed-up dividend yield for FY23, while Morgan Stanley thinks it could be as high as 5.85%.

But what all the projections show are expectations of profit growth over the next few years.

Earnings growth to fund shareholder payouts

A key reason why I think Lovisa could be a leading ASX dividend share is because of the expectation of earnings growth. Profit growth can help drive the Lovisa share price higher, but it can also fund growing dividends.

For example, estimates on CMC suggest that Lovisa could generate 47.6 cents of earnings per share (EPS). That puts the Lovisa share price at 29x FY22’s estimated earnings.

However, in FY24, profit projections on CMC suggest 73.5 cents of EPS – that would represent growth of 54% over two years. If Lovisa did achieve that FY24 figure, it’s valued at just 19x FY24’s estimated earnings.

What could drive Lovisa earnings higher?

I think Lovisa can grow its profit, and therefore its dividend, through a number of initiatives. It is investing “strongly” in its digital platform and strategy to drive continued global growth.

It’s also focused on identifying new markets in which to pilot its Lovisa brand.

The company boasts that it has a strong balance sheet and no debt and it’s continuing to control its costs.

In its last presentation in May, the company said its international rollout was continuing, with 59 new stores opening in the year to date.

The company’s same-store sales can continue to drive earnings higher. It said that in the first eight weeks of the second half of FY22, comparable store sales were up 12.1% and that sales momentum continued to the end of April 2022.

I think if the business expands its global store network, grows digital sales, increases same-store sales and achieves scale benefits, the profit and dividends can grow. This could also assist the Lovisa share price, which closed 1.15% lower at $13.81 on Thursday.

The post Here’s why I think Lovisa could be a top ASX dividend share appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 excellent ASX shares to buy and hold
• Brokers name 3 ASX shares to buy today
• Could be ‘one of the biggest success stories’: Top broker tips 87% upside for Lovisa shares
• Experts name 2 ASX growth shares to buy with major upside potential
• Analysts are tipping these ASX growth shares as buys

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 recommended Lovisa Holdings 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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The Qantas Airways Limited (ASX: QAN) share price hit some significant turbulence in June.

To be fair, it was a difficult month for many S&P/ASX 200 Index (ASX: XJO) shares, with the benchmark index closing the month down 8.9%.

But the Qantas share price fell much further, down 18.9% from the closing bell on 31 March.

Here’s what impacted the flying kangaroo in June.

What headwinds dragged on the Qantas share price in June?

The first six trading days in June saw Qantas shares closely track the benchmark performance, losing 1.5% by the close on 8 June.

The next seven trading days didn’t go as well, with the Qantas share price tumbling another 19.7% by the close on 17 June.

News of significant ground staff shortages may have spooked some investors.

On 9 June news broker that Qantas had asked for volunteers from its front office managers to assist overwhelmed ground crews. Qantas is facing reduced staff numbers following the airline’s pandemic workforce reductions, just as domestic travel returns to pre-pandemic levels.

While domestic air travel has rebounded rapidly, COVID-19 continued to drag on international routes in June, with a range of differing travel restrictions remaining in some foreign destinations.

And then there’s the cost of jet fuel.

If you filled up your car in June, you’ll have noticed you’re paying a premium, thanks in large part to Russia’s ongoing war in Ukraine. You likely haven’t had to fill up a jet plane, but those costs have also rocketed.

Qantas is responding to the higher costs by raising ticket prices and reducing the number of flights, working to fly with planes closer to capacity.

But those rocketing fuel costs certainly were a strong headwind for the Qantas share price in June.

On the plus side of the ledger

It wasn’t all doom and gloom last month though.

The Qantas share price enjoyed a few big boosts during June, and gained 2.5% from 17 June through to yesterday’s closing bell.

ESG investor interest, in particular, was piqued on 20 June, when the airline announced a US$200 million partnership with Airbus to spur a domestic sustainable aviation fuel industry, with the goal of significantly reducing aircraft emissions.

The airline also released a fairly bullish update on 24 June, reporting that it was on track to hit its earnings guidance. Qantas forecast earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $450 million to $550 million for the second half of the financial year.

And the Qantas share price lifted 4.3% on 27 June after one of its aircraft made the first direct commercial flight between Australia and Europe over the prior weekend, flying from Perth to Rome.

How has the Qantas share price performed longer-term?

After a rough month in June, the Qantas share price is now down 13% in 2022. That’s right in line with the 13% year-to-date loss posted by the ASX 200.

Shares are up 90% since the 20 March 2020 pandemic sell-off lows.

The post Why did the Qantas share price plunge 19% in June? appeared first on The Motley Fool Australia.

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More reading

• Why this smaller ASX travel share is locking horns with Qantas over regulation
• Own Qantas shares? Here’s why the $5K staff bonus could be up in the air
• Qantas share price climbs as first direct flight to Europe touches down in Rome
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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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As we leave a volatile FY22 behind us, many investors will be hoping for a calmer trading environment in the new financial year. Will the ASX share market gain fresh momentum? For their thoughts, we asked our Foolish contributors to compile a list of the ASX shares they reckon could deliver wealth in the years ahead. Here is what the team came up with.

9 best ASX shares for July 2022 (smallest to largest)

• Airtasker Ltd (ASX: ART), $118.8 million
• Kogan.com Ltd (ASX: KGN), $309 million
• Adairs Ltd (ASX: ADH), $329.7 million
• BUBS Australia Ltd (ASX: BUB), $379 million
• Rural Funds Group (ASX: RFF), $994.5 million
• Deterra Royalties Ltd (ASX: DRR), $2.31 billion
• NIB Holdings Limited (ASX: NHF), $3.41 billion
• ResMed Inc. (ASX: RMD), $12.45 billion
• BHP Group Ltd (ASX: BHP), $216.5 billion

(Market capitalisations as of 30 June 2022)

Why our Foolish writers love these ASX shares

Airtasker Ltd

What it does: Airtasker owns an online local services platform that enables people who need a task completed to connect with people who want the work. Examples of task categories include furniture assembly, removalists, website design, handyman services and accounting. 

By Tristan Harrison: Volatility in the Airtasker share price has seen it fall more than 60% in 2022. I think this makes the company an attractive investment opportunity when we consider its ongoing growth and potential. 

In the FY22 third quarter, Airtasker saw revenue rise by 21.2% to $8.6 million, while also generating $1 million of positive operating cash flow.

It’s rapidly growing internationally, opening up large potential markets. Third-quarter gross marketplace volume in the United Kingdom jumped 138% year-on-year, while posted task growth in the United States rose 90% quarter-on-quarter. 

With a gross profit margin of more than 90%, I think this business can become very profitable as it realises scale benefits and doesn’t need to heavily invest for growth. 

Motley Fool contributor Tristan Harrison does not own shares of Airtasker Ltd.

Kogan.com Ltd

What it does: Kogan is an online retailer with operations across Australia and New Zealand including brands such as Dick Smith, Matt Blatt, and Mighty Ape. The company has grown to be a one-stop shop for the online consumer – offering electricity plans, mobile plans, consumer goods, etc.

By Mitchell Lawler: Anyone who has held shares in Kogan over the past 12 months knows the pain – I’m one of them. It has been a journey to a high of $25 apiece and back down again to the current sub-$3 level.

As with much of the market, the prior exuberance from ‘decades of online adoption’ being brought forward has worn off and the fears of an impending recession have driven investors away from the consumer discretionary sector.

However, since 2018, Kogan has come a long way. Now boasting more than 4 million active customers, the online brand has become somewhat of a staple among shoppers. At a price-to-sales multiple of 0.4 times, the selling might be overdone. 

Motley Fool contributor Mitchell Lawler owns shares in Kogan.com Ltd.

Adairs Ltd 

What it does: Adairs is a home furnishings retailer boasting more than 170 stores across Australia and New Zealand.  

By Brooke Cooper: The Adairs share price has struggled through 2022 so far, tumbling nearly 50% year to date to trade around the $2.00 mark.  

While the company suffered amid COVID-19 outbreaks earlier this year, its paid loyalty program continued to grow. Linen Lovers was closing in on a million members at the end of the first half, having increased 10% over the 12 months prior.  

And the future for the retailer’s stock looks bright. My Fool colleague James reported Morgans slapped the stock with a $3.50 price target in early June. 

Additionally, following recent turbulence, Adairs shares offer an impressive dividend yield of around 9%. 

Motley Fool contributor Brooke Cooper does not own shares of Adairs Ltd.

BUBS Australia Ltd

What it does: Founded in 2006, Bubs produces and sells infant formula, organic baby food and cereals in Australia and overseas markets.

By Aaron Teboneras: The Bubs share price has continued to defy the recent slump of the S&P/ASX 200 Index (ASX: XJO). For context, the company’s shares are up almost 25% in the past month while the benchmark ASX 200 index is down around 6%.

The current supply shortage of infant formula across the United States is providing Bubs with a unique opportunity to boost revenue. Bubs recently signed a deal with the United States government to deliver at least 1.25 million tins of baby formula.

In addition, the company has been busy expanding its footprint in the country through new supply agreements with major retailers.

In light of this, broker Citi believes that Bubs is poised to grow significantly over the coming year.

According to ANZ Share Investing, the broker raised its price target by 29% to 76 cents for Bubs shares. This implies an upside of roughly 24% based on today’s closing price of 61 cents.

Motley Fool contributor Aaron Teboneras does not own shares in BUBS Australia Ltd.

Rural Funds Group

What it does: Rural Funds is an agricultural real estate investment trust (REIT) that holds a portfolio of farmland assets.

By Sebastian Bowen: There aren’t too many shares on the ASX that give an investor pure exposure to farmland and agricultural assets. But that’s exactly what Rural Funds does. This REIT owns almond orchards, macadamia orchards, vineyards, as well as cattle and crop farmlands. Rural Funds has a policy of increasing its dividend distributions by roughly 4% per year.

This Rural Funds has managed to do very consistently in recent years, growing its annual payouts from 9.3 cents per share in 2016 to 11.5 cents per share last year. With a dividend yield of more than 4.5% on recent pricing, Rural Funds Group could be a great place to look for a portfolio-diversifying, dividend-paying share this July.

Motley Fool contributor Sebastian Bowen does not own shares of Rural Funds Group.

Deterra Royalties Ltd 

What it does: Deterra is a mining share with a difference. It doesn’t conduct any physical mining or the like. Instead, Deterra manages and grows its portfolio of royalty assets, and distributes the cash flow back to shareholders via dividends.

By Zach Bristow: A dividend play for investors to consider, Deterra operates as a royalty business model that oversees a portfolio of mining and commodity royalties. Its model claims to have a lower risk, and higher-margin exposure to the resources sector. 

Deterra’s strategy is to pay 100% of its net profit after tax (NPAT) back to shareholders by way of dividends.

In FY21, it printed $94 million of NPAT and has a trailing dividend per share (DPS) of 23 cents. It confirmed royalty receipts of $59 million last quarter.

The share is evenly rated with five brokers each saying it’s a buy or a hold right now, according to Bloomberg data. From this list, the consensus price target is $4.70 per share. 

Motley Fool contributor Zach Bristow does not own shares of Deterra Royalties Ltd.

NIB Holdings Ltd

What it does: NIB Holdings is a leading Australian insurance company, and the first private health fund to list on the ASX back in 2007.

By Bernd Struben: NIB currently provides more than 1.6 million Aussies and Kiwis with health and travel insurance. And its market share continues to slowly expand, growing from 9.0% of the Australian resident health insurance market in 2019 to 9.3% in 2022.

The insurance sector is also one of the few that can thrive in higher interest rate environments. Insurers are required to hold plenty of secure debt to cover their policies, and as bond yields rise, so too does their passive income.

NIB shares are up 16% over the past 12 months. The company is also a reliable dividend payer, currently paying a 3.4% trailing dividend yield, fully franked.

Motley Fool contributor Bernd Struben does not own shares in NIB Holdings.

ResMed Inc.

What it does: ResMed is a provider of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders such as sleep apnoea and chronic obstructive pulmonary disease (COPD).

By James Mickleboro: ResMed had a positive month in June and materially outperformed the ASX 200 index. Despite this, I don’t believe it is too late to make an investment, particularly given that its shares are still down meaningfully year to date despite last month’s gains.

This is because I believe the company is well-placed to continue its strong sales and earnings growth long into the future, thanks to its leadership position in a massive (and growing) market.

ResMed estimates that globally, more than 900 million people suffer from sleep apnoea and more than 380 million people live with chronic obstructive pulmonary disease (COPD). However, the vast majority have yet to be diagnosed due to a lack of awareness among both the medical community and the general public. However, ResMed’s serviceable addressable market grows each year as awareness gradually increases.

And while at 30x estimated FY 2023 earnings, its shares are not cheap, I believe the premium is justified due to its positive long-term growth outlook.

Motley Fool contributor James Mickleboro does not own shares of ResMed Inc.

BHP Group Ltd

What it does: BHP is one of the world’s largest diversified miners. While it is a major supplier of iron ore, it also produces metals like copper and nickel that are essential for the global energy transition towards renewables, including the manufacture of batteries.

By Brendon Lau: The Big Australian has been battered by worries about a global recession and waning demand for commodities. But too much bad news is priced in the shares with broker Macquarie Group reiterating its ‘outperform’ recommendation on the shares.

Higher diesel and power costs have forced some miners to downgrade their production guidance, but the broker noted that these higher costs would accelerate the transition to green energy. BHP’s minerals, such as copper, are essential ingredients in this transition.

Macquarie also pointed out that BHP was trading on an attractive FY23 free cash flow yield of 16% using its forecasts and ~15% at spot prices. The broker’s 12-month price target on the BHP share price is $51 a share.

Brendon Lau owns shares of BHP Group.

The post Best ASX shares to buy in July 2022 appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 shares with enough pricing power to battle inflation: Expert
• How have ASX 200 mining shares fared over June?
• Is the Adairs share price outlook brightening for July?
• Broker rates these 2 top ASX 200 shares as buys in July
• Here are 2 top ASX 200 dividend shares to buy right now according to experts

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO, Kogan.com ltd, and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited and ResMed. The Motley Fool Australia has positions in and has recommended ADAIRS FPO, Kogan.com ltd, RURALFUNDS STAPLED, and ResMed Inc. The Motley Fool Australia has recommended BUBS AUST FPO, Macquarie Group Limited, and NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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While there are a good number of quality blue chip options on the Australian share market, two that could be in the buy zone are listed below.

Here’s why analysts at saying these ASX blue chip shares are buys right now:

REA Group Limited (ASX: REA)

The first blue chip to look at is REA Group. It is the dominant player in real estate listings in the Australian market with its realestate.com.au website.

The team at Citi appear to see recent weakness in the REA share price as a buying opportunity. The broker recently put a buy rating and $153.50 price target on its shares.

Its analysts were pleased with what management said at its recent investor day event and appear confident that the company’s growth can continue despite the slowing housing market.

The broker said:

While we do not expect the Investor Day to change sentiment on the stock in the short term given the slowing house market, it did highlight the levers (especially new products and price) in the core listings business to drive growth in the near term, while India and potential direct monetisation of the consumer through Property.com.au presents long-term growth potential.

Woolworths Group Ltd (ASX: WOW)

Another ASX blue chip share that could be in the buy zone is retail giant Woolworths.

It could be a top option for investors according to analysts at Goldman Sachs. This is due to the broker’s belief that the company’s operations are of the highest quality and capable of delivering solid sales and earnings growth even in the current environment.

Goldman has a buy rating and $41.70 price target on the company’s shares. It commented:

We are encouraged by the resilience and superior operations of WOW and reiterate our unchanged FY22-24e Sales and EPS CAGR of 6.9% and 14.9% respectively. We expect this to be driven by high price growth, well protected GPM and slight EBIT margin expansion as COVID costs roll-off and cost efficiencies continue.

The post Here are 2 blue chip ASX shares analysts rate as buys appeared first on The Motley Fool Australia.

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More reading

• How does the Woolworths dividend compare to Wesfarmers over the last 5 years?
• Here’s why ASX 200 tech shares are taking a beating on Wednesday
• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX shares today
• Here’s why I think the REA Group share price is a buy right now

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

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