Tag: Motley Fool

It’s been a very bumpy ride for the Corporate Travel Management Ltd (ASX: CTD) share price in recent months.

This ASX 200 travel share has lost 16% of its value over June and remains down by 19% in 2022. Like many ASX travel shares, the pandemic has given this company a lot of grief over the past few years. Corporate Travel Management is still struggling with the aftershocks today.

We can see this evident in Corporate Travel’s dividend history.

This travel share used to be a strong dividend-payer on the ASX. In 2019, the company paid out 40 cents per share in dividends. That would equate to a yield of over 2% on today’s share price. But the company only doled out 18 cents per share in 2020 before cancelling its dividend entirely. As of June 2022, it has yet to resume paying dividends.

So when will Corporate Travel Management re-enter the fray as an ASX dividend share?

When will Corporate Travel shares start paying dividends again?

Well, it’s hard to say. But going off the company’s update last month, there’s a chance it could be sooner rather than later.

Last month, Corporate Travel told investors that it is anticipating its monthly revenue could reach 2019 levels by the fourth quarter of this year.

The company is aiming for earnings before interest, tax, depreciation, and amortisation (EBITDA) of $265 million when the travel industry fully recovers from COVID-19.

For a business to be able to pay out sustainable dividends, it must first be sustainably profitable. If the company’s own predictions turn out to be accurate, it could be in a place to resume dividend payments soon.

But saying that, management could instead decide to reinvest its earnings back into the business for the next few years — even if it could afford to resume dividends. Remember, a dividend comes with an opportunity cost for every business.

But we shall have to wait and see what the company does next to be sure.

In the meantime, the current Corporate Travel Management share price gives this ASX 200 travel share a market capitalisation of $2.7 billion.

The post When might Corporate Travel shares start paying dividends again? appeared first on The Motley Fool Australia.

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More reading

• Board for take-off: Brokers rate the Corporate Travel Management share price a buy
• Best ASX shares to buy in June 2022
• Down 15% in a month, is the Corporate Travel share price a bargain?

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 recommended Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australian share market is home to a good number of shares that have the potential to grow strongly in the future. But is it home to any 20-baggers?

A 20-bagger is a share that provides a return 20 times greater than your original investment.

This means that if you were able to find one of these shares and invest $5,000 into it, you would turn that investment into a massive $100,000.

Whilst they are quite rare, there are plenty of examples of 20-baggers trading on the ASX today.

Chalice Mining Ltd (ASX: CHN), Race Oncology Ltd (ASX: RAC), and Vulcan Energy Resources Ltd (ASX: VUL) are three ASX shares that have generated returns of more than 2,000% over the last three years, much to the delight of their shareholders.

But that was then, and this is now. So, which ASX shares could be the next 20-baggers? While I think three years might be far too soon for this level of return, I believe the two ASX shares listed below have the potential to turn a $5,000 investment into $100,000 over the long term. Here’s why:

Life360 Inc (ASX: 360)

What it does: Life360 operates in the digital consumer subscription services market with a focus on products and services for digitally native families. Its key offering is the Life360 app, which provides location-based services, including sharing and notifications.

How it could become a 20-bagger: Life360 currently has a market capitalisation of just under $500 million. This means that its market capitalisation would grow to be $10 billion if the Life360 share price were to rise 2,000%.

While this sounds like a lot, I believe this is possible over the long term based on its leadership position in an enormous market. For example, management recently reiterated its belief that its serviceable addressable market is $55 billion globally. This comprises location sharing, crash and roadside assistance, identity theft protection, and pets and children location sharing verticals. It doesn’t include the item tracking market which the company recently entered with the acquisition of Tile.

Goldman Sachs currently values Xero Limited (ASX: XRO) at 16 times EBITDA. If we were to ascribe the same multiple to Life360, it would need to achieve EBITDA of $625 million to command a market capitalisation of $10 billion. This is a big ask but with ~38 million monthly active users (and growing) and such a huge market opportunity, I believe it is a possibility over the long term.

Nitro Software Ltd (ASX: NTO)

What it does: Nitro Software is a software company aiming to drive digital transformation in organisations around the world. Its key solution is the Nitro Productivity Suite, which provides integrated PDF productivity and electronic signature tools to customers in a market benefiting from structural tailwinds such as remote work and digitisation.

How it could become a 20-bagger: Nitro Software currently has a market capitalisation of approximately $300 million. If its shares were to rise 20 times over, this would take its market capitalisation to $6 billion.

Unlike Life360, Nitro doesn’t have a leadership position in its market. However, it is a worthy challenger to industry giant Docusign. Nitro has over 3 million licensed users and 13,000+ business customers across 157 countries. This includes over 67% of the Fortune 500 and three of the Fortune 10, which I believe is a testament to the quality of its offering.

Goldman Sachs estimates that the company has a “US$34bn TAM [total addressable market] across PDF, e-signing and workflows.” Furthermore, it highlights that “Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9 times uplift to Nitro’s current revenue base.” I believe this is achievable. And combined with the benefits of scale, I feel Nitro’s earnings have the potential to grow even quicker.

Nine times current revenue would be ~US$500 million or A$720 million. From this revenue, I believe a profit margin of at least 28% is possible, which would underpin a net profit of A$200 million and could justify a market capitalisation of $6 billion based on a P/E ratio of 30 times earnings.

Whether these forecasts prove accurate, only time will tell. However, I believe the risk/reward is favourable for long-term investors right now. Especially after 2022’s weakness in the tech sector.

The post Why I think these two ASX shares could turn $5,000 into $100,000 appeared first on The Motley Fool Australia.

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More reading

• Why ASX 200 tech shares are outperforming the market on Friday
• ASX 200 midday update: Qantas’ market update, lithium shares rebound
• Experts have named these top growth shares as buys
• 2 ASX tech shares Goldman Sachs rates as buys
• Brokers name 2 exciting small cap ASX shares to buy with 80%+ upside

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs, Life360, Inc., and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Nitro Software 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 when the market reopens? If you are, then you might want to look at the shares listed below.

Here’s why these ASX 200 dividend shares are rated as buys by analysts at Morgans:

AGL Energy Limited (ASX: AGL)

The first ASX 200 dividend share that Morgans rates highly right now is AGL. It currently has an add rating and price target of $9.92 on its shares.

The broker commented: “Despite the challenges facing the company we still see potential for strong earnings growth supported by the legacy assets and retain our ADD rating.”

And while Morgans isn’t expecting a big yield this year due to the pressures the energy company is facing, it is tipping a big rebound in FY 2023.

Morgans is forecasting fully franked dividends per share of 19 cents in FY 2022 and 65 cents in FY 2023. Based on the current AGL share price if $8.19, this will mean yields of 2.3% and 7.9%, respectively, for investors.

Macquarie Group Ltd (ASX: MQG)

Another ASX 200 dividend share that has been rated as a buy is investment bank Macquarie. Morgans has an add rating and $215.00 price target on its shares.

Although it suspects that the bank’s earnings may have peaked after a stellar performance in FY 2022, it doesn’t think this should put investors off.

Morgans commented: â€œWe anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).”

As for dividends, the broker is forecasting a $7.07 per share dividend in FY 2023 and then $7.47 per share dividend in FY 2024. Based on the current Macquarie share price of $165.33, this will mean yields of 4.3% and 4.5%, respectively.

The post 2 ASX 200 dividend shares analysts rate highly appeared first on The Motley Fool Australia.

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More reading

• Can Macquarie shares deliver an attractive dividend yield AND 30% upside in 2022?
• What’s with the AGL share price today?
• What’s the outlook for ASX 200 bank dividends?
• ASX utilities shares electrifying the market as suspension begins to unwind
• Analysts name 2 top ASX 200 dividend shares to buy 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 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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In this era of volatility and uncertainty, going for diversified investments like exchange-traded funds (ETFs) could make a lot of sense.

It’s hard to know which sector is going to perform next, or when the declines are going to stop.

ETFs give investors the ability to buy a whole group of shares across different sectors or different countries, depending on the particular ETF.

ETFs could be useful investments, particularly at the current lower prices. Here are two:

iShares S&P 500 ETF (ASX: IVV)

This is one of the most popular ETFs on the ASX, with a fund size of around $5 billion.

As the name suggests, it’s about investing in the S&P 500 – an index of 500 of the biggest and most profitable names that are listed in the US.

Readers may recognise many of the biggest names in the portfolio including Apple, Microsoft, Amazon.com, Alphabet, Tesla, Berkshire Hathaway, Johnson & Johnson, UnitedHealth, Nvidia, Exxon Mobil, Meta Platforms, Proctor & Gamble and Visa.

While past performance is not a reliable indicator of future performance, I think an average return per annum of around 14% over the past five years demonstrates the collective quality of the underlying businesses.

One of the attractive features of the ETF is its low management fee of just 0.03%, meaning nearly all of the returns are left in the portfolios of investors.

After a 17% drop in the iShares S&P 500 ETF unit price in 2022, it’s now at a materially cheaper price.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an investment focused on the video gaming and e-sports sector.

There aren’t many holdings in the portfolio – 24 at the last count – so it’s quite a concentrated portfolio. The top ten positions make up 64% of the overall weighting.

Those largest ten positions are: Tencent, Nvidia, Netease, Advanced Micro Devices, Activision Blizzard, Take-Two Interactive Software, Electronic Arts, Nintendo, Nexon and Sea.

VanEck has a bullish take on what makes this ETF attractive:

E-sports reflect the convergence of entertainment, video gaming, sports and media businesses. With an active, engaged and relatively young demographic, the stage is set for sustainable long-term growth.

By 2023, the competitive video gaming audience is expected to reach 646 million people globally.

The underlying businesses within this portfolio are generating ongoing revenue growth. VanEck says that e-sports revenue growth has increased by an average of 28% per year since 2015. The broader video gaming revenue has increased by an average of 12% per annum since 2015.

One of the ways that these businesses are collectively growing is by creating new revenue streams with e-sports through game publisher fees, media rights, merchandise, ticket sales and advertising.

According to VanEck materials, global games revenue is expected to grow by approximately 33% from US$150 billion in 2019 to US$200 billion in 2023

The post 2 quality ETFs to buy for the long-term appeared first on The Motley Fool Australia.

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More reading

• 2 fantastic international ETFs for ASX investors to buy
• Why I think better buying opportunities could still be ahead for ASX shares
• 3 highly rated ETFs for ASX investors to buy now
• 3 high quality ETFs for ASX investors to buy now
• I think these 2 ASX shares are buys in this volatility

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Activision Blizzard, Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Microsoft, Nvidia, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts, Johnson & Johnson, NetEase, and UnitedHealth Group and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Nvidia, VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) closed up a robust 0.77% on Friday at 6,578.7 points.

In 2022, the index has dropped by around 13%, presenting ASX investors with potential new opportunities.

Top broker Goldman Sachs says new value is emerging. In a new note, the broker names its best ASX 200 picks as the market correction continues.

ASX 200 P/E ratio now 15% below 20-year average

The broker says the ASX 200 is trading at a 12.2x forward price-to-earnings (P/E) ratio, according to reporting in the Australian Financial Review (AFR).

Goldman Sachs analysts Matthew Ross, Bill Zu, and Tony Wu say that’s 15% below the 20-year average.

According to the note:

From a valuation perspective, our global strategists believe that market pricing is more consistent with a mild recession than an average or deep recession, a view we share in the context of the Australian market.

While we expect multiples on most ‘growth’ stocks to continue to unwind, a growing number of these names have now de-rated so significantly that they have fallen out of our “High P/E” screen and now trade at significant discounts to their five-year averages.

So, which ASX 200 shares does Goldman like?

Goldman’s picks of the ASX 200 are A2 Milk Company Ltd (ASX: A2M), Aristocrat Leisure Limited (ASX: ALL), ARB Corporation Limited (ASX: ARB), Blackmores Limited (ASX: BKL), Breville Group Ltd (ASX: BRG), Domain Holdings Australia Ltd (ASX: DHG), EML Payments Ltd (ASX: EML), Pinnacle Investment Management Group Ltd (ASX: PNI), and Reece Ltd (ASX: REH).

Goldman notes that the impact of higher interest rates and slowing economic growth are yet to feed into consensus earnings revisions.

The broker said investors should keep in mind that while long-duration growth assets have de-rated, they remain expensive relative to the current level of interest rates.

Goldman says commodity stocks are trading well below all prior valuation troughs, and they comprise a uniquely large component of the ASX 200.

It also said ASX shares offer slightly less value than bonds compared to before the sell-off.

The post 9 ASX 200 shares now trading at ‘significant discounts’: broker appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• 2 cheap ASX 200 shares to buy that no one talks about: Glenmore
• Experts have named these top growth shares as buys
• 3 high-quality ASX 200 shares trading at 52-week lows right now
• Why Blackmores, Lake Resources, St Barbara, and Zip shares are dropping

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments, Goldman Sachs, and PINNACLE FPO. The Motley Fool Australia has positions in and has recommended EML Payments and PINNACLE FPO. The Motley Fool Australia has recommended A2 Milk, ARB Corporation Limited, and Blackmores 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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It’s been a rough few months for the Nickel Industries Ltd (ASX: NIC) share price.

Shares in Nickel Industries (formerly known as Nickel Mines) closed flat at $1.01 on Friday, underperforming the S&P/ASX 200 Index (ASX: XJO), which gained 0.77%.

The company has now lost 19% of its value over the past month alone, as well as 31% over 2022 thus far.

As my Fool colleague Monica covered earlier this month, Nickel Industries has been hit hard by the falling price of nickel itself.

Since the price of this base metal spiked back in March, nickel has fallen by almost 50%. So it’s perhaps no wonder that the Nickel Industries share price has come under pressure over the same period.

What about the dividend for Nickel Industries shares?

But falling share prices carry a silver lining when it comes to dividends. And Nickel Industries is a dividend-paying ASX share. So let’s check out what the current dividend yield for this company is today.

Nickel Industries has paid out two dividends covering FY 2022. The interim dividend hit investors’ bank accounts in September of last year. The final payment was doled out back In February this year. Both payments were worth 2 cents per share, and came unfranked.

A trailing annual dividend payment of 4 cents per share (in some neat maths) works out to give Nickel Industries a trailing dividend yield of 3.9% on the current share price of $1.01.

But that is only a trailing dividend yield. For investors to receive this yield going forward, Nickel Industries will have to at least maintain its dividend payouts for its next two dividend payments. This, of course, is not guaranteed.

No doubt investors will be keen to see what kind of cash comes their way going forward.

This ASX 200 resources share has a market capitalisation of $2.72 billion.

The post What is the current dividend yield on Nickel Industries shares? appeared first on The Motley Fool Australia.

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More reading

• The Nickel Industries share price has tumbled 36% since early March. What’s going on?
• Why did the Nickel Industries share price leap 7% on Friday?
• Why are ASX nickel shares tumbling 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.

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Investors who hold small-cap ASX shares have watched in horror this year as their investments turned to a sea of red.

And it’s not just paranoia — their underperformance is shown in the numbers. 

The S&P/ASX Small Ordinaries (ASX: XSO) is down about 27% so far this year, while its large-cap sibling the S&P/ASX 200 Index (ASX: XJO) has fallen only half that amount.

The team at Ophir Asset Management, which has traditionally favoured the smaller segment of the market, admitted 2022 has been a vomit-inducing ride.

“There is no doubt that in this tough market investors are seeing the downsides of small caps – greater volatility, less liquidity and bigger falls,” they said in a recent memo.

Sliding markets, like right now, are a test of nerve and patience for investors, according to Ophir analysts.

“They can also reveal what an investor’s true risk tolerance is, compared to what may be stated during much calmer investment waters,” read their memo.

“[But] by this stage it is often too late if an investor hasn’t ‘right-sized’ their allocation to small caps.”

It’s only human nature that some investors would be “questioning why they should bother” holding small-cap ASX shares.

To settle those nerves, the Ophir team put up four reasons why it’s worth holding on to the little guys through stormy seas:

1. Conditions have never been better for the little battler

Never in history have we been in a period where a small company with a great idea has such an opportunity to seriously disrupt larger incumbents.

Technology and globalisation have played a massive role in making it easier for smaller fish to challenge the big fish.

“Many businesses are software-based and they can be scaled to a global audience,” read the Ophir memo.

“Video conferencing technology and real-time supply-chain management solutions mean a CEO can run a manufacturing business scattered throughout the world.”

Governments and authorities have also become more savvy in regulating for competitive markets.

“Back in the late 19th century in the US, the largest companies were often controlled by the so-called ‘robber barons’, who created powerful monopolies in their industries from real estate, railroads and finance to steel and oil,” stated the Ophir team.

“Over time, policymakers and regulators increasingly recognised that competition benefited consumers and the playing field started to change.”

The leaders of tomorrow will come from small caps, according to Ophir.

“Investors who find these companies early can earn big returns before the company becomes a mature industry leader and known to the masses.”

2. Small caps have historically rewarded investors

Speaking of big returns, the Ophir team’s second point was that smaller companies have traditionally provided higher returns to investors over the long run.

“Amazingly, since 1926 in the US, US$1 invested in large caps grew to US$5,767 dollars by the end of 2017,” read the memo.

“But if it was invested in small caps it grew to a staggering US$38,842.”

But expectations must be set about the investment horizon.

“Though it is reasonable to assume that small-cap investors will continue to earn a premium because of small caps’ riskier nature, this may not occur over all periods,” said the Ophir team.

“There have been periods of 10 to 20 years where small caps have underperformed large caps, including in Australia.”

3. Finding mispricing opportunities is easier among small caps

When there are fewer analysts studying a particular company, the higher chance there is of something being missed and the stock price not reflecting the business’ fair value.

This “inefficient market” can provide golden opportunities for investors who put in the time to research the smaller gems.

“The latest Standard & Poor’s SPIVA Scorecard for active managers to December 2021 show that large-cap active managers, on average, have underperformed their benchmark over the longer term after fees,” read the Ophir memo.

“But small-cap managers have outperformed. Our Australian small-cap Ophir Opportunities Fund, which has the longest track record of any of our funds, has also outperformed.”

In the short term though, just like in 2022, circumstances can hinder picking small-cap winners.

“Competition is always increasing in markets and many other things can influence share prices in the short term other than fundamentals.”

4. There are bargains galore

And the final reason to keep faith in small-cap ASX shares is that a volatile time like now generates some excellent bargains to be purchased.

“Of course, a key part of this value has been the painful compression in valuations across most equity markets, generally most pronounced in small caps.”

The Ophir team crunched the cyclically adjusted price-to-earnings (P/E) ratios of the Australian and US small-cap indices versus the large-cap counterparts. 

It concluded that small-cap shares are heavily discounted at the moment and that, starting from now, an annual return rate in excess of 15% across its funds is not out of the question.

“Small-cap market returns look favourable over the next 5+ years,” read the memo.

“A large part of that confidence stems from investing in an attractively valued and less efficient small-cap market with an investment process that we believe gives us an edge in identifying mispriced companies over the long term.”

The post 4 reasons to stick with battered small-cap ASX shares appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• ASX 200 midday update: Qantas’ market update, lithium shares rebound
• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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

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What do you get when you put rising inflation and interest rates together? Caution. Fear. Penny-pinching. A metaphorical slamming shut of wallets across the nation as consumer confidence falls.

This doesn’t bode well for ASX retail shares, particularly those in the consumer discretionary sector.

What’s happened to consumer confidence?

As my Fool colleague Mitch reported last week, the latest Westpac-Melbourne Institute consumer sentiment index fell by 4.5% from the prior quarter to 86.4.

A reading below 100 indicates we’re feeling pretty worried. And the lower that number goes, the more inclined we are to not spend money on the things we want but don’t actually need or can put off.

The latest reading is concerning for the economy, given it’s around 10 points off how we felt at the onset of COVID-19 (75.6 points) and during the global financial crisis (79 points).

The factors feeding into this lacking confidence are skyrocketing energy prices, rising costs for various goods and services, and higher mortgage repayments as the banks increase home loan interest rates.

Bell Asset Management sums up the situation:

At present, the economy remains on a reasonably strong footing, but there is an increased risk of reduced consumer discretionary spending as priorities of the household wallet shift more toward essential purchases of fuel, utilities and food.

What does this mean for ASX retail shares?

Well, from an earnings point of view, you’d have to think falling consumer confidence wouldn’t be good for the bottom line of consumer discretionary stocks, in particular.

But if we look at ASX retail shares this week, many have done well.

Let’s take a quick snapshot of the week’s trade in ASX retail shares following the market close on Friday.

• JB Hi-Fi Limited (ASX: JBH) up 3.65% to $39.43 this week
• Super Retail Group Ltd (ASX: SUL) up 3.73% to $8.61
• Harvey Norman Holdings Limited (ASX: HVN) up 1.34% to $3.78
• Premier Investments Limited (ASX: PMV) up 2.07% to $20.17
• City Chic Collective Ltd (ASX: CCX) up 9.43% to $1.915

Of course, we have to bear in mind that the major market sell-off this year has made many ASX 200 shares look cheap. Some investors might be buying the dip or dollar-cost averaging already, and lifting share prices as they go.

But looking ahead, one broker is decidedly bearish on ASX retail shares.

Top broker bearish on retail sector

UBS has slashed its forecasts for ASX retail shares, according to reporting in The Australian.

UBS analyst, Shaun Cousins said in a new note:

The external environment has deteriorated dramatically such that our more mixed
view of the consumer is no longer justified and a more bearish view is required.

Cousins cut his FY23 EPS estimates by an average 23% to below consensus estimates.

He downgraded Harvey Norman, City Chic Collective, and Accent Group Ltd (ASX: AX1) .

Of the ASX retail shares he covers, Cousins cut his share price targets by an average 29%.

Cousins said:

Investor appetite for consumer discretionary retail is extraordinarily low, with value
investors yet to engage with the sector given further downside risk to earnings.

UBS has also cut its share price target on Lovisa Holdings Ltd (ASX: LOV) by 20% to $16.

The broker has also reduced its price target on Premier Investments, by 26% to $23, and Super Retail by 27% to $9.50.

The post What impacted ASX 200 retail shares this week? appeared first on The Motley Fool Australia.

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More reading

• 2 quality ASX dividend shares with 6%+ yields experts rate as buys
• Here’s where I’d invest $3,000 into ASX growth shares today
• How do you value the JB Hi-Fi share price in June?
• Why Bowen Coking Coal, Lake Resources, Premier, and ResApp shares are tumbling lower
• Why is the Premier Investments share price falling today?

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman Holdings Ltd. and Super Retail Group Limited. 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. and Super Retail Group Limited. The Motley Fool Australia has recommended Accent Group, Lovisa Holdings Ltd, and Premier Investments 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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A number of shares have been beaten down this year following the mini market crash.

While this is disappointing, it could have created a buying opportunity for investors once the volatility ends. Here’s why these ASX shares could be top options:

Altium Limited (ASX: ALU)

The first beaten down ASX share for investors to look at is Altium. It is the electronic design software provider behind the Altium 365 and Altium Designer platforms, the Nexus collaboration platform, and the Octopart search engine.

The Altium share price is down 37% since the start of the year. This could be a buying opportunity according to analysts at Bell Potter. They currently have a buy rating and $34.00 price target on Altium’s shares. This implies potential upside of 21% for investors over the next 12 months.

Bell Potter’s analysts believe Altium is “on track to achieve its FY22 guidance and expect much better subscriber growth in 2HFY22 relative to 1HFY22.”

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Another beaten down ASX share to look at is Domino’s. It is one of the world’s largest pizza chain operators with stores across the ANZ, Asia-Pacific, and European regions.

Its shares have fared even worse than Altium’s in 2022 and are down 46% since the turn of the year. Morgans believes this weakness is a buying opportunity and recently put an add rating and $93.00 price target on its shares. This implies potential upside of 40% for investors between now and this time next year.

Morgans remains positive on the company due to its store rollout plan, which it notes is “the engine of DMP’s growth.” And while near term trading conditions may be tough, the broker believes “the medium-term opportunity is absolutely undiminished.”

The post 2 beaten down ASX shares named as buys by experts appeared first on The Motley Fool Australia.

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More reading

• Could Altium shares benefit from the global chip shortage?
• Why no news could be good news for the Altium share price
• 5 things to watch on the ASX 200 on Tuesday
• Top brokers name 3 ASX shares to buy next week
• 3 ASX shares to buy for scary times: experts

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 Altium. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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There are a lot of shares to choose from on the Australian share market.

In order to narrow things down for investors, listed below are two ASX shares that are rated highly by analysts. Here’s why they could be top buy and hold options:

Lovisa Holdings Limited (ASX: LOV)

The first ASX share that could be a top buy and hold option is Lovisa.

Morgans is very positive on Lovisa due to its global expansion plans and its new and highly experienced CEO, Victor Herrero. The broker sees a huge opportunity for Lovisa in the massive US market. It explained:

Lovisa’s global footprint now spans 22 countries. In our opinion, investors can expect this number to increase steadily while, at the same time, Lovisa builds out its presence in its existing markets. We do not think there is any lack of opportunity. In the US, for example, Lovisa now has 81 stores, representing 0.25 stores for every million people), compared to Australia with 158 stores, 6.15 stores for every million people.

Morgans has an add rating and $24.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

Another ASX share that could be a top buy and hold option is TechnologyOne. It is an enterprise software provider servicing the government, financial services, health and community services, education, and utilities and managed services markets.

TechnologyOne appears well-placed for growth thanks to its shift to a software-as-a-service (SaaS) model and its UK expansion. It also has defensive qualities, which Goldman Sachs finds particularly attractive in the current environment. It commented:

Defensive end markets (public sector and education) with IT spending that are relatively resilient to recessions. Contractual CPI pricing pass-through, high recurring revenue, minimal churn (<1%), high margins and net cash are attractive attributes in a slowing economy. In addition, TNE’s recent result highlight continued momentum towards the +A$500mn FY26 ARR target, providing valuable earnings growth visibility over coming years, in our view.

Goldman has a buy rating and $13.30 price target on the company’s shares.

The post Analysts name 2 excellent ASX shares to buy and hold appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Experts name 3 ASX growth shares to buy with enormous upside potential
• 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
• TechnologyOne share price is a buy ahead of profit growth acceleration: broker

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 Lovisa Holdings Ltd 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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