Tag: Motley Fool

The Fortescue Metals Group Limited (ASX: FMG) share price is rebounding on Tuesday.

In afternoon trade, the mining giant’s shares are up 3% to $17.52.

Why is the Fortescue share price rising today?

Investors appear to have been picking up Fortescue shares today on the belief that they were oversold on Monday.

The Fortescue share price started the week with a sizeable decline after seaborne iron ore prices plunged in response to sharp falls in the futures markets.

With things looking a little more stable for iron ore prices today, Fortescue, BHP Group Ltd (ASX: BHP), and Rio Tinto Limited (ASX: RIO) shares are rebounding.

Are its shares good value?

Despite the recent weakness in the Fortescue share price, brokers aren’t recommending investors jump in.

In fact, none of the major brokers currently have a buy rating on its shares.

Though, it is worth noting that Macquarie’s neutral rating and $20.00 price target does imply meaningful upside of 14% from current levels.

Elsewhere, the bears at Goldman Sachs have a sell rating and lowly $13.50 price target on the company’s shares. Its analysts see far more value in BHP and Rio Tinto and have buy ratings on both.

The post Fortescue share price rebounds 3% today appeared first on The Motley Fool Australia.

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More reading

• Fortescue’s Twiggy adamant there’s ‘not a snowflake’s chance in hell’ of recession
• Why Bega, Fortescue, Santos, and Silver Lake shares are tumbling lower
• Why are ASX 200 iron ore shares getting hammered on Monday?
• Fortescue share price plunges 7%, but here’s why Twiggy’s not worried about a Chinese iron ore cartel
• Fortescue share price sinks 5% as iron ore price slides

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 Goldman Sachs. 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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The Qantas Airways Limited (ASX: QAN) share price is leaping ahead today.

Qantas shares have risen 2.6% and are currently trading at $4.545. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 1.41%.

Let’s take a look at what could be giving this ASX travel share a boost.

Qantas shares rise

Qantas shares are jumping, but it is not the only ASX 200 travel share on the rise today. Webjet Limited (ASX: WEB) shares have risen 3.2%, while Flight Centre Travel Group Ltd (ASX: FLT) shares are up 4.19%.

In today’s news, Qantas has ditched the mask mandate on selected international flights. This includes flight paths between Queensland, New South Wales and Western Australia to the USA, United Kingdom and Rome. An internal memo to Qantas staff cited by Nine News stated:

The change to in-flight mask requirements on some international flights is an important step in our transition to living with COVID, and we welcome this change

Meanwhile, a solution to another international travel barrier is also in focus today. The use of Australian digital COVID-19 vaccine certificates in restaurants and tourist attractions overseas could become easier in the future.

The Sydney Morning Herald reported Australia’s Federal Health Minister Mark Butler is meeting with G20 leaders to discuss reducing “impediments for travellers as they cross borders“. This could include a pilot program to universally recognise vaccine passports from multiple nations including Australia, Canada, Brazil and the United States.

In other news, Qantas announced a new sustainability partnership earlier this week. The airline will work with Airbus to establish a domestic sustainable aviation fuel industry. This involves a US$200 million investment.

Qantas share price snapshot

The Qantas share price has dropped nearly 3% in the past 12 months, while it has slumped more than 9% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has shed nearly 10% in a year.

Qantas has a market capitalisation of about $8.6 billion based on today’s share price.

The post What’s boosting the Qantas share price on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 travel shares lifting off on Monday?
• Qantas share price lifts amid new sustainability partnership
• What happened to the Qantas share price today?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• How did ASX 200 travel shares perform amid today’s sell-off?

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

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It may seem like a pretty scary time to have your money invested in ASX 200 shares.

After all, the S&P/ASX 200 Index (ASX: XJO) is down 14% over 2022 thus far. And many prominent ASX 200 shares have fallen far further than that.

But the reality is that periods like the one we’re in have often proven to be a perfect time to get started in investing. As the saying goes, ‘buy low, sell high’.

But where should one get started? There are hundreds of ASX shares to choose from. Not to mention exchange-traded funds (ETFs) or international shares.

I’ve talked about the conglomerate Washington H. Soul Pattinson and Co Ltd (ASX: SOL) before, and why I think that company is a good starting point. Well, here is another ASX 200 share investment that I personally think would also make a fantastic starting point.

Start with this ASX 200 share

It’s Coles Group Ltd (ASX: COL).

We all know Coles. It’s the second-largest supermarket chain in Australia, and services millions of Australians every year.

So, why this ASX 200 share?

Well, I think it’s important for a beginner to understand they are investing in a business, not just a share.

Coles is not an overly complicated business. Most of us would be able to get a handle on how a supermarket makes a crust. Plus, I think it is beneficial for a new investor to be able to go to one of ‘their’ stores and see how the business works and fares.

In addition, Coles is arguably a fairly safe investment. That doesn’t mean its shares can’t fall dramatically in value from time to time. But we all need (and will keep needing) to eat. That doesn’t change if the economy is in recession, if we have high inflation (or deflation, for that matter), or if interest rates go up.

Many Australians use Coles to fulfil this basic need, and I don’t see this changing too much in the future. It’s an efficient business that will arguably always be fairly competitive when it comes to the prices of food, drinks, and household essentials.

The benefits of dividends

Coles shares also pay a pretty robust dividend. At present, its shares offer a dividend yield of 3.6%, which also comes with full franking credits. I also believe a dividend-paying share is a great thing for a beginner investor, since it demonstrates how owning shares of a business can put money back into your pocket.

If an investor bought Coles shares today as their first investment, they can likely expect their first dividend payment in September.

No business is perfect, and Coles is certainly not a ‘double your money in two weeks’ kind of stock. But that’s precisely why I think it will make for a great starting ASX 200 share.

The post How to start investing in stocks: This ASX 200 share is where I’d begin appeared first on The Motley Fool Australia.

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More reading

• The ANZ share price has tumbled 24% from its 2022 high. Is it time to pounce?
• ASX 200 shares lift as RBA says recession not on the horizon
• Morgans is urging investors to buy these 2 ASX 200 shares for this challenging environment
• Why is the Premier Investments share price falling today?
• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy

Motley Fool contributor Sebastian Bowen 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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and Washington H. Soul Pattinson and Company 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 a good day on the market for the Beach Energy Ltd (ASX: BPT) share price despite no word having been released by the company.

The energy company’s stock might be gaining due to higher oil prices. The black liquid’s value lifted overnight, reportedly on the back of supply concerns.

At the time of writing, the Beach Energy share price is $1.6125, 4.03% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has lifted 1.51% at the time of writing with the S&P/ASX 200 Energy Index (ASX: XEJ) outperforming all other ASX 200 sectors.

Let’s take a closer look at what might be going on with the oil and gas company on Tuesday.

Beach Energy share price gains alongside oil prices

Beach Energy’s stock is lifting today, tracking upwards with both global oil prices and its home sector.

The Brent crude oil price lifted 0.9% to US$114.13 a barrel overnight, according to CommSec. Meanwhile, the West Texas Intermediate crude price rose 0.6% to reach US$110.27 a barrel.

The rise was likely due to concerns oil supply will remain tight amid continued sanctions on Russian oil and despite worries of a recession in the US, according to Reuters.  

The news is probably helping the energy sector outperform on Tuesday. It’s currently 3.33% higher, coming in as today’s best-performing ASX 200 sector.  

Meanwhile, the Beach Energy share price is the sector’s third-best performer, behind Paladin Energy Ltd (ASX: PDN) and Whitehaven Coal Ltd (ASX: WHC). They’ve lifted 9.2% and 7.05% respectively at the time of writing.

Beach’s share price is also likely recovering from yesterday’s 8% tumble. That drop followed news the company is prioritising a new opportunity over the development of an existing reserve.

Today’s gain included, the Beach Energy share price is around 28% higher than it was at the start of 2022. It has also gained approximately 26% since this time last year.

The post Here’s why the Beach Energy share price is leaping 4% today appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why is the Beach Energy share price tumbling 7% on Monday?
• ASX 200 midday update: PointsBet jumps, energy shares sink, Vicinity’s upgrade
• Despite recent volatility, the Beach Energy share price has still gained over the past 3 weeks. Here’s why
• 5 things to watch on the ASX 200 on Friday

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

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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.

The recent bear market has left many investors scared and reluctant to invest. Many one-time high-flyers in technology, both inside and outside the Nasdaq Composite, now trade at a fraction of their highs. The Composite itself is down about 31% year to date. 

However, that bear market means that $1,000 buys a lot more stock than it did a year ago. To that end, the market has priced Amazon (NASDAQ: AMZN) and The Trade Desk (NASDAQ: TTD) well within the range of such investors.

Amazon stock is trading at a substantial discount

Until recently, Amazon shareholders with only $1,000 to invest would have had to settle for a partial share. But now that Amazon just split its stock 20-for-1, small-scale investors have an easier time buying whole shares of this e-commerce and cloud giant.

Even with an extensive online retail footprint, consumers have bought less online, which has hurt Amazon stock. Investors have sold off as its North America and International divisions reported negative operating income.

Still, Amazon Web Services, which pioneered the cloud computing industry, continues to fire on all cylinders. It made up only 16% of Amazon’s revenue in the first quarter of 2022, but that revenue grew by 36% year over year.

This far exceeded the 7% revenue growth for the company over the same period in Q1. That revenue, which amounted to over $116 billion, still led to an overall net loss of $3.8 billion, down from an $8.1 billion profit in the year-ago quarter. This slower revenue growth has likely contributed to a 45% drop in Amazon’s stock price from its 52-week high. 

Nonetheless, analysts believe it can recover to 12% revenue growth for 2022. Moreover, the lower stock price has taken the price-to-earnings ratio to 50, a substantial discount for a stock that has often sold for over 100 times earnings in recent years. Given cloud resilience and a likely retail recovery, such a price point could make today a good time to start adding Amazon positions. 

The Trade Desk’s stock sells at a 60% discount at the moment

Investors who don’t know this company may assume it has something to do with trading stock. While it most certainly operates a market, this particular trade desk buys available advertising inventories.

Additionally, to foster a competitive advantage, it helps clients tailor media campaigns and set spending parameters to ensure they buy ad spaces that would enhance the marketing goals of clients. And it utilizes further advantages through software. Thanks to a new platform called Solimar, it can work around privacy updates from Apple and Alphabet. Also, with its Unified ID 2.0 solution, clients no longer need access to third-party cookies, a concern that has hurt some media stocks in recent months.

In the first three months of 2022, its revenue of $315 million surged by 43% year over year. This means revenue growth had remained consistent with 2021, when revenue also grew by 43%. Though the company reported a $15 million GAAP loss, non-GAAP income rose 50% to $105 million when excluding stock-based compensation and an income tax adjustment.

Still, The Trade Desk also predicts modest slowing as it forecast $364 million in second-quarter revenue, which would mean a 30% surge year over year if that figure holds.

Investors have turned on the company amid the more modest increases, and it sells at a nearly 60% discount to the 52-week high. However, the price-to-sales ratio of 18 is a two-year low and has fallen from 50 in November. This discount and its growth potential could make it a great time for a starter investment. 

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

The post Nasdaq bear market: Where to invest $1,000 right now appeared first on The Motley Fool Australia.

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More reading

• Why Meta, Amazon, and Apple shares were falling today
• Why Amazon stock crushed the market today
• 2 Warren Buffett stocks to buy and hold forever
• Amazon Just Split Its Stock: Here’s What Comes Next
• Better buy: Amazon vs. Alibaba

Will Healy has no position in any of the stocks mentioned. 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and The Trade Desk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and The Trade Desk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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We seem to have turned a corner with ASX bank shares. The ASX 200 banks have endured some of the worst selling pressure of recent weeks. Nowhere is that more clear than the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price.

ANZ shares are up a healthy 2.29% so far today at $21.88 a share. That’s a very pleasing step up from the lows under $21 that we saw on Friday last week. But ANZ shares are still down by 14% over the past month alone. They also remain down by more than 20% in 2022 thus far.

ASX bank shares have a rough start to 2022

Indeed, since we saw this bank hit a 2022 high of around $28.75 a share back in January, ANZ shares have given up around 24% of their value.

So with these kinds of losses under the belt, could it be time to pounce on ANZ shares?

Well, one investor who thinks so is Hugh Dive of Atlas Funds Management. In a recent piece for Livewire, Dive argued that ASX bank shares like ANZ are well placed to weather any inflationary pressures that might come our way. Here’s some of what he said:

Rising interest rates have historically seen expanding bank profit margins, as interest rates paid on loans increased immediately… Rising interest rates increase the benefits banks get from the billions of dollars held in zero or near-zero interest transaction accounts that can be lent out profitably.

The May reporting season showed that Australia’s banks are in good shape and face a better outlook than many sectors of the Australian market…

After the shock of last week’s rate rise has been digested, we expect the banks to outperform in the near future, enjoying a tailwind of a rising interest rate environment and high employment levels, which will see customers make the new higher loan repayments.

So is it time to buy the ANZ share price?

But Dive isn’t the only one bullish on ASX banks right now. As my Fool colleague James covered last week, analysts at Macquarie also see some potential in ANZ shares. Macquarie currently has an overweight rating on ANZ with a share price target of $34. That implies a potential upside of almost 60% on the current pricing.

This broker reckons the ASX banks like ANZ will benefit enormously from rising interest rates. It predicts that many savers won’t bother to chase higher interest rates for their term deposits and, thus, ANZ will enjoy a tailwind as it raises interest rates on its own loans.

So that’s two ASX experts who see good things ahead for the ANZ share price. But we shall have to wait and see if these predictions prove accurate.

In the meantime, the current ANZ share price gives this ASX 200 bank a market capitalisation of $61 billion, with a dividend yield of 6.61%.

The post The ANZ share price has tumbled 24% from its 2022 high. Is it time to pounce? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 shares lift as RBA says recession not on the horizon
• Morgans is urging investors to buy these 2 ASX 200 shares for this challenging environment
• Why is the Premier Investments share price falling today?
• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy
• Why is the Core Lithium share price slipping 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 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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The Novonix Ltd (ASX: NVX) share price has been a strong performer on Tuesday.

In afternoon trade, the battery technology company’s shares are up 7% to $2.51.

This makes the Novonix share price one of the best performers on the ASX 200 index today.

Why is the Novonix share price shooting higher?

Investors have been bidding the company’s shares higher today despite there being no news out of it.

However, it is worth noting that a number of beaten down shares are climbing particularly strongly today amid a broad share market recovery.

Beaten down battery metals and lithium shares such as Argosy Minerals Limited (ASX: AGY), Chalice Mining Ltd (ASX: CHN), and Sayona Mining Ltd (ASX: SYA) are also charging notably higher today.

Though, despite today’s gains, this group of shares is still down materially in recent weeks. For example, the Novonix share price remains down 37% over the space of the month, with Chalice and Sayona recording similarly severe declines.

In light of this, it’s possible that today’s buying could be from investors that believe these shares have been oversold.

Time will tell if they hold onto these gains or give them back if/when the market volatility returns.

The post Why is the Novonix share price charging 7% higher today? appeared first on The Motley Fool Australia.

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More reading

• These were the worst performing ASX 200 shares last week
• Novonix share price loses 20% in dire week for ASX 200 tech stocks
• The Novonix share price is the worst of the ASX 200 losers today. What’s going on?
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Novonix share price tumbles 10% amid Tuesday’s carnage

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

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

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

Stock splits are all the rage in 2022. Amazon just completed its first split in more than a decade; Tesla plans a 3-for-1 split later this year. And Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) will execute a 20-for-1 split on July 1.

Although stock splits don’t affect a company’s fundamentals or overall market cap, they can impact how investors feel about a stock. For many people, paying $2,000 for a single share seems outrageous. So Alphabet plans to fix this problem.

With its shares currently trading near $2,150, the company’s 20-for-1 split will bring the price down to a more manageable figure of around $100. And by lowering the price that much, Alphabet shares might attract more interest from retail investors. 

Why stock splits can spark retail investors’ interest

For the average investor, high stock prices are a problem for several reasons. There’s the obvious aforementioned sticker shock. But there’s also a technical concern: portfolio diversification. 

To understand why diversification is an issue, consider how much money the average retail investors have in their brokerage accounts. Wealth management company Personal Capital produced a study showing that the median balance for investors in their 20s is $10,701. And this gets to the heart of the problem: Many people, particularly young people, can’t invest $2,000 in a single stock without skewing their portfolio.

Most financial professionals advise capping any single stock at 5% of the portfolio’s total value. This supports portfolio diversification, and it provides protection should a single stock experience a catastrophic one-off event. But in the case of Alphabet’s $2,150 stock price, your portfolio would need to have a total value of at least $43,000 to satisfy the 5% rule. And that’s if you wanted to own only one share. If you owned two shares, you’d need a portfolio worth $86,000 to stay diversified. Many investors simply do not have the capital to meet this 5% threshold. So they either pass on Alphabet shares or disregard the rule and blow past the 5% cap.

One way around this problem is through fractional share trading. Many brokerages now offer investors the ability to buy these smaller ‘slices’ of stock. In theory, this solves the problem of high-dollar stock prices. Yet, while this process can help, it’s not without a few drawbacks. For one, not all brokerages offer it. Moreover, fractional share trading can come with additional fees or commissions, and fractional shares can be more difficult to sell than whole shares.

However, if a company initiates a stock split, these fractional share concerns are alleviated. As noted before, a lack of portfolio diversification can be an issue for younger investors, who have limited amounts of capital to invest. And once you consider that many of Alphabet’s own employees are in their 20s and 30s, it provides another reason the company would want to split its shares: employee compensation. 

Once again, cutting the price of the shares helps both the company and investors. Alphabet will be able to dole out bite-size stock compensation; employees will be able to balance their portfolios more effectively.

Alphabet’s fundamentals remain excellent

As for the company’s fundamentals, Alphabet remains a leader in the digital advertising market. It has roughly 27% market share of all digital advertising. Whether it’s through YouTube, Gmail, or its ubiquitous Google Search, the chances are high that you’ll get shown an ad on one of Alphabet’s apps or services today. And when that happens, Alphabet gets paid. 

That’s a big reason why Alphabet’s revenue for the last 12 months is $270 billion. That puts Alphabet No. 8 on the list of the largest American companies by revenue. To put that figure in perspective, Alphabet’s revenue is a few billion dollars more than the combined total sales of Ford and General Motors. And, Alphabet’s not done growing: the company is increasing revenue by 23% year over year.

Yet despite these rock-solid fundamentals, the stock is down 27% year to date. Investors who want to own the company for the long term would be wise to use the stock split to build a position. And now, they’ll be able to do so without putting all their eggs in the Alphabet basket.

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

The post Alphabet’s Stock Split: The Real Reason It Matters appeared first on The Motley Fool Australia.

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More reading

• 4 reasons to buy Alphabet before its stock split

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. Jake Lerch has positions in Alphabet (C shares), Amazon, Ford, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Tesla. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Cochlear Limited (ASX: COH) share price has fallen around 22% over the last year. While that’s not one of the biggest drops on the ASX in recent times, some experts think that the share has upside.

Cochlear is one of the ASX’s largest healthcare businesses. But is it a big opportunity? Some experts have had their say on the hearing device company.

But, first, let’s see how the business has been growing in recent times.

Latest profit update from Cochlear

The cochlear implant business reported in its FY22 half-year result that its 12% growth of sales revenue (in constant currency) to $815 million was driven by strong demand for sound processor upgrades and new acoustic implant products.

In HY22, cochlear implant units increased by 7% to 18,598. While services revenue increased 19% to $256.5 million and acoustics revenue jumped 38% to $100.9 million, cochlear implant revenue only went up 1% to $457.9 million.

The company’s underlying net profit after tax (NPAT) rose 26% to $159 million thanks to the combination of sales growth and an improved gross profit margin. It also experienced lower-than-expected operating expenses.

The business paid an interim dividend of $1.55 per share, representing a 35% increase.

The company said that its FY22 underlying net profit guidance is between $265 million to $285 million, equating to an increase of between 13% to 22% year on year.

Acquisition

A couple of months ago, Cochlear announced it was buying Oticon Medical, Demant’s hearing implant business, for approximately AU$170 million.

As part of the transaction, Cochlear has committed to providing ongoing support for Oticon Medical’s base of over 75,000 hearing implant recipients.

The attraction of the deal was that it would provide greater scale and enable increased investment in research and development, as well as market growth activities.

Oticon Medical is expected to add between A$75 million to A$80 million to annual revenue, though it’s currently loss-making.

Cochlear noted that while it’s a market leader in implantable hearing, it’s a small player in the hearing loss segment where hearing aids remain the primary treatment option.

Is the Cochlear share price an opportunity?

The broker Morgans certainly thinks so with a price target of $244.50. That implies a possible rise of more than 20%. Morgans likes the acquisition of Demant Oticon as it increases market share.

Based on Morgans’ estimates, the Cochlear share price is valued at 49 times FY22’s estimated earnings and 44 times FY23’s estimated earnings. Morgans also thinks that surgery delays caused by COVID-19 will help the outlook.

However, the broker Morgan Stanley only rates the business as ‘equal-weight’, which is like a ‘hold’ rating. It thinks margins could be challenged, though it notes the revenue growth of services and upgrades can help.

Morgan Stanley’s price target on the business is $208, which suggests a high single-digit rise in the share price.

Morgan Stanley thinks the Cochlear share price is valued at 45 times FY22’s estimated earnings and 40 times FY23’s estimated earnings.

The post Down 20% in a year, is the Cochlear share price a bargain buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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 Fortescue Metals Group Ltd (ASX: FMG) share price is tracking higher in early trade on Tuesday, now up 2.94% at $17.50 apiece.

But, longer-term, the Fortescue share price has tumbled to six-month lows after falling off the cliff’s edge on 10 June.

Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) and S&P/ASX 200 Resources Index (ASX: XJR) have each sunk 10% in the past month of trade. The S&P/ASX 200 Index (ASX: XJO) is also down 6%.

“I don’t know a better industry”

Fortescue’s chairman Andrew ‘Twiggy’ Forrest has warned investors that markets could remain “choppy and uncertain” for the coming years.

Despite this, he said there’s “not a snowflake’s chance in hell” of a global recession, adding that Fortescue is well positioned to weather any global downturn, The Australian Financial Review reports.

Fortescue is also set to benefit from its pivot into renewables, Forrest says. He noted the rapid uptick in commodity prices adds further upside to his case.

“I don’t know a better industry to be pivoting towards when fuel prices are going through the roof than an industry where you can make all your own fuel,” he told the AFR.

“We smoke $3.5 billion worth of fossil fuel into the atmosphere every year,” he added. “That is one hell of a pool of capital annually to invest into your own fuel production and green iron systems.”

Global recession unlikely

Forrest also said that amid surging input costs and a rising cost of capital, commodity prices are also spiking, feeding Fortescue the income it needs to push ahead with its plans.

Even if some countries will see a slowdown in growth, on a global scale, demand is set to remain strong, Forrest said.

Especially given there’s pent-up demand from COVID-19 that’s been increased by the conflict in Europe, according to Forrest.

Demand for iron ore “has remained strong too”, he said.

“And, if global demand for iron ore goes down, the last man standing will be the lowest cost producer. And that is Fortescue.”

In the last 12 months, the Fortescue share price has slipped 20% into the red and is down 9% this year to date.

The post Fortescue’s Twiggy adamant there’s ‘not a snowflake’s chance in hell’ of recession appeared first on The Motley Fool Australia.

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• Why Bega, Fortescue, Santos, and Silver Lake shares are tumbling lower
• Why are ASX 200 iron ore shares getting hammered on Monday?
• Fortescue share price plunges 7%, but here’s why Twiggy’s not worried about a Chinese iron ore cartel
• Fortescue share price sinks 5% as iron ore price slides
• Why Block, Fortescue, GUD, and Humm shares are sinking 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.

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