Tag: Motley Fool

I’ve utilised the ability of my superannuation fund which allows me to invest in S&P/ASX 300 Index (ASX: XKO) shares. One ASX share has more than doubled in value, and it has been my best performer in the relatively short period of time that I’ve been stock-picking in my superannuation fund.

I’m not suggesting that anyone should invest like that with their own fund – my focus here is to show that investing in particular businesses can work out well if we invest at the right time, no matter what the ownership structure is.

Temple & Webster Group Ltd (ASX: TPW)

My investment return currently shows a gain of over 110% since the investment in late October 2023.

When I think about Temple & Webster’s future, I think it has a compelling future. It can benefit from Aussies adopting online shopping. That has been a tailwind for a long time already for the company, but as the younger (digital-savvy) Aussies enter their bigger-spending years, it bodes well for the ASX share, in my opinion.

Shopping for homewares and furniture is seen as a discretionary category, meaning a downturn could be bad news for the company. I understand why the market was pessimistic about the high-growth business amid inflation and higher interest rates.

Why I decided to invest

I love looking at cyclical ASX shares when they’re at a weak point of a cycle. Share prices usually don’t fall for no reason, something has to worry investors. But, I think this is when we can see the best valuations to invest at.

Temple & Webster has continued to grow during this period, gaining market share. In the FY24 first-half result, it saw revenue growth of 23% thanks to growth of both repeat and first-time customers. It reached 1 million active customers for the first time in February 2024. Amazingly, in the period 1 January 2024 to 11 February 2024, revenue was up 35% year over year.

An e-commerce business has a number of advantages compared to bricks and mortar retailers. Once the digital infrastructure has been built it can materially benefit from increased scale, profit margins can increase thanks to a number of factors, the fixed costs can become a smaller percentage of revenue, it can get better terms with suppliers, and it can invest more in areas such as marketing.

I’m excited by what the business can become in five years, particularly if it reaches its goal of $1 billion in annual sales sooner rather than later.

Great businesses sometimes see volatility and go through heavy declines. I view those times as a chance to buy a compelling business at a much cheaper price.

I wouldn’t despair if the Temple & Webster share price went through more pain because I’d view that as another chance to buy it at a great price.

I’m not looking to sell the ASX share in my superannuation fund, I think it can become much bigger in the long-term. But, I’d be happy to wait for some more volatility before buying for my portfolio seeing as it’s already the largest position in the stock-picking part of my fund.

The post This is the best ASX share buy I’ve made in my superannuation fund appeared first on The Motley Fool Australia.

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

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

More reading

• If I could buy only one ASX stock this February earnings season, it would be…
• Why these 3 ASX 200 shares just earned some big broker upgrades
• Why Challenger, Hansen, JB Hi-Fi, and Temple & Webster shares are surging today
• Up 115% in a year, Temple & Webster share price soars again today on record revenue
• Shares vs. property: 3 furniture retailers hit 52-week highs amid continually rising home values

Motley Fool contributor Tristan Harrison has positions in Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Qw8q5NH

Fortescue Ltd (ASX: FMG) stock has achieved sizeable gains in the past few months. Could the ASX mining share be bigger than the Commonwealth Bank of Australia (ASX: CBA) by 2026?

How big is Fortescue now?

Fortescue’s market capitalisation is now higher than Wesfarmers Ltd (ASX: WES), Macquarie Group Ltd (ASX: MQG), ANZ Group Holdings Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC).

ANZ currently has a market cap of around $85 billion, Westpac sits at $86 billion, and Fortescue has a market cap of $89 billion.

In the last six months, the Fortescue share price has lifted by 39%.

How big is CBA? It has a market capitalisation of $195 billion at the time of writing.

So, Fortescue would have to more than double in size to reach the level that Australia’s biggest bank is currently at. It seems unlikely that Fortescue can rise that much in a relatively short time, and that doesn’t even account for the possibility of CBA shares rising – though they could fall.

But, if Fortescue stock were to reach the market cap heights of CBA, there could be three things that power it there, in my opinion.

Stronger iron ore price

I think the biggest reason for Fortescue’s recent rally is the strength of the iron ore price.

Six months ago, it was close to US$100 per tonne, and now it’s up to US$130 per tonne. Iron ore costs roughly the same each month to mine, so any extra revenue for that production largely translates into extra net profit (aside from paying more to the government).

The current iron ore price has been achieved at a time when the Chinese property sector is reportedly weak. If the Chinese economy and the property sector can rebound, that could push the iron ore price higher, leading to stronger profitability for Fortescue.

It’s impossible to know what the iron ore price is going to do. Forecasting it to go materially higher from here may be too optimistic.

More production

Another way to increase revenue would be to produce more iron ore. I’m not sure Fortescue can produce much more at its current projects that are already at full production.

But it’s certainly possible that the high-grade Iron Bridge project could produce more as it ramps up.

Fortescue also has the high-grade Belinga iron ore project in Africa, which it believes “will one day be among the largest iron ore mines in the world”. While it may take longer than 2026 to reach full production, the market may price in some of the potential improvements that Fortescue could experience.

Fortescue noted that the Belinga project opened “growth opportunities for Fortescue throughout Africa”.

More production, combined with a good iron ore price, enables the miner to make good profits. I think it’s vital the iron ore price stay high if Fortescue is to have any chance of overtaking CBA in the next few years. It obviously can’t control what’s happening with the iron ore price.

Green energy

One of the most exciting elements of Fortescue stock is the company’s growth plans in green hydrogen, green ammonia and high-performance batteries.

It has a long-term goal of producing millions of tonnes of green hydrogen annually, which could unlock a large new earnings stream for the business.

In the long term, I think the energy division (and Fortescue Capital) could be what gets Fortescue shares the closest to CBA.

But it’s also the riskiest – is Fortescue putting its money to good use? Will there be enough demand for this green energy? Will customers want to pay the amount that Fortescue needs to make a good profit on the money it has invested?

I wouldn’t bet on Fortescue being a bigger business than CBA by the end of 2026, but investor excitement about Fortescue’s energy division could help a lot as the main production gets closer.

The post Will Fortescue stock be worth more than CBA by 2026? appeared first on The Motley Fool Australia.

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

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

More reading

• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• 16% gross yield: The 3 hottest high-dividend ASX stocks to buy right now
• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• Shares vs. property: Beginner investors choosing Aussie shares, ASX ETFs and rentvesting

Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

Imdex Ltd (ASX: IMD) shares are having a day to remember on Monday.

In morning trade, the ASX All Ords share is up 20% to $1.93.

This follows the release of the mining technology company’s half-year results.

ASX All Ords share jumps on results

• Revenue up 18.4% to $235.3 million (16% in constant currency)
• Normalised EBITDA up 13% to $71 million (14% in constant currency)
• Net profit after tax down 26% to $16.8 million
• Normalised net profit after tax up 7.5% to $32.8 million
• Fully franked interim dividend flat at 1.5 cents per share

What happened during the half?

For the six months ended 31 December, Imdex reported an 18.4% increase in revenue to $253.3 million. This was driven almost entirely from the acquisition of Devico, which contributed revenue of $36.1 million. The core Imdex business reported a modest 0.2% lift in revenue to $199.2 million.

Also growing was the company’s normalised EBITDA, which rose 13% to a record of $71 million. This excludes Devico integration costs and the non-cash impairment of Maghammer.

It was these one-offs that meant that its net profit after tax was down 26% to $16.8 million on a reported basis but up 7.5% on a normalised basis.

And judging by the ASX All Ords share’s performance today, it seems the market is more focused on the normalised result than the reported result.

Management commentary

Imdex CEO, Paul House, was pleased with the half. He said:

We are very pleased that this half has demonstrated the resilience of the IMDEX business model and our strategy to put together end-to-end solutions that deliver value to customers and gain market share in what has been a contracting market.

We generated record revenues, record EBITDA and margin improvement. We concurrently completed the Devico operational integration, thereby unlocking further revenue and cost synergies in the longer-term. This is a wonderful acknowledgement of the hard work by our teams around the world.

Outlook

Management remains optimistic on the company’s prospects in 2024 despite the potential for lower mining exploration spending. It said:

S&P Market Intelligence has reported exploration spend for CY24 is likely to be in line with or marginally down (<5%) on CY23. The high-cost operating environment presents opportunities for IMDEX’s innovative end-to-end solutions, integrated product offering, orebody knowledge and directional drilling to improve drilling productivity.

Customer activity globally is anticipated to remain steady during 2H24. The Company’s mid to major customers are well funded and are expected to maintain, and in some regions expand drilling programs.

As of 15 February, the ASX All Ords share revealed that the number of sensors on hire were up approximately 5% on the prior corresponding period. This reflects the addition of some of the Devico sensors as Imdex progresses the systems integration globally.

The post Why this ASX All Ords share leaping 20% despite a big dent in profits appeared first on The Motley Fool Australia.

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

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

More reading

• 2 ASX shares under $50 new investors can buy confidently
• Invest like a Roman general
• This ASX dividend share is forecast to pay a 9% yield in 2026
• Lendlease share price crashes on $136m half-year loss
• Bendigo Bank share price tumbles on half-year earnings slump

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

from The Motley Fool Australia https://ift.tt/VP3IlB7

I love the idea of investing in ASX shares that can provide a mixture of capital growth and passive income. If you’re looking for two stocks that cost under $50 per share, I’ve got two I’d love to share with you.

Profit-making companies are attractive because they can pay out some profit as a dividend and re-invest the rest for more growth.

Here’s why I really like — and own — the two ASX shares below.

Metcash Ltd (ASX: MTS)

Metcash currently has a share price of $3.56. It supplies IGA supermarkets around Australia, as well as the liquor businesses Cellarbrations, The Bottle-O, IGA Liquor, Porters Liquor, Thirsty Camel, Big Bargain Bottleshop and Duncans.

It recently announced that it’s buying Superior Food, a leading Australian food service distribution business. Metcash said food service (which supplies businesses) was a “large and growing market”.

For me, what’s most exciting is the company’s hardware division which includes Mitre 10, Home Timber & Hardware, Total Tools and more. It’s buying Bianco Construction Supplies, a construction and industries supplies business servicing the South Australia and Northern Territory. It’s also buying Alpine Truss, one of the largest frame and truss operators in Australia.

When we put these divisions together, I think Metcash has solid earnings, which are leveraged to population growth.

I believe that an eventual rebound of construction and renovation activity will provide a helpful backdrop for Metcash’s hardware earnings to grow materially.

In my opinion, the ASX share has a low price/earnings (P/E) ratio for the quality of the business. According to the projections on Commsec, the Metcash share price is valued at 12.5x FY24’s estimated earnings with a possible grossed-up dividend yield of 8.1%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson currently has a share price of $34.21. Since the start of 2020, it has risen by more than 50%, though past performance is not a guarantee of future returns.

It owns a diversified portfolio of different assets, including ASX shares, unlisted businesses, credit/bonds, property and so on.

I like the diversification that this company offers, and it regularly adds to its portfolio. This ensures a portfolio focus on sectors with long-term return potential for shareholders.

Soul Pattinson has been a listed business since 1903, which shows it has excellent longevity. The ASX share has paid a dividend every year since 2000, and it has grown its annual dividend per share each year since 2000.

I think it’s one of the most likely Australian businesses to be around in 20 years because of that diversification element. While I wouldn’t call it cheap, I think it’s an excellent long-term ASX share to buy.

The post 2 ASX shares under $50 new investors can buy confidently appeared first on The Motley Fool Australia.

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

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

More reading

• Here’s why I can’t wait for Soul Patts’ shares to report next month
• Are Metcash shares worth buying for that fat 6% dividend yield?
• 3 ASX shares that could soar thanks to the RBA
• ASX dividend shares: What’s better, growth or consistency?
• Soul Patts shares: Here’s how some investors are getting a 22% yield

Motley Fool contributor Tristan Harrison has positions in Metcash and 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 Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/8n6bOaC

According to some accounts, after a successful battle, the victorious Roman general would be paraded through the streets of the city.

And, behind him, a slave would repeat the phrase ‘Memento mori‘.

Translated, it means: ‘You are mortal’; a reminder to the general not to let success go to his head.

It’s good advice.

Humility is something to be cultivated in all walks of life, I reckon.

(And when you’ve done that, you can be proud of yourself. Which… means you’re back to square one!)

But seriously, humility is a very, very handy trait, particularly for investors.

We all know the stock market is volatile. Certainly the last few years have been a case in point.

Starting in February 2020, we had the fastest bear market in history, followed by the fastest recovery.

In 2022, the technology sector lost around one-third of its value. Then in 2023, it gained about 30%.

And those examples are nothing compared to the rises and falls of some individual companies’ shares, often in much shorter timeframes.

Now, no-one needs to be reminded of their mortality when shares fall. That one’s easy, unfortunately.

But it’s when they rise that we need to remain sober in our assessments.

It’s also really hard.

We want to believe that rising share prices are justified: because we like getting richer.

And we like the feeling of having our judgement validated. “See, I was right!” is a powerful emotion.

But, dear reader, memento mori.

The problem is that our instinct is to take the gains for granted, but that same instinct causes us to suffer the losses greatly.

Again, it’s only natural.

They’re just not very helpful instincts.

They blind us to the fact that sometimes our gains are pure luck. A fluke.

That sometimes the investment case is justified, but the gains get out of all proportion.

A great example of that last instance is Microsoft, currently the world’s second-largest listed company (by market capitalisation).

In early 2000, before the tech crash, Microsoft’s shares sold for almost US$52 per share.

Then, dot com became dot bomb.

Microsoft shares wouldn’t reach those heights again for more than 15 years, not crossing the US$52 mark until October 2015!

Imagine how good you felt, in 2000: the shares had tripled in less than three years.

Imagine how tough the next 15 years were.

And since 2015? The shares are up almost 8-fold in price, to US$404 as of this writing.

What’s next for Microsoft? I don’t know.

Maybe the shares go straight to $1,000.

Maybe they fall to $200.

No, I don’t want to rob you of the joy (relief?) of rising share prices.

Because, here’s the thing: if you can be equanimous when shares rise, you’ll also be more philosophical when they fall.

But, if you let your emotions get the better of you in the good times… they’ll probably get the better of you during the unavoidable falls, too.

Yes, those of us who have been battered over the past few years can be excused for wanting to enjoy it when shares rise.

Yes, I’m being a killjoy. Sort of.

But I’m doing it because I want you to be prepared for both the ups and the downs.

I want you to be prepared – financially, mentally and emotionally – so you can see this investing thing through to the end.

If you’re still nursing some losses, remember that a diversified portfolio of well-chosen shares is very, very likely to go up, over time.

And if you’re ahead? Memento mori.

Fool on!

The post Invest like a Roman general appeared first on The Motley Fool Australia.

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

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

More reading

• This ASX dividend share is forecast to pay a 9% yield in 2026
• Lendlease share price crashes on $136m half-year loss
• Bendigo Bank share price tumbles on half-year earnings slump
• Why are Boral shares outperforming the ASX 200 today?
• A2 Milk share price jumps 12% on solid half-year results

Motley Fool contributor Scott Phillips has positions in Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/u4V8MQg

ASX dividend shares that offer a high dividend yield can be really attractive for investors wanting passive income. We know that interest rates on savings accounts and term deposits fluctuate and may not always offer as much return.

Now could be the right time to look at ASX shares beaten down because of the current economic backdrop.

Real estate investment trusts (REITs) face a difficult situation in periods of higher interest rates as they put pressure on building valuations and also mean higher interest costs, hurting net rental profit.

Growthpoint Properties Australia Ltd (ASX: GOZ) has a portfolio of “high-quality” industrial and office properties across Australia. The company says it invests in existing properties to ensure they meet tenants’ needs now and into the future. Let’s take a closer look.

Large dividend yield expected

As of November 2023, Growthpoint had an occupancy rate of 94% and a weighted average lease expiry (WALE) of 5.8 years — “underpinning income to security holders”.

The Commsec forecast suggests it could pay a distribution per security of 20.5 cents in FY26. This would be a distribution yield of close to 9%.

I’ll also mention that the forecast for FY24 is 19.3 cents per security, a distribution yield of 8.2%.

How much are Growthpoint shares actually worth? It’s hard to truly value a property until it goes through a sale process.

The ASX dividend share advised in December 2023 that external valuations had been conducted for around 62% of the group’s portfolio. They indicated a decrease of approximately $137.8 million, or 4.7%, on a like-for-like basis compared to 30 June 2023’s book values.  

The specific decrease in external valuations of these properties is expected to reduce the net tangible assets (NTA) by 19 cents. But there are other factors that could impact the final NTA. They include internal valuations for the other properties, the value of derivatives, other Growthpoint investments and changes to net debt at the balance date.

At June 2023, the business had an NTA of $4, down 12.3% compared to June 2022.

With the Growthpoint share price at $2.35, it appears to be trading at a large discount.

What’s the outlook for these property sectors?

I don’t have a crystal ball, nor does management. However, the ASX dividend share does have a high occupancy rate and a compelling WALE.

Growthpoint managing director Timothy Collyer explains:

The group’s movement in preliminary draft external valuations reflects the increased cost of capital and higher return expectations from investors. In the industrial market, supply constraints continue to drive strong rental growth, which has largely offset yield expansion.

Office markets are experiencing higher-than-average vacancies, although physical occupancy continues to increase across all markets and is anticipated to improve in 2024 as more businesses implement return-to-office policies.

Despite the lower preliminary draft external valuation of the group’s properties, Growthpoint’s high-quality portfolio with secure tenants on long leases continues to perform well in terms of occupancy (94%) and WALE (5.8 years).

While the NTA may have more to fall, the Growthpoint share price could be undervalued, making the dividend yield too compelling to miss.

The post This ASX dividend share is forecast to pay a 9% yield in 2026 appeared first on The Motley Fool Australia.

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

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

More reading

• $20,000 in savings? Here’s how I’d try to turn that into $1,463 a month of passive income
• How investing $100 per week can create $1,500 in annual ASX dividend income
• $10,000 in savings? Here’s how I’d try to turn that into $500 a month of passive income

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/VN8xP9n

The Lendlease Group (ASX: LLC) share price is having a tough time on Monday.

In morning trade, the international property and infrastructure company’s shares are down 15% to $6.35.

This follows the release of the company’s half-year results.

Lendlease share price crashes on half-year results

• Revenue down 3.8% to $4,733 million
• Segment earnings before interest, tax, depreciation, and amortisation (EBITDA) down 20% to $283 million
• Operating profit after tax down 42% to $61 million
• Statutory loss after tax of $136 million
• Interim dividend of 6.5 cents per share

What happened during the half?

For the six months ended 31 December, Lendlease recorded a statutory loss after tax of $136 million.

Management notes that its statutory earnings were impacted by a reduction in investment property valuations, redundancy costs, and an additional provision in relation to UK building remediation regulations.

Funds under management (FUM) were down slightly during the half due to challenging markets. They reduced 1% to $47.8 billion.

There was $0.9 billion of new FUM deployed, down from $2.9 billion in the prior corresponding period. This was due to slower market conditions.

Positively, there is $6 billion of future secured FUM in delivery from Development projects that are planned to move into funds or mandates and $4 billion of third party capital mandates to be deployed.

Management commentary

Commenting on the half, Global CEO and managing director, Tony Lombardo, said:

Despite challenging capital markets, we’ve continued to execute on our stated strategic initiatives, simplifying the business and further streamlining our operations. We reached a major development milestone with completion of the $1.5b retail development, The Exchange TRX, and are nearing completion on $2b of luxury apartments at One Sydney Harbour, Barangaroo.

Outlook

Also potentially weighing on the Lendlease share price today was its outlook statement.

The company has revised its expected FY 2024 return on equity guidance to 7%, reflecting lower certainty of transaction timing and higher execution risks.

The Lendlease share price is X over the last 12 months.

The post Lendlease share price crashes on $136m half-year loss appeared first on The Motley Fool Australia.

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

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

More reading

• Bendigo Bank share price tumbles on half-year earnings slump
• Why are Boral shares outperforming the ASX 200 today?
• A2 Milk share price jumps 12% on solid half-year results
• 1 ASX dividend stock down 50% to buy in February
• I’m planning to buy this top ASX ETF for my child

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.

from The Motley Fool Australia https://ift.tt/4PNHQRU

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is tumbling on Monday.

In response to the regional bank’s half-year results, its shares are down 4% to $9.46.

Bendigo Bank share price tumbles on half-year results

Here’s how the bank performed compared to the second half of FY 2023:

• Total lending down 0.7% to $78.2 billion
• Net interest margin (NIM) down 15 basis points to 1.83%
• Net interest income down 3.6% to $813.6 million
• Cash earnings after tax down 5% to $268.2 million
• Statutory net profit up 13.8% to $282.3 million
• Fully franked interim dividend up 3.4% to 30 cents per share

What happened during the half?

Bendigo and Adelaide Bank’s total lending was down 0.7% during the six months ended 31 December. This was driven by competitive market pressures, which weighed on residential lending volumes. Business lending was up 0.2% and Agribusiness was down 3.9% due to seasonal run-off in the Agribusiness book.

Also heading in the wrong direction was the bank’s NIM, which was down 15 basis points to 1.83%. It was impacted by price competition in both lending and deposits and a higher level of liquid assets.

This ultimately led to the bank’s cash earnings after tax falling 5% to $268.2 million. And while its statutory profit was up by a solid 13.8%, this reflects the benefits of Homesafe revaluations.

Management commentary

The company’s CEO, Marnie Baker, revealed that its consumer business was the main drag on its performance. She said:

Cash earnings for our Consumer division decreased 9.9% to $250.8 million due to intensity in competition on both sides of the balance sheet. The challenges outlined in our full year results remain. We have seen heightened competition across the mortgage portfolio and consequently slowing growth relative to system.

Baker also advised that she is optimistic the bank’s cost to income ratio will improve after a difficult half. The CEO adds:

Our cost to income ratio was challenged during the half, increasing by 230 basis points impacted by the lower income environment. We continue to work on our medium-term objective of a cost to income ratio towards 50%.

No guidance has been given for the second half.

The post Bendigo Bank share price tumbles on half-year earnings slump appeared first on The Motley Fool Australia.

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

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

More reading

• Why are Boral shares outperforming the ASX 200 today?
• A2 Milk share price jumps 12% on solid half-year results
• 1 ASX dividend stock down 50% to buy in February
• I’m planning to buy this top ASX ETF for my child
• Morgans says these high-yield ASX dividend stocks are buys

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

from The Motley Fool Australia https://ift.tt/UQrqeW7

Boral Ltd (ASX: BLD) shares are catching the eye on the ASX on Monday.

In morning trade, the building materials company’s shares are up 3.5% to $6.05.

This compares to the ASX 200 index, which is up 0.1%.

Why are Boral shares outperforming the ASX 200?

Investors have been buying the company’s shares this morning after it received a takeover offer from its largest shareholder, Seven Group Holdings Ltd (ASX: SVW).

According to the release, the investment company, which owns over 70% of Boral, has tabled a $6.05 per share offer to take full control. This comprises 0.1116 Seven Group shares and $1.50 cash per share.

This represents a modest 3.5% premium to where Boral shares ended the week on the ASX.

But the price may not stay there. The release notes that the offer price will increase to a maximum of $6.25 per share if it reaches the 90.6% compulsory acquisition threshold.

If that happens, it would mean a more palatable 6.8% premium to where Boral shares last traded.

But don’t expect a better offer any time soon. It advised that “it will not acquire Boral Shares for an amount in excess of $6.25 for at least 12 months following the close of the Offer.”

Seven Group’s CEO, Ryan Stokes, commented:

Today’s announcement represents an exciting opportunity to integrate Boral into SGH’s leading Industrial Services portfolio. The transaction has a compelling rationale for SGH, and for Boral’s shareholders, who would become SGH shareholders as part of the transaction and continue to benefit from the operational improvement journey underway at Boral. The terms of the Offer reflect our disciplined approach to capital allocation, and we will retain a strong balance sheet position post-transaction.

Boral says take no action

As things stand, Boral is advising its shareholders to take no action.

Shareholders are advised to take no action in relation to the Offer, or any correspondence received from SGH, until they receive further information from Boral in relation to the Offer.

A board committee of Boral’s independent directors has been established and is currently considering the offer.

The post Why are Boral shares outperforming the ASX 200 today? appeared first on The Motley Fool Australia.

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

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

More reading

• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Why Boral, Dicker Data, Droneshield, and Novonix shares are charging higher
• Boral share price jumps 13% on massive profit growth and guidance upgrade

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.

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

The A2 Milk Company Ltd (ASX: A2M) share price is starting the week with a bang.

In morning trade, the infant formula company’s shares are up 12% to $5.67.

This follows the release of its half-year results today.

A2 Milk share price jumps on half-year results

• Revenue up 3.7% to NZ$812.1 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 5% to NZ$113.2 million
• Net profit after tax up 15.6% to NZ$85.3 million
• Cash balance increased 12% to NZ$792.1 million

What happened during the half?

For the six months ended 31 December, A2 Milk reported a 3.7% lift in revenue to NZ$812.1 million.

Management advised that this was driven by continued growth in the China & Other Asia segment (up 16.5%), partially offset by a 24.1% decrease in the ANZ segment due largely to a change in distribution strategy. Elsewhere, USA revenue increased by 8.6% and MVM decreased by 4.7%.

Infant milk formula (IMF) sales grew 1.5% with China label up 10.4% and English label down 6.9%. Liquid milk sales also grew modestly, with ANZ sales up 1.5% and USA sales up 7.0%. Other nutritional sales grew by 48.5% and ingredients sales (MVM) decreased by 4.7%.

A2 Milk’s gross margin came in at 46.7%, which was 0.2ppts higher than FY 2023 but 0.9ppts lower than the prior corresponding period. This was primarily due to higher input costs, foreign exchange movements, and the adverse impact of sales mix, which offset price increases and cost savings.

Nevertheless, the company’s EBITDA increased by 5% to NZ$113.2 million. This reflects increased revenue, lower administrative and other expenses, and higher net interest income.

But despite the company reporting a 12% increase in its cash balance to NZ$792.1 million, it will not be paying a dividend. Management advised that it has decided to continue to prioritise investment in growth opportunities and balance sheet strength, ahead of returning capital to shareholders.

Outlook

Management warned that China IMF market conditions remain challenging with a double-digit decline in market value still expected in FY 2024.

Nevertheless, A2 Milk’s revenue growth guidance for FY 2024 has improved since its prior outlook statement. It expects revenue growth of low to mid single-digit percent for the year. It also expects its margins to be largely in line with what was recorded in FY 2023.

The A2 Milk share price is still down 12% over the last 12 months despite today’s gain.

The post A2 Milk share price jumps 12% on solid half-year results appeared first on The Motley Fool Australia.

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

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

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why 4DMedical, A2 Milk, QBE, and Zip shares are charging higher 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 A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/lQrTX28