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Tax-loss selling is a phenomenon that’s seen each June, which accelerates in the second half of the month.

The idea is that investors sell their worst-performing ASX shares before the end of the financial year arrives. They’re willing to cop the capital loss to cancel out their tax liability from their wins.

This means that sometimes stocks that have already fared poorly during the financial year can spiral down even further in June, as demand plummets and supply soars.

And this could present some juicy bargains, according to a recent Market Matters report.

“[Tax loss-selling] can often send already depressed stocks down into oversold/deep value areas, which can be attractive for the well-informed investor,” read the document.

“The key is determining the difference between value and a company simply in trouble.”

As such, the report presented three examples of “quality” ASX shares that could see their valuations plummet but may present excellent opportunities to buy:

‘Things are as bad as they can get’

ARB Corporation Limited (ASX: ARB) is a 4-wheel drive accessories provider, which has seen its share price plunge 46% since the start of the calendar year.

According to the Market Matters report, the company has been struck down by “a trifecta” of headwinds in the new car market — shortages of staff, supply chain constraints and slowing sales.

“When we combine this with margin contraction due to rising commodity [prices], the picture has looked bleak for ARB, which has clearly been reflected by its share prices fall.”

But it’s a retailer that Market Matters continues to like.

“It’s starting to feel like things are as bad as they can get for ARB,” read the report.

“It’s now trading on 19.6x FY22 earnings compared to a 5-year average of 27.5x… This is one retailer we like into excessive weakness.”

At the time of writing the report ARB shares were around $31, with the Market Matters team declaring it would pounce when it fell to $30.

The ARB share price ended Tuesday afternoon at $28.39.

Half the price it was a year ago

Medical and industrial glove maker Ansell Limited (ASX: ANN) has seen its valuation plummet 46% over this financial year.

The market has been disappointed with the company’s post-COVID performance.

“Who would have thought the stock would be trading well under its 2020 highs in today’s new health & safety world?” read the Market Matters report.

“January’s major downgrade courtesy of rising cost and falling margins hasn’t been forgotten — and for MM to be interested another leg lower is required.”

The document advised that Ansell shares are already “fairly cheap” trading on 15.5 times price-to-earnings valuation but would prefer a tax-loss selling dip to under $23 before picking it up.

The stock finished Tuesday at $23.06.

‘A quality, monopolistic business’

Real estate classifieds site REA Group Limited (ASX: REA) has made many investors wealthy over the past couple of decades.

But the stock price has suffered in recent months.

“REA has corrected 42% from its mid-2021 high and is currently down 35% for the financial year after finding itself in two unpopular naughty corners — i.e. property and growth high valuation names.”

The Market Matters team reminded investors this is “a quality, almost monopolistic-style business”, with “useful pricing power”.

“But it currently is in the wrong place at the wrong time,” read the report.

“The question is when has real value been restored – it’s still not cheap per se, trading on an estimated valuation of 35.2x for 2022.”

The Market Matters crew admitted they are still reluctant about increasing their exposure to the technology sector.

“But a little lower and it will become compelling… MM likes REA into weakness under $100.”

REA closed on Tuesday at $103.44.

The post 3 ASX shares to pounce on after tax-loss selling: report appeared first on The Motley Fool Australia.

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More reading

• Here’s why I think these ASX tech shares are buys in June
• 2 ASX shares the Aussie lifestyle can’t do without
• Here are 2 ASX 50 shares analysts rate as buys
• Can the REA share price turn over a new leaf in 2022?
• Leading brokers name 3 ASX shares to buy today

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 recommended ARB Corporation Limited, Ansell Ltd., and REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The dreaded ‘I’ word has done the rounds in financial markets since the beginning of the year, steamrolling any equity daring enough to stand in its way. In the process, shares in Magellan Financial Group Ltd (ASX: MFG) and other fund managers on the ASX have felt the sting of inflation.

However, investors could be in for more pain as a 40-year high in US inflation increases the chances of the Federal Reserve hiking rates by a sizeable 75 basis points.

The expectation for higher interest rates means more market participants are opting to watch how this pans out from the sidelines while holding cash. In light of this, fund managers are more and more becoming FUD (fear, uncertainty, and doubt) managers.

Let’s take a look at how this battle has impacted Magellan and other fund manager shares recently.

Fund flood gates wide open

For Magellan shares, the pain began with the loss of its contract with St James’s Place back in December last year. Prior to this, the ASX-listed fund manager counted more than $116 billion in funds under management (FUM).

Fast forward to the end of May this year, and Magellan is looking at a total FUM of $65 billion. That is nearly a slicing in half of the company’s former glory. Consequently, Magellan shares have similarly fallen away, tumbling 36% year-to-date.

The once-admired fund has struggled to retain investors’ money amid the challenging macroeconomic conditions. Not to mention the difficulty in enticing new investors while many of its managed funds underperform benchmarks. For example, the Magellan Global Fund (hedged) has provided lesser returns than the MSCI World Net Total Return Index over a one-year, three-year, five-year, and seven-year period.

Fellow ASX-listed fund manager Platinum Asset Management Ltd (ASX: PTM) has also suffered at the hand of fund outflows. After entering the new year with a tidy sum of $22 billion in FUM, Platinum now only has $19.6 billion under its belt.

Ultimately, the reductions in funds under management directly impact the company’s bottom line. In the fund management business, revenue is a percentage fee of the total FUM. As you can see, these companies have an uphill battle to stem the outflows.

Doing better than Magellan shares

One ASX-listed fund manager that appears to be fending off high-interest rate fears is GQG Partners Inc (ASX: GQG). The US-based global boutique asset management firm has experienced a net inflow of funds since the end of last year.

According to the latest FUM report, GQG Partners held $94.6 billion, up from December’s $91.2 billion. Part of the reason might be GQG’s outperformance compared to benchmarks over the last few years. Furthermore, growth in the company’s FUM has served up increased revenue over the past 12 months.

As covered by my colleague Sebastian, it is believed that Magellan shares will continue to reel in pain until its own performance figures improve.

The post War on funds: What’s going on with Magellan shares and other ASX-listed fund managers? appeared first on The Motley Fool Australia.

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More reading

• Top ASX dividend shares to buy in June 2022
• These were the worst performing ASX 200 shares last week
• Why Block, Evolution, Fortescue, and Magellan shares are sinking today
• Why Boss Energy, Crown, Magellan, and Shaver Shop shares are rising
• ASX 200 midday update: Magellan rebounds, Crown’s takeover boost

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

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As we near the end of the financial year, many investors are watching the ASX All Ords with apprehension.

The All Ordinaries Index (ASX: XAO) has been on a downward trend in June, shedding nearly 625 points (down 8.4%) so far this month. But amidst all the carnage, some insiders are buying up ASX All Ord shares at a discount.

This could be a promising indicator, considering these are the people that should know the business best. If insiders are comfortable accumulating shares, maybe there’s a disconnect between the share price and the underlying business.

Seeing value in these ASX All Ord shares

Audinate Group Ltd (ASX: AD8)

The first ASX All Ords share in our list is Australian digital audio technology company, Audinate. It appears the market is not hearing the positive aspects of the business. In FY21, the Dante software maker eclipsed its pre-COVID-19 revenue, reaching $33.4 million. Although, the company’s latest FY22 update suggests revenue growth may not be high, with forecasts of above $30 million.

However, Audinate chair David Krall decided to buy $134,600 worth of Audinate shares on 1 June 2022. The purchase takes the board members holding to 500,000 shares worth a total of $3.29 million at the time of writing.

Polynovo Ltd (ASX: PNV)

There is plenty going on for this dermal regeneration medical company. Despite Polynovo achieving 40% revenue growth in the last 12 months and turning profitable, this ASX All Ord share is one of the most heavily shorted companies on the market. In addition, the next quarterly rebalance will see Polynovo booted from the S&P/ASX 200 Index (ASX: XJO).

Yet, Polynovo chair David Williams has continued to relentlessly buy shares in the medical device company. On 6 and 7 June, Williams added a further $284,123 worth of shares to his name. This takes his total purchases above $5.1 million since the beginning of May this year.

Dicker Data Ltd (ASX: DDR)

In its recent first-quarter FY22 update, Dicker Data posted impressive increases in its revenue and net earnings. Though, the market has not changed its sentiment on the technology distribution company, with shares down nearly 22% year-to-date.

Clearly, chief operating officer Vladimir Mitnovetski sees the current share price of this ASX All Ords share as an opportunity. On 7 June, the executive director acquired 2,500 shares in the company for $29,500.

Notably, the company is currently offering a dividend yield of 4% based on its current share price.

The post Buying the dip: 3 ASX All Ord shares insiders are loading up on appeared first on The Motley Fool Australia.

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More reading

• Why is the Polynovo share price rising while other ASX 200 stocks are plummeting?
• Why Australian Clinical Labs, Lake Resources, PolyNovo, and ResApp are rising
• These are the 10 most shorted ASX shares
• Are these 2 compelling ASX shares buys in June 2022?
• Why is Audinate outperforming other ASX tech shares today?

Motley Fool contributor Mitchell Lawler 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 AUDINATEGL FPO, Dicker Data Limited, and POLYNOVO FPO. The Motley Fool Australia has positions in and has recommended AUDINATEGL FPO and Dicker Data 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 Vanguard MSCI Index International Shares ETF (ASX: VGS) is a fairly popular exchange-traded fund (ETF) on the ASX today. It is one of the index ETFs that ASX investors like to use to gain exposure to shares listed outside Australia and the ASX.

But this ETF’s name doesn’t exactly tell us what kind of shares an investment into VGS units would give an investor exposure to. So today, let’s check out what exactly it is that you get when you invest in the Vanguard International Shares ETF.

VGS is a very broad fund. It officially tracks the MSCI World ex-Australia Index, which covers the largest companies across “major developed countries” of the world.

There are more than 20 share markets that VGS covers. But it is dominated by the United States, which commands around 70% of this ETF’s total holdings. Other significant contributors include Japan (6.3%), the United Kingdom (4.5%), Canada (3.7%), and Switzerland (3%).

This inevitably means that it is the US that also dominates VGS’s underlying shares. Although this ETF holds close to 1,500 individual companies within it, the largest companies still dominate.

Take Apple Inc (NASDAQ: AAPL). This world-famous American technology giant is the largest individual holding within VGS right now. Even though it is one of almost 1,500 companies within VGS, it still commands a 4.9% weighting in the ETF’s portfolio.

What else is in the Vanguard International Shares ETF?

It’s a similar story with the other large-cap US tech shares. Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), Tesla Inc (NASDAQ: TSLA), and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) are VGS’s next-largest holdings. Together, these four companies represent another 10% or so of VGS’s total weighting.

So of $100 invested in VGS units right now, approximately $15 would be invested in these five big tech companies alone.

But that’s not to say there isn’t still a diverse range of international companies within this ETF. Other significant holdings include Switzerland’s Nestle, France’s LVMH, the UK’s Shell, and Japan’s Toyota. The US offers up more than just tech companies too. Farm machinery company Deere & Company is there. As is healthcare giant Johnson & Johnson. You’ll also find the Coca-Cola Company, consumer staples king Procter & Gamble, and oil titan Exxon Mobil.

So if an investor puts money into the Vanguard VGS ETF, they are certainly getting a big chunk of US tech. But they will also get a very wide range of large, dominant businesses hailing from many corners of the globe.

The Vanguard MSCI Index International Shares ETF charges a management fee of 0.18% per annum.

The post What do you get when you invest in the VGS ETF? appeared first on The Motley Fool Australia.

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More reading

• 3 popular ETFs for ASX investors to buy now
• 3 ASX ETFs for investors to buy next week
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• Why now could be a good time to invest in Vanguard Msci Index International Shares ETF
• 3 fantastic ETFs for ASX investors to buy next week

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, Coca-Cola, Johnson & Johnson, Microsoft, Procter & Gamble, 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, Apple, Microsoft, Tesla, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and 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 Vanguard MSCI Index International Shares 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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It’s been a rocky start to the trading week, to say the least. Tuesday’s session saw investors run for the hills, wiping around $80 billion in value from ASX shares in the process. This followed higher-than-expected US inflation figures and fears over rising interest rates.

During times of increasing uncertainty and volatility, many investors gravitate to ASX dividend shares for their potential to deliver regular returns that may outperform share price gains.

On that note, we asked our Foolish contributors to compile a list of ASX dividend shares they reckon would make great buying for income investors in June. Here is what the team came up with.

7 best ASX dividend shares for June 2022 (smallest to largest)

Accent Group Ltd (ASX: AX1), $685.46 million

Smartgroup Corporation Ltd (ASX: SIQ), $1.03 billion

TechnologyOne Ltd (ASX: TNE), $3.57 billion

Bank of Queensland Limited (ASX: BOQ), $4.41 billion

GQG Partners Inc (ASX: GQG), $5.06 billion

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), $8.95 billion

Telstra Corporation Ltd (ASX: TLS), $43.91 billion

(Market capitalisations as of 14 June 2022)

Why our Foolish writers love these ASX dividend shares

Accent Group Ltd

What it does: Founded in 1981, Accent Group is a distributor and retailer of footwear and apparel. The group operates more than 500 stores across Australia and New Zealand.

By Aaron Teboneras: The Accent share price has tumbled by around 50% in 2022 amid a sell-off across the broader ASX.

In the past two months alone, the footwear retailer’s shares have slumped by more than 20%. However, one broker believes these falls represent a major buying opportunity.

As reported by my Foolish colleague Mitchell, Bell Potter believes there is significant upside for Accent shares.

The broker currently has a $2.20 price target on Accent shares, representing a possible uplift of almost  80% based on Tuesday’s closing price of $1.24.

Furthermore, the board is expected to pay 5.8 cents in fully-franked dividends in FY22, giving Accent shares a current dividend yield of around 4.4%.

Motley Fool contributor Aaron Teboneras does not own shares of Accent Group Ltd.

Smartgroup Corporation Ltd

What it does: Smartgroup provides business services including salary packaging, novated leasing, fleet management, and payroll administration to assist employers with outsourcing employee benefits.

By Bernd Struben: Over the past three years, Smartgroup’s business model has proven itself in good times and bad. The company is currently enjoying strong cash generation and claims a healthy balance sheet. But it was also resilient during the pandemic lockdowns, still generating profits and paying dividends throughout 2020.

Prior to yesterday’s general market sell-off, the Smartgroup share price had bucked the wider selling trend in 2022 and was up around 1% for the year. Following Tuesday’s falls, however, Smartgroup’s shares are now sitting around 4% lower year to date. 

Based on Tuesday’s closing price of $7.44, the company is paying a fully franked dividend yield of 4.9%. Smartgroup trades on a price-to-earnings (P/E) ratio of around 16 times, which I believe looks like good value for a company generating strong cash flow.

Motley Fool contributor Bernd Struben does not own shares of Smartgroup Corporation Ltd.

TechnologyOne Ltd

What it does: This S&P/ASX 200 Index (ASX: XJO) constituent is one of Australia’s leading providers of enterprise software solutions. The company offers a plethora of software-as-a-service (SaaS) products spanning dozens of industries, from student management to business analytics.

By Mitchell Lawler: Finding a dividend-paying share that might be less at risk in a high-interest rate environment is a challenge. However, TechnologyOne appears to be a good candidate on paper.

This long-standing tech company has embedded itself in market areas that are less vulnerable to the ramifications of rising rates. For example, around 76% of TechnologyOne’s annual recurring revenue in the latest half-year was derived from local government, education, and government customers.

While a dividend yield of 1.36% may seem on the slim side, the dividends per share have been steadily rising for nearly a decade straight. Goldman Sachs recently stuck a $13.30 price target on TechnologyOne shares, which equates to a potential upside of around 26% based on Tuesday’s closing price of $10.55.

Motley Fool contributor Mitchell Lawler does not own shares of TechnologyOne Ltd.

Bank of Queensland Limited

What it does: Bank of Queensland is an ASX 200 banking share. Although it is not a member of the big four, it still has a significant presence in the Australian banking sector.

By Sebastian Bowen: Bank of Queensland could be an ASX dividend share worth considering for income investors as we approach 2022’s halfway point. Bank of Queensland is a share that’s often overlooked in favour of its larger banking counterparts. However, it still offers many of the benefits that its larger peers do, not least being a hefty dividend yield. On recent pricing, BOQ shares offer a trailing and fully-franked dividend yield of 6.73%.

Recently, broker Goldman Sachs predicted that Bank of Queensland will be able to raise its dividend even higher over the rest of FY2022 and FY2023. That could mean investors who get in today could be lucky enough to get a yield-on-cost of over 8% by next financial year.

Motley Fool contributor Sebastian Bowen does not own shares of Bank of Queensland Limited.

GQG Partners Inc

What it does: GQG Partners is one of the largest fund managers on the ASX with a market capitalisation of around $5.06 billion. It offers investment solutions spanning international, global, and emerging markets.

By Tristan Harrison: Broker Morgans currently rates GQG shares as a buy. In terms of the dividend yield, based on Tuesday’s closing price of $1.63, the company is expected to pay a 7.3% yield in FY22 and 7.9% in FY23.

GQG recently released its May 2022 monthly funds under management (FUM) update which showed that FUM had increased by 4.6% over the month of May to US$94.6 billion, up from US$90.4 billion in April 2022. So, despite recent market volatility, GQG is still experiencing sizeable fund inflows.

The business offers a range of dividend strategies for income investors and is also looking to expand into additional markets such as Australia and Canada.

Motley Fool contributor Tristan Harrison does not own shares of GQG Partners Inc.

Washington H. Soul Pattinson and Co. Ltd

What it does: Investment house Washington H. Soul Pattinson and Co – colloquially known as Soul Patts – curates a diversified portfolio of equities, property, and loans. It has been listed on the ASX since 1903.

By Brooke Cooper: Inflation is on the rise, interest rates are taking off, and markets have struggled in 2022 so far. What many investors seek in times like these is certainty.

And while nothing on the share market is guaranteed, Soul Patts’ historically strong dividends might help ease the minds of anxious investors.

The company has bumped its dividends every year since 2000. Soul Patts credits its success to its flexible mandate, helping create a diverse investment portfolio.

On top of that, the Soul Patts share price is around 20% lower than it was at the start of this year, meaning it might offer a good entry point for new investors.

Motley Fool contributor Brooke Cooper does not own shares of Washington H. Soul Pattinson and Co. Ltd.

Telstra Corporation Ltd

What it does: Telstra is Australia’s leading telecommunications company and one of the largest companies on the Australian share market.

By James Mickleboro: With the market going through an extremely volatile period and inflation rearing its ugly head, I think Telstra could prove to be a good option for income investors.

This is due to the company’s defensive qualities, new inflation-linked mobile pricing, leadership position in the telco industry, and its strong, free-cash-flow generation.

I believe its cash flow will allow Telstra to maintain its dividend at a fully-franked 16 cents per share in the near term before it eventually grows it once the new T25 strategy starts to bear fruit. For now, based on the current Telstra share price of $3.75, this will mean yields of around 4.3%.

Motley Fool contributor James Mickleboro does not own shares of Telstra Corporation Ltd.

The post Top ASX dividend shares to buy in June 2022 appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most traded ASX 200 shares on Tuesday
• Experts name 3 ASX growth shares to buy next week
• Brokers name 2 ASX 200 dividend shares to buy with big fully franked yields
• How much have Soul Patts shares paid in dividends over the last 5 years?
• Are Telstra shares still ASX dividend heavyweights?

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 SMARTGROUP DEF SET, Telstra Corporation Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Accent Group 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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If you don’t have sufficient funds to build a truly diverse portfolio, a quick way to add some diversity is with exchange traded funds (ETFs).

This is because through just a single investment, ETFs give investors exposure to whole indices, industries, and themes.

There are a large number of ETFs for investors to choose from, but three that could be worth considering are listed below. Here’s what you need to know:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF could be a top option for investors. As its name suggests, this ETF gives investors exposure to a number of exciting tech shares in the Asian market. Among its holdings are the likes of ecommerce giant Alibaba, search engine company Baidu, and WeChat owner Tencent. These companies have been revolutionising the lives of billions of people in the region and look well-positioned for growth over the next decade.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF for investors to consider is the BetaShares Nasdaq 100 ETF. This popular ETF provides investors with exposure to the 100 largest non-financial shares on the famous Nasdaq index. This means that investors will be owning a slice of tech giants such as Amazon, Apple, Facebook (Meta), Microsoft, Netflix and Google (Alphabet). And with the Nasdaq index down materially from recent highs following a market selloff, now could be an opportune time to make a long term investment in the ETF.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A final ETF to consider is the VanEck Vectors Morningstar Wide Moat ETF. This ETF gives investors exposure to a portfolio of fairly valued companies with sustainable competitive advantages or moats. There are approximately 50 stocks in its portfolio including Amazon, Berkshire Hathaway, Constellation Brands, Intel, and Microsoft. It is worth highlighting that legendary investor Warren Buffett is a huge fan of companies with moats. So, if you’re aiming to follow his investment style, this ETF could be a good way to do it.

The post Here are 3 top ETFs for ASX investors to buy now appeared first on The Motley Fool Australia.

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More reading

• Get exposure to Asian shares with these 2 ETFs
• 3 ASX ETFs for investors to buy next week
• 2 ASX growth shares I’d buy right away with $2,000
• 3 high quality ETFs for ASX investors to buy this month
• Here’s why the BetaShares Nasdaq 100 ETF could be a buy 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 positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF and VanEck Vectors Morningstar Wide Moat 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 ASX share market saw a lot of pain on Tuesday. The S&P/ASX 200 Index (ASX: XJO), representing the biggest companies on the ASX, slumped 3.55%. However, I believe there are some good opportunities in this period.

Investors are focused on risk factors such as inflation and rising interest rates. In theory, when interest rates go up, it pulls down the value of asset prices. Investors are certainly putting that theory to the test in the real world at the moment.

But, in my opinion, these lower prices just represent better buying opportunities. There are plenty of ASX shares that I think could make good long-term buys. Here are two of them.

City Chic Collective Ltd (ASX: CCX)

City Chic is a fast-growing business in the apparel and footwear industry. The ASX retail share specialises in selling items to plus-size women.

It sells through a variety of brands in different countries including City Chic, CCX, Evans, Avenue, Hips & Curves, and Fox & Royal.

For me, it’s the global growth potential that is one of the key attractions of City Chic shares. Australia doesn’t have a big population, but City Chic is now generating revenue in North America, the UK, and mainland Europe.

This ASX share may have a solid tailwind behind it. Using Credence Research as its source, City Chic says the plus-size market is forecast to grow by approximately 7% per annum in the coming years.

The retailer also noted that the average annual spend in the plus-size category is currently “materially” less than the rest of the women’s apparel market. City Chic also noted increasing rates of plus-size women globally.

I think the ASX share is doing a good job of achieving growth, particularly online. In the first half of FY22, it made $178 million in global sales. The company said that 77% of the prior 12 months of sales were made online.

In the 17 trading weeks from 27 December 2021 to 24 April 2022, it saw “strong” total sales growth of 25% year on year.

Unlike some other smaller ASX shares, City Chic is making a profit, while also growing in size quickly. In HY22 it made $14 million of underlying net profit after tax (NPAT). I think that’s a positive about the business – it’s not making losses. This can provide valuation support.

Since the start of 2022, the City Chic share price is down by 66%. It looks good value for the long term to me.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an exchange-traded fund (ETF) that gives investors exposure to the video gaming sector.

As a group of businesses, I think the sector this ETF represents has attractive growth potential, particularly after the 23% decline so far in 2022.

VanEck points out that video gaming has achieved average annual growth since 2015 of 12%. E-sports is growing even quicker, partly due to the fact that it has created new potential revenue streams such as game publisher fees, media rights, merchandise, ticket sales, and advertising.

E-sports revenue has grown by an average of 28% per annum since 2015.

The competitive video gaming audience is expected to reach 646 million people globally, partly because of the rising population of ‘digital natives’, according to VanEck.

With the revenue growth for the sector, I think names like Nvidia, Netease, Advanced Micro Devices, Take-Two Interactive Software, Electronic Arts, and Nintendo can deliver long-term earnings growth and this can help shareholder returns.

The post I think these 2 ASX shares are buys in this volatility 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 Nvidia. The Motley Fool Australia has recommended Nvidia and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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 Northern Star Resources Ltd (ASX: NST) share price isn’t escaping the wider market selloff today.

Northern Star shares closed on Tuesday trading for $8.06, down 3.13%.

The Northern Star share price joined the wider selling action, fuelled by hot running inflation figures and fears of aggressive interest rate hikes out of the United States.

This saw US markets fall sharply yesterday (when the ASX was closed for the Queen’s Birthday holiday) and caused similar angst here today, with the All Ordinaries Index (ASX: XAO) closing down 3.70% at the end of the day.

With gold prices also down around 2.5% since the US inflation figures were released on Friday, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) also closed down 2.06% today.

But, according to Catapult Wealth portfolio manager Tim Haselum, gold stocks, and particularly the Northern Star share price could have a strong year ahead.

Low debt and long mine life

Northern Star has a current market cap of approximately $9.4 billion. Focused on gold, the company produces and explores in Western Australia, the Northern Territory and the US state of Alaska. The miner pays a trailing dividend yield of 2.4%, fully franked.

Commenting on the outlook for Northern Star, Haselum said (courtesy of The Advertiser):

The main variables here are the gold price, currency and production volumes. Like all commodity companies, NST reported rising costs as wages and transport expenses keep pushing higher. Despite this, NST ha a very low debt, strong track record for management and their mines are relatively long life.

Haselum acknowledged the rising interest rate environment, but added, “We think you have to throw the old economic textbooks out as we could still see strength in gold valuations and it continues to be an attractive store of wealth.”

Catapult Wealth has a buy rating on the miner and a 12-month target of $11.88 for the Northern Star share price.

Northern Star share price snapshot

The Northern Star share price hit all-time highs in November 2020.

This year the miner has been struggling, with shares down 14% in 2022. That compares to a year-to-date loss of 10% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Why this fund manager sees major upside potential for the Northern Star share price appeared first on The Motley Fool Australia.

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More reading

• The Northern Star share price is down 25% from its April high. Is now the time to buy?
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Northern Star share price having such a lacklustre start to the week?
• 5 things to watch on the ASX 200 on Monday
• Where is the Northern Star share price headed in June?

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

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The market meltdown that wiped more than $100 billion in shareholder value on Tuesday didn’t stop one ASX 200 share from getting a “buy” upgrade.

The S&P/ASX 200 Index (ASX: XJO) crashed 3.55% on Tuesday, taking its fall from its August 2021 high to nearly 13%.

That means our key benchmark is now in correction territory. This is defined as a drop of between 10% and 20% from the peak.

Why this ASX 200 share is holding firm

But amid the gloom that’s been triggered by rapid interest rate hikes and runaway inflation, broker Macquarie upgraded the Endeavour Group Ltd (ASX: EDV) share price.

This may explain why the hotel operator and alcoholic drinks retailer outperformed the market today.

The Endeavour Group share price ended flat at $7.15, which is an admirable feat given most ASX 200 shares closed in the red.

Positive earnings outlook

There are a few reasons behind Macquarie’s decision to lift its rating on the shares to “outperform”. For one, the group’s earnings are more defensive than discretionary retailers, several of which got downgraded by the broker.

Another reason is Endeavour Group’s ability to generate a decent return on invested capital (ROIC). Macquarie explains:

We believe that the [approximate] $300m capex [capital expenditure] spend targeting 15% ROIC, amortising to 10% ROIC by year five, will drive 3.9% EBIT growth annually.

We think the retail and hotels businesses act as natural hedges against each other and should minimise the impact of an economic downturn.

Defensive income and margin expansion

Further, the growth in private label brands is driving the group’s expanded earnings before interest and tax (EBIT) margin. This positive trend is likely to continue, according to Macquarie.

The broker also pointed out that its pokies business has proven to be relatively resilient during times of economic uncertainty. Gambling isn’t an easy habit to kick.

Another thing that is helping the ASX 200 share is the trend for consumers to spend more on services than goods. Households initially spent big buying furniture and electronics as we emerged from the pandemic, but they are now preferring to spend on experiences instead.

What is the Endeavour Group share price worth?

However, it’s not all good news for the Endeavour Group share price. Regulatory risks remain a concern as there’s always scrutiny on liquor and gaming. Any potential reform could hurt profits.

Macquarie’s 12-month price target on the shares is $7.70 a share, and the forecast FY22 dividend yield stands at around 2.8%.

The post The ASX 200 share that just got upgraded to buy amid the market carnage appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Macquarie Group Limited. 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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S&P/ASX 200 Index (ASX: XJO) travel shares descended today amid a wider market sell-off.

The share prices of Flight Centre Travel Group Ltd (ASX: FLT), Webjet Limited (ASX: WEB) and Qantas Airways Limited (ASX: QAN) all plunged today.

So why did ASX 200 travel shares struggle on Tuesday?

Qantas share price takes a hit

Flight Centre shares dropped nearly 5%, Webjet shares fell almost 8% while Qantas shares descended 6%. For perspective, the S&P/ASX 200 Index (ASX: XJO) closed 3.55% in the red today.

ASX 200 travel shares appeared to follow the footsteps of US counterparts. In US markets on Monday, Delta Airlines Inc (NYSE: DAL) fell 8.29%, American Airlines Group Inc (NASDAQ: AAL) shares dived 9% while United Airlines Holdings Inc (NASDAQ: UAL) shares tumbled 10%.

Shares tumbled in the United States overnight amid higher than expected inflation figures and speculation that the US Federal Reserve would lift rates by up to 0.75%.

Sky high interest rates increase the cost of borrowing, potentially leading to higher costs for the airlines. Consumers could also have less money to spare for travel.

ASX2 00 travel shares could soon face more competition from Virgin Australia Holdings. The airline, not currently listed on the ASX, is planning direct flights between Gold Coast and Bali, Sunrise reported. Virgin is owned by Bain Capital.

In news on the weekend, Flight Centre is reportedly planning to take high achieving staff at the company to a Las Vegas conference, The Australian reported.

Meanwhile, Qantas has again faced accusations of “predatory” entry into the regional airline market. However, QantasLink CEO John Gissing hit back in comments reported in the Sydney Morning Herald. He said:

What Rex calls predatory behaviour is actually competition which provides these regional communities with choice, more services and lower fares.

Share price snapshot

Flight Centre shares have surged 17% in a year, while Qantas shares are up 3%. Meanwhile, Webjet shares have leapt 6% in the past year.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has shed 9% in the past 12 months.

The post How did ASX 200 travel shares perform amid today’s sell-off? appeared first on The Motley Fool Australia.

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More reading

• Why did the Qantas share price nosedive 6% today?
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• Up 12% this year, are Webjet shares fairly priced?
• Virgin Australia eyes upcoming ASX IPO: ‘Doing at least as well’ as Qantas
• ‘We need your help’: What’s dragging on the Qantas share price today?

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 Flight Centre Travel Group Limited and Webjet 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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