Tag: Motley Fool

Interest rates rose again this week for the second consecutive month.

Believe it or not, the Reserve Bank of Australia is deliberately trying to slow the economy down.

It wants Australians to spend less, thus reducing demand for goods and services.

That’s obviously not the best environment for any business, not just ASX-listed companies.

When central banks do this, it is playing with fire. It has to be careful not to slow down activity so much that the country falls into recession.

Wilsons head of investment strategy David Cassidy thinks authorities will be successful in avoiding a global recession, but it will still be a bumpy ride.

And in such nervous times, he would pick only very specific ASX shares to buy.

“With the return and volatility of quality defensives being historically superior to those of broader equities during choppy market conditions, investors may benefit from purchasing these stocks during turbulent times.”

Cassidy names three such quality defensive ASX shares in a recent Wilsons memo:

Market dominance matters when people have less to spend

One important theme that Cassidy’s team seeks in quality defensive shares is market dominance.

The idea is that if a company has a monopoly or a massively unassailable position, economic downturns don’t matter as customers still have no choice but to buy its goods and services.

They could even raise prices in response to inflation, and would not lose business.

A great example of this is toll road operator Transurban Group (ASX: TCL).

“Toll roads are used every day to get from A to B and pre-COVID had steady, consistent earnings growth,” he said.

“Transurban is our pick with its monopolistic power in NSW, VIC, and QLD. TCL should be able to pass inflation costs onto the consumer as prices rise.”

The Transurban share price has risen more than 4% year-to-date during a period in which the rest of the non-mining market has struggled. The stock also pays out a 2.5% dividend yield.

Cassidy also identified telephony as an “essential” service for Australians.

And he, not surprisingly, likes the market leader.

“Providers like Telstra Corporation Ltd (ASX: TLS) operate within an oligopoly with solid pricing power,” said Cassidy.

“Earnings are unlikely to be volatile now competition in the market has subsided.”

Telstra shares have dipped around 8% since the start of this year, while giving out a 2.8% dividend yield.

The third ASX share Cassidy named is related to a very basic human need — hunger.

“Since people need to buy food and basic household items, stocks from these sectors can do well when volatility is high.”

Australia has an effective duopoly in the supermarket sector, but Cassidy has a definite favourite out of Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

“The underperformance in Woolworths adds to the case for buying at current prices,” he said.

“Woolworths’ valuation premium to Coles has also been eroded slightly over the past few months.”

Indeed the Woolworths share price has dropped more than 10% so far this year. The ASX share hands out a 2.7% dividend yield.

The post Tolls and phones: Wilsons unveils 3 ASX shares to buy for a slowing economy appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on Tuesday
• Will June be a good month for the Transurban share price?
• Analysts name 2 top ASX 200 dividend shares to buy right now
• Transurban share price hit by broker downgrade
• What’s the outlook for the Telstra share price in June?

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 positions in and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) fell heavily after the Reserve Bank increased rates more than expected. The benchmark index fell 1.5% to 7,095.7 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to rebound on Wednesday following a solid night of trade in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.75% higher this morning. On Wall Street, the Dow Jones rose 0.8%, the S&P 500 climbed 0.95%, and the Nasdaq was also up 0.95% after bond yields eased.

Platinum update

The Platinum Asset Management Ltd (ASX: PTM) share price will be on watch today following the release of the fund manager’s latest funds under management (FUM) update. That update revealed that Platinum experienced net outflows of approximately $209 million In May. This left it with FUM of $19,588 million.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good day after a solid night of trade for oil prices. According to Bloomberg, the WTI crude oil price is up 1.3% to US$120.02 a barrel and the Brent crude oil price has risen 1.3% to US$121.09 a barrel. Concerns over tight supplies continue to keep oil prices at high levels.

ResMed rated as a buy

The ResMed Inc (ASX: RMD) share price could be good value according to analysts at Goldman Sachs. This morning the broker has reiterated its buy rating and $34.40 price target, implying potential upside of ~20%. Goldman notes that there “is a 12-18 month backlog of new patients waiting to be diagnosed.”

Gold price climbs

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a decent day after the gold price climbed overnight. According to CNBC, the spot gold price is up 0.65% to US$1,855.4 an ounce. The safe haven asset was boosted by falling bond yields.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• Experts name 2 excellent blue chip ASX 200 shares to buy
• Why is Audinate outperforming other ASX tech shares today?
• Here’s why the Perenti share price is rocketing 18% today
• Can the Evolution Mining share price turn the corner in June?
• Will June be a good month for the Santos share price?

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 ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. 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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Are you interested in adding some more ASX shares to your portfolio in June?

Three ASX shares that could be worth considering this month are listed below. Here’s what you need to know about them:

Altium Limited (ASX: ALU)

The first ASX share to look at is Altium. It is an award-winning printed circuit board (PCB) design software provider. Altium could be worth considering due to its leading position in a market exposed to the Internet of Things and artificial intelligence booms. The proliferation of electronic devices is expected to lead to increasing demand for its software over the next decade.

Bell Potter currently has a buy rating and $41.25 price target on its shares. This compares to the latest Altium share price of $27.62.

Life360 Inc (ASX: 360)

Another ASX share to look at is Life360. This growing technology company is responsible for the Life360 mobile app. This market leading app is for families and offers useful features such as communications, driver safety, and location sharing. It also recently acquired Jiobit and items tracking company Tile. These are opening the door to material cross and upselling opportunities to its tens of millions of users.

Bell Potter is bullish on the company’s future and has a buy rating and $7.50 price target on its shares. This compares to the current Life360 share price of $3.12.

Megaport Ltd (ASX: MP1)

Megaport could be another ASX share to consider buying. It offers scalable bandwidth for public and private cloud connections, metro ethernet, and data centre backhaul. Megaport has networking equipment in hundreds of data centres around the world, which has created a software layer that provides an easy way for users to create and manage network connections. This means that through the Megaport network, users can create and run a global network with or without the need for physical infrastructure.

Goldman Sachs currently has a buy rating and $13.10 price target on Megaport’s shares. This compares favourably to the latest Megaport share price of $5.95.

The post 3 fantastic ASX shares that analysts reckon have huge upside potential appeared first on The Motley Fool Australia.

More reading

• Why is Audinate outperforming other ASX tech shares today?
• Megaport share price hits multi-year low: Is this a buying opportunity?
• Why did ASX 200 tech shares fall today?
• Goldman Sachs says beaten-up Megaport share price has 100% upside
• Top broker says unloved Life360 share price has 120% upside

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Life360, Inc., and MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 All Ordinaries Index (ASX: XAO) fell today, but three ASX All Ordinaries shares defied the trend.

The All Ords Index fell 1.54% today to 7,318.60 points. For perspective, the S&P/ASX 200 Index (ASX: XJO) also dropped 1.53%.

So let’s take a look at which shares outperformed the index today.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price jumped 3.9% today. However, in earlier trade, it leapt 7% before pulling back.

The lithium developer’s shares jumped on the day after the company was added to the benchmark ASX 200 index as part of a June 2022 quarterly rebalance. ASX lithium shares including Lake tumbled last week after Argentina set a reference price for lithium carbonate exports of US$53 per kilogram.

However, a S&P Global Commodity Insights publication overnight states that Chinese lithium carbonate producers don’t see “any impact of this announcement” on the spot market in the near term. The source said:

I think overseas prices won’t drop drastically following Argentina’s announcement, though there’s also not enough support for prices to go up that much more,

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price jumped 3.77% today. However, in earlier trade, the company’s share price lifted 7.5% before retreating. Like Lake Resources, Core Lithium also joined the ASX 200 index yesterday.

As my Foolish colleague Bernd reported, investors potentially saw the ASX lithium share sell-off last Wednesday as “overdone”. Lithium shares fell on Wednesday after news of the Argentina reference point on lithium prices, along with a note out from Goldman Sachs.

However, other market analysts including Macquarie are more optimistic on the outlook for ASX lithium shares. Core Lithium is exploring the Finniss Lithium project near Darwin in the Northern Territory. Drill assay results from the project released on 3 June revealed intersections outside the mineral resource at BP33.

Perenti Global Ltd (ASX: PRN)

The Perenti Global share price soared a mammoth 10% today, defying the market trend. Shares jumped after the company announced a huge contract win.

The mining services company has been awarded a contract for the Evolution Mining Ltd (ASX: EVN) Cowal Underground project in NSW. The contract, involving both production and underground development, could be worth a whopping $520 million. Perenti said the project will deliver strong cash flows in return for capital investment.

Commenting on the win, CEO Mark Norwell said:

The Cowal contract represents one of the largest underground mining projects in Barminco’s history, generating revenue of nearly $520 million with an initial term of four years, from a contract commencement date in early July 2022.

The post 3 ASX All Ordinaries shares that had a terrific Tuesday appeared first on The Motley Fool Australia.

More reading

• Core Lithium share price shakes off oversupply concerns to march 8% higher today
• Why is the Lake Resources share price rising 6%?
• Why Core Lithium, Perenti, Strandline, and Yancoal shares are pushing higher
• Here’s why the Perenti share price is rocketing 18% today
• Could the Core Lithium share price be set to take off again 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 Piedmont Lithium Ltd (ASX: PLL) share price has reversed all of its gains since the start of the month.

This comes despite the company not releasing any price-sensitive news to the ASX lately.

At market close, shares in the Australian lithium miner finished the day at 80 cents, down 3.03%. This means that its shares have lost 13% in a week.

Let’s take a look at what could be driving the fall around the company’s share price.

What has happened to Piedmont shares?

Investors are continuing to offload Piedmont shares after heavy falls across the lithium sector in the past week.

As widely reported, Goldman Sachs sent shockwaves across the lithium industry following its bearish report.

The United States-based investment behemoth predicted that lithium prices will drop to US$16,000 per tonne in 2023.

Currently, the going price for the battery making ingredient is around US$70,000. This represents a drop of more than 77% in the coming year.

According to Goldman Sachs, the sharp correction is being driven by “fundamental mispricing which has generated an outsized supply response.”

While lithium miners dismissed the negative analysis, investors sidelined with Goldman Sachs, sending lithium stocks south.

On the upside, the broker believes that long-term demand for lithium will remain robust from around 2024.

Piedmont share price summary

Despite the recent fall, the Piedmont share price has risen by almost 9% in 2022.

However, when looking at the longer-term, the company’s shares are down 12% over the past 12 months.

For context, the S&P/ASX 200 Index (ASX: XJO) has tumbled 4.6% in 2022, and 2.5% since this time last year.

Based on today’s price, Piedmont commands a market capitalisation of roughly $453.71 million.

The post Why has the Piedmont Lithium share price cratered 13% in a week? appeared first on The Motley Fool Australia.

More reading

• Why did the Temple & Webster share price plunge 10% today?
• ASX retail shares tumble following RBA rate rise
• 4 reasons ASX 200 tech shares might be down, but not out: expert
• How does the Westpac dividend yield compare to the other ASX banks?
• Representing 40% of Warren Buffett’s portfolio, here is why Apple is a great stock to own today

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

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The Temple & Webster Group Ltd (ASX: TPW) share price had a tough day today.

The company’s share price dropped 10.42% to $3.87. For perspective, the S&P/ASX 200 Index (ASX: XJO) fell 1.53% today.

So what impacted the Temple & Webster share price today?

RBA rate decision

The Temple & Webster share price finished the day well in the red, but it was not the only ASX retail share to drop.

The JB Hi-Fi Limited (ASX: JBH) share price slipped 3.45% today, while Harvey Norman Holdings Limited (ASX: HVN) shares fell 1.16% and the Nick Scali Limited (ASX: NCK) share price dropped 1.85%.

Temple & Webster shares fell in the lead up to and following the Reserve Bank of Australia (RBA) lifting interest rates this afternoon.

The RBA lifted the benchmark interest rate by 0.5 percentage points today to curb inflation, as my Foolish colleague Bernd reported. The cash rate now sits at 0.85%.

A rate hike was widely predicted. Goldman Sachs predicted the 0.50% jump, while other analysts predicted more modest increases of between 0.25 and 0.4%.

Interest rate rises can impact retail shares due to rising costs and consumers having less spare cash to spend on retail including furniture and homewares.

Reserve Bank Governor Philip Lowe said: “Inflation in Australia has increased significantly. While inflation is lower than in most other advanced economies, it is higher than earlier expected.”

City Index senior market analyst Matt Simpson said the rate hike was the first 50 basis point (bps) rise since February 2000. He added:

That’s also 75-bps over the past two meetings, which makes it their most aggressive back to back meeting on record.

I really think the RBA have restored some credibility today by coming out swinging.

Multiple brokers have recently rated the Temple & Webster share price as a buy, including Credit Suisse, UBS, and Morgan Stanley.

In a recent update, the company launched a new online business named The Build with 20,000 products in 39 categories.

Temple & Webster share price snapshot

The Temple & Webster share price has fallen 64% in the past year, and by a similar amount in the year to date. It’s also down 12% over the past month and 17% in a week.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has lost nearly 3% in the past year.

The post Why did the Temple & Webster share price plunge 10% today? appeared first on The Motley Fool Australia.

More reading

• Do experts think the Temple & Webster share price is a massive opportunity?
• Expert reveals what to do with 4 ASX shares in trouble
• Here’s why I think these 2 ASX growth shares are top buys in May
• Could now be a great time to start investing in ASX shares?
• Why I think the Temple & Webster share price is in the buy zone right now

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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S&P/ASX 200 Index (ASX: XJO) retail shares suffered alongside the broader market this afternoon amid the Reserve Bank of Australia’s decision to hike interest rates by 0.5%.

It comes just one month after the RBA lifted rates by 0.35% – bringing the national cash rate to 0.85%. And more hikes could be on the cards for coming months.

The CEO of industry body National Retail Association described the RBA’s decision – likely to hit consumers in the pockets and weigh on retailers’ bottom lines – as “heavy-handed”.

The ASX 200 plunged 1.53% on Tuesday. Meanwhile, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) tumbled 2.34%.

ASX 200 retail shares slump following RBA decision

As of Tuesday’s close, the share prices of ASX 200 retail giants JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN) were down 3.4% and 1.1% respectively.

Retail-focused conglomerate Wesfarmers Ltd (ASX: WES)’s stock slumped 3.8%.

Finally, ASX 200 retail shares City Chic Collective Ltd (ASX: CCX) and Super Retail Group Ltd (ASX: SUL) are also feeling the brunt. They fell 3.2% and 2.1% respectively.

RBA governor Philip Lowe noted inflation in Australia is lower than in other advanced economies but higher than was previously expected.

Many factors making headwinds for ASX 200 retailers ­– COVID-19 and supply chain issues – also drove inflation this year.

But National Retail Association CEO Dominique Lamb is dubious that such a hike was necessary.

She called the RBA’s decision “heavy-handed”, saying the regulator moved too fast to increase interest rates.

“Many retailers are watching consumer confidence rapidly slipping [amid] a raft of increasing costs and external factors such as the cost of fuel, power … increasing wages, and supply chain issues,” Lamb told The Motley Fool Australia. She continued:

Interest rate rises in quick succession impacts the willingness of consumers to spend and invest in their homes and [they will] shrink their basket sizes.

At the end of the day, many retailers are hanging on and this could be the last straw.

The post ASX retail shares tumble following RBA rate rise appeared first on The Motley Fool Australia.

More reading

• Are these 2 beaten-up ASX shares too cheap to ignore in June 2022?
• Why this top broker is tipping the Wesfarmers share price to rise 24%
• Top brokers name 3 ASX shares to buy next week
• What’s in store for the Wesfarmers share price in June?
• 2 more of this broker’s best ASX share ideas for June

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 positions in and has recommended Harvey Norman Holdings Ltd. and Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd., Super Retail Group Limited, and Wesfarmers 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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Good luck sugarcoating the performance of tech shares over the last six months.

The tech-heavy Nasdaq composite index in the United States is officially in a bear market, down 23%. Meanwhile, the picture isn’t any prettier in Australia, with the S&P/ASX All Technology Index (ASX: XTX) down 32.8%.

Put simply, it has been complete pandemonium in the tech sector. The onset of rising interest rates has been a figurative vampire to the lofty valuations once witnessed among the high-flying sector — slowly sucking the enthusiasm from shareholders.

However, one expert portfolio manager, Bradley Amoils of Axiom Investors, believes the sun will shine on tech shares once again. If that is the case, perhaps exuberance will also return to ASX 200 tech shares.

Let’s take a look at the four reasons behind this expert’s tech confidence.

Why this isn’t the end for tech shares

It is hard to argue that many tech companies were experiencing a state of euphoria prior to the recent pullback. However, the manager of around $22 billion worth of funds is not buying into the demise of tech.

In an interview with the AFR, Amoils addressed the real impact of higher interest rates, stating:

…it’s really important that if the consumer is spending twice as much on gasoline and 50 per cent more on food, clearly they have less money to spend on other things.

This means products sold by some of Amoils core holdings such as Alphabet Inc (NASDAQ: GOOG), Microsoft Corporation (NASDAQ: MSFT), and Tesla Inc (NASDAQ: TSLA), will be competing for a share in less spare dollars.

Despite this headwind, the seasoned money manager believes four positive long-term factors still ring true for tech shares. These are debt, demographics, deglobalisation, and disruption.

The first two factors are what could be setting up the tech shares for outperformance. Essentially, enlargening debt and an aging population are indicating a continued slowing in global economic growth. This sets the scene for potential outperformance by the companies that can disrupt and deliver sustainable double-digit growth into the future.

Finally, supply chain woes and political incompatibilities are accelerating a trend towards deglobalisation. Amoils believes this will catapult domestic spending on technological developments in individual regions.

Landscape for those inside the ASX 200

Many ASX investors will be hoping Bradley Amoils’ four factors prevail. After all, only one of the top 10 ASX All Tech index constituents is in the green so far this year.

The three worst impacted ASX 200 tech shares have been Xero Limited (ASX: XRO), REA Group Limited (ASX: REA), and Altium Limited (ASX: ALU). These once-lauded investments are now on their knees after cratering 45%, 38%, and 38% respectively.

The post 4 reasons ASX 200 tech shares might be down, but not out: expert appeared first on The Motley Fool Australia.

More reading

• How does the Westpac dividend yield compare to the other ASX banks?
• Representing 40% of Warren Buffett’s portfolio, here is why Apple is a great stock to own today
• Own Rio Tinto shares? Here’s why the miner is being sued by this Russian aluminium producer
• Is the ASX about to wave goodbye to this billion-dollar nickel miner?
• Why has the Newcrest share price tumbled 9% in a month?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Altium, Microsoft, Tesla, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), 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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When it comes to Westpac Banking Corp (ASX: WBC) shares, it’s probably fair to say that investors expect big things. Not in terms of share price appreciation (although that is always welcome on the ASX). But in terms of dividend payments. As an ASX 200 bank (and a big four bank at that), Westpac is well-known as a strong dividend-paying share.

This blue-chip share has been paying generous and fairly regular dividends for decades, alongside most other ASX bank shares.

But Westpac’s credentials have also been rocked in recent years. For one, the bank has been subject to a number of fines from the government’s regulators.

Westpac was also the only ASX big four bank not to pay a final dividend in 2020, the first time it had skipped a biannual dividend payment for decades.

So how does the Westpac dividend measure up in mid-2022 compared to the other ASX banking shares? Well, let’s dig in and find out.

Does the Westpac dividend stand out from the other ASX bank shares?

As it currently stands, Westpac shares offer a fully franked dividend yield of 5.13% (7.33% grossed-up). That comes from the bank’s last two dividend payments, which consist of the upcoming interim payout of 61 cents per share that investors will receive on 24 June, as well as the final dividend of 60 cents that was doled out in December last year.

That compares quite well to a number of the other ASX banking shares. Commonwealth Bank of Australia (ASX: CBA) is certainly at the back of the line when it comes to yields on offer today. CBA shares currently have a fully franked yield of 3.67% on the tablet today.

Turning to the other big four banks, we have National Australia Bank Ltd (ASX: NAB) shares, with a fully franked yield of 4.64% on offer. Australia and New Zealand Banking Group Ltd (ASX: ANZ) pips Westpac though, with its current, fully franked yield of 5.88%.

So Westpac gets the dividend yield silver medal when it comes to the big four.

However, some other ASX banks currently have even higher yields on display right now. Take Bank of Queensland Limited (ASX: BOQ). It’s currently offering a fully franked dividend yield of 5.95% on recent pricing. Bendigo and Adelaide Bank Ltd (ASX: BEN) isn’t quite as impressive but still has a fully franked 5.01% yield as it presently stands.

So all in all, the Westpac dividend yield is towards the upper echelons of what the ASX banking sector is currently offering investors today when it comes to income. But things can change quickly in this space, so don’t expect this situation to last forever.

The post How does the Westpac dividend yield compare to the other ASX banks? appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX dividend shares that experts rate as buys
• Top brokers name 3 ASX shares to buy next week
• What are brokers forecasting for the Westpac share price in June?
• What’s dragging on ASX 200 bank shares like NAB on Thursday?
• Why did the Westpac share price beat the ASX 200 in May?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank 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 positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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.

Uncertainty has been the name of the game recently, as the stock market continues to face an immense amount of pressure from high inflation, rising interest rates, and economic impacts linked to the war between Russia and Ukraine. It comes as no surprise that technology stocks have been particularly humbled, with the Nasdaq Composite slipping almost 25% since the start of the year.

Some of the world’s paramount tech companies like Netflix and Meta Platforms have delivered weak financial reports in recent quarters as the technology sector as a whole tries to navigate unfavorable macroeconomic conditions. Apple (NASDAQ: AAPL), however, is one of few companies that has sustained strong operational success in the past few months. In a market full of uncertainty today, the technology juggernaut offers investors an ideal investment opportunity. I think the great Warren Buffett would agree as well — the iPhone maker currently represents 40% of his Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) investment portfolio.  

Resiliency at its finest

Apple alleviated some investor unease by reporting an in-line Q2 2022 report. In the past twelve quarters, the tech leader has now beat earnings estimates each time and has only missed on revenue forecasts once, highlighting management’s strong visibility of the business. Total revenue and earnings per share (EPS) both increased 8.6% year-over-year, up to $97.3 billion and $1.52, respectively, and operating margin remained stable from a year ago at 30.8%. 

The company has a fantastic one-two punch with its products and services business segments. While its products business — which includes the iPhone, iPad, Mac, wearables, Home, and accessories — increased a moderate 6.6% year-over-year to $77.5 billion, the company’s services segment — which comprises Apple Music, AppleTV+, the App Store, iCloud, and other subscription services — surged 17.3% to $19.8 billion. 

Apple is well-positioned for future growth given its stable products segment and the untapped potential of its services business, which continues to make headway quarter after quarter. For the full year, Wall Street analysts project the company’s revenue to climb 7.7% year-over-year to $394.0 billion, and its EPS to rise 9.4% to $6.14. I think Apple’s steady growth in the wake of gloomy economic conditions, combined with its $28.1 billion in cash and cash equivalents, make the technology giant a no-brainer today. And fortunately for investors, the broader market sell-off has pulled Apple’s stock price down with it, making the company’s valuation attractive at the moment. 

Apple’s valuation has normalized 

Apple’s share price has fallen 19% year-to-date, making its valuation much more attractive than what it was at the start of the year. The stock currently sports a price-to-earnings multiple of 24, which is largely in line with its five-year average of 23. But unlike many of its technology counterparts, the company’s valuation has shrunk in spite of maintaining success on the business front. Thus investors with lengthy time horizons can exploit the ongoing sell-off by purchasing shares of Apple at current valuation levels.

AAPL PE Ratio data by YCharts

I like Apple today

Apple is among the few technology companies that have continued to deliver strong financial results recently. Even still, the stock has been punished by investors, leaving it down almost 20% since the beginning of 2022. I believe investors should take advantage of the unjustified sell-off by accumulating shares of Apple stock today. The company’s business is in wonderful condition, and I feel its robust balance sheet and cash generation make it a very stable investment right now. 

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

The post Representing 40% of Warren Buffett’s portfolio, here is why Apple is a great stock to own today appeared first on The Motley Fool Australia.

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Luke Meindl has positions in Apple. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, 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 Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., and Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., and Netflix. 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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