Tag: Motley Fool

Shares in Kogan.com Ltd (ASX: KGN) have endured a stretch of dampened sentiment, dating back to October 2020. This is despite the eCommerce company bringing New Zealand-based Mighty Ape under its arm, which now accounts for ~20% of gross profits.

Disappointingly, the founder-led business has swung into unprofitability. However, this has been partially attributed to increased inventory. Ongoing issues within the supply chain have forced many retailers to choose whether to order in advance and risk oversupply, or to run inventory-light and potentially miss out on some sales.

The challenging balancing act has left many investors uninterested in holding Kogan shares. Yet, Kogan is not alone in this struggle — so, could the fundamental case for the company still be intact?

What other retailers are stocking up?

In April 2021, Kogan informed the market that it had mismatched its inventory levels with customer demand. As a result, the company incurred higher warehousing costs due to the storage of excess inventory.

For context, it was revealed in the FY21 results that Kogan’s inventory had increased 102% from $112.9 million to $227.9 million. As of December 2021, the online retailer had managed to decrease this by ~14% to $196.8 million. Further, this amount was quoted to be $193.9 million at the end of March 2022 — indicating further improvement.

Meanwhile, many other retailers (including online ones) have experienced a significant increase in inventories year-over-year. Take a look at the table below:

Company	Inventory change (YoY)	Price change (YoY)
Cettire Ltd (ASX: CTT)	+517%	-69.4%
Mydeal.com au Ltd (ASX: MYD)	+287%	+47.1%
City Chic Collective Ltd (ASX: CCX)	+158%	-47.5%
Lovisa Holdings Ltd (ASX: LOV)	+68%	+7.7%
Adairs Ltd (ASX: ADH)	+49%	-51.7%
Nick Scali Ltd (ASX: NCK)	+48%	-19.4%
Amazon.com Inc (NASDAQ: AMZN)	+47%	-28.5%

As we can see from the above, inventories across many reputable retailers have jumped compared to a year ago. At the same time, most of those in the table above have also experienced share price weakness, much like Kogan shares have.

In fact, the biggest online retailer of them all — Amazon — reported a US$3.8 billion net loss in the first quarter.

What does it mean for Kogan shares?

From my own assessment, the inventory data illustrates that Kogan has been sold off partly on an issue that is widespread in the retailing industry at the moment. Already, the company has demonstrated it is right-sizing to where it should be.

Today, the Kogan share price is at levels not seen since March 2019. Meanwhile, active customers have increased by nearly 2.5 times to 4 million from that time.

For these reasons, I personally think Kogan shares make an attractive proposition. Ultimately, I’ll be looking for further improvement in inventory and EBITDA margins in the next update.

The post Stocked up: Kogan shares are not alone in their inventory woes appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These ASX All Ordinaries shares have the greatest margin risks from surging inflation: UBS
• Why is the Kogan share price leaping 5% today?
• These are the 10 most shorted ASX shares

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler owns shares in Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO, Amazon, Cettire Limited, and Kogan.com ltd. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Kogan.com ltd. The Motley Fool Australia has recommended Amazon, Cettire Limited, and Lovisa Holdings 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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled notably lower. The benchmark index fell 1% to 7,211.2 points.

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

ASX 200 expected to fall again

The Australian share market looks set to extend its losses on Wednesday following a poor night of trade in the US. According to the latest SPI futures, the ASX 200 is expected to open the day 34 points or 0.5% lower this morning. On Wall Street, the Dow Jones fell 0.7%, the S&P 500 dropped 0.6%, and the Nasdaq was down 0.4%.

BHP demerger

Today is payday for eligible BHP Group Ltd (ASX: BHP) shareholders. This morning the mining giant is scheduled to complete its demerger and pay shareholders new shares in Woodside Energy Group Ltd (ASX: WDS). Shareholders will receive one new Woodside share for every 5.534 BHP shares they owned on the ex-dividend date.

Oil prices mixed

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is down slightly to US$115.04 a barrel and the Brent crude oil price has risen 1% to US$122.84 a barrel. The latter was boosted by the EU banning most Russian oil imports.

AVZ Minerals shares due to return

The Avz Minerals Ltd (ASX: AVZ) share price is scheduled to return from its lengthy suspension on Wednesday. The lithium developer is currently battling legal action from a Chinese company that claims it owns a stake in the Manono Lithium project. There are fears that AVZ could end up owning as little as 36% of the project.

Gold price tumbles

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a difficult day after the gold price tumbled overnight. According to CNBC, the spot gold price is down 1% to US$1,833 an ounce. The precious metal tumbled after bond yields widened, reducing its appeal.

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

More reading

• VAS is a unique ETF on the ASX. Here’s why
• Could another demerger be on the cards for BHP shares?
• 3 junior miners with initial public offerings and ASX floats in June
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why Argosy, Arafura, Beach, and De Grey Mining shares are rising

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

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Last month brought with it pretty frosty conditions for many ASX investors. But, will the storm clouds reveal any silver linings as we approach the end of the financial year in June? For their thoughts, we asked our Foolish contributors to compile a list of the ASX shares they reckon could deliver wealth over the investing rainbow. Here is what the team came up with.

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

• DroneShield Ltd (ASX: DRO), $90.83 million
• BrainChip Holdings Ltd (ASX: BRN), $1.94 billion 
• Corporate Travel Management Ltd (ASX: CTD), $3.23 billion
• Pro Medicus Limited (ASX: PME), $4.41 billion
• Domino’s Pizza Enterprises Ltd (ASX: DMP), $6.15 billion
• Xero Limited (ASX: XRO), $13.35 billion
• National Australia Bank Ltd (ASX: NAB), $102.23 billion

(Market capitalisations as of 31 May 2022)

Why our Foolish writers love these ASX shares

DroneShield Ltd

What it does: DroneShield develops and sells hardware and software for the detection and disruption of drones.

By Bernd Struben: I believe this small-cap ASX share has significant growth potential. The company’s expanding customer base spans some 100 nations, including the United States, which makes up 40% of its revenue and sales pipelines.

Demand for counter-drone technology was already growing before Russia’s invasion of Ukraine. Since then, DroneShield has received numerous inquiries about its equipment from Ukrainian government agencies. While only one shipment has been sent to Ukraine to date, the country could provide additional future growth avenues.

DroneShield reported a cash balance of $8 million as at 31 March. Its latest quarterly figures showed a 32% year-on-year lift in customer cash receipts. The DroneShield share price has rallied 25% in 2022 so far.

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

BrainChip Holdings Ltd

What it does: BrainChip develops software and hardware-accelerated solutions for advanced artificial intelligence (AI) and machine learning applications.

By Aaron Teboneras: I believe the BrainChip share price is trading in bargain territory after falling by around 12% since the start of last week.

The company is continuing to develop its Akida neuromorphic processor unit hardware product. The Akida chip is designed to think like a human brain and it can be used for a variety of purposes worldwide. These include in the manufacture of smart cars such as the Mercedes EQXX concept car as well as in home automation, unmanned aircraft, medical instruments, cybersecurity, and more.

This broad addressable market provides BrainChip with huge potential to materially grow in the future, particularly given its existing partnership with NASA. BrainChip’s technology reduces the count, size, and power consumption of existing components, which are paramount concerns in spaceflight and aerospace applications

Valued at $1.94 billion, BrainChip is still a relatively emerging company that is looking to dominate the AI market. Should BrainChip be able to deliver on its potential, I think its share price is extremely attractive at its current price of $1.135.

Motley Fool contributor Aaron Teboneras does not own shares of BrainChip Holdings Ltd.

Corporate Travel Management Ltd

What it does: Corporate Travel Management provides business travel management services.

By Brooke Cooper: The Corporate Travel Management share price has slipped by nearly 14% over the last 30 days despite the company releasing a positive update to the market in early May.

Following a series of acquisitions, Corporate Travel expects its monthly revenue in the current quarter to surpass that of 2019, prior to when the COVID-19 pandemic hit. It also has no debt, a strong cash balance, and is recovering faster than the broader corporate travel sector in its key operating regions.

Morgan Stanley is also optimistic about Corporate Travel shares. The broker has slapped the company’s stock with a $30 price target and a buy rating. The Corporate Travel share price closed Tuesday’s session at $22.17.

Motley Fool contributor Brooke Cooper does not own shares of Corporate Travel Management Ltd.

Pro Medicus Limited

What it does: Pro Medicus is a healthcare imaging software provider to a vast range of medical companies across Australia, North America, and Europe.

By Mitchell Lawler: The Pro Medicus share price has been an ultra-performer over the last decade, with the company’s shares increasing in value by more than 100 times. Yet, growth in the company’s underlying business remains as consistent as ever.

For the 12 months ending December 2021, Pro Medicus increased its revenue by 36% year on year. For reference, this is above its five-year compound annual growth rate of 23.2%. Reassuringly, profit margins are showing continual improvement – now at 47% — suggesting economies of scale are at play.

Analysts at Bell Potter currently have a buy on this company with a $55 price target. This represents a potential 30% upside from the current Pro Medicus share price of $42.13.

Motley Fool contributor Mitchell Lawler owns shares of Pro Medicus Limited.

Domino’s Pizza Enterprises Ltd 

What it does: Domino’s is a leading pizza chain operator with over 3,200 stores across the ANZ, Asian, and European markets.

By James Mickleboro: I think the recent weakness in the Domino’s share price has created a buying opportunity for investors in June. That weakness, which has seen the share price fall by around 40% in 2022, has been driven by softness in the Japanese market and overall concerns about inflation impacts.

And while these factors could weigh on Domino’s second-half performance, I believe investors should be focusing more on the company’s long-term growth outlook now. This outlook is, arguably, very positive thanks to management’s plan to double its store network in existing markets to 6,650 stores by 2033.

Combined with its strong balance sheet, which could support further acquisitions, this bodes well for the company’s revenue and earnings growth over the next decade.

Motley Fool contributor James Mickleboro does not own shares of Domino’s Pizza Enterprises Ltd.

Xero Limited

What it does: Xero is a global software business that provides subscribers with cloud accounting and business tools.

By Tristan Harrison: I think Xero is one of the highest-quality S&P/ASX 200 Index (ASX: XJO) shares around right now. Furthermore, the 40% drop in the Xero share price this year makes it look even more attractive.

The business is growing its global subscriber base, which increased by 19% in FY22 to 3.27 million. And, arguably, targeting a truly global addressable market gives the company a long growth runway.

Xero’s services are also very profitable. Its gross profit margin was 87.3% in FY22, allowing the company to re-invest a lot of new revenue into growth activities.

While it’s heavily investing at the moment, over the long term Xero intends to significantly improve its profitability.

Motley Fool contributor Tristan Harrison does not own shares of Xero Limited.

National Australia Bank Ltd

What it does: NAB is one of the big four Aussie banks and commands a significant chunk of the financial products market in Australia.

By Sebastian Bowen: No doubt, NAB is a name and an ASX share that needs little introduction. It’s part of the big-four-banks cohort and holds a prominent position on the ASX 200.

NAB could be worth a look this month as inflation continues to be a defining theme of our current investing climate. Banks are famously inflation-resistant businesses due to their easily adjustable margins.

In addition, NAB’s current fully franked dividend yield is well over 4% (and over 6% grossed-up), meaning inflation is almost covered by this dividend alone. As such, NAB could be worth a look for anyone who is keen to shore up an ASX share portfolio against rising prices in June.

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Ltd.

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

More reading

• Down 15% in a month, is the Corporate Travel share price a bargain?
• Why has the BrainChip share price performed so strongly in May?
• 3 ASX shares I’m telling my clients to buy: advisor
• Xero share price charges higher: Can this tech share keep rising?
• Here are 2 top ASX dividend shares to buy according to analysts

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield Ltd, Pro Medicus Ltd., and Xero. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. and Xero. The Motley Fool Australia has recommended Corporate Travel Management Limited, Dominos Pizza Enterprises Limited, and DroneShield 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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If you’re a fan of tech shares, then you may want to look closely at the two listed below.

Here’s why these could be tech shares to buy:

Altium Limited (ASX: ALU)

The first tech share for investors to look at is Altium. It is the electronic design software provider behind the Altium 365 and Altium Designer platforms. In addition, the company owns the Nexus collaboration platform and the Octopart search engine for electronic parts.

Importantly, all of Altium’s platforms have exposure to the printed circuit board (PCB) market, which is growing strongly thanks to industry trends such as Internet of Things (IoT) and artificial intelligence.

Analysts at Bell Potter are bullish on Altium and are forecasting strong growth in the coming years. In light of this, the broker has a buy rating and $41.25 price target on the company’s shares. Based on the latest Altium share price of $28.76, this implies potential upside of 43% over the next 12 months.

Megaport Ltd (ASX: MP1)

Another ASX tech share that could be a buy in June is Megaport. It is a leading cloud connectivity and networking solutions provider with operations across a large number of data centres globally.

Megaport has been tipped to grow rapidly in the coming years by Goldman Sachs thanks to the long-term structural tailwinds of public cloud adoption (and multi-cloud usage).

In addition, the transition towards Networking as a Service (NaaS) is expected to be a key driver of its growth. All in all, Goldman estimates that these tailwinds currently provide it with a $129 billion per annum opportunity across its current geographies.

The broker has a buy rating and $13.10 price target on its shares. Based on the current Megaport share price of $7.31, this suggests potential upside of 79% over the next 12 months.

The post Analysts say these ASX tech shares have over 40% upside appeared first on The Motley Fool Australia.

More reading

• Why I think these 3 ASX shares are top-quality buying at today’s prices
• 3 ASX growth shares brokers rate as buys right now
• 3 reasons to own Altium shares for the long term
• You won’t find more profitable ASX tech shares than these companies right now
• ASX 200 midday update: BlueScope and Fortescue rise, Boral tumbles

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium 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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Looking for dividend shares for you income portfolio? If you are, you may want to check out the two listed below that have been rated as buys by analysts.

Here’s what you need to know about these ASX 200 dividend shares:

Harvey Norman Holdings Limited (ASX: HVN)

The first ASX 200 dividend share that could be in the buy zone is retail giant Harvey Norman.

The team at Goldman Sachs is positive on the retailer and believes it is well-placed to defend its strong market position from online disruption. The broker also expects Harvey Norman to provide investors with generous dividends in the near term.

Its analysts are forecasting fully franked dividends per share of 42 cents in FY 2022 and 39 cents in FY 2023. Based on the current Harvey Norman share price of $4.38, this will mean yields of 9.6% and 8.9%, respectively.

Goldman has a buy rating and $5.80 price target on its shares.

South32 Ltd (ASX: S32)

Another ASX 200 dividend share that could be a buy is South32. It is diversified mining and metals company producing a range of green commodities.

Morgans is a big fan of the company following recent portfolio changes. It commented: “We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.”

In respect to dividends, Morgans is forecasting fully franked dividends in the region of 26 cents per share in FY 2022 and 35 cents per share in FY 2023. Based on the current South32 share price of $5.00, this equates to yields of 5.2% and 7%, respectively.

Morgans has an add rating and $6.10 price target on the miner’s shares.

The post Experts name 2 excellent ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most traded ASX 200 shares on Tuesday
• I think these 2 high-yield ASX dividend shares are buys in June
• Why this rich lister is buying ASX dividend shares that ‘pay you to wait’
• Here are the 3 most traded ASX 200 shares on Monday
• Broker names 2 of the best ASX resources shares to buy now

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

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The Lynas Rare Earths Ltd (ASX: LYC) share price has soared in May, but could it go even higher in June?

The rare earth producer’s share price has jumped nearly 10% from $8.96 at market open on 2 May to its closing share price of $9.85 on Tuesday. In contrast, the S&P/ASX 200 Index (ASX: XJO) has dropped 3% over the same time frame.

So what is the outlook for the Lynas share price?

Positive outlook

Lynas is exploring and processing rare earth minerals at the Mt Weld project in Western Australia. The company also has a refining facility in Malaysia.

One analyst has suggested Lynas is the “sweet spot of decarbonisation” and rated the company as a buy in early May. Alphinity Investment Management principal Stephane Andre said:

Lynas is the one I’m proposing, which is a buy for me. It is really at the sweet spot of decarbonisation and geopolitical diversification. So when you think about decarbonisation, rare earth is really critical for wind turbines, electric vehicles and so on.

As my Foolish colleague Bernd reported, Lynas is the only large rare earths producer outside of China.

In the first quarter of 2022, Lynas reported record Neodymium-Praseodymium (NdPr) production of 1,687 tonnes. The company also achieved record sales revenue of $327.2 million.

Another broker that has recently recommended Lynas shares is Canaccord. Amid ASX mining share volatility, its analysts recommend investing in sector leaders with “robust balance sheets” and earnings growth in the near term. The team added:

…particularly those with leverage to attractive long-term supply/demand fundamentals such as Allkem, Lynas Rare Earths, and Oz Minerals.

In early May, Macquarie also placed an outperform rating on the company’s shares with a $12.80 price target. As my Foolish colleague James reported, Macquarie likes Lynas’ boost in production and is optimistic it could experience strong growth in FY 2023.

Share price snapshot

The Lynas share price has surged by more than 78% in the past year but has fallen around 3% in the year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned less than 1% in the past year.

Lynas has a market capitalisation of about $8.9 billion based on today’s share price.

The post What’s the outlook for Lynas share price in June? appeared first on The Motley Fool Australia.

More reading

• Own Lynas shares? So do these big institutional investors
• The Lynas share price has surged 15% in 2 weeks. What’s the deal?
• Here are the top 10 ASX shares today
• Why is the Lynas share price powering ahead today?
• Falling ASX 200 mining shares ‘an opportunity to invest in sector leaders’: broker

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 TechnologyOne Ltd (ASX: TNE) share price had a reasonably volatile month.

The enterprise software company’s shares were down over 8% month to date at one stage before ultimately ending the period right back where they started it.

Where next for the TechnologyOne share price?

The TechnologyOne share price may have been flat in May but one leading broker is tipping it to climb higher in June.

According to a recent note out of Goldman Sachs, its analysts have put a buy rating and $13.30 price target on the company’s shares.

Based on the current TechnologyOne share price of $10.50, this implies potential upside of 27% for investors over the next 12 months.

What did the broker say?

Goldman has been looking over TechnologyOne’s recent half-year results and was pleased with what it saw. This was particularly the case with its annual recurring revenue (ARR) growth, which offset softer than expected margins.

Overall, it feels that this supports its view that the company is well-positioned to at least achieve its medium term ARR target. The broker also likes the company’s defensive qualities in a potentially challenging environment.

Goldman commented:

TNE reported a solid 1H22 result with a stronger-than-expected FY22 ARR outlook offset by softer margins. In our view, TNE is making meaningful strides on the path to A$500mn ARR driven by both an acceleration in the pace of SaaS transition as well as improving underlying fundamentals (net expansion and new business).

Execution on new business growth in the UK and cross-sell into the existing customer base (supported by lower friction to adoption on the SaaS platform) will be key determinants in TNE’s growth post-transition, which we believe will become increasingly evident in coming years.

With a potentially challenging macro backdrop on the horizon we see TNE as offering resilient earnings given its low churn, mission critical software and defensive public sector end markets.

The post Why the TechnologyOne share price could be a top option for investors in June appeared first on The Motley Fool Australia.

More reading

• 2 top ASX shares that could be excellent buy and hold options
• 2 beaten-up ASX tech shares with major upside: experts
• Leading broker names the best ASX tech share to buy following 2022’s tech meltdown
• Top brokers name 3 ASX shares to buy today
• Why Nufarm, Sayona Mining, Tabcorp, and TechnologyOne shares are falling

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

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If you’re looking for exchange traded funds (ETFs) to buy next month, then you may want to check out the three listed below.

Here’s what you need to know about these popular ETFs:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for investors to look at is the BetaShares Asia Technology Tigers ETF. This popular ETF gives investors exposure to the growing Asian economy through a number of the most promising tech shares in the region. This includes ecommerce giant Alibaba, search engine company Baidu, and WeChat owner Tencent. As these tech shares, and therefore the ETF, have been hammered in 2022, now could be an opportune time to make a patient long-term investment.

BetaShares Global Energy Companies ETF (ASX: FUEL)

Another ETF for investors to consider is the BetaShares Global Energy Companies ETF. As its name implies, this fund allows investors to own a slice of some of the biggest energy companies in the world. Among the fund’s holdings are the likes of BP, Chevron, ExxonMobil, and Royal Dutch Shell. All these companies look well-placed to benefit from sky high oil prices which are being underpinned by supply constraints following the loss of Russian supply.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A third ETF to look at is the VanEck Vectors Morningstar Wide Moat ETF. This ETF has been inspired by legendary investor Warren Buffett. When he looks for an investment, he has a tendency to choose companies with sustainable competitive advantages or moats. VanEck has taken that into account and pulled together around 50 attractively priced companies with sustainable competitive advantages. These include Alphabet (Google), Altria, Boeing, Coca Cola, Kellogg Co, and Walt Disney.

The post 3 top ETFs to today in June appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ETFs for ASX investors to buy next week
• Why is the Betashares Asia Technology Tigers ETF having such a cracker of a day?
• 3 high quality ETFs for ASX investors to buy now
• 2 beaten down ETFs for investors to buy now
• 3 top ETFs for ASX investors to buy now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Global Energy Companies ETF – Currency Hedged. 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 Goodman Group (ASX: GMG) share price was a positive performer on Tuesday despite the market weakness.

The integrated global integrated industrial property company’s shares rose almost 1% to $20.55.

However, this wasn’t enough to stop the Goodman share price from recording a monthly decline of over 14%.

Why did the Goodman share price tumble in May?

The weakness in the Goodman share price appears to have been driven by the prospect of interest rates rising quicker than expected. Traditionally, rising rates have caused a de-rating in the Australian real estate sector and this tradition continued in May with the S&P/ASX 200 Real Estate index falling 8.9%.

This even managed to offset the release of another strong quarterly update from Goodman, which saw the company upgrade its earnings guidance yet again.

In case you missed it, for the three months ended 31 March, Goodman reported a 3.7% increase in like-for-like net property income and a 98.7% occupancy rate.

In light of this strong form and its work in progress of $13.4 billion across 89 projects, management upgraded its earnings per share guidance from 20% to at least 23%. This is the second upgrade of FY 2022.

Goodman’s CEO, Greg Goodman, explained that business is booming and is expected to continue thanks to long-term structural drivers.

He said:

Goodman has had another strong quarter with our operating results reflecting the highly targeted location of our portfolio. This has continued to produce high occupancy, cashflows, and development activity. The business environment is changing, with increased interest rates, inflation, geopolitical risks and the ongoing impacts of the pandemic, however, the long-term structural drivers of demand have not changed.

Where next for its shares?

In response to the update, the team at Citi retained their buy rating and $29.50 price target.

Based on the current Goodman share price, this implies potential upside of 43% for investors over the next 12 months.

Citi believes that Goodman’s guidance is conservative and feels that recent weakness has created a buying opportunity. It said:

Similar to previous periods, we see FY22 guidance as conservative given strong FUM growth into 4Q22, off the back of development completions and rising asset values (as GMG’s book cap rates are softer than market). Moreover, despite fears, we see the growth outlook as being robust for FY23 as well given solid demand for industrial (which is driving market rental growth above longer-term averages) and ongoing investment demand, which should support asset value and AUM growth. We re-iterate Buy and see the -25% YTD share price decline as a good entry point.

The post Why has the Goodman share price tanked 14% in a month? appeared first on The Motley Fool Australia.

More reading

• Why I’d buy these 2 ASX 200 shares
• How to turn $20,000 into $180,000 in 10 years with ASX shares
• Analysts name 2 ASX 200 shares to buy after the selloff
• ASX shares paid out a record $98b in dividends in the 12 months to March. Which are the star performers?
• ‘We see value’ in this dividend ASX share: expert

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

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The Allkem Ltd (ASX: AKE) share price has surged ahead in May.

The lithium company’s shares have gained 12% from their $12.18 market open on 2 May to Tuesday’s closing price of $13.71. In today’s trade, the company’s share price fell 2.77%. For perspective, the S&P/ASX 200 Index (ASX: XJO) closed 1.03% lower today.

So why has Allkem had such a good month?

Why has the Allkem share price gone up?

Allkem is a lithium and boron producer with projects in Argentina, Western Australia, Japan, and Canada.

The company’s share price appears to have surged on the back of positive broker notes and optimism that lithium demand will outstrip supply.

As my Foolish colleague Zach reported on 25 May, Barrenjoey analysts rated Allkem as a buy with a $15 price target. This is 9% more than its current share price.

Brokers at Cowen showed even more optimism toward the Allkem share price, upgrading it to an $18 price target.

Meanwhile, earlier in May, Morgans placed an add rating on the company’s share price with a $16.98 price target. As my Foolish colleague James noted, because Allkem is already shipping lithium in large quantities, it has the potential to benefit from high lithium prices.

In the company’s quarterly activities report released in mid-April, Allkem said it aims to increase lithium production three-fold by 2026. The company is targeting maintaining a 10% share of the global lithium market across the next decade.

The company’s Mt Caitlin operation, located in WA, produced 48,562 dry metric tonnes (dmt) of spodumene concentrate at 5.4% lithium oxide grade in the March quarter. A total of 66,011 tonnes were shipped in the quarter, generating record revenue of US$143.8 million from this project.

Allkem is also expanding the Olaroz lithium carbonate facility in Argentina with a stage two lithium facility. Construction was 77% complete by the end of March with production targeted in the second half of this year.

In Japan, the company has completed the construction of the Naraha lithium hydroxide plant. First production from this site is predicted in the third quarter of this year.

Share price snapshot

The Allkem share price has soared 108% in the past 12 months, while it is up nearly 32% year to date.

For perspective, the ASX 200 benchmark index has returned less than 1% in the past year.

Allkem has a market capitalisation of about $8.7 billion based on the current share price.

The post Why has May been such a great month for the Allkem share price? appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert
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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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