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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

JB Hi-Fi Limited (ASX: JBH)

According to a note out of Goldman Sachs, its analysts have reiterated their sell rating and $39.20 price target on this retailer’s shares. The broker believes that JB Hi-Fi will fall short of the market’s expectations in FY 2023. This is due to softening discretionary goods spending and increasing competition from online pureplays including Amazon. The JB Hi-Fi share price was trading at $48.53 on Friday.

Macquarie Group Ltd (ASX: MQG)

A note out of Credit Suisse reveals that its analysts have downgraded this investment bank’s shares to an underperform rating and trimmed their price target on them to $150.00. This follows the release of a full-year result that fell short of Credit Suisse’s expectations. And with the broker believing that Macquarie’s earnings have peaked, it feels now could be the time to sell. The Macquarie share price was fetching $183.11 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $38.60 price target on this conglomerate’s shares. As with JB Hi-FI, Goldman expects Wesfarmers to be impacted from softening consumer demand. This is being driven by broad-based inflation and higher housing costs. In addition, its analysts expect a decline in housing transaction volumes to negatively impact household goods consumption. The Wesfarmers share price ended the week at $49.97.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Top ASX dividend shares to buy in May 2022
• 4 ASX shares of the most trusted brands in Australia
• 2 ASX 200 dividend shares to buy according to a top broker
• Where next for the Wesfarmers share price?
• Own ASX 200 retail shares? Here’s how the majors are tackling climate change

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. 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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Despite popular sentiment, rising interest rates do not benefit all finance ASX shares.

The big banks, certainly, enjoy rate rises as they have both borrowers and depositors as customers.

When the Reserve Bank cash rate increases, they often pass on the full change to its borrowers while only awarding a partial amount to the depositors.

This fattens up what is known as their net interest margin, which is the difference between what they pay out to depositors and the income they receive from borrowers. 

But for those smaller players that are loan-only businesses, it’s a different picture.

Forager Funds, in a memo to clients, noted that rising interest rates “can affect customers’ ability to repay their loans” and inflate the cost of funding for the lenders. 

“Fear of growing problems in this sector has sent share prices plummeting,” read the memo.

“The fund has small investments in both Wisr Ltd (ASX: WZR) and Plenti Group Ltd (ASX: PLT), whose respective share prices have fallen 42% and 35% this calendar year alone.”

Performance ‘exceeded expectations’

Despite the stock price drop, the Forager team noted that the performance of the businesses has “exceeded expectations”.

The lending business is a race for scale.

“The expectation is for a small number of healthily profitable players to emerge over time and Wisr and Plenti look like two of them,” read the memo.

“March quarter reports showed Plenti’s loan book is already north of $1 billion and Wisr isn’t far away. They will both hit $2 billion over the next few years without dramatically increasing the rate of progress and that should enable them to be nicely profitable.”

‘Fear is overdone’ for Wisr and Plenti

The anxiety among investors for shares like Wisr and Plenti is, not so much the growth rate, but the hit to profitability from bad debts arising out of rising rates.

The Forager team acknowledged this “healthy scepticism is warranted”.

“But the fear is overdone,” read the report.

“Both these businesses are specifically targeting safer borrowers with a proven capacity to repay their loans. The March quarterly reports still showed default rates well below our long-run expectations.”

Forager also noted both Wisr and Plenti have indicated they will raise charges to customers.

“In any case, savings rates in Australia remain high and jobs plentiful,” the memo read.

“Economic conditions are absolutely going to deteriorate. But, while the portfolio weightings need to remain modest, we expect both businesses to successfully navigate and prove that their current share prices are far too low.”

The post 2 ASX shares with prices ‘far too low’ right now: Forager appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Analysts name 2 ASX shares to buy with ~50% upside potential
• 3 Stocks Warren Buffett Is Betting on Big Time Right Now
• Top ASX dividend shares to buy in May 2022
• Here are 2 fantastic ETFs for ASX investors to buy in May

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 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 investment options, then the two ASX shares listed below could be worth considering.

Analysts currently rate these shares as buys and see potential for them to climb materially higher from current levels. Here’s what you need to know:

Altium Limited (ASX: ALU)

The first ASX share to look at is Altium. It is the electronic design software company behind the Altium Designer and Altium 365 platforms, the NEXUS team-based PCB workflow solution, and the Octopart electronic parts search engine.

Thanks to their exposure to the rapidly growing Internet of Things (IoT) and artificial intelligence (AI) markets, demand for this offering is expected to increase materially over the coming years. In fact, management is targeting revenue of US$500 million by 2025-2026. This is more than double its FY 2022 revenue guidance of US$213 million to US$217 million. It is also targeting market dominance in electronic design software with a massive 100,000 subscribers by 2026. This compares to 55,978 at the end of the first half.

One leading broker that believes the Altium share price is great value at the current level is Bell Potter. It recently reiterated its buy rating and $41.25 price target on the company’s shares. Based on the current Altium share price of $27.00, this implies potential upside of 53%.

Baby Bunting Group Ltd (ASX: BBN)

Another ASX share that could be in the buy zone is leading baby products retailer Baby Bunting.

It has been tipped as a buy due to its positive growth outlook, exposure to less discretionary spending, and its strong market position. The latter is expected to strengthen further in the coming years as its store network expansion continues.

For example, at present the company has 60 national superstores across Australia. However, analysts at Citi expect this to hit 68 at the end of FY 2022 and then sees scope for over 110 stores in the future. In addition, the broker sees other growth opportunities from “exclusive/private label growth and supply chain efficiencies.”

At present, Citi has a buy rating and $6.22 price target on the company’s shares. Based on the current Baby Bunting share price of $4.21, this suggests of 48% for investors over the next 12 months.

The post Analysts name 2 ASX shares to buy with ~50% upside potential appeared first on The Motley Fool Australia.

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• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Is the Altium share price now great value after dropping 30% in 2022?
• Why did the Xero share price just rebound 6%?

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. The Motley Fool Australia has recommended Baby Bunting. 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.

Warren Buffett probably ranks as the most frequently quoted investor in history. One of his most famous statements seems especially applicable in the current market environment: “Be fearful when others are greedy. Be greedy when others are fearful.”

There’s no question that many investors are fearful as a result of the stock market’s volatility. However, true to form, Buffett is showing some signs of being greedy. Here are three stocks that Buffett is betting on big time right now.

1. Chevron

Buffett’s Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) added to its positions in only a handful of stocks in the fourth quarter of 2021. Chevron (NYSE: CVX) was one of them. And Berkshire’s regulatory filing for its first-quarter results reveals that Buffett is still a fan of the oil and gas stock. As of the end of Q1, Berkshire owned $25.9 billion of Chevron shares.

There’s no mystery behind why Buffett likes Chevron these days. Russia’s invasion of Ukraine disrupted energy markets. Demand is picking up with fewer travel restrictions related to COVID-19. Oil prices have soared as a result of these factors.

Unsurprisingly, Chevron stock has trounced the market. Based on Berkshire’s increased stake in the company during the first quarter, Buffett seems to think this outperformance can continue. He could very well be right.

Chevron stands as one of the strongest oil companies from a financial perspective. It’s also expanding into clean energy with the pending acquisition of Renewable Energy Group. 

2. Occidental Petroleum

While Chevron is Buffett’s favorite oil stock, it’s not his only one. Berkshire has also been busy scooping up shares of Occidental Petroleum (NYSE: OXY).

In Berkshire’s Q1 regulatory filing, the company revealed that it had bought Occidental preferred stock, along with warrants to buy up to 83.86 million shares of common stock. Last week, another regulatory filing disclosed that Berkshire now owns 142.3 million Occidental shares. 

Occidental should benefit from many of the same tailwinds as Chevron. Like Chevron, Oxy is also ramping up its clean-energy initiatives, including carbon capture projects.

Buffett probably especially likes the Occidental preferred stock that Berkshire owns. Those shares pay a juicy dividend yield of 8%. It won’t take much share appreciation for this investment to pay off nicely.

3. HP

Tech stocks haven’t exactly been Buffett’s forte in the past. He’s had a few successes but some notable flops, as well. However, this mixed record didn’t deter Berkshire from opening a huge position in HP (NYSE: HPQ) recently.

Early last month, Berkshire purchased nearly 121 million shares of HP. It now stands as the largest shareholder of the technology giant, owning around 11% of its outstanding shares.

Why does Buffett (or one of his investment managers) like HP so much? The most likely reason is that the stock is cheap. Even with the boost provided by the revelation of Berkshire’s stake, HP’s shares trade at only 8.6 times expected earnings.

Buffett probably also likes HP’s dividend yield of 2.7%. And he’s a fan of share buybacks. HP plans to repurchase at least $4 billion of its stock this year. 

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

The post 3 Stocks Warren Buffett Is Betting on Big Time Right Now appeared first on The Motley Fool Australia.

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• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing

Keith Speights has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares) and HP. 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), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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It’s been a stormy month on the Aussie stock market so far in May. So we asked our Foolish contributors to compile a list of ASX shares that experts reckon have a fine outlook with a strong chance of dividend windfalls over the long range. Here is what the team came up with.

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

• Adairs Ltd (ASX: ADH), $433.43 million
• Elders Ltd (ASX: ELD), $2.21 billion 
• Brickworks Limited (ASX: BKW), $3.33 billion
• Wesfarmers Ltd (ASX: WES), $55.3 billion
• Macquarie Group Ltd (ASX: MQG), $67.22 billion
• Westpac Banking Corp (ASX: WBC), $83.29 billion
• BHP Group Ltd (ASX: BHP), $227.55 billion

(Market capitalisations as of 13 May 2022)

Why our Foolish writers love these ASX dividend shares

Adairs Ltd 

What it does: Adairs is a leading ASX retail company operating in the homewares space. It owns traditional brick-and-mortar stores nationally as well as a thriving e-commerce platform.

By Sebastian Bowen: Adairs was definitely something of a COVID winner, and experienced a notable uplift in sales and profits over 2020 and into 2021. The company has been struggling somewhat in 2022 though, with a meaningful share price reduction of close to 40% over the year to date.

However, this has pushed up Adairs’ fully-franked dividend yield to more than 7%. Even if Adairs trims its dividends moving forward, it’s still arguably likely to have a robust dividend yield at the current share price of $2.51. Thus, this often-overlooked dividend share could well be worth a look in May.

Motley Fool contributor Sebastian Bowen owns shares of Adairs Ltd.

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Elders Ltd 

What it does: Elders is a 180-year-old agricultural business that provides a range of products and services to support rural communities across Australia and New Zealand.

By Mitchell Lawler: Elders is one ASX dividend share that has continued to go from strength to strength amid the disruption around the world. The Australian agricultural business enjoyed a 22% revenue uplift over the past year as the industry experiences better than usual conditions.

The latest forecasts from the Australian Bureau of Agricultural and Resource Economics (ABARES) suggest the good conditions will persist between June and August. Specifically, there’s a 75% chance of rainfall totals of more than 50mm across much of the company’s key operational regions.

Recently, Goldman Sachs highlighted its conviction buy rating on Elders shares – accompanied by a $17.65 price target, compared to the current $13.99 per share. The company currently offers a dividend yield of 3.00%.

Motley Fool contributor Mitchell Lawler owns shares of Elders Ltd.

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Brickworks Limited 

What it does: Brickworks is not only the largest brickmaker in Australia, but also specialises in other building products as well as property and investments.

By Tristan Harrison: Brickworks has been operating for several decades. It’s a major player both in Australia and in the United States.

In terms of dividends, Brickworks hasn’t cut its payment for more than four decades. Management is proud of the company’s reliability as a dividend payer to shareholders.

The business is seeing growth within its industrial property trust, with properties being built on excess Brickworks land. Over the next few years, Brickworks is expecting the trust to complete building properties that add $60 million of gross rental and $1.5 billion of leased asset value to the trust.

The trailing, grossed-up dividend yield on Brickworks shares is around 4.00% based on Friday’s closing share price of $22.15.

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

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Wesfarmers Ltd 

What it does: Wesfarmers is a retail conglomerate that operates some of Australia’s favourite brands including Bunnings, Kmart, and Officeworks.

By Brooke Cooper: An oldie but a goodie, Wesfarmers has been a blue-chip staple among ASX investors for decades. Wesfarmers is also a consistent dividend-paying stock. It’s been handing investors back a portion of its profits since the 1980s.

Broker Morgans believes Wesfarmers has a strong management team and a healthy balance sheet. It also expects the company’s Bunnings brand will continue to attract customers despite uncertain economic conditions.

On top of that, Morgans is expecting the Wesfarmers dividend to grow to a fully-franked, $1.81 per share in the 2023 financial year.

Motley Fool contributor Brooke Cooper does not own shares of Wesfarmers Ltd.

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Macquarie Group Ltd 

What it does: Macquarie is among Australia’s largest banks and is primarily involved in investment, commercial banking and asset management.

By Aaron Teboneras: The Macquarie share price has fallen by almost 10% in the past week and could be trading at bargain levels, according to Morgans.

The investment bank delivered its FY22 results earlier this month, reporting double-digit growth across key financial metrics. However, this wasn’t enough to stop its shares from falling due to the market’s lofty expectations.

Nonetheless, the board decided to increase its final dividend by 4.5% to $3.50 for the full year ending 31 March.

The team at Morgans upgraded its outlook on Macquarie shares to ‘add’ from ‘hold’. In addition, the broker raised its 12-month price target by 2.6% to $215 apiece.

Based on Friday’s closing price of $183.11, this represents a potential upside of almost 18% for investors.

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

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Westpac Banking Corp 

What it does: Westpac is Australia’s oldest banking and financial services group and is one of the largest banks listed on the ASX. 

By James Mickleboro: I think Westpac could be a dividend share to buy in May, particularly given the recent release of the bank’s half-year results. The update revealed cash earnings of almost $3.1 billion and an interim fully franked dividend of 61 cents per share. Both were ahead of the market’s expectations for the period.

But in my opinion, the main reason to be positive is that the bank continues to target a cost base of $8 billion in FY2024, down from $13.3 billion in FY 2021 (including $2.3 billion of one-offs). This is despite two of its peers admitting defeat on their own cost-reduction targets this month due to inflation. If Westpac delivers on this, it should be supportive of earnings and dividend growth in the coming years.

At present, Citi is forecasting fully franked dividends of $1.23 per share in FY2022, $1.55 per share in FY 2023, and $1.80 per share in FY2024. Based on the current Westpac share price at the time of writing, this will mean yields of 5.1%, 6.4%, and 7.5%.

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corp.

BHP Group Ltd 

What it does: BHP is one of the world’s biggest miners and is involved in a diversified array of natural resources including iron ore, metallurgical coal, and copper.

By Bernd Struben: On the back of soaring commodity prices, BHP has become a star dividend payer, currently paying a 10.7% trailing dividend yield.

Plato Investment Management’s Peter Gardner believes there’s more to come.

“The big Australian is in a really good position to continue delivering big dividends… During the recent reporting season, BHP announced a record first-half dividend of $1.50 per share, fully franked,” he said. “This dividend was announced along with increasing revenues, increasing earnings, and increasing profit.”

Gardner also believes BHP’s pending merger deal with Woodside Petroleum Limited (ASX: WPL) would be “a tax-effective income opportunity for BHP shareholders”.

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

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

More reading

• 4 ASX shares of the most trusted brands in Australia
• 2 ASX 200 dividend shares to buy according to a top broker
• Where next for the Wesfarmers share price?
• The Boral share price has been smashed 10% so far in May. What’s happening?
• Own ASX 200 retail shares? Here’s how the majors are tackling climate change

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ADAIRS FPO and Brickworks. The Motley Fool Australia has positions in and has recommended ADAIRS FPO, Brickworks, and Wesfarmers Limited. The Motley Fool Australia has recommended Elders Limited, Macquarie Group Limited, and 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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If you’d like to make some investments but aren’t sure which shares to buy, you could look at exchange traded funds (ETFs) instead. This increasingly popular asset class allows you to invest in large groups of shares from particular indices or sectors through a single investment.

But which ETFs could be in the buy zone? Two that are very popular are listed below. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF for investors to look at is the BetaShares Asia Technology Tigers ETF. This ETF tracks the performance of an index comprising around 50 of the biggest and brightest technology shares in Asia.

These are the tigers of the Asian economy and include the likes of Alibaba, Baidu, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent.

As the Asian tech sector is expected to remain a growth sector for some time to come, this could make the BetaShares Asia Technology Tigers ETF a great option for long-term focused investors. Particularly after recent weakness dragged many of these companies (and therefore the ETF) down materially from their highs.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF that investors might want to look at is the VanEck Vectors Morningstar Wide Moat ETF, especially if you’re after high quality and defensive companies to invest in.

That’s because this ETF aims to invest in a collection of companies that are deemed to be fairly valued and have sustainable competitive advantages or moats (hence the ETF’s name).

The VanEck Vectors Morningstar Wide Moat ETF also has around 50 shares among its holdings. These include Adobe, Amazon, Boeing, Campbell Soup, Constellation Brands, Lockheed Martin, Microsoft, Walt Disney, and Wells Fargo.

The post Here are 2 fantastic ETFs for ASX investors to buy in May appeared first on The Motley Fool Australia.

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• 3 high quality ETFs for ASX investors to buy this month
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• 3 high quality ETFs for ASX investors to 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 no position in any of the stocks mentioned. 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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With interest rates rising, Australians are about to tighten their belts and watch their spending.

If you have less money to play with, then naturally you will be more careful where you spend it.

As such, it’s interesting to analyse the latest update to the Roy Morgan’s Australia’s most trusted brands rankings.

As the economy slows down, which are the brands best placed to attract customers and revenue?

ASX shares that have the most trustworthy brands

For the year ending March, incredibly the top six most trusted brands had not changed from the previous quarter:

1. Woolworths Group Ltd (ASX: WOW)
2. Coles Group Ltd (ASX: COL)
3. Bunnings Warehouse
4. Aldi Australia
5. Kmart
6. Qantas Airways Limited (ASX: QAN)

While Aldi is privately owned, Bunnings and Kmart are both brands operated by the Wesfarmers Ltd (ASX: WES) conglomerate.

Roy Morgan chief Michele Levine noted the rising cost of living would challenge businesses looking to maintain trust and minimise distrust.

“The last two years have proven to be good ones for Australia’s supermarkets and big retailers,” she said. 

“Coles, Woolworths, Aldi, Bunnings Warehouse and Kmart have consistently ranked in the top five most trusted brands in Australia and this trend hasn’t changed in the early months of 2022.”

Woolworths and Wesfarmers shares have sunk so far this year, by around 2% and 17% respectively.

The Coles and Qantas share prices have fared better, with both ASX shares moving around 2.6% upwards.

US company makes huge strides in Australia

The huge mover in the latest survey was Apple Inc (NASDAQ: AAPL).

The technology provider moved up six places to be rated the ninth most trusted brand among Australians.

“Respondents who trust Apple noted several aspects of Apple’s services that stand out including that ‘their privacy and security is much higher of a priority than competitors’,” said Levine.

“‘Apple’s technology is useful and designed well – I use them extensively at home’, ‘I have used Apple’s products my entire working career’ and ‘They have always tried to develop user-centred products’.”

Apple shares have suffered the wrath of investors in the rotation away from high-growth stocks, falling almost 22% for the year so far.

The post 4 ASX shares of the most trusted brands in Australia appeared first on The Motley Fool Australia.

More reading

• ‘Safe haven’: Why this broker backs Woolworths shares amid recent turbulence
• Where next for the Wesfarmers share price?
• Will Microsoft and Apple shares finally give way in the stock market’s downturn?
• Own ASX 200 retail shares? Here’s how the majors are tackling climate change
• Analysts name 2 ASX dividend shares to buy to beat inflation

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 positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Apple. 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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Despite a strong finish to the week, the S&P/ASX 200 Index (ASX: XJO) recorded a sizeable decline last week. The benchmark index fell 1.8% over the five days to 7,075.1 points.

Fortunately, not all shares dropped with the market. Here’s why these were the best performers on the ASX 200 last week:

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price was the best performer on the ASX 200 last week with a whopping 44.4% gain. This was driven by countless announcements revealing that the heavily shorted medical device company’s chairman, David Williams, had bought shares on-market. This may have spooked short sellers into buying shares to close their positions.

Lifestyle Communities Limited (ASX: LIC)

The Lifestyle Communities share price was on form and charged 11.2% higher over the period. This was driven by a positive response from brokers to a trading update. That update revealed that the land lease communities company has reaffirmed its forecast to deliver 1,100 to 1,300 new home settlements and 450 to 550 resale settlements attracting a deferred management fee between FY 2022 and FY 2024. Goldman Sachs responded by reiterating its conviction buy rating and $24.65 price target.

TPG Telecom Ltd (ASX: TPG)

The TPG share price was a positive performer and pushed 8.6% higher last week. This followed a positive reaction to news that the telco has signed a binding agreement to sell 100% of its passive mobile tower and rooftop infrastructure. TPG is selling the infrastructure to OMERS Infrastructure Management for $950 million. These funds are expected to be used by TPG to pay down its existing debt.

IPH Ltd (ASX: IPH)

The IPH share price wasn’t far behind with a 7.4% gain. This was despite there being no news out of the intellectual property services company. This latest gain means the IPH share price is now up by a sizeable 22% over the last 12 months despite the market volatility.

The post These were the best performers on the ASX 200 last week appeared first on The Motley Fool Australia.

More reading

• These were the worst performers on the ASX 200 last week
• Here are the top 10 ASX shares today
• Why did the Telstra share price rebound nearly 2% on Friday?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why is the Magellan share price up 7% 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 POLYNOVO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has recommended IPH Ltd and TPG Telecom 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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Woolworths Group Ltd (ASX: WOW) shares are outperforming the broader market in 2022, and they’re well-positioned to continue their trajectory, according to one expert.

BW Equities’ Tom Bleakly recently labelled the supermarket giant’s stock a ‘buy’ saying it (and its peers) have managed to shake off recent disruptions.

At the closing bell yesterday, the Woolworths share price was up 1.16% at $37.64. That’s 2.3% lower than it was at the start of the year.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has slumped 7% so far this year.

So, what is it that the expert thinks Woolworths shares have going for them? Let’s take a look.

Here’s why this expert is backing Woolworths shares

Woolworths has faced numerous challenges this year, but its shares are still worth looking at, according to Bleakly.

He recently told The Bull he was impressed by the company’s recent earnings. Particularly, considering the notable supply chain issues it’s been facing.

Of course, the 13 weeks to 3 April saw major flood events in Australia as well as the worst of the Omicron outbreak.

That saw absenteeism surge in the company’s fulfilment centres, as well as the closure of stores and lesser product availability.

Still, Woolworths reported more than $15 billion of group sales for the period. That was a 9.7% increase on those of the prior comparable quarter.

Additionally, Bleaky believes the stock is in the right spot to ward off recent market turbulence.

The ASX 200 has been on a rollercoaster the last few weeks, seemingly spurred by Australia’s inflation rate hitting 5.1% in late April, followed by the nation’s first rate rise in 11 years in early March.

Bleaky commented that Woolworths’ home sector has been a “safe haven” in the turbulence.

Indeed, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) has fallen just 1.6% since the start of this year, besting the performance of the Woolworths share price.

The post ‘Safe haven’: Why this broker backs Woolworths shares amid recent turbulence appeared first on The Motley Fool Australia.

More reading

• Own ASX 200 retail shares? Here’s how the majors are tackling climate change
• What’s with the Woolworths share price on Wednesday?
• Is the Woolworths share price good value right now?
• Which ASX supermarket shares could win (and lose) as higher inflation hits shelves?
• Here’s how the Woolworths share price stacked up in April

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

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Once upon a time, Appen Ltd (ASX: APX) was an ASX market darling sitting alongside four other constituents of the WAAAX group.

For many years, the AI training data company was a crown jewel among a bucket of ASX tech shares. From 2017 to 2019, revenue growth accelerated at a tremendous rate — with Appen posting growth of 33%, 62%, and 97% in each successive year.

However, the company’s growth became derailed during the COVID-19 pandemic. In 2020, revenue growth slowed to 47% before reducing to a limp last year at a pace of 10%. Consequently, the Appen share price has been obliterated from its all-time high in 2020 — falling 83%.

So, why would anyone consider acquiring Appen now?

Primed for higher interest rates

Distressed valuations over the past couple of years have created an ideal merger and acquisition (M&A) environment. In fact, last year was a record high for M&As, topping $5 trillion in deal volume. Not to be left out, the ASX had its fair share of the action with aggregate transaction value hitting $130.5 billion.

While strong activity has continued into this year, private capital now is now searching for deals in a rising rate environment. As such, dealmakers might show a greater interest in companies with minimal debt and a decent amount of cash.

Additionally, a solid track record of profitability is a must. We have already seen the ramifications on ASX shares that are loss-making in this macroeconomic climate. And most important, the company needs to display signs of being fundamentally ‘undervalued’ by the market.

When it comes to Appen on the ASX, in my view, the unloved tech company ticks these boxes.

How ASX-listed Appen shapes up

For all of its listed life, Appen has been profitable on a trailing 12-month basis. And while the company’s earnings have been in decline since mid-2020, this has coincided with several acquisitions and top-line growth across new markets.

Possibly the key to any potential Appen appeal is its immaculate balance sheet. At the end of December 2021, debt was zilch while cash and cash equivalents sat at US$47.9 million. For reference, automotive industry software company Infomedia Limited (ASX: IFM) received a takeover approach this morning, sporting a similar-looking balance sheet.

The final reason why I think ASX-listed Appen could be a potential takeover target is the valuation. Slowing growth and downgraded guidances have sapped investors of their confidence in the Appen share price.

As a result, the company trades on a price-to-earnings (P/E) ratio of 19 times — compared to the industry average of 30 times. Similarly, Appen’s price-to-book (P/B) ratio is the lowest it has been as a listed company at 1.4 times.

These factors don’t take into consideration how future performance could adjust the company’s valuation. However, I think private capital could be tempted to take a chance if Appen can continue to run at profit, pay a dividend, and trade at a relatively cheap valuation.

The post Here’s why I think ASX-listed Appen could be a potential takeover target appeared first on The Motley Fool Australia.

More reading

• The Appen share price is charging 6% higher on Friday
• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• What’s up with the Appen share price on Wednesday?
• 5 things to watch on the ASX 200 on Tuesday
• These are the 10 most shorted ASX shares

Motley Fool contributor Mitchell Lawler has positions in Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd and Infomedia. The Motley Fool Australia has recommended Infomedia. 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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