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There are some high-quality exchange-traded funds (ETFs) that have suffered significant sell-offs amid the current market volatility.

While a lower price may not automatically mean a business or investment is better value, it does allow investors to invest at a lower price.

The businesses in the below two ETFs are exposed to industry tailwinds:

VanEck Video Gaming and Esports ETF (ASX: ESPO)

As the name suggests, this ETF is all about the global video gaming and e-sports world.

For some specific names, these are the biggest 10 positions in the ESPO ETF’s portfolio: Tencent, Nvidia, Activision Blizzard, Netease, Nintendo, Advanced Micro Devices, Electronic Arts, Nexon, Bandai Namco, and Zynga.

There is a sizeable double-digit representation in the portfolio from the US, Japan, and China. So, there is a bit of global geographic diversification in the portfolio away from Australia.

The global video gaming industry has seen annualised double-digit revenue growth since 2015, with e-sports revenue growing even faster (which has risen by an average of 28% per annum since 2015).

E-sports is actually opening up a number of revenue streams with the large gaming audiences that it gets. Examples of those new sources of revenue include game publisher fees, media rights, merchandise, ticket sales, and advertising.

Video gaming is now such a large sector that it is bigger than the combined entertainment industries of music and movies.

The ETF has annual management fees of 0.55%.

How much cheaper is the ESPO ETF? It has dropped by 28% since the beginning of 2022.

Betashares Global Cybersecurity ETF (ASX: HACK)

This ETF’s name also gives a clear indication of its purpose. It’s about the global cybersecurity sector.

There are a total of around 40 positions in the HACK ETF portfolio. These are the biggest names in the ETF’s holdings: Cisco Systems, Palo Alto Networks, Crowdstrike, Zscaler, Mandiant, Booz Allen Hamilton, Leidos, Cloudflare, Sailpoint Technologies, and Akamai Technologies.

BetaShares says that with cybercrime on the rise, the demand for cybersecurity services is expected to grow strongly for the foreseeable future. According to Statista, the global cybersecurity market is expected to rise from US$151.67 billion in 2018 to US$248.26 billion in 2023.

The fund provider notes that “Australian investors currently have few local options for gaining exposure to the fast-growing cybersecurity sector”. There are “very few pure-play cybersecurity firms listed on the Australian sharemarket”.

The HACK ETF comes with an annual management fee of 0.67%.

This investment has also seen a sizeable drop since the beginning of 2022, falling by 20%.

The post Here are 2 quality ETFs that are now a lot cheaper appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Activision Blizzard, Advanced Micro Devices, BETA CYBER ETF UNITS, Cisco Systems, Cloudflare, Inc., CrowdStrike Holdings, Inc., Nvidia, and Zynga. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts and NetEase. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended Activision Blizzard, CrowdStrike Holdings, Inc., Nvidia, and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There is much encouragement from experts to buy up ASX shares after they’ve been heavily discounted in recent months.

In fact, FNArena founder Rudi Filapek-Vandyck only warned a few days ago that the proportion of “buy” recommendations from the analyst community is at an all-time high.

“The only precedent over the past 16 years occurred in 2011 when financial markets were gripped by anxiety that debt-laden Greece might turn into the bombshell that would cause the implosion of the European Union.”

But it’s not a matter of just hoovering up everything in sight.

There are still many stocks that face hardships for a while yet.

Rising interest rates worry some sectors more than others

The big hurdle in Australia at the moment is rising interest rates.

The Reserve Bank of Australia increased the cash rate this month by 25 basis points. But many economists reckon there are more to come.

In such an environment, the team at Wilsons warn that there are some risks to consider for ASX shares:

• Lower disposable income
• Lower house prices
• Higher cost of debt for businesses
• RBA policy error 

These risks mean that there are some parts of the market Wilsons would avoid when bargain-hunting.

“We believe that investors should remain underweight sectors such as retail and housing to avoid the risks cited above,” it noted in a memo to clients.

“We think this is sensible until there is more certainty around the quantum of rate hikes over the next year.”

The retail sector is the most direct victim of Australians with less money to spend.

“This could be a very challenging period for retailers,” read the memo.

“Consumer confidence has already been impacted by expectations of higher interest rates and higher inflation; further declines could lead to a substantial slowdown in consumer spending.”

And housing is not far behind, with mortgage repayments set to rise and dampening demand.

“In 2009-10, rate hikes were quickly followed by a period of weaker prices,” stated the Wilsons team.

“For Australian equities, risks remain elevated on sectors and companies associated with housing activity.”

Stocks that could be under pressure

The memo named 3 particular stocks that will be impacted from the housing slowdown:

• Domain Holdings Australia Ltd (ASX: DHG)
• Mirvac Group (ASX: MGR)
• Stockland Corporation Ltd (ASX: SGP)

Wilsons is concerned about sales listings falling, which would affect the earnings of a classifieds site like Domain.

Real estate developers Mirvac and Stockland face multiple pressures.

“The housing development sector should be weaker from lower demand for housing (if prices fall),” the memo read.

“Elevated timber and steel prices could add to build costs. These companies are unlikely to be able to pass these costs onto buyers.”

The post Warning: 3 ASX shares under pressure from rising interest rates appeared first on The Motley Fool Australia.

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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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On Thursday, the Commonwealth Bank of Australia (ASX: CBA) share price pushed higher despite the market selloff.

This was driven by a positive reaction to the banking giant’s third quarter update.

What happened during the third quarter?

For the three months ended 31 March, compared to the quarterly average during the first half, Australia’s largest bank revealed a 1% decline in operating income to $6,103 million and flat cash earnings of $2,400 million.

According to note out of Goldman Sachs, this means that the bank’s quarterly cash earnings are run-rating 10% ahead of its second half forecasts. In addition, it was 9% ahead of the analyst consensus estimate.

Is the CBA share price in the buy zone?

Despite the bank impressing during the quarter, Goldman Sachs still doesn’t see enough value in the CBA share price to change its recommendation.

As a result, this morning the broker has retained its sell rating with an improved price target of $89.86.

Based on the current CBA share price of $102.15, this implies potential downside of 12% for investors over the next 12 months.

Why is the broker bearish?

The main reason that Goldman is bearish on the CBA share price is its valuation. The broker just doesn’t believe that the bank’s shares deserve to trade at such a premium to its rivals.

Goldman explained:

Overall we reiterate our Sell rating given: i) while CBA’s balance sheet is strong and operationally, exhibited superior performance on volume growth versus its major bank peers (ANZ at 0.3x system average WBC at 0.4x, but NAB at 1.2x), ii) NIMs remain soft, with CBA more exposed to sector wide headwinds (elevated swap rates, portfolio mix effects and price competition). As such we do not believe this justifies the 53% PPOP premium it is currently trading on versus peers (peers adjusted for ex-dividend; versus 26% 15-yr average).

The post Broker says the CBA share price is expensive and a sell appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• Why CBA, Incannex, Judo Capital, and Orica shares are rising
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• CBA share price pushes higher on consensus-beating quarterly update
• CBA share price on watch following $2.4bn Q3 cash profit

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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You might be sick of hearing this, but turbulent times like now mean it’s more important than ever to retain a long-term view of ASX shares.

You might look at a particular stock and be horrified that it has dropped half its value this year.

But past share price movements have no links to future performance. 

Yes, we know that goes against human instincts. But it’s true — stocks are not living beings and they have no memory of where they have been!

So let’s take a look at three examples of ASX shares that have plunged horribly but have sensible tailwinds behind them for the long term, according to Firetrail Investments.

Competitive advantage in a nascent market

Investors of Telix Pharmaceuticals Ltd (ASX: TLX) must be tearing their hair out right now.

The biotechnology company’s prostate cancer product Illucix was released last month, yet the shares have lost an alarming 56% so far this year.

Firetrail analysts still have faith that the stock price will catch up with company performance in the future.

“Telix has a distribution advantage over competitor Lantheus Holdings Inc (NASDAQ: LNTH), given the Illucix radioisotope can be stored in generators at nuclear pharmacies,” their recent memo to clients read.

“Telix’s distribution partner Cardinal Health Inc (NYSE: CAH) has over 100 nuclear pharmacies across the United States, giving them greater proximity to patient dosing sites.”

Pengana High Conviction portfolio manager James McDonald is also a fan of this ASX share. He said last week that Telix could become a 10-bagger.

“There’s a real revolution going on in radiotherapy in recent years,” he said.

‘Significant’ medium-term growth opportunity

If you can believe it, Megaport Ltd (ASX: MP1) has been even less fun to own than Telix.

The stock price for the virtual network provider is more than 65% lower than where it started the year.

The Firetrail team understands the short-term movement downwards.

“Megaport reported 3Q FY22 revenues that were modestly below market expectations,” read its memo.

“The lower step-up in monthly recurring revenue raised some concerns around the pace of its partner channel strategy ramp-up and the extent to which this may be impacting momentum in Megaport’s core business.”

But with the world moving more and more of computing into the cloud, the thematic tailwinds just cannot be denied for this ASX share.

“We continue to believe the medium-term growth opportunity for Megaport is significant and will be realised within a reasonable timeframe.”

Shaw and Partners senior investment adviser Adam Dawes also said last week that his team has been buying up Megaport shares.

“We really like this one… It’s even lower than $8 today — I think there’s definitely some value there.”

The Megaport share price closed Thursday at $6.58, down 9.74% for the day.

People are leaving their jobs 

The Firetrail team noticed a remarkable phenomenon going on in the US.

“Since COVID-19, the rate of voluntary resignations in the US has soared to its highest level in over 25 years, well above levels seen post-GFC,” they noted.

And the analysts are seeing a similar trend in Australia too, which will have an impact on ASX shares.

“Higher labour costs will hurt companies with tighter profit margins and larger labour forces,” the Firetrail report said.

“On the other hand, this trend will benefit a company like Seek Limited (ASX: SEK) who is a beneficiary of higher labour force turnover.”

The share price for the jobs classifieds site is down 28.6% so far this year.

The post 3 ASX shares destined for greatness: Firetrail appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re an income investor in search for dividend shares to buy to overcome inflation, then you may want to look at the ones listed below.

Analysts are very positive on these dividend shares and are forecasting attractive yields from them in the coming years. Here’s what you need to know:

Adairs Ltd (ASX: ADH)

Adairs could be a dividend share to buy, particularly with its shares trading 40% lower in 2022. It is a leading furniture and homewares retailer behind the Focus on Furniture, Mocka, and eponymous Adairs brands.

The weakness in the Adairs share price has been driven by a combination of market volatility and the company’s underperformance in FY 2022 due to COVID headwinds.

While the latter is disappointing, analysts at Morgans are expecting the retailer to bounce back in FY 2023. Especially given the recent acquisition of Focus on Furniture and the launch of its new national distribution centre.

In light of this, the broker is forecasting big dividends from Adairs in the coming years. It has pencilled in fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.42, this will mean yields of 7.9% and 10.7%, respectively.

Morgans also sees plenty of upside for the company’s shares with its add rating and $3.50 price target.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider is Telstra. Australia’s largest telecommunications company could be a great option for income investors given its defensive qualities and attractive yield.

In addition, while Telstra still has plenty of work to do, its outlook is now arguably the most positive it has been in a decade. This is thanks to the success of its T22 strategy which ends this year and the potential of its upcoming T25 strategy.

Management is very confident in its plans and expects the T25 strategy to deliver solid and sustainable growth in the coming years. This could bode well for Telstra’s dividends.

In the meantime, the team at Morgan Stanley is expecting fully franked 16 cents per share dividends again in FY 2022 and FY 2023. Based on the current Telstra share price of $3.87, this will mean yields of 4.2%.

In addition, Morgan Stanley sees a lot of value in its shares at the current level. It has an overweight rating and $4.60 price target.

The post 2 ASX dividend shares that brokers are tipping as buys right now appeared first on The Motley Fool Australia.

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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 ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO 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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Cryptocurrencies have suffered from a brutal sell-off the past few months, but the last fortnight has been especially bad for investors.

In the month of May alone, Bitcoin (CRYPTO: BTC) has lost more than 26% of its value in Australian dollar terms.

According to a Coinjar memo to clients on Wednesday night, we are well and truly in a bear market that started exactly a year ago.

“It’s all so clear in retrospect: May 2021 was the end of the bull run,” read the memo.

“Since then, monthly exchange users have been trending down and people have stopped Googling crypto. Even the burst to US$69,000 in November now looks like it was designed to engineer exit liquidity for the big players.”

The flight of capital out of digital assets is not just seen in the devaluation of volatile cryptocurrencies.

“Recent trends show that the amount being stored in DeFi [decentralised finance] protocols is rapidly decreasing and USDC is being cashed out for real USD.”

Why this winter might turn into an ice age

Crypto last went through a bear market over 2018 to early 2020.

Similar to the spectacular gains seen over the COVID-19 pandemic, 2017 was a massive year of gains. But then a “crypto winter” followed for two years.

Coinjar’s assessment is that the new 2022 winter is different.

“Unlike previous crypto winters, this one looks set to unfold against a much changed macroeconomic background,” read the memo.

“Cheap money has dried up and the appetite for risk is marginal. The revolutionary technologies to have emerged during this bull run – DeFi, NFTs, DAOs, layer 2s and, yes, stablecoins – have shown themselves to be largely unready for primetime.”

To add to this, regulators around the world are “sharpening their claws” against crypto and blockchain. 

“It’s hard to believe we’re going to V-shape our way out of this one.”

Why a sunny spring could follow the current freeze

Those who stuck with their investments through the 2018 winter saw their currencies skyrocket again after the coronavirus arrived.

And, believe it or not, prospects look even brighter this time around.

“When things collapsed in 2018, crypto was toxic,” read the Coinjar memo.

“Banks wouldn’t touch it, Google and Facebook both banned crypto advertising and the topic was about as conversationally welcome as an extended treatise on your bowel movements.”

Now there are actual sovereign nations who treat Bitcoin as currencies, even more that are forming crypto strategies, and big finance institutions offering crypto products.

“The biggest companies in the world [are] unleashing web3 projects and the slow, steady adoption by industries as diverse as high fashion, music, gaming, sports, energy, and more.”

Yes, those activities may slow down as crypto rugs up for another winter. But now is the time for consolidation, according to Coinjar.

“As the adage goes: bear markets are for building – and right now there’s a lot of building going on. What will emerge when the frost thaws?”

The post Is this the start of a long crypto winter? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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 Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled notably lower. The benchmark index fell 1.75% to 6,941 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to edge higher

The Australian share market looks set to end the week in a subdued fashion following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher this morning. In the US, the Dow Jones was down 0.3%, the S&P 500 dropped 0.1%, and the Nasdaq edged 0.05% higher. The Dow fell for a sixth straight day.

Oil prices rise

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a good finish to the week after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.95% to US$106.73 a barrel and the Brent crude oil price is up 0.5% to US$108.07 a barrel.

CBA remains a sell

Commonwealth Bank of Australia (ASX: CBA) shares could be a sell according to analysts at Goldman Sachs. In response to the banking giant’s third-quarter update, the broker has retained its sell rating with an improved price target of $89.86. While the broker appears to have been impressed with CBA’s update, it still didn’t see enough to justify the premium its shares trade at.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a tough finish to the week after the gold price sank overnight. According to CNBC, the spot gold price is down 1.75% to US$1,820.9 an ounce. Traders were selling the precious metal after the US dollar strengthened.

Goodman shares named as a buy

The recent pullback by the Goodman Group (ASX: GMG) share price could have created a buying opportunity for investors. According to a note out of Goldman Sachs, its analysts have initiated coverage on the property company with a buy rating and $25.00 price target. It said: “Our view of GMG is supported by a solid outlook for the Industrial sector more broadly, with a number of favourable fundamentals underpinning future long-term demand for industrial space.”

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

More reading

• Why did the South32 share price beat the other ASX 200 miners today?
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• Why CBA, Incannex, Judo Capital, and Orica shares are rising
• Blockdown! Why is the Block share price crashing by 16% 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 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 growth shares to buy, then you may want to consider the two listed below that brokers are bullish on.

Here’s what you need to know about these growth shares:

Cochlear Limited (ASX: COH)

The first ASX growth share for investors to look at is Cochlear. It is one of the world’s leading hearing solutions companies, which is a great position to be in given ageing populations around the world and the market’s significant barriers to entry.

Analysts at Morgans are very positive on the company, particularly given its improving earnings profile post-pandemic.

Morgans commented:

Cochlear maintains a dominant position in the implantable hearing solutions segment. While we continue to believe a full recovery from Covid-based disruptions still has time to play out, improving demand and strong pipeline, coupled with management’s increasing confidence, suggests an improving earnings profile.

The broker currently has an add rating and $244.50 price target on Cochlear’s shares. Based on the current Cochlear share price of $208.59, this implies potential upside of 17% for investors.

Nitro Software Ltd (ASX: NTO)

Another ASX growth share that analysts rate highly is Nitro. It is a technology company that provides businesses of all size with integrated PDF productivity and eSignature tools.

Unfortunately, the Nitro share price has fallen heavily this year despite reporting strong growth. This has been driven by significant weakness in the tech sector, particularly for loss-making companies.

And while Nitro is not expected to be profitable for a few more years, the team at Goldman Sachs believe investors should look beyond this. Especially given that it is well-funded and has a huge market opportunity to grow into in the future.

Goldman Sachs commented:

We appreciate that a material re-rate likely requires a change in sentiment towards unprofitable tech companies, however we think NTO screens attractively relative to tech peers and on a longer-term view. Our focus now shifts to NTO’s execution on its pipeline of new business and e-sign cross-sell opportunities, with concerns over balance sheet now eased. We see NTO as an attractive long-term growth opportunity at a discounted valuation.

Goldman has a buy rating and $2.35 price target on the company’s shares. Based on the current Nitro share price of $1.18, this suggests almost 100% upside for investors.

The post Analysts say these top ASX growth shares are buys appeared first on The Motley Fool Australia.

More reading

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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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking to combat rising inflation with some dividend shares, then the two listed below could be worth considering.

Analysts have recently named these ASX 200 dividend shares as buys. Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

The first ASX 200 dividend share to look at is mining giant BHP.

It has been tipped as a top option for investors due to the high levels of free cash flows it is generating from its portfolio of world class operations. This is being underpinned by favourable commodity prices and bodes well for dividend payments in the near term.

For example, Citi recently upgraded the company’s shares to a buy rating with a $56.00 price target. While it wasn’t overly impressed with BHP’s production during the recent quarter, it commented that there is “too much cash flow to ignore.”

Citi is expecting this cash flow to support fully franked dividends per share of ~$4.86 in FY 2022 and then ~$4.89 in FY 2023. Based on the current BHP share price of $44.95, this implies yields of 10.8% and 10.9%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX 200 dividend share that analysts rate as a buy is banking giant NAB.

For example, the team at Goldman Sachs recently retained their conviction buy rating on the bank’s shares with a $34.17 price target.

Goldman Sachs likes NAB due to its balance sheet mix, which the broker feels provides the best exposure to the domestic system growth. It also highlights that NAB’s franchise is performing strongly, growing at or above system growth in most segments, and expects this to continue.

Its analysts are forecasting attractive dividends in the near term. They have pencilled in fully franked dividends of $1.52 per share in FY 2022 and $1.65 per share in FY 2023. Based on the current NAB share price of $30.82, this implies yields of 4.9% and 5.35%, respectively.

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

More reading

• NAB share price lifts amid Suncorp rumours
• Why GrainCorp, Link, NAB, and Pendal shares are sinking today
• The NAB share price is in reverse today. Here’s why
• Why are ASX 200 mining shares in the green today?
• Why are ASX 200 mining share prices slipping 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 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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Well, today has been quite an interesting day for the South32 Ltd (ASX: S32) share price. Soon after market open this morning, South32 shares shot up, climbing as high as $4.51 a share (up more than 2%). That stood in stark contrast to the broader S&P/ASX 200 Index (ASX: XJO), which opened deep in the red and has been steadily falling all day. The ASX 200 has now finished up the trading day down 1.75% at well under 6,950 points.

Saying all of that, South32 did end up falling back to earth. After climbing as high as $4.51 a share, the diversified miner is now back at $4.37 a share at the end of today’s trading session, down by 0.91%. But the strange thing is that most other ASX mining shares, especially the larger ones, had a far worse time of it today.

Take BHP Group Ltd (ASX: BHP). BHP shares ended the day down by 1.55% at $44.95 each. Fortescue Metals Group Limited (ASX: FMG) plunged by 2.76%. It was a similar story with Rio Tinto Limited (ASX: RIO), which lost 2.09%.

Energy share Woodside Petroleum Limited (ASX: WPL) was a standout loser, dropping by more than 3%. Even the ‘safe haven’ gold shares couldn’t save the resources sector. ASX 200 gold miner Northern Star Resources Ltd (ASX: NST) lost 2.75% today

So South32’s performance seems very mild compared to these sobering moves.

But why have investors spared South32 from the worst of the falls today?

What spared the South32 share price today?

Well, it’s hard to say. There’s been nothing out of South32 today, save for a share buyback notice. The company has consistently been executing share buybacks, which could lend support to a company’s share price.

But South32 has also been the recipient of some broker love this week, which could also be helping the market to put a floor under the company’s shares. As my Fool colleague James covered just yesterday, broker Morgans recently called South32 one of its “best ideas”. Morgans currently rates South32 as an “add”, with a 12-month share price target of $6.10. That’s almost 40% above its current share price.

This optimism comes from what Morgans sees as South32’s diverse portfolio of metals and minerals, many of which are “ESG-friendly”. It’s also expecting big things from the company when it comes to dividends over the coming few years.

So perhaps it was this bullish thesis that steadied investors’ hands when it came to the South32 share price today. No doubt such an optimistic share price prediction was warmly received by existing shareholders.

The post Why did the South32 share price beat the other ASX 200 miners today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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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