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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.

What happened

Shares of Apple (NASDAQ: AAPL), Meta Platforms (NASDAQ: FB), and Salesforce.com (NYSE: CRM) were plunging today, down 5.6%, 6.8%, and 7.9%, respectively, as of 2:05 p.m. ET. There wasn’t any material news out of these companies today, although Apple did announce it was leading an initiative to implement passwordless sign-in open standards for the web. In addition, news out of the European Union suggested stiffer rules for big tech, and potential penalties could be in the offing.

More likely, these companies fell in sympathy with an overall market decline, with the S&P 500 index falling 3.7% and the tech-heavy Nasdaq Composite down a whopping 5.2% as of 2:06 p.m. ET.

So what

One could probably chalk today’s market decline to a reversal from yesterday’s big rally. Yesterday, the Federal Reserve released its minutes for its May meeting. The Fed hiked interest rates 50 basis points, as expected, and also announced plans for a gradual reduction in its balance sheet of Treasuries and mortgage-backed securities.

The market likely rallied because Chairman Jay Powell said the Fed was not yet considering a higher 75 basis-point hike at the next meeting, which some had feared. In addition, perhaps the gradual ramping up of balance-sheet reduction calmed the nerves of the markets, which were expecting the Fed to slam even harder on the brakes.

After a relief rally, there’s usually a reversion back to skepticism. Investors are now likely turning their attention to the next inflation reports, which come out next week. If inflation stays high, the Federal Reserve may have to move faster, which could increase risks of a recession.

A first-time jobless-claims number also came out today, showing first-time claims ticked up above 200,000. That was higher than expected, although unemployment is still very low by historical standards. Still, the above-consensus number likely alerted some investors that the Fed could be hiking into a slowdown.

High inflation and higher interest rates also hurt the intrinsic value of high-growth stocks with their earnings well into the future. So even as bad as Apple, Meta, and Salesforce were today, the high-growth Cathie Wood-like stocks were down even more.

Still, often times, “tech” is painted with a broad brush, even though Meta Platforms trades at a bargain-basement valuation of 15.9 times earnings and Apple trades at a reasonable 25 times earnings. It’s not surprising that Salesforce is down more than the others, as it trades at 116 times earnings, although just 37 times earnings based on forward estimates.

There could also be some hedge fund liquidations today. This could occur if funds are now forced to sell stocks due to higher rates on margin loans or a tidal wave of investors are asking for redemptions.

In terms of the news, Apple, in conjunction with Alphabet and Microsoft, announced they would work together to expand support for passwordless sign-ons across websites and apps. This is based on standards created by the FIDO Alliance (the Fast Identity Online non-profit for web security) and the World Wide Web Consortium. The consortium aims to grow more secure solutions such as fingerprint, face, or device PIN number sign-ins, as passwords have become cumbersome and a growing security liability in recent years.

European lawmakers also recently proposed regulations that could force Apple to open up its devices to other third-party payments systems besides Apple Pay. The EU is even contemplating a large fine on Apple for failing to provide access to other digital wallets in the past. European Commission Executive Vice President Margrethe Vestager said, “We have indications that Apple restricted third-party access to key technology necessary to develop rival mobile wallet solutions on Apple’s devices.”

Big tech has regularly been subjected to hefty fines from the European Union, and it looks like another could be coming. It’s obviously not a great time for Apple and other tech companies for that to happen, given recent supply chain woes and fears over a consumer device demand slowdown.

Now what

It’s hard to know what to do with all-star large-cap tech companies today. They’re not unprofitable, like so many high-growth software, electric-vehicle, and meme stocks. The three I’ve previously mentioned are also reasonably priced, given their scale and growth potential as the world continues to digitize.

Today and the upcoming months could continue to be volatile, as every month will bring new inflation data, which will spur a debate over whether or not we might have a recession. And the ongoing war in Ukraine provides even more uncertainty.

However, for highly profitable, cash-rich tech companies with large moats and solid growth outlooks, such as these three names, this marketwide pullback is likely going to turn out to be a good long-term buying opportunity. Investors in these names should probably hold on over the summer, while those without a position who have a longtime horizon may wish to think about scaling gradually into owning these stocks. 

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

The post Why Apple, Meta Platforms, and Salesforce stocks plunged today appeared first on The Motley Fool Australia.

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• Which ASX 200 shares have historically performed well during rising inflation?

Billy Duberstein has positions in Alphabet (C shares), Apple, Meta Platforms, Inc., and Microsoft and has the following options: short June 2022 $145 puts on Microsoft. His clients may own shares of the companies mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Apple, Meta Platforms, Inc., Microsoft, and Salesforce.com. 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 recommended Alphabet (A shares), Alphabet (C shares), Apple, Meta Platforms, Inc., and Salesforce.com. 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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Shares of Incannex Healthcare Ltd (ASX: IHL) are on ice today pending a company announcement. Before being placed on the backburner, the Incannex share price rested at 38 cents apiece.

Zooming out, shares of the cannabis player have faltered more than 39% this year to date, amid a violent selloff in growth-type shares in 2022.

In wider market moves, the S&P/ASX 200 Health Care Index (ASX: XHJ) has crumbled today and is now more than 3% in the red, bringing losses to 12% this year.

Meanwhile, in the US, the Nasdaq Composite Index (Nasdaq) fell sharply overnight, marking its largest single-day drop since 2020.

Investors sold off shares in the tech-biased Nasdaq after US Federal Reserve chair Jerome Powell raised the Fed’s base interest rate by 0.5 percentage points, in an effort to control inflationary pressures.

Why is the Incannex share price halted?

The company requested its shares be put on ice in lieu of a market-sensitive announcement regarding upcoming study readouts.

“[Incannex] requests a trading halt to be applied to its securities…pending an announcement by the company regarding results of its extensive preclinical study assessing IHL-216A in a sports concussion model,” it said in the filing.

“The Company requests that the trading halt remains in place until the earlier of the commencement of normal trading on May 10, 2022 or the release of the announcement.”

Naturally the ASX awarded Incannex its request and, as such, investors must now wait until the company posts its next update on or before May 10.

Earlier in the year, investors appeared rattled by Incannex’s decision to acquire APIRx Pharmaceutical USA, LLC for US$93 million.

Even though it now claims a total addressable market of more than US$400 billion globally, investors didn’t appear as thrilled.

As such, losses have continued into May and shares have stooped from a high of 70 cents in March.

Incannex Healthcare share price snapshot

In the last 12 months, the Incannex Healthcare share price has held a 24% gain. However, it has collapsed into the red on each of the shorter time frames.

The post Down 25% in a month, the Incannex share price is now halted. Here’s why appeared first on The Motley Fool Australia.

More reading

• How have ASX cannabis shares been performing so far in 2022?

Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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The Bitcoin (CRYPTO: BTC) price cratered overnight, falling as much as 11% to hit US$35,612.

At time of writing, the world’s biggest crypto by market cap is down 9% over the past 24 hours, currently worth US$36,509.

The last time the Bitcoin price fell as much in a single day was when Russian troops crossed into Ukraine, sending global markets into turmoil in late January.

And it’s not just Bitcoin. CoinMarketCap tells us that all but one of the top 100 cryptos by market cap are well into the red today (stablecoins aside).

So, what’s going on?

Bitcoin price succumbs to rate fears

The finger of blame looks to be pointing squarely at surging global inflation figures. Figures that are forcing central banks the world over to begin ratcheting up interest rates more aggressively than most analysts had expected.

The US Federal Reserve restrained itself this week with a 0.50% rate hike rather than the feared 0.75%. But investors are all too aware that further rises are just around the bend from the Fed and other central banks the world over.

Following a big relief rally on Wednesday, yesterday (overnight Aussie time) US markets tanked. The tech-heavy Nasdaq led the way down, plummeting 5%.

And as we’ve seen throughout this year, the Bitcoin price tends to move in close alignment with risk assets like high growth tech shares.

What the experts are saying

Commenting on the crypto rout, Jason Lau, chief operating officer of Okcoin exchange said (quoted by Bloomberg), “Investors are jittery about the Fed continuing to raise interest rates after yesterday’s 50 bps hike. The potential of additional rate hikes makes the trajectory of the global economy uncertain.”

Digital asset fund manager Valkyrie Investments head of research, Josh Olszewicz added:

Bitcoin has become increasingly correlated with US trading hours and US traditional market indices, likely due to a combination of increasing US institutional presence as well as the absence of China after the sweeping bans last year.

Since March this year, most of the large selloffs in Bitcoin have kicked off during US market open, potentially suggesting a market participant continues to sell every bullish rally.

Following the latest round of selling, the Bitcoin price is down 23% so far in 2022.

The post Bitcoin price plunges 11%. What’s going on? appeared first on The Motley Fool Australia.

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• Here’s why the Bitcoin price surged 6% overnight
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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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The WiseTech Global Ltd (ASX: WTC) share price has fallen a lot over the past month. Could the ASX tech share now be a major opportunity?

For readers that aren’t sure what WiseTech does, it describes itself as a leading provider of software to the logistics execution industry globally. It has over 18,000 global logistics companies as customers across 165 countries, including 42 of the top 50 global third-party logistics providers and 24 of the 25 largest global freight forwarders worldwide.

Its key platform is called CargoWise.

What’s happening to the WiseTech share price?

Lots of ASX shares, particularly ones that are often labelled as ASX growth shares, have seen price declines in 2022 amid high inflation and commitments by central bankers that they will keep increasing interest rates to bring inflation back to a more normal level.

Since the start of 2022, the Xero Limited (ASX: XRO) share price has fallen nearly 40%, the Altium Limited (ASX: ALU) share price has dropped 31% and the Seek Limited (ASX: SEK) share price has fallen around 25%.

The WiseTech share price has not been missed in the sell-off by investors, falling by around 30%.

Why do interest rates matter for asset valuations? Billionaire Ray Dalio once explained:

It all comes down to interest rates. As an investor, all you’re doing is putting up a lump sum payment for a future cash flow.

However, WiseTech continues to see growth, with rising profit margins.

FY22 half-year earnings wrap

The first half of FY22 saw total revenue rise 18% to $281 million, with CargoWise revenue up 29% to $193 million, driven by new customer wins, price and increasing existing customer usage.

It said that market penetration momentum is continuing, with two new global rollouts secured in the first half of FY22, including FedEx.

The company is also working on improving its efficiencies. An organisation-wide efficiency and acquisition synergy program is ‘well-progressed’ with $20.2 million of gross cost reductions in the first half of FY22. It said it’s on track to achieve a cost reduction run-rate of around $45 million for FY22, beating its previous target of around $40 million.

Operating leverage saw the business grow its earnings before interest, tax, depreciation and amortisation (EBTIDA) by 54% to $137.7 million and underlying net profit after tax (NPAT) went up by 77% to $77.3 million.

In FY22, the company is expecting revenue growth of between 18% to 25%, representing revenue of between $600 million to $635 million.

It also upgraded its FY22 EBITDA growth guidance to a range of 33% to 43%, up from 26% to 38%. The new guidance represents a range in dollar terms of between $275 million to $295 million.

Is the WiseTech share price a buy?

Despite the decline, Citi has just affirmed its neutral target on the business with a price target of $46.35 because of the recent slowing of freight volumes, which could impact WiseTech’s revenue because it generates revenue from the number of transactions. Therefore, revenue may be at the lower end of the FY22 revenue guidance, which is stated above.

However, Ord Minnett rates the business as a buy with a price target of $52.

Both brokers are expecting growth in the short-term for WiseTech.

The post The WiseTech share price has tumbled 20% in a month. Is it a bargain? appeared first on The Motley Fool Australia.

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• The Appen share price is soaring 5% on Thursday. Could this be why?
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• 5 things to watch on the ASX 200 on Friday
• Why are ASX 200 tech shares having such a dire day?
• Why Andromeda Metals, ARB, BCI Minerals, and WiseTech shares are tumbling lower

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended 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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The Xero Limited (ASX: XRO) share price is tumbling by more than 7% on Friday.

Its woes follow a disastrous session for the US stock market. That appears to be plaguing the S&P/ASX 200 Index (ASX: XJO) this morning with the index’s tech sector bearing the brunt.

At the time of writing, the Xero share price is $88.41, 7.13% lower than its previous close.

However, at its lowest point of the day so far the business and accounting software-as-a-service (SaaS) provider’s stock was trading at $87.89 – representing a 7.67% drop and a new 52-week low.

For comparison, the ASX 200 is currently down 2.52%.

Let’s take a closer look at what could be weighing on the SaaS provider’s stock today.

Xero share price sinks

The Xero share price is suffering on Friday after the Nasdaq Composite (NASDAQ: .IXIC) plunged 4.9% overnight.

The tech-heavy index was weighed down by some of its biggest names, with the NASDAQ-100 (NASDAQ: NDX) recording a 5% tumble.

That’s likely dragging on the S&P/ASX 200 Information Technology Index (ASX: XIJ). It has dumped a whopping 4.07% at the time of writing.

That makes it the worst-performing ASX 200 sector on Friday. Though, it’s worth noting that none of the ASX 200’s 11 sectors are trading in the green right now.

However, Xero’s stock isn’t the tech sector’s biggest weight today. That unfortunate crown is worn by Life360 Inc (ASX: 360) – its share price is exhibiting a 9.3% fall.

Looking to the broader ASX technology sector, the S&P/ASX All Technology Index (ASX: XTX) has dipped 4.15%. That leaves it almost 29% lower than it was at the start of 2022.

Though, that’s outperforming the Xero share price. The SaaS provider’s stock has fallen 39% year to date.

The post Xero share price plummets 7% as tech sector struggles appeared first on The Motley Fool Australia.

More reading

• Analysts rate these ASX growth shares as buys in May
• Why are ASX tech shares having such a dire run on Monday?
• Why is the Xero share price sinking 6% today?
• Here’s why ASX 200 tech shares are having such a stellar end to the week
• Why the Xero share price is a buy right now: experts

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 National Australia Bank Ltd (ASX: NAB) share price is trading lower on Friday.

In morning trade, the banking giant’s shares are down 1% to $31.90.

This is a relatively positive outcome given that the ASX 200 index is currently down a sizeable 2.2%.

This appears to have been driven by a positive response to NAB’s half-year results from a leading broker.

What did the broker say about the bank’s results?

According to a note out of Goldman Sachs, its analysts were reasonably pleased with NAB’s half-year results. Although, it acknowledges that the bank’s earnings growth was a touch slower than it was forecasting, it was pleased with its net interest margin (NIM).

The broker commented:

NAB’s 1H22 cash earnings grew by 4% on pcp to A$3,480 mn, 2% below GSe, driven by lower-than-expected Trading non-interest income and higher operating expenses. The interim DPS of A73¢ was slightly above GSe (A72¢), reflecting a payout ratio of 68%.

NAB’s 1H22 NIM was down 6 bp hoh to 1.63%, which was 2 bp above our expectations (GSe 1.61%). NAB expects a moderate positive NIM impact from the rising rate environment on replicating portfolios in 2H22.

Is the NAB share price good value?

After reviewing its half-year results, Goldman Sachs believes the NAB share price is good value at the current level.

As a result, the broker has retained its conviction buy rating and lifted its price target to $34.17.

Based on the current NAB share price, this implies a potential return of 7.1% for investors over the next 12 months before dividends and 12% to 13% including dividends.

Why is Goldman bullish?

Goldman is bullish on NAB due to its balance sheet mix. It feels this gives NAB the best exposure to the domestic system growth.

In addition, the broker is positive on NAB’s NIM outlook, strong franchise performance, and feels the NAB share price is attractively priced.

The broker explained:

We reiterate our Buy rating (on CL) on NAB and it remains our preferred sector exposure given: i) NAB’s balance sheet mix provides the best exposure to the domestic system growth we foresee over the next 12-18 months, which should favour commercial lending over mortgage lending, ii) NAB’s franchise is performing strongly, growing at or above system growth in most segments, iii) NAB’s disclosure on NIM leverage to higher rates is even more optimistic than our own assessment, iv) while valuations are no longer cheap, our revised TP continues to offer c. 13% TSR. We therefore reiterate our Buy recommendation (on CL).

The post What’s the outlook for the NAB share price following the bank’s latest results? appeared first on The Motley Fool Australia.

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• Here’s all what you need to know about the latest NAB dividend
• NAB share price tumbles on earnings miss and costs outlook

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 Beach Energy Ltd (ASX: BPT) share price managed to outrun benchmarks in April and climbed more than 4% into the green. At the time of writing, it is trading at $1.65 apiece, down 4% on the day.

While April was a fairly quiet month for Beach, strong market fundamentals have boosted revenue and earnings for the exploration and production company.

Meanwhile, the benchmark S&P/ASX 200 Index (ASX: XJO) clipped a loss of around 1% over the same timeframe.

Oil markets soar in April

Last month was hallmarked by the release of Beach Energy’s Q3 results and FY22 expenditure guidance update.

During the quarter, Beach recognised sales revenue of $458 million, symbolising a 15% gain on the previous quarter.

However, while revenues stretched up, production narrowed by 3% to 5.2 MMboe, compounded by a 5% reduction in sales volume.

Consequently, it was the anabolic-like growth of both oil and natural gas markets in 2022 that transposed to higher income for Beach, it notes. The company reported a realised oil price of $176.5 per barrel and a realised gas/ethane price of $8.4/GJ, up 51% and 10% respectively.

Pricing strengths continued to run throughout April. Brent Crude oil finished $1 per barrel higher at approximately US$108 per barrel while natural gas futures are each resting at multi-decade highs in US, UK, and European contracts.

Helping ‘fuel’ the rally, the Russian-Ukrainian conflict has ensured that geopolitical risks continue to plague energy markets. Oil prices surged another 5% this week after the European Union put forward a plan to ban Russian crude oil imports.

In fact, Beach Energy wasn’t the only winner last month. Energy markets around the world are rocketing. The Betashares Global Energy Companies ETF (ASX: FUEL) also landed around 5% in the green last month, for instance, despite some end-of-month volatility.

Beach Energy share price snapshot

In the last 12 months, the Beach Energy share price has shot up by 30% and is now trading back above its pre-pandemic highs.

This year to date, shares have surged 31% and are in the green across all major time frames.

The post Why did the Beach Energy share price beat the ASX 200 in April? appeared first on The Motley Fool Australia.

More reading

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• Why are ASX 200 energy shares leaping higher today?
• 5 things to watch on the ASX 200 on Wednesday
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• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Zach Bristow 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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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.

What happened 

As investors sell off stocks broadly, the “risk-off” trade has made its way to cryptocurrencies. The market has been down sharply since just before the trading opened Thursday, and that’s when a sudden crash hit crypto. 

As of 3:30 p.m. ET, the value of Dogecoin (CRYPTO: DOGE) had fallen 5.4% over the prior 24 hours, Ethereum (CRYPTO: ETH) was down 7.8%, and The Sandbox (CRYPTO: SAND) was down 11.8%. Ironically, early Thursday morning, values were up by nearly 10% from their Wednesday lows. 

So what 

Amid the backdrop of a falling crypto market, the news related to the industry is fairly positive. Congress is considering allowing companies to include cryptocurrencies in their 401(k) plans, which could bring a new swath of investors to the assets. California also announced that it will also look into regulations to adopt digital assets — not fight against them — as an executive order from President Joe Biden indicated recently.

Gucci also announced that it will begin accepting certain cryptocurrencies in its stores as early as this month, Bitcoin, Ethereum, and Dogecoin among them.

Despite those positive news items, the falling stock market is pulling cryptocurrency values down with it. In addition, the volatility of tokens means the stock market’s losses are generally magnified in crypto, at least in the short term. 

Now what 

The volatility we are seeing Thursday is par for the course in cryptocurrencies. Investors need to expect that valuations will swing wildly, even if news seems to be moving in their favor. What’s really changed in the last six months is that crypto values have become much more correlated with the stock market overall. 

Taking a step back, I do see some positive news for the crypto industry. Retailers accepting cryptocurrencies is a positive step toward broader adoption, and a flood of developers are moving into the space as well. That’s great for the development of the crypto economy, but it’ll take time for developers to build new projects and for user adoption to grow. 

I’m bullish on the development in the crypto space, as well as what appear to be favorable trends in the regulatory environment, at least in the U.S. These should be tailwinds for the crypto market overall. But it will be a while before those things have any direct impact, and clearly, traders’ time horizons are getting shorter by the day. 

Big market sell-offs can be great buying opportunities for long-term investors, though it can be difficult to take advantage of them. I plan to buy crypto assets in the coming months in anticipation of their growth over the next decade, but that doesn’t mean I think values will recover quickly. It may take months or even years for even the best cryptocurrencies to get back to their previous highs. 

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

The post Why Ethereum, Dogecoin, and The Sandbox dropped today appeared first on The Motley Fool Australia.

More reading

• Why The Sandbox Cryptocurrency Is Up Today
• Here’s how the Ethereum price stacked up in April
• Can cryptocurrency bounce back in May?
• Here’s what happened with Dogecoin in April
• Why Bitcoin, Ethereum, and Coinbase Jumped Today

Travis Hoium has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. 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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Insurance Australia Group Ltd (ASX: IAG) shares are currently trading with a 4.13% dividend yield and that can mean more than extra pocket change for willing investors.

IAG offers its shareholders the option to participate in a dividend reinvestment plan. Let’s take a look at what that means for those who own stock in the S&P/ASX 200 Index (ASX: XJO) insurer.

At the time of writing, the IAG share price is $4.60. The company has handed out 19 cents of dividends over the last 12 months.

All the details on IAG’s dividend reinvestment plan

Own IAG shares? If so, you can up your holding in the company for free – sort of.

The company operates a dividend reinvestment plan, allowing shareholders to forego their cash dividends in return for more shares.

Any new shares handed to investors under the dividend reinvestment plan will be free of broker or transaction costs.

How many shares per dividend that participating shareholders will receive will vary. That variation is based on a few factors – mainly, the value of a particular dividend and the trading price of IAG shares.

The company will decide what each share handed out under the dividend reinvestment plan is worth based on the average market price of IAG shares over at least 5 trading days.

For instance, IAG’s most recent dividend was worth 6 cents. Meanwhile, the company’s directors determined the dividend reinvestment plan’s price to be approximately $4.84.

So, an investor participating in the plan with a holding of roughly 80 shares would receive a single new share.

Any remaining value – that is, a portion of a payout that doesn’t make up the value of full share – is then carried forward to the next dividend payout.

IAG investors can also choose to commit only a portion of their shares to the plan, thus receiving both a cash dividend and additional shares.

Sadly for some, only shareholders who live in Australia or New Zealand can participate in the plan. Though, the company notes there are some exceptions to that rule.

The post Does IAG have a dividend reinvestment plan? appeared first on The Motley Fool Australia.

More reading

• What happened to the IAG share price in April?
• How does the IAG dividend compare to QBE?
• The IAG share price has lost 10% since February. Is it an opportunity?
• How did the IAG share price compare to its sector in the March quarter?
• How did the IAG share price stack up in the March quarter?

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 positions in and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The REA Group Limited (ASX: REA) share price is under pressure on Friday amid a market selloff and the release of a softer than expected quarterly update.

In morning trade, the property listings company’s shares are down 9% to a 52-week low of $110.68.

REA share price slides on softer than expected Q3 growth

• Revenue up 23% year on year to $278 million
• EBITDA up 27% to $155 million
• Free cash flow up 39% to $91 million
• National listings growth of 11%
• 7 million unique visits per month

What happened during the third quarter?

For the three months ended 31 March, REA delivered a 23% increase in revenue. And thanks to its operating expenses growing slower than revenue at 17% to $122 million, the company’s EBITDA grew at the quicker rate of 27% to $155 million.

This means that REA’s revenue is now up 32% year to date to $869 million and its EBITDA is up 27% year to date to $523 million including acquisitions. Excluding acquisitions, the company’s revenue is up 23% and its operating EBITDA is up 25% in FY 2022.

A key driver of this growth was its Australian Residential business, which delivered strong quarterly revenue growth thanks to higher buy listings, price rises, increased depth and Premiere penetration, and continued growth in add-on products.

The release also highlights that the flagship realestate.com.au delivered a record average monthly audience for the quarter. The website grew to be Australia’s sixth largest online brand during the quarter, with 12.7 million people visiting each month on average. This represents 63% of Australia’s adult population.

What about the rest of its operations?

Rental revenue also continued to benefit from increased depth penetration and a price rise, though this was more than offset by a decline in rental listings.

REA’s Commercial and Developer revenue was broadly flat. This reflects weaker Developer revenues due to a continued decline in project commencements, which offset improved Commercial revenue from higher depth volumes and price rises.

Finally, the company’s Media, Data & Other revenues increased for the quarter, REA India delivered strong revenue growth, and its Financial Services business delivered strong growth in operating revenue. The latter was due to continued growth in settlements and brokers and the acquisition of Mortgage Choice.

How does this compare to expectations?

As you might have guessed from the REA share price performance today, this quarterly update was softer than the market was expecting.

A note out of Goldman Sachs states: “REA delivered a 3Q22 update that was below expectations, with Sales/EBITDA +23%/+27% vs. pcp and -7%/-6% vs. GSe.”

Management commentary

REA Group Chief Executive Officer, Owen Wilson, was pleased with the quarter. He commented:

“Australians transacted property at pace during the quarter as continued high demand gave sellers the confidence to bring their properties to market. These conditions, combined with record take up of our premium products, contributed to our very strong result. We also continued to see excellent growth in our strategically important Financial Services, Data and Indian businesses.”

Outlook

REA has had a difficult start to the fourth quarter due to the timing of Easter. It explained that national listings were down 8% in April due to a 19% decline in Sydney and an 18% decline in Melbourne.

And with the federal election happening in the coming weeks, REA expects listing volumes to be lower for the quarter.

Nevertheless, the fourth quarter volume headwinds are expected to be more than offset by higher Residential and Commercial yields, supported by contracted price rises and increased depth penetration, the benefit of strong March volumes deferred into Q4, and growth in Data and REA India revenues.

Mr Wilson concluded:

“The Australian property market is very healthy. While we are seeing housing price moderation in some areas, the strong economic fundamentals will continue to support robust conditions beyond this quarter. We are excited by the significant growth opportunities throughout our business and are well positioned to deliver another strong full year result.”

The post REA share price sinks 9% to 52-week low following Q3 update 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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