Tag: Motley Fool

ASX dividend shares can pay an appealing dividend yield. However, larger yields can be more risky if they’re in danger of being cut. How about some stocks that pay high income and they come from resilient sectors?

ASX mining shares can see commodity prices, profits, and dividends bounce around largely due to external factors. BHP Group Ltd (ASX: BHP) is a good example of that.

Retail shares can also see performance ups and downs, particularly in volatile economic times. So I wouldn’t count on them for reliable income every single year either.

But healthcare is a great sector for consistency. People don’t choose when to get sick or injured, as shown in the latest GDP numbers. Households and governments usually place a high importance on healthcare spending. Plus, the healthcare sector also has tailwinds, such as an ageing population and a growing population.

Healthco Healthcare and Wellness REIT (ASX: HCW)

This real estate investment trust (REIT) owns a portfolio of properties across hospitals, aged care and so on.

It targets “stable income characteristics including long leases, contracted rental escalations (including fixed and CPI escalations), sustainable rents and strong tenant covenants.

The business has an occupancy rate of 99% and a weighted average lease expiry (WALE) of around 12 years, which locks in a lot of rental income.

This ASX dividend share pays a distribution every quarter, so it’s delivering pleasing, regular income.

It expects to pay a distribution of 8 cents per security in FY24, which translates into a forward distribution yield of 5.8%. According to the Commsec projection, it could be paying a distribution per unit of 9 cents by FY26, which would be a yield of 6.6%.  

Medibank Private Ltd (ASX: MPL)

Medibank is the largest private health insurer in Australia. A lot of people appear to place a high value on having private health insurance.

It ended FY23 with more than 4 million customers and grew by 11,000 policyholders in that year. In the first four months of FY24, it added another 5,200 policyholders.

Medibank is seeing good growth in its non-resident business, which saw 40% policy unit growth in FY23.

The ASX dividend share is also looking to grow earnings with bolt-on acquisitions.

For example, it recently increased its investment in Myhealth Medical Group, which increased its shareholding from 49% to 90% for around $50.8 million. This move recognised the “critical role GPs play in prevention, early detection and ongoing care and support in the community, including people living with complex and chronic conditions”. It was emphasised that GPs will continue to retain full clinical autonomy and lead the clinical teams.

For the 12 months to June 2023, Myhealth made earnings before interest and tax (EBIT) of $16 million and net profit after tax (NPAT) of $6.1 million.

According to Commsec, the business is projected to pay an annual dividend per share of 16 cents, which would be a grossed-up dividend yield of 6%. By FY26, it could be paying a grossed-up dividend yield of 6.3%, according to the forecast on Commsec.

The post I’d buy these two resilient ASX dividend shares for big income appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 reliable ASX dividend shares to beat inflation
• Want a large and growing dividend? Medibank shares might be the answer
• 3 ASX dividend shares for income investors to buy now
• Brokers say these ASX dividend shares are buys next week
• Morgans says these ASX dividend shares are buys this month

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 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.

from The Motley Fool Australia https://ift.tt/8kGaO5y

We’d all like to live a comfortable life in retirement, and we may need our assets to last a number of decades. I’m going to tell you why I think a couple of leading ASX-listed exchange-traded funds (ETFs) could be the right choice for retirees.

I’d guess plenty of retirees have money invested in property, ASX bank shares and even a small number of high-risk, high-return mining and energy shares. There are a lot of other businesses that could deliver better returns and give diversification.

I’m not suggesting people need to become full-time fund managers. Instead, ASX ETFs – which give us exposure to a group of companies in a single investment – could be the answer. Plenty of them are invested in international businesses too, giving exposure away from Australia.

Imagine having ETF investments worth $100,000. If they go up 10% over a year, the end result would be $110,000. Selling $5,000 would equate to a yield of 5% on the starting balance, and the investor would be left with $105,000. Of course, with the share market, we might see an 18% rise in one year and a 10% fall the next year – we can’t know what’s going to happen in the next 12 months.

The lower the ‘yield‘ we take, the more sustainable it is likely to be when the bad years are included over a longer time period. If an ETF goes up 15% in one year, I would not bet on it rising another 15% in the next year. That’s why I’d look at something like 4% to up to perhaps 6% as the target withdrawal yield.

Here are two ASX ETFs that I think would work well in retirement.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

This fund invests in (US-listed) businesses that have very strong competitive advantages, or economic moats, which give them the ability to outperform their peers. There are a number of different moats, including brand power, patents, licences, cost advantages, network effects, switching costs (for customers) and more.

The MOAT ETF specifically looks for companies that Morningstar analysts think have economic moats that will endure for 10 to 20 years.

Once it establishes a watchlist of these advantaged companies, the ASX ETF will invest only if a company is trading at a valuation cheaper than what the analysts think is a fair price.

Since this fund’s inception in June 2015, it has returned an average of 15.5% per annum.

VanEck MSCI International Quality ETF (ASX: QUAL)

This fund is invested in 300 companies from across the globe. To qualify for this portfolio, companies have to rank well on three things – earnings stability, a high return on equity (ROE), and low financial leverage.

In other words, it suggests they make high profits for how much shareholder money is retained in the business, they don’t typically see large, negative earnings shocks, and they have strong balance sheets.

When you put these factors together, the ASX ETF is typically going to invest in companies that do very well over time.

At the moment, the biggest positions are names like Nvidia, Microsoft, Meta Platforms and Apple.

300 businesses in a single investment is a lot of diversification, but it hasn’t dampened the returns. Since its inception in October 2014, the QUAL ETF has returned an average of 16.7% per annum.

Foolish takeaway

Share markets have performed strongly over the last 14 months – this recovery has shown why it’s a good idea to invest when there’s fear around.

I wouldn’t expect the next 12 months to show huge returns, but I think both of these ASX ETFs are capable of producing very good returns over the next three to five years and the longer term.

The post 2 excellent ASX ETFs I’d buy for retirement appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 excellent ASX ETFs for beginner investors
• 8 popular ASX ETFs smashing new 52-week highs
• 5 ASX shares I think you can confidently invest $500 in right now
• Don’t miss out on these 3 excellent ASX ETFs in February
• 2 ASX ETFs I wish I’d bought for my portfolio

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. 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 Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia has recommended Apple, Meta Platforms, Nvidia, and VanEck 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.

from The Motley Fool Australia https://ift.tt/gr8v16T

Audinate Group Ltd (ASX: AD8) shares are catching the eye on Monday morning.

At the time of writing, the ASX 300 stock is up a sizeable 17% to a record high of $18.75.

This follows the release of the media networking solutions provider’s half-year results.

ASX 300 stock delivers record result

• Revenue up 47.7% to US$30.4 million (A$46.6 million)
• EBITDA up 137% to A$10.1 million
• Net profit after tax of A$4.7 million (compared to loss of A$0.4 million)
• Operating cash flow up 18% to A$11.8 million
• Cash and equivalents balance of A$111.7 million

What happened during the half?

For the six months ended 31 December, Audinate reported a 47.7% increase in revenue to a record of US$30.4 million.

A key driver of this growth was revenue from Chips, Cards and Modules (CCM), which grew 45.6% to US$22.7 million.

Among the highlights were its Brooklyn modules and Ultimo chips, which grew revenue by 50% and over 200%, respectively. The latter was boosted by easing supply constraints, which allowed the ASX 300 stock to satisfy a backlog of pent-up demand. Management expects Ultimo revenue growth to revert to a lower rate in the second half.

Also performing positively was its Software business, which reported revenue growth of 56.2% to US$7.3 million. The products primarily responsible were IP Core (up ˜100%), Dante Embedded Platform (up ˜75%), and retail software sales (up ˜60%).

Audinate’s gross margin percentage increased to 71.8% from 71.2% in the previous corresponding period, held back by the fulfilment of pent-up Ultimo demand. Further improvements in margin are expected in the second half due to cost reduction initiatives and favourable product mix shift.

EBITDA more than doubled during the half and came in at a record of A$10.1 million. This was driven by strong sales growth and an improving EBITDA margin despite an increase in its headcount from 186 to 204.

The company also invested in new products during the half. Management highlights that it achieved significant new product milestones with its Dante Connect product. In addition, momentum has continued to build with its video solutions business, with 50 manufacturers now licensing its offerings (up from 30 a year ago).

Management commentary

Audinate’s co-founder and CEO, Aidan Williams, commented:

Our first half results have again been excellent as the business was able to fully satisfy the demand for Dante products free from recent constraints. It was an outstanding result to achieve our aim of a cumulative ecosystem of >30,000 video products ahead of schedule, and I look forward to further successes over the remainder of FY24.

Outlook

While no guidance was given for the full year, management remains cautiously optimistic on its outlook. It said:

The Company continues to be watchful of potential softening global economic conditions over the rest of FY24. Improving supply chain conditions and shorter lead times for our customers result in a reduced sales order backlog, complicating management of any softening in economic conditions. The Company continues to explore several M&A opportunities, buoyed by a stronger balance sheet from the capital raise.

This ASX 300 stock is now up over 130% since this time last year.

The post Guess which ASX 300 stock is rocketing 17% after record half appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• True blue tech: The ASX shares I’d buy to build a Nasdaq index-inspired portfolio

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

from The Motley Fool Australia https://ift.tt/qmB9LZ1

I love the idea of investing in S&P/ASX 200 Index (ASX: XJO) shares for my child. Buying shares with young children in mind is a long-term focus as it’s still many years until they become adults. That leaves plenty of time for compounding to do its wonderful thing.

Investing in the right exchange-traded fund (ETF) can come with pleasing capital growth. But I think some particular individual names have a lot more growth potential.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is an affordable jewellery retailer with over 100 stores in Australia and more than 800 stores globally.

The business makes a good profit from its typical store, and it doesn’t cost much to open a new store because of how low-cost the products are to produce.

Therefore, the company’s store rollout program is key to its long-growth outlook. In FY23 it added 172 net stores.

The ASX 200 share has only just entered a number of markets including Canada, Mexico, Spain, Hong Kong, Taiwan, China and Vietnam. When you look at the potential of those new markets, the US and other existing markets, they add up to a huge addressable market for Lovisa.

If the business can keep adding more than 100 extra stores to its network each year, I think its overall sales and net profit after tax (NPAT) can keep scaling. In ten years, I think Lovisa could become a much bigger business.

The broker UBS estimates Lovisa could generate earnings per share (EPS) of $1.52 in FY28, which suggests it could be valued at 16 times FY28’s estimated earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is an ASX 200 share that specialises in restoring buildings and contents after insured events, including fire, storms, flooding and so on.

The business is expanding in a number of different ways, which I think will help it deliver impressive profit growth and, hopefully, share price growth.

This ASX 200 share can grow its core business geographically – it’s already working on growing in countries beyond Australia – at this stage, it’s in the US and it recently entered New Zealand. The company has indicated more geographic growth could occur.

It’s working hard on expanding its catastrophic response services, which saw revenue growth of more than 100%. This is a natural fit with its core work.

I’m also excited by the synergies that John Lyng is creating by expanding into other areas where it can bring its expertise and cross-sell. It’s making acquisitions in the body corporate/strata management space. Another growth area it has recently expanded into includes smoke alarms, fire, gas, and electrical testing and compliance.

If all of these divisions can keep growing for a number of years, Johns Lyng can become a much bigger business and make much more profit in the coming years.

The post 2 ASX 200 shares I’d buy for my child and hold ’til the 2030s appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• I’ve made 40% in 3 months on this ASX 200 stock, I still think it’s a buy
• 5 things to watch on the ASX 200 on Monday
• ASX passive income: How much should you invest to earn $1,000 every month?
• Top brokers name 3 ASX shares to buy next week
• Could Lovisa shares help you become a millionaire?

Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and Lovisa. The Motley Fool Australia has recommended Johns Lyng Group and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/yQmHhUI

The fund manager L1 has told investors about three ASX shares that it owns which it thinks are exciting.

Often, investors like to look at technology businesses as ones that can outperform. But, there are other sectors that can also help our portfolios beat the market. Without a crystal ball, we can’t know for sure which stocks are going to do great. But, L1 thinks the below names are compelling ideas.

Newmont Corporation CDI (ASX: NEM)

L1 noted that Newmont shares had fallen recently because of expectations that the ASX gold share‘s 2024 production volumes dropped due to a number of operational downgrades across the portfolio.

The most recent downgrade was with the Telfer and Brucejack mines being temporarily suspended due to environmental and operating safety issues.

That’s not exactly a positive picture, is it?

L1 expects much of this near-term operating weakness will be “transitory and supportive of Newmont’s strategy to focus on execution at its large, low-cost and high free cash flow generative assets, while divesting smaller operations to simplify the portfolio.”

After the acquisition of Newcrest, Newmont is the largest gold producer in the world. L1 points out the ASX gold share has an extensive portfolio of tier one mines with several development-ready growth assets that can support production growth in the next few years.

As an added bonus, the ASX mining share has “strong exposure” to copper, with annual copper production of around 150kt.

Nexgen Energy (Canada) CDI (ASX: NXG)

Nexgen is a Canadian uranium miner which is benefiting from a strengthening price.

According to L1, the uranium price recently reached a 15-year high as medium-term demand tailwinds indicated the possibility of “material, potential supply deficits by the end of this decade.”

The fund manager noted this sentiment was further amplified because the world’s largest uranium producer called Kazatomprom (which supplies a fifth of global supply) revealed a downgrade to its 2024 production expectations. L1 says this shows the “fragility of current supply”.

NextGen is working on plans to develop the world’s largest uranium deposit, called Arrow, which is located in Saskatchewan in Canada.

L1 then said it “would be a major, new, strategic Western source to address the anticipated market deficit. At the current uranium spot prices, Arrow, once developed, has the potential to generate more than C$2 billion of cash flow per annum.”

Resmed CDI (ASX: RMD)

Resmed has certainly been one of the ASX shares that have received a lot of investor attention over the last several months. Incredibly, Resmed shares are up around 4% over the past six months, despite the uncertainty surrounding the ASX healthcare share.

This company is a large manufacturer of continuous positive airway pressure (CPAP) machines and masks to treat sleep apnea.

The fund manager noted that the company recently reported its FY24 second quarter that included a gross profit margin which saw improvement that was better than expected. This update reportedly “allayed fears over the impact of GLP-1 weight loss drugs.”

L1 decided to buy shares in September 2023 after talking with more than 20 sleep physicians and distributors. The fund manager decided that weight loss drugs are “manageable” and the stock was “oversold”.

The investment team attended the JP Morgan conference in San Francisco, where Resmed presented its own analysis of the GLP-1 sleep impact, which confirmed L1’s views.

While the Resmed share price has climbed, it is/was trading at a discount of more than 20% to the ASX share’s historic average forward price/earnings (P/E) ratio.

The post 3 ASX shares this fund manager thinks are compelling buys right now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up this week
• Morgans says these ASX 50 shares are strong buys
• 5 ASX shares I think you can confidently invest $500 in right now
• 5 things to watch on the ASX 200 on Thursday

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

from The Motley Fool Australia https://ift.tt/YIOksVq

The JB Hi-Fi Limited (ASX: JBH) share price is having a strong start to the week.

In morning trade, the retail giant’s shares are up 5% to $59.57.

Investors have been buying the company’s shares following the release of its half-year results.

JB Hi-Fi share price jumps on half-year results

For the six months ended 31 December, JB Hi-Fi reported:

• Total sales down 2.3% to $5.16 billion
• Earnings before interest and tax (EBIT) down 20% to $386.7 million
• Net profit after tax down 20% to $264.3 million
• Earnings per share of 241.8 cents
• Interim dividend down 20% to 158 cents per share

What happened during the half?

During the first half, JB Hi-Fi reported a modest 2.3% decline in total sales to $5.16 billion.

This was driven by a 9.9% decrease in The Good Guys sales to $1.39 billion, which offset a 0.7% increase in JB Hi-Fi Australia sales and a 5.1% lift in JB Hi-Fi New Zealand sales.

In respect to The Good Guys business, its dominant Home Appliance categories remained resilient, but the Consumer Electronics categories were softer as they cycled elevated demand in the prior corresponding period.

Over at the key JB Hi-Fi Australia business, its modest sales growth reflects continued customer demand for technology and consumer electronics products, supported by well-executed Black Friday and Boxing Day promotional periods.

On the bottom line, JB Hi-Fi’s net profit after tax was down 20% to $264.3 million for the half. This was driven largely by margin weakness due to inflationary cost pressures.

How does this compare to expectations?

While the company may have posted a sharp decline in profits, it was still well ahead of expectations. This explains why the JB Hi-Fi share price is charging higher today.

Commenting before the results, Morgans was spot on with its suggestion that the company could surprise to the upside. It said:

We think there’s a good chance JB Hi-Fi could surprise positively in its 1H24 result. We forecast EBIT of $371.0m, 4% above consensus of $358.2m.

Management commentary

JB Hi-Fi’s Group CEO, Terry Smart, was pleased with the company’s performance. He said:

We are pleased with our performance as we cycled the elevated customer demand in the prior year. As expected, we saw the trading environment become more challenging, marked by heightened competitive activity and increased on-floor discounting. Our focus remained on maximising customer demand through delivering consistently high levels of customer service and driving best value for our customers.

Outlook

No guidance has been given but management has provided a trading update.

During January, JB Hi-Fi Australia sales were up 2.5% with comparable sales growth of 1.7%, JB Hi-Fi New Zealand sales were up 8.2% but comparable sales were down -4.1%, and The Good Guys sales down 2.2% with comparable sales down 2.2%.

Terry Smart adds:

In a challenging retail environment, we continue to adapt and innovate to maximise the opportunities it gives us. Our unwavering focus on delivering value for our customers by leveraging our established and proven low-price market position and providing exceptional customer service continues to ensure we remain top of mind for shoppers. This strategy not only ensures our continued relevance to our loyal existing customers but also drives the expansion of our market share.

The JB Hi-Fi share price is up 33% since this time last year.

The post JB Hi-Fi share price jumps 5% after smashing first-half earnings estimates appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Monday
• History shows 2024 could be a big year for ASX 200 shares. Here are 3 to look at now
• Buying ASX retail shares? You’ll want to see these numbers
• 3 ASX 200 dividend shares I think you could safely hold for decades
• Here are the top 10 ASX 200 shares 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 Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/MJANm6F

The CAR Group Limited (ASX: CAR) share price is edging lower on Monday morning.

In early trade, the auto listings company’s shares are down 0.5% to $33.31.

This follows the release of the company’s half-year results.

CAR Group share price falls on results

Here’s a summary of how the company performed during the first half compared to the prior corresponding period:

• Adjusted revenue up 60% to $531 million
• Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) up 56% to $277 million
• Adjusted net profit after tax up 34% to $163 million
• Reported net profit down 72% to $117 million
• Partially franked interim dividend up 21% to 34.5 cents

What happened during the half?

For the six months ended 31 December, Car Group reported a 60% jump in revenue to $531 million. This was driven by double-digit revenue growth in all key markets through strong execution of its strategy.

In addition, the company’s results were boosted by transformative acquisitions in the US and Brazil made in the last financial year.

And given the more complex macroeconomic environment the company was operating in, management believes it demonstrates the strength and resilience of the group’s diversified business model and the value it provides to its customers.

It also believes it highlights the significant long term growth opportunity in the group’s large and under penetrated markets.

On the bottom line, Car Group’s adjusted net profit after tax was up 34% to $163 million and its reported net profit was down 72% to $117 million. The latter reflects the recognition of a $333 million gain on acquisition of Trader Interactive in the previous year.

How does this compare to expectations?

While strong on paper, Car Group’s results was largely in line with expectations and likely already priced in. This may explain why its share price is having a subdued session.

Goldman Sachs commented:

CAR reported a 1H24 result in-line with GSe with 1H24 Sales/EBITDA/NPAT growing +60%/+56%/+34% (incl. acquisitions) vs. pcp to A$531mn/A$277mn/A$163mn, which was +2%/+0%/+0% vs. GSe, with strength in Australia (particularly media) and Korea.

Management commentary

CAR Group’s CEO, Cameron McIntyre, was pleased with the half. He commented:

CAR Group has had an excellent first half of the financial year. With the completion of the acquisitions of Trader Interactive and webmotors last year, we have accelerated our growth strategy and are executing on key strategic priorities across the group. Our Brazilian business, webmotors delivered exceptional revenue and earnings growth in the first full six months of majority ownership.

Our financial results reflect the significant progress that has been made in delivering on our key strategic priorities and the resilience of our business through economic cycles. We have achieved double digit revenue and earnings growth in all of our key markets, demonstrating the strength of our business model as customers continue to prioritise our premium advertising products in a more challenging macro environment.

Outlook

While no firm guidance was given for the full year, management has laid out its expectations.

On a pro forma basis, it expects “to deliver good growth in Revenue and EBITDA in FY24.”

Whereas on an actual basis, it is expecting “very strong growth in Revenue and Adjusted EBITDA and strong growth in Adjusted NPAT in FY24.”

Positively, it also expects “to see expansion in the CAR Group EBITDA margin on a proforma basis in FY24.”

The Car Group share price is up 48% over the last 12 months.

The post Car Group share price falls despite 32% first-half earnings jump appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• CSL share price sinks 6% on major trial failure
• Are Wesfarmers shares a good long-term buy?
• These are the 10 most shorted ASX shares
• 1 ASX dividend stock down 60% to buy right now
• I think this ONE factor gives ASX shares a huge chance to make big returns

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 Goldman Sachs Group. The Motley Fool Australia has recommended Car Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/mgWRFap

The CSL Ltd (ASX: CSL) share price is under pressure on Monday.

In morning trade, the biotechnology company’s shares are down 6% to $286.14.

Why is the CSL share price falling?

Investors have been hitting the sell button this morning after CSL released disappointing trial results for its highly anticipated CSL112 product.

The company has been undertaking the Phase 3 AEGIS-II trial evaluating the efficacy and safety of CSL112 compared to placebo in reducing the risk of major adverse cardiovascular events (MACE) in patients following an acute myocardial infarction (AMI).

According to the release, while there were no major safety or tolerability concerns with CSL112, unfortunately, the study did not meet its primary efficacy endpoint of MACE reduction at 90 days.

As a result, CSL revealed that there are no plans for a near-term regulatory filing. Which is a big blow given how analysts have previously estimated that CSL112 could pull in peak sales of US$3 billion per year.

This isn’t goodbye

While CSL isn’t pushing ahead with a near term regulatory filing, it isn’t necessarily saying goodbye to CSL112 just yet.

The company’s Head of R&D, Dr Bill Mezzanotte, commented:

Substantial work remains to fully analyse and understand the complete data and then to determine any development path ahead for this asset. We thank all the patients, families, caregivers, and investigators for their support and participation in the AEGIS program.

AEGIS-II is the most ambitious study in our company’s history and we are proud of the quality of the study we delivered and the enhanced capabilities we developed to do so. We plan to apply these capabilities as well as our plasma protein platform to future unmet medical need in cardiovascular and metabolic conditions as well as those in our other strategic therapeutic areas.

The post CSL share price sinks 6% on major trial failure appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 things ASX investors should watch this week
• Own CSL shares? What to expect from its half-year results
• Here’s how the ASX 200 market sectors stacked up this week
• Morgans says these ASX 50 shares are strong buys
• Up 28% since October, why are CSL shares attracting regulator scrutiny?

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

from The Motley Fool Australia https://ift.tt/iOY6QAa

The Wesfarmers Ltd (ASX: WES) share price has been a solid performer in the last few months, despite challenging economic conditions. It’s up more than 14% in the past six months.

The company is one of my blue-chip favourites. It usually offers an appealing mix of earnings growth and a decent dividend yield.  

What does this business do?

Wesfarmers is the parent company of a number of different well-known brands including Bunnings, Kmart, Officeworks, Target, Catch and Priceline.

It has a chemicals, energy and fertilisers business called WesCEF, and it also owns a few other industrial businesses, including Blackwoods and Coregas.

The company recently made acquisitive moves in the healthcare sector with deals to buy Silk Laser Australia and Instantscripts. These were logical bolt-on acquisitions for the Australian Pharmaceutical Industries/healthcare division, which includes Priceline and Clear Skincare Clinics.

Are Wesfarmers shares a good long-term buy?

There are two main elements that make me believe it’s a star ASX blue-chip stock.

First, the strength and diversification of its businesses are impressive to me.

Bunnings, Kmart and Officeworks are what I’d consider market leaders. And owning the best brands can come with a number of advantages, in my opinion.

A major strength of Wesfarmers is its ability and flexibility to buy different businesses in various industries. This allows it to find the best opportunities anywhere in the economy and apply its expertise and scale.

The other positive I want to point to is the company’s impressive financials.

What I particularly like is the return on equity (ROE) and return on capital (ROC). It shows it’s very profitable for the money it retains, and bodes well for medium-term growth (and Wesfarmers shares) if it can keep making those sorts of internal returns.

In FY23, Wesfarmers as a whole generated a ROE of 31.4%, which is a fantastic level of profitability. The company does pay attractive dividends, but I’d point out that it makes such good money on retained profit it would be vindicated to retain and invest more.

The company’s biggest and most profitable divisions – Kmart and Bunnings – earn excellent returns. Bunnings reported a ROC of 65.4% in FY23, and Kmart Group reported a ROC of 47%.

To me, those numbers justify the business trading on the price/earnings (P/E) ratio that it does. According to Commsec, Wesfarmers shares are currently valued at 27x FY24’s estimated earnings.

The post Are Wesfarmers shares a good long-term buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ASX stocks that could explode in February
• Own Wesfarmers shares? Here’s your half-year results preview
• Would I be crazy to buy Wesfarmers shares at $58?
• Beginner investors: 5 top Aussie stocks I’d buy for 2024
• Where I’d invest $2,000 in ASX 20 shares today

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

from The Motley Fool Australia https://ift.tt/DhiBPEt

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) is still the most shorted ASX share with short interest of 20.6%, which is up slightly week on week. Short sellers continue to target the lithium miner due to weak battery materials prices.
• Syrah Resources Ltd (ASX: SYR) has short interest of 18.5%, which is up week on week again. Weak graphite prices have weighed heavily on its operations and balance sheet.
• Core Lithium Ltd (ASX: CXO) has short interest of 12.7%, which is down slightly week on week. This lithium miner’s shares are down over 80% since this time last year, much to the delight of short sellers.
• Sayona Mining Ltd (ASX: SYA) has 11.7% of its shares held short, which is up week on week again. Short sellers have been loading up on this lithium miner’s shares after it revealed costs that were significantly higher than the price it was receiving for its product.
• IDP Education Ltd (ASX: IEL) has 9.9% of its shares held short, which is down week on week. Short sellers appear to be betting that the loss of its monopoly in Canada and student visa changes will mean IDP Education underperforms expectations.
• Deep Yellow Limited (ASX: DYL) has seen its short interest rise to 9.3%. Short sellers don’t appear to believe that uranium prices will remain as strong as the market expects.
• Genesis Minerals Ltd (ASX: GMD) has seen its short interest rise to 9.3%. This seems to be because of concerns over integration risks from recent acquisitions.
• Chalice Mining Ltd (ASX: CHN) has short interest of 9.1%, which is up strongly week on week. Short sellers appear to believe that capital raisings will be required in the near term.
• Weebit Nano Ltd (ASX: WBT) has short interest of 8.7%, which is up week on week again. This semiconductor company recently reported quarterly revenue of less than $0.5 million. It ended last week with a market capitalisation of $700 million.
• Flight Centre Travel Group Ltd (ASX: FLT) has 8.4% of its shares held short, which is flat week on week. Short sellers may believe the market is too optimistic on the travel agent’s growth and revenue margin assumptions.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These top ASX growth shares can rise 30% to 40%
• Shares vs. property: Beginner investors choosing Aussie shares, ASX ETFs and rentvesting
• 6 oversold ASX shares to buy in February 2024
• Why are ASX uranium shares getting thumped on Friday?
• Is Flight Centre about to regain ASX dividend share status?

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 Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/kxVacS9