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The Nickel Mines (ASX: NIC) share price is falling today amid an update on its Oracle Nickel Project.

Nickel Mines shares are currently trading on the ASX at $1.17, a 2.5% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 1% at the time of writing.

Let’s take a look at what is happening at Nickel Mines.

Oracle nickel project

Nickel Mines advised the company’s Oracle Nickel Project in Indonesia has been granted corporate tax relief. The project is under construction at the Indonesia Morowali Industrial Park in Central Sulawesi, Indonesia.

Nickel mines signed an agreement with partner Shanghai Decent Investment to acquire a 70% interest in the project in December. In February, the miner completed the acquisition of an initial 10% interest in the project.

The venture has been granted tax concessions for 10 years of production plus a further 2 years at 50% of the corporate Indonesian tax rate.

Nickel Mines managing director Justin Werner said the Oracle Nickel Project has made “tremendous progress” since December.

All 12 of our RKEF lines that are either in operation, commissioning or under construction have been granted these tax concessions in recognition of meeting the expenditure and investment conditions set by the Indonesian government.

These tax concessions along with the very low levels of sustaining capex required by our RKEF operations have resulted in 97%-99% EBITDA to free cash flow conversion over the course of 2021.

Nickel Mines hopes to complete its 70% stake in the project by the end of the year.

Last week, the Nickel Mines share price had a turbulent week. The company’s shares have fallen 29% from market close on Monday 7 March to their current price.

As my Foolish colleague Tristan reported, the company addressed media speculation regarding a short position in LME nickel held by the Tisinghan group.

Nickel Mines also withdrew a share purchase plan after receiving applications totalling $57 million. The company had been aiming to raise $18 million.

Last week, the London Metal Exchange suspended trading in nickel after record price increases on commodity markets.

Nickel mines on the ASX snapshot

The Nickel Mines share price has plunged around 17% in the past year, dropping 18% year to date.

In the past month, the miner’s shares have taken an 18% hit, sliding 29% in the past week alone.

For perspective, the benchmark ASX index has returned around 5% over the past year.

The post Nickel Mines (ASX:NIC) share price slides despite Indonesian project update appeared first on The Motley Fool Australia.

More reading

• 5 ASX shares making unbelievable news this week
• These were the worst performing ASX 200 shares last week
• These 3 ASX 200 shares are topping the volume charts this Friday
• Why Core Lithium, Nickel Mines, SG Fleet, and Whitehaven Coal are pushing higher
• ASX 200 (ASX:XJO) midday update: Block falls, Nickel Mines jumps

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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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.

The past few months have not been friendly to high-multiple, high-growth tech stocks. Soaring inflation has pushed the Fed to plan to raise interest rates this year, sparking a sell-off into safer assets. Add in the recent geopolitical turmoil, and we have the ingredients for major uncertainty in the stock market. 

Streaming platform Roku (NASDAQ: ROKU) has been severely affected and its stock has been in a downward spiral since last July. Roku’s share price has fallen roughly 50% so far in 2022, as overall market pessimism continues hammering the stock. The company is also facing its own set of problems, giving investors lots to think about. 

Should you scoop up discounted shares in this streaming business today? Let’s take a closer look.

Roku is dealing with inflation 

Like the rest of the economy, Roku is facing inflationary pressures and supply-chain issues relating to the company’s sale of media sticks. While hardware sales only represented 17% of the business in 2021, over the past three quarters, Roku has posted a widening loss — a negative 28.4% in the most recent quarter on a gross margin basis. Management has decided not to pass on higher component costs to customers. 

Roku’s licensed TV partners are also trying to navigate the situation. “Similar to Q3, overall U.S. TV unit sales in Q4 fell below pre-COVID 2019 levels,” Anthony Wood, Roku’s founder and CEO, highlighted in the shareholder letter. These inventory challenges are clearly hurting sales figures. Since Roku’s main objective is to get its operating system into as many households as possible, any headwind to achieving this certainly hurts company performance.  

In 2021, 83% of Roku’s overall sales came from its platform segment, which includes high-margin advertising and subscription fees. This is the bread and butter of the business, but even it is struggling in the current economic environment. Organizations that advertise on Roku’s platform, particularly in industries like autos and consumer packaged goods, pared back ad spend in the fourth quarter due to their own supply chain disruptions. 

Although Roku increased revenue 33% in Q4 2021, the growth rate missed Wall Street expectations. Furthermore, first-quarter 2022 guidance of 25% year-over-year sales growth disappointed as well. Higher component costs and ongoing supply-chain challenges will continue to negatively affect Roku in the near term, so investors shouldn’t be surprised if the player segment’s gross margin remains negative in the next few quarters. 

On a positive note, I believe that these issues will prove to be temporary. And the market’s pessimism on Roku provides a great buying opportunity for investors. 

The future still looks promising 

If we zoom out and focus on the bigger picture, we’ll see that Roku is in a prime position to benefit from the world’s transition away from traditional cable TV and toward streaming entertainment. 

Roku is the top streaming platform in the U.S., Canada, and Mexico by hours streamed. In 2021, Roku’s 60.1 million active accounts (up 17% year over year) viewed 19.5 billion hours (up 15% year over year) of content. And monetization continues showing strength. Average revenue per user of $41.03 over the trailing 12 months was up 43% compared to the prior-year period.  

There are 1 billion cable-TV subscriptions worldwide, signaling a massive opportunity ahead for Roku. On a micro level, Roku’s management cites Nielsen data that shows that the average household in the U.S. watches eight hours of TV per day. And Roku’s average active account streams 3.6 hours per day, leaving room for engagement to grow in order to control more TV time. 

And as more TV time goes to streaming, advertising dollars will ultimately follow. According to eMarketer, connected-TV ad spending in the U.S. is forecast to exceed $30 billion in 2025, increasing its share of total digital ad spending. Roku is in an extremely advantageous position to capitalize on this trend. 

Valuation is at a three-year low

Roku’s stock is now trading for 5.7 times 2021 revenue. This is the lowest multiple shares have sold for in about three years. The market has completely thrown out Roku with other tech stocks. But this business is a huge leader in the streaming space, and it also has the chance to capture a big chunk of ad dollars that will inevitably flow to connected TV over the next decade. 

With a more attractive valuation today and a long-term thesis that remains intact, Roku’s stock looks like a screaming buy right now. 

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

The post Down 50% in 2022, should you buy this top streaming stock right now? appeared first on The Motley Fool Australia.

More reading

• 2 ASX lithium shares that brokers rate as buys with huge upside potential
• Nickel Mines (ASX:NIC) share price slides despite Indonesian project update
• Woodside (ASX:WPL) share price slips but CEO says Ukraine puts ‘spotlight’ on natural gas
• ASX 200 (ASX:XJO) midday update: Elders jumps, Magellan and Zip tumble
• The CBA (ASX:CBA) share price has gone nowhere in 10 months… time to buy?

Neil Patel owns Roku. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Roku. 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.

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

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A message from our CIO, Scott Phillips:

“G’day Fools. If you’re like us, you’re dismayed by the events taking place in Ukraine. It is an unnecessary humanitarian tragedy. Times like these remind us that money is important, but other things are far more valuable. And yet the financial markets remain open, shares are trading, and our readers and members are looking to us for guidance. So we’ll do our best to continue to serve you, while also hoping for a swift and peaceful end to war in Ukraine.”

————

Even though it’s only around lunchtime, the Woodside Petroleum Limited (ASX: WPL) share price has already had a wild ride so far during today’s trading. At present, Woodside shares are down 0.63% at $31.78. But soon after market open, Woodside shares were up, and up convincingly. After opening at a flat $32 a share after closing at $31.98 last week, Woodside quickly rose as high as $32.49 in the first hour or two of today’s session. That was a gain close to 1%. But it wasn’t to last.

So what on earth is going on here? After all, oil prices have started the week on the rise. As my Fool colleague James covered this morning, oil was up more than 3% overnight, although that was after a week of heavy falls last week. So it could be some deeper issues that investors are having with the global ructions in the energy market that are currently playing out.

According to a report in The Australian today, Woodside CEO Meg O’Neill reckons the spotlight is now on natural gas, particularly in light of the war in Ukraine. Not only have oil prices exploded in recent weeks, largely due to the fallout from the war, but gas prices have followed suit.

Woodside share price falls, but CEO says gas is the future

O’Neill told the Australian that 20-25% of Woodside’s LNG (liquified natural gas) production in 2022 will be sold at spot prices, which means the company will benefit well from the rising prices. Unfortunately, she doesn’t believe Woodside is in a position to meaningfully make up any shortfalls in the European gas market that have resulted from the sanctions that European nations are placing on Russia: “the transportation costs just make it uneconomic”.

However, she is more excited about the role Woodside can play in helping wean Japan off Russian gas. Japan, the third-largest economy in the world, reportedly “buys between 20 and 25 per cent of Russia’s LNG exports”. Here’s what O’Neill had to say about that opportunity:

What the Japanese do in the short term is a little hard for me to say. Long term, I think Japan will be looking to the question of where should they get their energy from and they will be leaning more towards countries like Australia.

Even though Woodside shares have had a tough day today, the ASX 200 energy giant is still up almost 40% in 2022 so far.

At the current Woodside share price, the oil company has a market capitalisation of $31.01 billion, with a dividend yield of 5.85%.

The post Woodside (ASX:WPL) share price slips but CEO says Ukraine puts ‘spotlight’ on natural gas appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Why are ASX 200 oil shares taking such a beating today?
• Why Newcrest, Nickel Mines, Rio Tinto, and Woodside shares are dropping today
• Woodside (ASX:WPL) share price tumbles but boss sees ‘a change with us for decades’

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 Bruce Jackson.

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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a strong gain. The benchmark index is currently up 1.1% to 7,142.8 points.

Here’s what is happening on the ASX 200 today:

Elders shares jump

The Elders Ltd (ASX: ELD) share price is shooting higher today after the release of a trading update. The agribusiness company revealed that trading conditions have been strong during the first half. As a result, it is expecting its underlying earnings before interest and tax (EBIT) to increase by 20% to 30% in FY 2022.

Magellan funds under management fall again

The Magellan Financial Group Ltd (ASX: MFG) share price is under pressure again on Monday. The fund manager’s shares dropped to a multi-year low after it revealed a 10.5% reduction in its funds under management since 25 February. At the close of US trading on Friday 11 March, Magellan had funds under management of approximately $69.1 billion. This compares to $77.2 billion late last month. Its poor performing global fund weighed heavily on its funds under management again.

CSL higher on plasma collection optimism

The CSL Limited (ASX: CSL) share price is rising today. This appears to have been driven by optimism that plasma collections are improving. A note out of Citi highlights that industry data is pointing to a recovery in collections. So much so, it is forecasting 2022 collections to be above pre-pandemic levels. The broker expects this and the completion of its acquisition of Vifor Pharma to support its shares in the coming months. Its analysts have a buy rating and $335.00 price target on its shares.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Elders share price with an 11% gain. This follows the release of its impressive trading update this morning. The worst performer has been the Zip Co Ltd (ASX: Z1P) share price with a 3% decline. Zip’s shares are now down 65% in 2022.

The post ASX 200 (ASX:XJO) midday update: Elders jumps, Magellan and Zip tumble appeared first on The Motley Fool Australia.

More reading

• 2 punished ASX shares that don’t deserve to be (and experts are buying)
• Why is the Elders (ASX:ELD) share price jumping 11% to a decade-high?
• Magellan (ASX:MFG) share price hits multi-year low after fund outflows accelerate
• Down 14% in a month, why the Pilbara Minerals (ASX:PLS) share price is attractive right now: analyst
• $20k invested in these ASX shares 10 years ago is now worth…

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. owns and has recommended CSL Ltd. and ZIPCOLTD FPO. The Motley Fool Australia has recommended Elders Limited. 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 Commonwealth Bank of Australia (ASX: CBA) share price has amassed a reputation as a winner on the S&P/ASX 200 Index (ASX: XJO). It’s hard not to do so when CBA shares have outstripped the performance of all of your ASX banking peers in recent years. Indeed, the CBA share price is the only one out of the ASX 200 big four banks to have enjoyed a new all-time high in the past 7 years or so. 

But CBA’s march has certainly slowed in recent months. At the time of writing, CBA shares are sitting at $101.15. That’s up a healthy 1.78% so far today. Alas, that’s pretty much the same level they were commanding in May last year, a good 10 months ago. And we haven’t seen the CBA share price get close to its all-time high of $110.19 that we saw late last year for a while now.

That represents quite a change of pace for CBA shares. When it last hit an all-time high in November last year, CBA had spent the preceding 12 months rising by more than 57%. That high watermark also represented a 20% premium to where CommBank shares were just before the COVID-induced crash of 2020. And back then, CBA was also at what was then an all-time high.

So now that CBA has been stuck in the mud for a few months, could this be a time to pick up its shares today? Is the CBA share price a buy right now? 

Buy or sell for the CBA share price? Here’s what the brokers say

Broker opinion remains mixed on the CBA share price. Investment bank Goldman Sachs is one such broker who isn’t wild about CBA shares and where they stand today. Upon news that the Bank would be offloading half of its share in China’s Bank of Hangzhou earlier this month, Goldman retained its sell rating on CBA with a 12-month share price target of $82.94. 

This broker reckons there is still too much of a premium priced into CBA shares. It points out that the bank trades expensively compared to its peers. If CBA indeed descends to this pricing level over the next year, investors would be out of pocket by close to 20%. 

But fellow broker Bell Potter disagrees. As my Fool colleague James covered earlier this month, Bell Potter is still buy rated on the CBA share price, with a 12-month share price target of $108. That implies an upside of roughly 7% going forward. This broker is more bullish on CBA’s overall metrics, including return on equity and cash flows.

So one of these brokers is going to be wrong over the coming year. Unfortunately, we don’t know which one yet. But investors will have a clear favourite, I’d wager.

At the current CBA share price, this ASX 200 banking share has a market capitalisation of $172.17 billion, with a dividend yield of 3.72%.

The post The CBA (ASX:CBA) share price has gone nowhere in 10 months… time to buy? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Why has the CBA (ASX:CBA) share price climbed 7% so far this month?
• Own CBA (ASX:CBA) shares? Here’s why the bank’s boss is ‘very optimistic’ for 2022
• Is the Westpac (ASX:WBC) share price the cheapest bank to buy right now?
• Record $36bn in dividends could help ASX share market recovery

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 Bruce Jackson.

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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.

Amazon (NASDAQ: AMZN) announced a 20-for-1 stock split after the market closed on March 9. Typically, a split announcement draws a lot of attention to a stock and Amazon is no exception. 

Despite recent loss-taking by the broad market, Amazon’s shares were up more than 6% on the day following the announcement. That said, a pending split should not be the sole reason investors buy or sell a stock.

Let’s look at some of the details of the announcement and, more importantly, at Amazon’s business prospects to determine if investors should buy its stock before the split.

Amazon announces 20-for-1 stock split 

While Amazon announced the 20-for-1 stock split on March 9, the move will not take effect immediately. Management still needs to gain shareholder approval on a vote slated for May 25. If approved, Amazon will trade on a split-adjusted basis on June 6.  

Note, however, that the change will not increase or decrease shareholder ownership. You will not suddenly own 20 times more of Amazon’s business than before the split. Instead, your current ownership will be sliced more thinly. In the end, shareholders are left with the same magnitude of ownership, split into more pieces. 

Amazon’s business prospects 

Digging into Amazon’s business prospects, investors may find it more exciting than the news of the split. The company has increased revenue from $61 billion in 2012 to $479 billion in 2021. The explosive revenue growth has flowed to operating income, which increased from $676 million to $24.9 billion in that same time.

Amazon has evolved through the years, starting from a tiny bookseller to an e-commerce giant and now much more. Indeed, its more profitable Amazon Web Services segment has grown to an annual revenue run rate of $71 billion as of its quarter ended December 2021. What’s more, Amazon generated over $30 billion in advertising revenue in the trailing 12 months.

It has all crescendoed in excellent shareholder returns and earnings-per-share (EPS) growth. In the last decade, Amazon has compounded earnings per share at a rate of 47.1%. Similarly impressive, its share price has increased by more than 1,500% over that period.

Amazon’s stock price valuation 

Fortunately for potential investors, Amazon has been selling at its lowest price-to-earnings (P/E) ratio in the past five years. The market is concerned about how the economic reopening will affect sales and customer retention at Amazon in the near term. As a result, Amazon is trading at a P/E of 45, down from its peak of over 240 reached in 2018.

Before or after a stock split, Amazon is an excellent stock to buy for long-term investors. Better yet, to minimize the impact from trading activity surrounding the stock split, investors can split their purchase in two, buying half of their allocation before and half after the June 6 inflection point. 

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

The post Should you buy Amazon stock now or wait until after the stock split? appeared first on The Motley Fool Australia.

More reading

• Is Amazon stock a buy now before the 20-for-1 stock split?
• Amazon makes its case to join the Dow
• Amazon (NASDAQ:AMZN) announces US$10b share buyback and 20-for-1 split
• Why Rivian tanked ahead of earnings after the bell
• 3 stocks that could be worth more than Apple by 2035

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Parkev Tatevosian owns Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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If you’re looking for an easy way to invest in international shares for diversification purposes, then exchange traded funds (ETFs) could be the answer.

This is because ETFs allow investors to gain exposure to a large number of international shares through just a single investment.

But which ETFs should you look at? Listed below are three excellent ETFs that could be worth getting better acquainted with this month:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF to look at is the BetaShares Global Energy Companies ETF. This ETF allows investors to gain exposure to the global energy market at a time when oil prices are at multi-year highs. BetaShares notes that the ETF includes energy producers that are larger, more geographically diversified, and more vertically integrated than Australian-listed energy companies. Among its holdings are energy giants such as BP, Chevron, ExxonMobil, and Royal Dutch Shell.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF for investors to look at is the BetaShares NASDAQ 100 ETF. It gives investors exposure to 100 of the largest non-financial companies on the famous Nasdaq index. This includes many of the most iconic companies in the world such as Alphabet, Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. And with the Nasdaq down heavily from its highs, now could be a good time to consider a patient, long term investment in this ETF.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

A final ETF for investors to look at is the VanEck Vectors Morningstar Wide Moat ETF. This Warren Buffett inspired ETF gives investors easy access to companies with sustainable competitive advantages or moats. The fund is currently invested across 46 attractively priced shares boasting these qualities. This includes the likes of Alphabet, Altria, Boeing, Coca Cola, Kellogg Co, Walt Disney, and Warren Buffet’s own Berkshire Hathaway.

The post 3 top international ETFs for ASX investors to look at this month appeared first on The Motley Fool Australia.

More reading

• Here are 3 top ETFs for ASX investors to watch
• Check out these ETFs in March
• 3 excellent ETFs for ASX investors to look at in March
• Are these 2 leading ETFs great buys in March 2022?
• 2 quality ASX shares that have been sold-off

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. owns and has recommended BETANASDAQ ETF UNITS and BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AMP Ltd (ASX: AMP) share price has been on a downwards spiral after announcing its full-year results last month.

The financial services company delivered a mixed performance due to challenging trading conditions for the backend of the financial year.

At the time of writing, AMP shares are swapping hands for 92.2 cents, up 1.32%.

What happened to the AMP dividend?

In an effort to conserve its capital position, the board opted not to declare a final 2021 dividend.

The board noted that to support the transformation of the business going forward, a conservative approach to capital management was best.

As such, shareholders reacted on the day by initially driving up the AMP share price by almost 6%, but this was short-lived. Since 10 February when the company reported its financial scorecard, AMP shares have declined by around 15%.

Internal net cash outflows include the group’s payments such as dividend payments from Australian wealth management.

In FY21, internal AUM decreased to $83 billion from $86.7 billion at FY20. This primarily related to the transition of $9.2 billion from the New Zealand wealth management.

Nonetheless, the board did state that following the completion of the demerger in H1 FY22, AMP’s capital management strategy and dividends will be reviewed.

Previously, AMP declared a special fully franked dividend of 10 cents per share in FY20.

AMP share price snapshot

Over the past 12 months, AMP shares have fallen around 35% in value, with all of these losses coming in 2021. When looking over a 5-year time frame, AMP shares are down more than 80%.

AMP has a price-to-earnings (P/E) ratio of 17.50 and commands a market capitalisation of roughly $2.97 billion.

The post Has the AMP (ASX:AMP) dividend gone the way of the dodo? appeared first on The Motley Fool Australia.

More reading

• The AMP (ASX:AMP) share price has dumped 16% in under 4 weeks. What’s happening?
• Why did the AMP (ASX:AMP) share price leap 8% in February?
• AMP (ASX:AMP) share price lifts as new suitor for capital arm emerges
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Here’s why AMP (ASX:AMP) shares are set for a transformation

Motley Fool contributor Aaron Teboneras 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 share market is sensitive and jittery this year, to say the least.

The prospect of inflation, interest rates and now the consequences of a war in Europe are understandably making investors nervous, and the action has been volatile.

Because of this environment, Ophir Funds co-founders Steven Ng and Andrew Mitchell said that many ASX-listed companies that reported decent financials in February still saw their stock price do a freefall.

“Any result in our industrials-centric portfolio that was not perfect — i.e. a large beat on actual earnings and raising of future earnings guidance — was dealt with harshly,” they said in a letter to clients.

They provided two examples, and why they bought more of those ASX shares after the price fell.

Buy while others are worried about temporary problems

Telecommunications provider Uniti Group Ltd (ASX: UWL) and fashion retailer City Chic Collective Ltd (ASX: CCX) dropped a heart-breaking 21.3% and 20.4% over February.

In fact, they have plunged even further in March, taking their year-to-date losses to 32.2% and 43% respectively.

This is despite City Chic reporting at the top end of its guidance range and Uniti meeting expectations, according to Ng and Mitchell.

“Not results that would normally warrant such harsh share price treatment.”

Investors punished the ASX shares for a couple of specific tailwinds — high inventory levels for City Chic and a new housing construction slowdown for Uniti.

But Ng and Mitchell believe the problems are transient.

“We don’t believe [the issues] will prevent them from overdelivering on earnings in the next few years,” they said.

“As such, we have continued to use the price weakness to add to the positions.”

City Chic shares closed on Friday at $3.13 while Uniti was at $3.12.

Australian shares will be fine in 2022

According to Ng and Mitchell, the market currently expects the S&P/ASX 200 Index (ASX: XJO) to enjoy about 12% earnings growth for the 2022 financial year.

“This is still above average and suggests that the Aussie share market can still generate reasonable returns this year — providing it’s not derailed by an escalation in the war or by central banks taking away the punchbowl too quickly.”

The post 2 punished ASX shares that don’t deserve to be (and experts are buying) appeared first on The Motley Fool Australia.

More reading

• Down 14% in a month, why the Pilbara Minerals (ASX:PLS) share price is attractive right now: analyst
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Friday

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 recommended Uniti Group Limited. 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 Elders Ltd (ASX: ELD) share price has started the week with a bang.

In morning trade, the agribusiness company’s shares have jumped 11% to a decade-high of $13.34.

Why is the Elders share price surging higher?

Investors have been bidding the Elders share price higher today after responding positively to a trading update.

According to the release, Elders revealed that it expects its underlying earnings before interest tax (EBIT) to increase 20% to 30% in FY 2022. Management notes that this outlook exceeds the market expectations based on the mid-point of the earnings expectations of sell side analysts covering the company.

Elders’ Managing Director and CEO, Mark Allison, commented: “Elders’ performance so far in our financial year 2022 has been strong and exceeds our performance after the first five months of FY21. After finalisation of the February trading numbers, which continue improved earnings for the first quarter, we now believe we will exceed analysts’ consensus for the full year to 30 September 2022 and produce an Underlying EBIT result in the range – which is necessarily broad given we are only five months into our financial year.”

What is driving its strong form?

The release explains that Elders has experienced an improvement in its Retail and Wholesale segments compared with the same time last year. This is due to increased sales and favourable seasonal conditions in most parts of Australia.

And while management acknowledges that some of these sales are forward purchases by primary producers seeking to mitigate the risk of instability in supply chains, it still considers the majority of sales are a result of increased activity.

In addition, the company’s Agency business continues to perform strongly as a result of high prices in both sheep and cattle. This is being offset slightly by lower volumes due to restocking and the good availability of feed on farm. Real Estate is also exceeding expectations due to increased turnover and high demand.

All in all, FY 2022 looks set to be a very positive year for Elders.

The post Why is the Elders (ASX:ELD) share price jumping 11% to a decade-high? 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 Elders Limited. 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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