Tag: Motley Fool

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 recent declines in many indexes and popular stocks have led some investors to wonder if now is the time to be buying stocks. The short answer is yes.

Bear markets are inevitable

One thing that’s inevitable in investing is volatility; it’s a tale as old as investing itself. While daily fluctuations in market prices are not good indicators of trends, investors use periods of market movements to categorize a market as either a bull market or a bear market. Bull markets are used to describe rising prices, and bear markets are used to describe declining prices.

In January 2022, the S&P 500 had its worst month since the start of the COVID-19 pandemic in March 2020, declining by 5%. While this alone isn’t enough to declare a bear market (several institutions use a 20% threshold), many believe we are approaching bear market territory after a long bull market. If you’re a long-term investor, it’s best to realize bear markets are inevitable, and that the short-term movements of stock prices shouldn’t affect your outlook on investing in the long run. Bear markets don’t last forever.

Focus on dollar-cost averaging

Unfortunately, it’s easy to sometimes let emotions guide your investing decisions. Dollar-cost averaging is a good strategy to help stop yourself from trying to time the market — something that is virtually impossible to do consistently. Instead, you make consistent investments at regular intervals, regardless of stock prices or market conditions. Let’s say you have $12,000 you want to invest. Instead of investing it all at once, you could choose to break down the investments like the following:

Frequency	Number of Investments	Amount of Each Investment
Weekly	16	$750
Monthly	8	$1,500
Quarterly	4	$3,000
Bi-annually	2	$6,000

Data source: author calculations. 

The exact amount and frequency you choose don’t matter as much as the fact that you remain consistent. One of the main problems with trying to time the market is you risk investing lump sums right before the market or a specific stock plunges.

Imagine you had the previously mentioned $12,000 and were interested in investing in Meta Platforms, the formerly named Facebook. Had you invested all of it on Feb. 2, 2022, when the share price was $323, you would’ve bought just over 37 shares. The next day, shares of Meta dropped by 26%, which would’ve instantly brought your investment total down to around $8,900.

Of course, you can’t predict when something like this may happen, but by incorporating dollar-cost averaging, you protect yourself from such events. If anything, it gives you a chance to potentially lower your cost basis. Time in the market is more important than timing the market.

Focusing on the long term is what matters

If you’re investing, it helps to focus on the long term. If anything, you can view periods of declining markets as a chance to grab your investments at a “discount.” If you believe in a company and are willing to invest in it with the stock price at $150, a drop to $125 shouldn’t cause you to panic; it’s a chance to increase your overall holdings for cheaper if you so choose. Your financial future is what matters — you can’t go wrong keeping that in mind with your investing decisions. 

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

The post Is now really the time to be buying shares? appeared first on The Motley Fool Australia.

More reading

• Why has the ETFS Battery Tech & Lithium ETF (ASX:ACDC) been on a highway to hell the past month?
• ASX 200 (ASX:XJO) midday update: JB Hi-Fi impresses, Crown accepts $8.9bn Blackstone bid
• Why is the Brainchip (ASX:BRN) share price tumbling 6% on Monday?
• Top broker tips 50% upside for this ASX 200 mining share
• Is Newcrest Mining (ASX:NCM) set to start a share buyback in 2022?

Stefon Walters has no position in any of the stocks 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. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Meta Platforms, Inc. The Motley Fool Australia has recommended Meta Platforms, Inc. 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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Boy, has it been a disappointing month for the ETFS Battery Tech & Lithium ETF (ASX: ACDC). Not only have ACDC units lost a nasty 1.3% so far today, but this ASX exchange-traded fund (ETF) has lost close to 7% of its value over the past month or so. Indeed, since 17 January, ACDC is down by almost 7.5%.

By comparison, the ASX 200 has also faced some choppy waters recently. But over the past period, the ASX 200 has barely lost 2.1%, making ACDC a definite market-trailer.

So what might have gone so wrong for this future-facing ETF? Well, to answer that, let’s take a look at how this ETF is bolted together.

The ETFS Battery Tech & Lithium ETF tracks the Solactive Battery Value-Chain Index. This, in turn, aims to give investors exposure to “the energy storage and production megatrend”. On the latest data, this ETF had 32 underlying companies in its investment portfolio. Close to 24% of those holdings hail from Japan, with the United States representing another 19.4%, South Korea 11%, and Australia 9.5%.

ASX investors would probably recognise ACC’s two largest holdings as well – Mineral Resources Limited (ASX: MIN) and Pilbara Minerals Ltd (ASX: PLS). These two miners hold an ACDC weighting of 4.8% and 4.7% in this ETF respectively. Other holdings in this ETF include carmakers Nissan Motor Co and Renault SA, as well as weapons company Lockheed Martin.

Short circuit? Why the ACDC ETF has struggled lately…

Looking at Mineral Resources, we can immediately see a source of red ink for this ETF. Minerals Resources shares have had a shocker over the past couple of months. This company is down around 20% since 17 January and remains down by more than 11% year to date.

Pilbara Minerals hasn’t done too much better. The lithium producer’s shares are down more than 17% since 17 January, and also remain down around 11.8% so far in 2022.

So with ACDC’s two largest holdings going backwards by double-digits over the past month or so, not to mention the volatility we have seen across global markets since then too, it’s perhaps no surprise ACDC units have been under the pump recently.

But longer-term shareholders are still sitting rather well. Even after this much-to-be-desired recent performance, this ASX ACDC ETF has still given its investors an average return of 30.58% per annum over the past 3 years.

The ETFS Battery Tech & Lithium ETF charges an annual management fee of 0.69%.

The post Why has the ETFS Battery Tech & Lithium ETF (ASX:ACDC) been on a highway to hell the past month? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: JB Hi-Fi impresses, Crown accepts $8.9bn Blackstone bid
• Why is the Brainchip (ASX:BRN) share price tumbling 6% on Monday?
• Top broker tips 50% upside for this ASX 200 mining share
• Is Newcrest Mining (ASX:NCM) set to start a share buyback in 2022?
• What’s going on with the CSL (ASX:CSL) share price today?

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) has fought back from a bad start to be trading higher. The benchmark index is currently up 0.4% to 7,243.9 points.

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

JB Hi-Fi first half update

The JB Hi-Fi Limited (ASX: JBH) share price is storming higher today after the release of its half year results. While its sales and profits were pre-released to the market in January, a couple of pleasant surprises have given its shares a boost. The first is that trading was positive during the month of January, with JB Hi-Fi Australia and The Good Guys delivering solid year on year growth. The other pleasant surprise was a $250 million off-market share buyback.

Bendigo and Adelaide Bank bounces higher

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is on form today after its half year results release went down well with the market. The regional bank reported an 8.5% increase in revenue to and an 18.7% lift in cash earnings to $260.7 million. This allowed the bank to declare a fully franked interim dividend of 26.5 cents per share, which is up 12.8% over the prior corresponding period.

Crown accepts $8.9 billion takeover offer

The Crown Resorts Ltd (ASX: CWN) share price is pushing higher today after accepting an $8.9 billion takeover offer from Blackstone. The casino and resorts operator has accepted an offer of $13.10 cash per share, which represents a premium of ~32% to its share price on 18 November. This date was the day before Blackstone tabled its original offer.

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Regis Resources Limited (ASX: RRL) share price with a 9.5% gain. Investors have been buying gold shares amid concerns over escalating tensions in Ukraine. Going the other way is the Pilbara Minerals Ltd (ASX: PLS) share price with a 6% decline on no news. However, it is worth noting that a large number of lithium shares are sinking on Monday.

The post ASX 200 (ASX:XJO) midday update: JB Hi-Fi impresses, Crown accepts $8.9bn Blackstone bid 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 owns and has recommended Bendigo and Adelaide Bank 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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This year so far has been a rollercoaster for the Brainchip Holdings Ltd (ASX: BRN) share price and it’s been plunged into another loop-the-loop today.

The company’s stock is tumbling despite no news having been released on it for more than a week. Though, it’s not alone in its slump.

At the time of writing, the Brainchip share price is $1.52, 5.74% lower than its previous close.

For context, the broader market is in the green today. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.4%. Meanwhile, the All Ordinaries Index (ASX: XAO) has gained 0.3%.

Let’s look at what might be weighing on the artificial intelligence focused ASX tech share today.

Why is the Brainchip share price plunging lower today?

The Brainchip share price is handing back some of its lofty year-to-date gains this morning as the S&P/ASX All Technology Index (ASX: XTX) slips lower again.

The index has fallen a notable 18.4% since the start of this year. It’s falling another 1.1% today, potentially driven lower by the tech-heavy Nasdaq Index’s 2.7% tumble on Friday.

Meanwhile, prior to today, the Brainchip share price had gained a whopping 108% year to date.

It’s been rocketed by news of a capital injection, two new patents – one in January and another in February, and a strong December quarter performance.

In fact, its early January gains were so severe that the ASX issued it with a speeding ticket. In response, the company said it was as confused as anyone.

Though, it pointed to its release of immaterial news and excitement over the AI industry as potential reasons for its gains.

But that excitement ­– if it were indeed the reason behind Brainchip’s surge – appears to have waned this morning.

Additionally, while there’s been no news of Brainchip the company for more than 10 days, disturbing headlines regarding brain chips have recently emerged.

The reports are unlikely to have had any impact on the Brainchip share price. Particularly, given the company is in no way involved with the claims or the company involved.

However, stranger things than what could be a case of mistaken identity have impacted the market sentiment of a sector before.

A case of mistaken identity?

In recent days, news has emerged detailing alleged animal abuse committed during product testing for Elon Musk-backed brain chip start-up, Neuralink.

Neuralink is developing implantable technology that could interact with the brain to help people with paralysis control computers and devices. It’s a far cry from Brainchip’s work in the AI field.

According to reporting by Business Insider, published late last week, Neuralink is facing potential action on claims that monkeys were forced to withstand “extreme suffering” during testing for “highly invasive experimental head implants.”

An animal rights group reportedly plans to hand records of the alleged abuse to the United States Department of Agriculture.

The testing is said to have been conducted by a research centre affiliated with the University of California between 2017 and 2020. Neuralink reportedly cut ties with the university when the monkeys were transferred to its own facility in 2020.

The post Why is the Brainchip (ASX:BRN) share price tumbling 6% on Monday? appeared first on The Motley Fool Australia.

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

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ASX 200 mining shares have started the year well in 2022. They are flourishing while undercurrents of inflation, monetary policy, and interest rates continue to play havoc for equity investors.

The S&P/ASX 300 Metals & Mining Index (XMM) has spiked more than 8% since trading restarted on January 4, well ahead of the benchmark index.

One such share fitting the mould in 2022 is Northern Star Resources Ltd (ASX: NST), the gold miner that reported results last Friday. It declared a record dividend in the process.

As a result, one top broker has tipped Northen Star shares to sprout higher in 2022. Let’s take a look.

Why’s this ASX 200 mining share tipped to explode in 2022?

According to analysts at investment bank Jefferies, Northern Star is well-positioned to deliver growth and value to investors this year.

From its most recent results, Northern Star grew profits after tax by 43% to $261 million, after growing revenue by 63% to $1.8 billion for the half.

Importantly, the broker notes, the jump in turnover came about from Northern Star selling more than 60% more gold compared to the same time last year.

It sold 477Koz of gold from its mine at Kalgoorlie, another 212koz from its Yandal site, and 90koz from the Pogo operation.

The jump in sales and carry through to profit and free cash flow enabled the board to declare a record dividend of 10 cents per share on a payout ratio of 27% of earnings.

What do brokers think?

Given this momentum and the broker’s own analysis, Jefferies reckons Northern Star has set its guidance conservatively and it sees the potential for further revisions upward later this year.

Northern Star can deliver outsized production due to ongoing improvements at its Kalgoorlie sites, alongside other positive updates from its other sites, Jefferies notes.

As a result, the broker recommends the stock a buy and values Northern Stat at $14 per share, signalling a potential upside of 52% should the thesis play out.

Meanwhile, the team at JP Morgan is also heavily bullish on Northern Star, noting that it “remains our key pick, with the deepest discount to valuation and comparables”.

“NST has a strong balance sheet and is generating solid [free cash flow] FCF at current gold prices. The company is focused on three production hubs – Kalgoorlie and Yandal in Australia, and Pogo in Alaska,” analysts noted in a recent update.

“The company has a track record of project delivery and strong production growth. We have an Overweight rating, based on valuation.”

JP Morgan values Northern Star at $11 per share, slightly behind Jefferies but heavily bullish nonetheless.

Quick summary on Northern Star shares

This ASX 200 share has fallen almost 24% in the last 12 months and is down a further 2.5% this year to date.

In the last week, investors have regained confidence and have sent shares more than 7% higher. The company’s share price closely tracks the price of gold because it is a price taker, as shown in the chart below.

The post Top broker tips 50% upside for this ASX 200 mining share appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Record dividend: Northern Star Resources (ASX:NST) share price climbs on half-year results
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

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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Shares in gold mining giant Newcrest Mining Ltd (ASX: NCM) have started the week trading up more than 5%. At the time of writing, the Newcrest share price was fetching $23.92 in morning trade on Monday.

Newcrest fell hard in late January following the release of its quarterly report for the three months ending 31 December 2021.

Investors dumped the stock and, consequently, it bottomed at 52-week lows of $21.50 to close the month. Prior to that, it had been rangebound, with no real price action up or down since August.

The tug-of-war continues today. But one broker reckons Newcrest has a few tricks up its sleeve in order to drive value for shareholders once more. Let’s take a look.

Newcrest to repurchase shares in 2022?

According to analysts at Credit Suisse, investors should consider the possibility of Newcrest approving a share buyback program over the coming periods.

Share buybacks have picked up in recent years. S&P Global reported that 2021 was a record year for companies repurchasing their own stock.

In the United States for instance, during the third quarter of 2021, share repurchases were worth $234.6 billion. That’s an 18% gain from the previous quarter and 130% on Q3 2020.

Credit Suisse analysts reckon that a buyback approval would add incremental value for shareholders. They also think it’s feasible, seeing as Newcrest is well capitalised to put the cash aside.

“Whilst NCM has plenty of capital expenditure ahead to fund its high returning growth pipeline, it can comfortably fund this in our view,” the broker said.

Although, the investment bank remains cautious on the integration of new chief financial officer Sherry Duhe. It notes the board might be more conservative in its capital budgeting for a smooth transition.

If this were to occur – and Newcrest was to commit to buying back its own stock – Credit Suisse reckons the gold miner could then instigate the program in August, when it reports full-year results.

Nevertheless, the broker is heavily bullish on Newcrest shares and values the company at $30 per share. It is joined by analysts at JP Morgan, Macquarie, Barrenjoey, Morgans, Shaw and Partners, Morgan Stanley, and Jefferies.

In fact, according to a list of analysts obtained from Bloomberg Intelligence, almost 70% of analysts covering the gold miner have it as a buy right now with an average price target of $28.86.

Newcrest share price snapshot

In the last 12 months the Newcrest share price has lost nearly 8% and is down 2.29% this year to date following its drop in January.

As such it has slipped 3% in the last month, but has regained support lately and climbed 6% into the green in the last week. Newcrest’s share price closely tracks the movements of the price of gold, as shown in the chart below.

The post Is Newcrest Mining (ASX:NCM) set to start a share buyback in 2022? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
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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 CSL Limited (ASX: CSL) share price has started the week in the red.

In late morning trade, the biotherapeutics giant’s shares are down 2% to $243.68.

Why is the CSL share price falling today?

The weakness in the CSL share price today could have been driven by a note out of S&P Global Ratings, which appears to have overshadowed the completion of its share purchase plan.

According to the note, the ratings agency has affirmed its ‘A-2’ short-term rating on the company with a negative outlook. The latter suggests that a downgrade to its rating could occur in the future.

S&P commented: “The negative outlook reflects our view that the incremental debt burden to part fund the [Vifor] acquisition will cause leverage to increase above adjusted debt to EBITDA of 2.0x. It also reflects the view that the company’s credit metrics could remain above our tolerances for the ‘A-‘ rating level if it experiences any unexpected operational issues or if the integration benefits from the Vifor acquisition are not realized in a timely manner.”

Share purchase plan completes

In other news, this morning CSL announced the completion of its share purchase plan.

The release notes that the company has raised $750 million at $253.57 per new share. This represents a 2% discount to the five-day volume weighted average CSL share price up to and including the closing date of the share purchase plan.

These funds will be used to support the proposed acquisition of Vifor Pharma.

The company revealed that the share purchase plan received strong support from eligible shareholders, with a total of 56,180 individual holders participating. Valid applications totalled $942.7 million, which meant the offer had to be scaled back.

CSL’s Chief Executive Officer and Managing Director, Paul Perreault, commented: “We are delighted with the strong support we have received for the acquisition of Vifor Pharma from our shareholders. On behalf of the Board, I wish to thank all shareholders who participated in the SPP. We look forward to delivering on the exciting growth opportunities underpinning the acquisition of Vifor Pharma.”

The post What’s going on with the CSL (ASX:CSL) share price today? 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. owns and has recommended CSL Ltd. 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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Commonwealth Bank of Australia (ASX: CBA) is continuing on its path of technological innovation.

If you own CBA shares, here’s the latest tech move from the big 4 bank.

What tech hub is CommBank moving into?

CBA reported that it is opening a Technology Hub at the Entrepreneur and Innovation Centre in Adelaide’s Lot Fourteen development.

The bank said the new hub will see it grow its technology workforce and partner with education and industry. CommBank expects to hire as many as 150 tech specialists over the next 5 years, including software engineers, data scientists and cyber security specialists.

Commenting on the development, Brendan Hopper, CIO for Technology at CBA said:

We want to be involved in providing amazing opportunities for career development and innovation – both for new entrants to the technology sector through our graduate, intern and technology associates programs – and also via reskilling opportunities for people who are already in the ever-changing technology sector.

The bank said the focus will be on artificial intelligence, data and cyber security.

It noted that the pandemic has altered the way people view their work, saying many tech workers don’t want to spend every day in an office, yet they do want to remain connected with colleagues.

Enter the new Technology Hub where CBA’s workforce can gather as required to drive technological innovation for the bank.

“Keeping employees connected in person is in some cases a major factor of innovation, learning, collaboration and passion,” Hopper said. “Lot Fourteen has the ingredients to be a major centre for technological innovation, collaboration and helping Australia advance towards becoming a more digital economy,” he added.

Adelaide’s Entrepreneur and Innovation Centre is scheduled to open in 2024.

How have CBA shares been performing?

CBA shares are up 1.2% in morning trade today, leaving the share price down 2.7% in the new year.

By comparison the S&P/ASX 200 Index (ASX: XJO) is up 0.2% today and down 4.8% year-to-date.

The post Own CBA (ASX:CBA) shares? Here’s the bank’s next big tech move appeared first on The Motley Fool Australia.

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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 stock market will crash again. It’s not a question of whether, but rather when. Perhaps the biggest near-term risk is that high and still rising inflation might provide the push that causes the next major drop. How? Well, the Federal Reserve’s expedited meeting scheduled for Monday might lead to faster and more aggressive tapering than the market already expects. That could cause a shift out of riskier assets like stocks, leading to a market correction.

Whether or not that particular scenario comes into play, the reality is that stocks can go down as well as up. If you recognize that and plan for it appropriately, you can make it through a mere market crash — and emerge on the other side in a great spot to ride any subsequent recovery.

With that in mind, here are four reasons not to worry about a stock-market crash.

1. You don’t need to sell your stocks today

As a general rule, you should not have money invested in stocks that you expect you’ll need to spend within the next five years. If you have followed that guideline, it becomes much easier to stomach a market crash. It’s still not fun, but you can make it through.

After all, if you don’t need the money immediately, then you don’t have to sell shares when they’re low just to cover your bills. That gives you the chance to not only hold on through a crash but also to potentially add more to strong companies while they’re near their cheapest. The ability to buy low — instead of selling low — allows you to end up in a better spot once the crash passes.

2. You have emergency money stocked away, just in case

One of the bigger risks most people face when the market crashes isn’t the crash itself, but rather the fact that a down market is often linked to job losses. Even if you fully intend to hold on to your stocks through a crash, if you find yourself without a paycheck and with no cash buffer, you could wind up needing to sell due to that job loss.

A three- to six-month emergency fund buys you time to both look for another job and figure out ways to cut costs before you feel forced to sell your shares. It’s a buffer that can come in incredibly handy in a tough environment. It’s also one of those things that you hope you’ll never have to use — but if you do, you’ll be incredibly glad it’s there when you need it.

3. You own strong companies that still pay their dividends

The beauty of a stock’s dividend is that it tends to get paid based on the underlying company’s ability to generate cash, rather than on the stock market’s short-term mood. When companies continue to pay their dividends in a down market, that helps investors in a number of ways.

First, the cash itself can be used to buy more shares while they’re down — either of the company that paid the dividend or of a different one that looks like a compelling value at a low price. That cash becomes available without you having to sell stock or somehow scaring up money from another source, which can be comforting if you’re a bit nervous about the future.

Second, the fact that companies continue to make their payments from available cash flows can provide a calming effect for investors, even as the market appears to panic around them. After all, there’s nothing quite like cold, hard cash to remind people that there’s a business behind each stock. If a dividend is still supported and getting paid, it means there’s still a successful company there, no matter what the stock price might say at the moment.

4. You have a value investor’s mindset

Ultimately, a share of stock is an ownership stake in a business. If that business is currently profitable and expected to remain that way, each share is certainly worth something. Value investors recognize that a company’s intrinsic worth is based on its ability to generate cash over time, and not simply on what the market thinks its shares should be priced at today.

As a result, a market crash can make great companies’ shares available at a price below what those value investors believe they’re really worth. That sort of pricing turns value investors into aggressive buyers during a crash and it’s a key part of the strategy that helped Warren Buffett earn and expand his fortune.

Especially when combined with the first three reasons not to worry about a stock-market crash, this fourth reason can actually give you an opportunity to profit from one. After all, if you’ve got the cash to ride out the decline and the wherewithal to buy near the lows, you have the opportunity to make some serious coin in any subsequent recovery.

Are you ready for the next crash?

While these four factors can help you make it through a market crash with much less worry, they all work much better if you have them in place before you need them. So start getting your plan in place today. That way, you’ll be in a much better place the next time the market crashes.

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

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Chuck Saletta has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

 

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

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The Baby Bunting Group Ltd (ASX: BBN) share price closed lower on Friday, down 3%, following the release of the company’s half year results.

Baby Bunting shares had opened Friday at $5.55 per share, but ended the day trading at $5.27.

At the time of writing, the shares are fetching for $5.25, bringing the loss since Friday’s open to 5.4%.

Below you’ll find the highlights from the company’s results for the half year ending 31 December (H1 FY22).

Baby Bunting share price dips despite dividend bump

• Total sales of $239.1 million, an increase of 10% from the prior corresponding half year
• Pro forma earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 18.6% year-on-year to $21.8 million
• Pro forma net profit before tax (NPAT) of $12.5 million, up 16.4%. on H1 FY21
• Pro forma earnings per share (EPS) growth of 15.4%
• Interim dividend of 6.6 cents per share, fully franked up 13.8% from H1 FY21

What else happened during the half year?

Alongside its pro forma NPAT lift of 16.4%, Baby Bunting also reported a 12.2% increase in statutory NPAT to $8.1 million. Statutory figures include items like employee equity incentive expenses and the “significant costs associated with business transformation projects”.

Digital sales also continued to grow at the company, representing 23.8% of total sales, up from 19.7% in H1 FY21.

The Baby Bunting share price may be coming under some pressure with the 1.25% reported increase in its cost of doing business (on a pro forma basis).

The company cited its investments in the new National Distribution Centre and one-off establishment costs for New Zealand, along with $500,000 of COVID-related costs, for bringing the cost of doing business to 30.2% of sales for the year.

What did management say?

Commenting on the results, Baby Bunting’s CEO Matt Spencer said:

Baby Bunting had an exceptional first half in what were, again, some challenging conditions. Through great work by the Baby Bunting team, we achieved record sales and grew gross profit, without compromising value to the consumer. This contributed to a significant growth in NPAT…

Our store performance was supported by our strengthened digital offer, including click and collect and online sales.

What’s next?

After opening news stores during the half in New South Wales, Victoria and Queensland, bringing the total number of stores to 64, Baby Bunting plans to open 2 or 3 more stores in the current half year. It eventually aims to have more than 100 stores across Australia.

The first Baby Bunting store in New Zealand is facing delays from the ongoing pandemic. That opening is now expected to occur early in the 2023 financial year.

Looking ahead, Spencer said:

Baby Bunting remains focused on executing its strategy of growing market share. We will continue to leverage our investments in our transformation program and growing our product range including exclusive relationships with suppliers and our own private label offering. We will also expand our services business and continue to strengthen our logistics and supply chain capabilities.

The company said that due to ongoing uncertainty caused by COVID-19, it could not currently give specific earnings guidance for FY22.

Baby Bunting share price snapshot

The Baby Bunting share price is down 6.1% so far in the new year. That compares to a year-to-date loss of 4.9% posted by the All Ordinaries Index (ASX: XAO).

The post Here’s why the Baby Bunting (ASX:BBN) share price has dived 5% in 2 days appeared first on The Motley Fool Australia.

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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 Baby Bunting. 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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