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ASX shares are having a tough time of it today.

At time of writing the All Ordinaries Index (ASX: XAO) is down 1%, having been down as much as 1.4% in earlier trading.

ASX shares in the tech space are doing it even tougher.

The S&P/ASX All Technology Index (ASX: XTX) is currently down 2.4% following an earlier loss of 2.9%.

Why are ASX shares under pressure?

Inflation figures out of the United States surprised to the upside once more. Inflation in the world’s largest economy now stands at 7.5%, the highest level since 1982.

That means the US Federal Reserve is more likely to raise rates by more, and more often, than many investors had been hoping.

This saw US share market tumble yesterday (overnight Aussie time), with the Dow Jones falling 1.5% and the tech-heavy Nasdaq closing down 2.1%. And the ripple effect is seeing many ASX shares selling off today.

Abrupt change in financial conditions

Australia’s inflation rate remains well below the 7.5% just posted in the US. But that doesn’t mean ASX shares are immune to rapid rate increases by the US Fed, the world’s most watched central bank.

Speaking at a parliamentary hearing today, Reserve Bank of Australia (RBA) governor Philip Lowe said the surprising leap in US inflation was a “source of uncertainty” for Australia’s economic outlook,

As the Australian Financial Review reports, Lowe “warned investors that the country’s financial markets are at risk of an ‘abrupt adjustment’ if surging US inflation forces the Federal Reserve to raise interest rates faster than expected”.

According to Lowe:

For the first time in several decades, inflation has become a major issue in the global economy. It’s entirely possible that countries with higher inflation rates will need a bigger adjustment in interest rates than currently anticipated. And if so, this could result in an abrupt change in financial conditions around the world including here in Australia.

However, Lowe noted that the current inflationary situation is very different in Australia and much of Asia. “The prices have gone up, so the US is in a very different position than us,” he said. “Inflation is not a problem in China, in Japan, in most of south-east Asia.”

While Lowe kept the door open for a possible cash rate rise this year, which would throw up some headwinds for ASX shares, he didn’t expect the cash rate to reach 2.5% for several years.

Addressing the real interest rate (which takes inflation into account) versus nominal rates (which do not), Lowe said that if inflation in Australia reaches the central bank’s midpoint target of 2.5%, a 2.5% cash rate would offer zero real returns, rather than negative.

According to Lowe (quoted by the AFR):

So if we just get to zero real interest rate, then the cash rate would have to average at least 2½ per cent because that’s what we want inflation to average. Let’s hope productivity growth will be stronger and the return to savers will be positive in real terms.

With today’s market action in mind, we imagine ASX shareholders will be watching the developments at the world’s top central banks closely.

The post ASX shares at risk? RBA’s Lowe sounds warning on US rate rises appeared first on The Motley Fool Australia.

More reading

• Here’s why the IAG (ASX:IAG) share price is charging 4% higher today
• Why are these ASX 200 tech shares tumbling more than 6% on Friday?
• What’s the outlook for AGL (ASX:AGL) shares according to these brokers?
• Hazer (ASX:HZR) share price rockets 14% on low-carbon hydrogen project
• The carnage continues: Appen (ASX:APX) shares tumble 7%, here’s why

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 Insurance Australia Group Ltd (ASX: IAG) share price is having a great day in comparison to the rest of the market.

In early afternoon trade, the insurance giant’s shares are up over 4% to $4.74.

The compares very favourably to the ASX 200, which is down by a disappointing 0.8% at the time of writing.

Why is the IAG share price outperforming the market today?

Investors have been bidding the IAG share price higher today after the insurer released its half year results.

IAG’s results were quite messy due to high natural perils costs, which were above its allowance by $299 million during the period. This reflects events including the Victorian earthquake and severe weather across Australia in October.

This ultimately led to IAG reporting a 57.8% decline in its insurance profit to $282 million and a 62% reduction in its cash earnings to $176 million. The latter appears to have fallen short of expectations.

For example, according to Morgans, it was expecting a first half cash profit of $210 million, whereas the consensus estimate stood at $285 million.

And while IAG’s interim dividend of 6 cents per share was in line with Morgans’ estimates, it was short of the consensus estimate of 8 cents per share. It was also the lowest interim dividend in a decade.

So why are its shares pushing higher?

The market appears to be overlooking the cash profit and dividend miss due to its FY 2022 guidance and its longer term outlook.

Management spoke very positively about current trading conditions and has upgraded its gross written premium (GWP) guidance from “low” to “mid single-digit” growth.

It also reaffirmed its reported insurance margin guidance of 10% to 12%, which management believes puts it on course to achieve its aspirational goal of 15% to 17% over the medium term.

In respect to the future, IAG’s CEO, Nick Hawkins, commented: “IAG today is a much stronger, more resilient company than in recent years and we have the right foundations to position us well for the future. I am confident we will continue to deliver profitable business and customer growth in FY22 and longer-term value for our stakeholders.”

The post Here’s why the IAG (ASX:IAG) share price is charging 4% higher today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: IAG upgrades guidance, Magellan sinks again
• IAG (ASX:IAG) share price on watch amid earnings miss but guidance upgrade
• 5 things to watch on the ASX 200 on Friday
• Could IAG (ASX:IAG) shares become suddenly sexy amid rising interest rates?
• Own IAG (ASX:IAG) shares? Here’s what to expect when it reports next week

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 Insurance Australia 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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Friday is proving to be a rough day for S&P/ASX 200 Index (ASX: XJO) technology shares as they weigh heavily on the broader market.

In fact, at the time of writing, tech and buy now, pay later (BNPL) shares are among the ASX 200’s worst performing constituents, despite relative silence across the sector.

Right now, the ASX 200 is down 1.09%. Meanwhile, the S&P/ASX 200 Info Tech Index (ASX: XIJ) has fallen 3.14% and the S&P/ASX All Technology Index (ASX: XTX) is down 2.72%.

Let’s take a look at what might be dragging on ASX tech shares on Friday.

ASX 200 tech shares leading the index’s fall

ASX 200 tech shares are suffering today after the Nasdaq Index plummeted 2.1% overnight.

It tops off a shocking 30 days over which the United States-based, tech-heavy index has fallen more than 2% in 6 separate sessions, culminating in a 6.39% tumble.  

Additionally, renewed fears of rising interest rates have likely also put pressure on ASX tech stocks after the Reserve Bank of Australia governor Phillip Lowe warned changes to international interest rates could spur an “abrupt adjustment in financial conditions”.

Right now, the biggest fallers on the ASX 200 include Life360 Inc (ASX: 360), Appen Ltd (ASX: APX), and Zip Co Ltd (ASX: Z1P). They’ve fallen 7.2%, 7.1%, and 6.1% respectively.

At the same time, Block Inc CDI (ASX: SQ2) and Megaport Ltd (ASX: MP1) are both down more than 5%.

The only ASX 200 tech share to be recording a gain right now is Computershare Limited (ASX: CPU).

It’s continuing its recent rally, having gained 0.55% at the time of writing. It’s also hit a new 52-week high in today’s session.

Unfortunately for BNPL fans, Block and Zip both have an additional weight on their shoulders today.

Their international competitor, Affirm Holdings Inc (NASDAQ: AFRM), tumbled 21% overnight after it released its quarterly earnings early.

Other recognisable Nasdaq stocks that plummeted during the United States’ Thursday session include Australian export Tritium DCFC Ltd (NASDAQ: DCFC). After rocketing 113% earlier this week, its share price slumped 15% last night.

Stock in Meta Platforms Inc (NASDAQ: FB) also fell 1.6% after Wednesday’s 5% gain. It has fallen 27% since the end of January.

The post Why are these ASX 200 tech shares tumbling more than 6% on Friday? appeared first on The Motley Fool Australia.

More reading

• The carnage continues: Appen (ASX:APX) shares tumble 7%, here’s why
• ASX 200 (ASX:XJO) midday update: IAG upgrades guidance, Magellan sinks again
• ASX BNPL shares in focus after Affirm (NASDAQ:AFRM) share price tumbles 21%
• After a disastrous 2021, the Zip (ASX:Z1P) share price has tumbled another 30%. What’s going on?
• Here are the top 10 ASX shares today

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 Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd, Block, Inc., Life360, Inc., MEGAPORT FPO, Meta Platforms, Inc., and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Meta Platforms, Inc. 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 AGL Energy Limited (ASX: AGL) are heading south today and are now trading 6% lower at $6.82 apiece.

Whilst there’s been no price-sensitive news out of the energy giant’s camp today, AGL did release its first-half results for FY22 yesterday.

Market pundits originally responded well to the update, which was characterised by a 6% year on year gain in revenue. There was also a jump back into the black with statutory net profit after tax (NPAT) at $555 million.

However, the activity was short-lived yesterday as investors started to pick apart the update. Underlying NPAT decreased by 41% and the interim dividend was cut to 16 cents per share compared to 41 cents last year.

Is AGL a buying opportunity after its results?

Morgan Stanley analysts remain neutral on the stock. However, they do reckon AGL is set to deliver a strong set of results in FY23. But for now, they think it might be best for investors to sit on the sidelines.

Morgan Stanley says AGL should benefit from a recovery in energy demand after the La Nina summer in Australia and COVID-19 lockdowns.

The investment bank also notes that energy prices in the eastern states of Australia are another potential tailwind for AGL shares, especially given the current state of energy markets around the world.

However, the broker also cautions investors on the prospect of supply increases. New plants and company ventures may even out the demand/supply equation and reduce prices.

AGL’s redundancy program is sure to help its operating costs in FY22/FY23, the broker says, alluding to the energy giant’s decision to slash its coal and gas power plant workforce last year.

Even though Morgan Stanley remains neutral on AGL shares, the broker did lift its price target by 6% to $6.88. This means they feel AGL is fairly valued right now (supporting its neutral view).

What do other brokers say?

Fellow broker JP Morgan is more constructive on AGL and rates the shares a buy on an $8.75 price valuation.

The team likes AGL’s current valuation, its corporate appeal, and current strength in underlying commodity markets. As such, the broker urges its clients to buy AGL.

Credit Suisse is equally bullish on AGL and has set a price target of $8.20 per share.

AGL share price snapshot

In the past 12 months, AGL has tanked almost 40% after a difficult period in 2021. However, this year to date, the AGL share price has climbed by 8%.

The post What’s the outlook for AGL (ASX:AGL) shares according to these brokers? appeared first on The Motley Fool Australia.

More reading

• ‘Not enough’: Government challenges AGL (ASX:AGL) over planned closures
• AGL (ASX:AGL) takes a knife to dividends in its first-half earnings
• 5 things to watch on the ASX 200 on Thursday
• Both have had a bumper start to the year. But which is the better buy, AGL or Origin (ASX:ORG) shares?
• Could AGL (ASX:AGL) be gearing up for a major capital raise?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 Hazer Group Ltd (ASX: HZR) share price is powering ahead today despite the broader market being sold off.

At the time of writing, the hydrogen producer’s shares are swapping hands for $1.08, up 13.68%.

In comparison, the All Ordinaries (ASX: XAO) is currently 0.86% lower to 7,521.1 points.

What’s the move behind Hazer shares charging higher?

The Hazer share price is climbing after the company announced a framework to develop a low-carbon emission hydrogen production facility in Canada.

In its release, Hazer advised it has signed a memorandum of understanding (MOU) with Suncor Energy Inc and FortisBC Energy Inc.

The proposed hydrogen project will process natural gas feedstock to produce 2,500 tonnes per annum of low-carbon emission hydrogen and approximately 9,000 tonnes of synthetic graphite by-product.

Under the MOU, the three co-parties will work together to advance the project from concept to implementation. This includes conducting a feasibility study, securing funding arrangements, and concluding all binding agreements to establish the project consortium and carry out the project.

Suncor will lead the development of the project and, on completion, will operate the facility. FortisBC will supply natural gas feedstock and will purchase the hydrogen produced from the facility. Lastly, Hazer will supply the technology, lead engineering components, and manage the supply of catalyst to the project.

The feasibility study is expected to begin this month with the award of an engineering services contract.

A final investment decision (FID) is being scheduled for 2023, with operations targeted to kick off in 2025.

As part of the technology sharing program, Hazer will receive royalty payments to support the development of its technology.

The news comes after Australia and New Zealand Banking Group Ltd (ASX: ANZ) released a handbook claiming Australia can play a “pivotal role” in the hydrogen export market.

Management commentary

Speaking on the announcement boosting the Hazer share price today, CEO Geoff Ward said:

We are delighted to enter into this collaboration with Suncor and FortisBC, two leading Canadian energy companies committed to building new business opportunities in decarbonisation.

The proposed hydrogen project will materially advance the Hazer technology building on the work that we are doing at the current Hazer Commercial Demonstration Project at Woodman Point in Perth, Australia.

Canada is an excellent jurisdiction for the Hazer technology, with strong platforms and incentive programs to drive decarbonisation action, access to a well-priced low carbon intensity electrical grid and strong demand for low-carbon energy across power, heating and industrial sectors.

About the Hazer share price

Despite today’s strong gains, the Hazer share price has fallen by 25% over the past 12 months. When looking at the year to date, its shares are down by roughly 7%.

Hazer presides a market capitalisation of about $172.67 million and has approximately 162.89 million shares on its books.

The post Hazer (ASX:HZR) share price rockets 14% on low-carbon hydrogen project appeared first on The Motley Fool Australia.

More reading

• Selling out? Cettire (ASX:CTT) share price slumps amid founder selling rumours
• Can Australia win the $1.4 trillion global hydrogen race?
• 2 small-cap ASX shares we’ve bet big on: fund manager
• In a sea of red, this ASX All Ordinaries share is hitting 2-year highs. Here’s why
• Here’s why the Recce (ASX:RCE) share price is climbing today

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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In what would be a disappointing end to the week for ASX investors, the S&P/ASX 200 Index (ASX: XJO) has taken a nasty tumble this Friday thus far. At the time of writing, the ASX 200 is down by a notable 1.1%. But that’s nothing compared to the Appen Ltd (ASX: APX) share price. Appen shares are currently down a nasty 6.67% at $8.39 each.

That puts Appen’s 2022 performance to date at a miserable -24.9%. It also means that Appen shares are now down close to 80% from the all-time highs we saw back in August 2020.

So what’s gone so wrong with the Appen share price today?

Well, we can’t quite be certain. There’s been no major news or announcements out of Appen today, indeed for the past week or so.

But it’s possible that Appen shares have been caught up in the ASX tech share selloff we seem to be witnessing so far this Friday. Although the ASX 200 is down by more than 1% so far, the S&P/ASX All Technology Index (ASX: XTX) is faring far worse. It’s currently down by more than 2.7%.

Down 7%! What’s Appen-ing to Appen shares?

This, naturally, has seen ASX tech shares shed value across the board. For example, Block Inc CDI (ASX: SQ2) shares are down close to 6%. Xero Limited (ASX: XRO) shares have lost close to 4%. And the WiseTech Global Ltd (ASX: WTC) share price is down almost 3%. Poor Nuix Ltd (ASX: NXL) has lost more than 6% today. So it’s not just Appen.

This tech share selloff appears to have been sparked by a savage selloff over in the United States overnight. The tech-heavy US NASDAQ-100 (INDEXNASDAQ: NDX) Index lost 2.33% overnight, resulting in most US tech shares shedding chunks of value.

This in turn could have been induced by the inflation figures that came out last night from the US economy. The US Department of Labor announced last night that inflation Stateside was running at an annualised 7.5%. That’s the highest level in decades.

Investors know that higher inflation typically leads to higher interest rates. And tech shares like Appen are particularly vulnerable to higher rates. This is due to the fact that many of them are still in their ‘growth phases’ of development, and have a higher reliance on debt.

So that might be why the Appen share price, along with many other ASX tech shares, is getting punished today. That might disappoint some Appen investors, but that’s the way the cookie crumbles sometimes.

At the current Appen share price, this ASX tech share has a market capitalisation of $1.03 billion, with a trailing dividend yield of 1.2%.

The post The carnage continues: Appen (ASX:APX) shares tumble 7%, here’s why appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: IAG upgrades guidance, Magellan sinks again
• What are brokers expecting for ASX tech shares this earnings season?
• Top brokers name 3 ASX shares to buy today
• Is the ASX value shares party just getting started?
• Why Appen, Nanosonics, Nearmap, and Temple & Webster are sinking

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. owns and has recommended Appen Ltd, Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns and has recommended Appen Ltd, WiseTech Global, and Xero. 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 Friday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is sinking. The benchmark index is currently down 1.1% to 7,207.9 points.

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

IAG shares rise following half year results

The Insurance Australia Group Ltd (ASX: IAG) share price is pushing higher today following the release of its half year results. The insurance giant delivered a cash profit well short of consensus estimates at $176 million. However, the market appears willing to overlook this due to management upgrading its FY 2022 gross written premium guidance from low to mid single-digit growth.

Magellan shares sink after FUM update

The Magellan Financial Group Ltd (ASX: MFG) share price is tumbling again on Friday. This follows the release of an out of cycle funds under management (FUM) update. That update reveals that Magellan’s FUM has fallen 6.85% since the end of January to $87.1 billion. And with several ratings agencies putting its funds under review or downgrading them, there’s a real chance that its FUM could continue to fall as the month rolls on.

Zip shares tumble

The Zip Co Ltd (ASX: Z1P) share price is tumbling lower today in response to a heavy decline from a rival on Wall Street. The Affirm share price crashed 21.5% during the overnight session and then a further 7% in after-hours trade. Investors were selling down the BNPL provider’s shares after its quarterly update disappointed.

Best and worst ASX 200 performers

The Unibail-Rodamco-Westfield (ASX: URW) share price is the best performer on the ASX 200 today with a 7% gain. This follows news that it is selling a 45% stake in Westfield Carré Sénart and creating a joint venture with Societe Generale Assurances and BNP Paribas Cardif. The worst performer has been the Appen Ltd (ASX: APX) share price with a 7.5% decline. This follows broad weakness in the tech sector and ongoing concerns over demand for its services.

The post ASX 200 (ASX:XJO) midday update: IAG upgrades guidance, Magellan sinks again appeared first on The Motley Fool Australia.

More reading

• Magellan (ASX:MFG) share price slides 6% as FUM bloodbath continues
• ASX BNPL shares in focus after Affirm (NASDAQ:AFRM) share price tumbles 21%
• IAG (ASX:IAG) share price on watch amid earnings miss but guidance upgrade
• After a disastrous 2021, the Zip (ASX:Z1P) share price has tumbled another 30%. What’s going on?
• 5 things to watch on the ASX 200 on Friday

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 Appen Ltd and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen Ltd and Insurance Australia 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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It’s a good day to own Woolworths Group Ltd (ASX: WOW) shares for fans of both start-ups and supermarket giants.

The company’s venture capital leg W23 – which works to partner with start-ups to grow their brands ­– has welcomed a new face. Enter, plant-based meat producer All G Foods.

At the time of writing, the Woolworths share price is $33.64, 1.55% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is down 1.06% right now.

Let’s take a closer look at Woolworths’ latest multimillion-dollar investment.

Here’s Woolworths’ latest investment

Today’s news from the Australian Financial Review (AFR), later shared on W23’s website, details the supermarket’s second investment into plant-based meat.

Woolworths’ W23 also backs Harvest B. Harvest B works to supply plant-based meat producers with ingredients to create their products.

That’s a short hop, skip, and jump from All G Foods’ business. The company is behind plant-based meat brand Love BUDS.

Additionally, its website states it’s working to use precision fermentation to produce animal proteins, therefore creating milk “without the cow”.  

All G Foods’ founder and CEO Jan Pacas is also a co-founder of pet services business Mad Paws Holdings Ltd (ASX: MPA), which floated on the ASX in March 2021.

It welcomed Qantas Airways Limited (ASX: QAN) and Airtasker Ltd‘s (ASX: ART) founder as pre-IPO investors.

Pacas also co-founded unlisted tech company Flare.

It’s not public how much funding Woolworths has provided All G Foods. However, the AFR reported All G Foods’ seed funding round raised $16 million last year.  

“There’s a great attraction to work with Woolies because they’re an innovative company with great distribution capabilities,” Pacas was quoted as saying today. “They’re the dream partner.”

“I want to make this bigger than A2 Milk Company Ltd (ASX: A2M) was at its peak.”

Woolworths share price snapshot

This year so far has been tough on the Woolworths share price.

It has fallen 12% year to date, leaving it 3% lower than it was 12 months ago.

The post Own Woolworths (ASX:WOW) shares? Now you also own part of this niche start-up appeared first on The Motley Fool Australia.

More reading

• Why is the Woolworths (ASX:WOW) share price trailing Coles by 5% over the past month?
• Why does the Woolworths (ASX:WOW) share price have the blues today?
• Price check: Woolworths (ASX:WOW) shares have already dropped 8% in 2022. Can they recover?
• Could this be the biggest issue faced by ASX retail shares heading into earnings season?
• Will supply chain issues continue to dog Woolworths (ASX:WOW) when it reports this month?

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 recommended Airtasker Limited. The Motley Fool Australia has recommended A2 Milk. 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 Codan Limited (ASX: CDA) opened poorly on Friday and now trade less than 2% down at $8.99 apiece.

Codan shareholders have been walking on a saw’s edge these past 3 months with shares descending from highs of $10.44 in November to now trade near 52-week lows.

Zooming out, the picture is even more painful for Codan. Shares have faltered off 52-week highs of $19.33 back in June 2021 and there has been several drops of $2 in a day across that time.

Yet whilst most investors are feeling pessimistic, not all market pundits are as downbeat on Codan. Plus, shares have climbed 4% in the last week of trading, suggesting newfound support as market turbulence begins to settle in 2022. Could it be that Codan is set for a comeback this year? Let’s take a look.

Is Codan set to explode in 2022?

According to Simon Conn, portfolio manager at Investors Mutual Limited, that could very well be the case, should the market agree.

Speaking to an episode of Buy Hold Sell on Livewire, Conn noted that Codan is a stock that’s “probably not well known by investors” although, the company “has a great management team, a good board and it dominates a niche”.

In fact, Codan makes handheld metal detectors and other mining technologies, in addition to defence communications that are used by the military in combat.

It has exposure to the domestic security, NGO’s, military defence, public safety, remote land management and commercial sectors, and was first incorporated in South Australia in 1959.

The portfolio manager explains that Codan has been outselling its competition for many years now, and have a global leadership position in the market.

Importantly for investors, the company reaffirmed its guidance for the first half in an update last month, according to Conn. Investors appeared somewhat galvanised by the results, and bought in at 52-week lows and drove the stock north in vertical fashion.

However, Codan has been caught up in the tech selloff that’s ensued since December and hasn’t been able to recover since. It is down 2% since January 4, but has regained strength recently and is now up 3% for the last month of trading.

Nevertheless, Conn and his team are excited about the company’s balance sheet and growth prospects, especially considering it is such a mature entity.

“But again, a good management team, trades on 15 times [earnings], it’s debt-free, which positions them for further acquisitions. And it’s a business that we think can continue to grow”, he said.

“Their other division is in the radio communications sector. They made some recent acquisitions in that area and they highlighted in their update last week that those businesses have tracked well and there’s further acquisition opportunity for them to build out that portfolio in time”, Conn added.

Although, the market has to agree with this sentiment, and with the S&P/ASX All Technology Index (ASX: XTX) plunging more than 15% so far in 2022, the pressure is on Codan to show up to the party.

Even still, valuation, financial health and a market leading position form the bulk of Conn’s bullish thesis on Codan.

“We think it looks pretty attractively priced at these levels”.

Codan share price snapshot

In the last 12 months, the Codan share price has lost over 24% and is now down 2% this year to date.

Over the last month of trading, shares have regained support and are now up 3%, and another 4% in the past week.

The post Fundie says this beaten up ASX All Ordinaries share is set to surge in 2022 appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• Why did these tech shares lead the ASX 200 today?
• These were the best performing ASX 200 shares last week
• Why A2 Milk, Baby Bunting, Codan, and Sezzle shares are surging higher
• ASX 200 (ASX:XJO) midday update: Zip confirms Sezzle talks, Fortescue’s Q2 update

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 REA Group Limited (ASX: REA) share price has been in a funk since the start of the year, plunging by 21%.

The property listings business announced its FY22 half-year results earlier this month. Despite smashing expectations, the REA share price has not responded in kind.

At the time of writing, REA shares are swapping hands for $135.23, down 3.07% for the day so far.

What’s dragging the REA share price lower?

Investors have been selling off REA shares despite the company reporting a robust six-month performance in H1 FY22.

While key financial metrics increased in the double-digits, it appears investors were more focused on the outlook for the second half.

REA advised that growth rates are expected to slow down as it cycles through a strong period of listing volumes. In addition, the federal election and potential regulatory measures to slow house price inflation could also negatively impact listing volumes.

As such, management didn’t provide any earnings guidance for the full year, which appears to have unsettled investors.

In the days following, the REA share price sank to an 11-month low of $134.11 but has since rebounded slightly.

Is this a buying opportunity?

In an interview with Livewire Markets run by Ally Selby, Elston Asset Management’s Bruce Williams and Investors Mutual Limited’s Simon Conn gave their view on the REA share price.

Williams touched on the company’s fundamentals but placed a hold on REA shares. He said:

It’s just a hold for us at the moment, verging on a sell. It is a very good business. The platform business is very strong domestically, and it’s had a great property market. We just struggle to see how they maintain the growth they have achieved because they’ve done a lot on pricing, premium pricing penetration, as they call it. The property market’s been extremely good and it’s likely not to roll off, but become a little more steady, which will promote less activity, which is what this company thrives on. So for us on a valuation basis, it’s hanging on to a hold.

Conn said sell after being asked if the REA share price is cheap enough. He said:

No, not yet. It’s still very full at 41 times going to maybe 35 times next year. There’s a lot of good news in the price and as Bruce alluded to, there’ll be headwinds going forward over the year in the housing market. Look, it’s a great business. It has a great network effect. So they’ve got some pricing power. There’s just a lot of good news baked into the price. We think Domain is a more attractively priced opportunity in that sector and we’re playing that by owning Channel Nine which has a 60% holding in Domain, which is quite a bit cheaper than REA.

About the REA share price

Over the past 12 months, REA shares have dropped by around 13% for shareholders. The company’s share price is treading close to its 52-week low of $131.33.

On valuation grounds, REA commands a market capitalisation of roughly $18.43 billion, with approximately 132.12 million shares on its registry.

The post The REA (ASX:REA) share price has tumbled 21% this year. Is it a bargain? appeared first on The Motley Fool Australia.

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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 recommended REA 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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