Tag: Motley Fool

Key points

• The Ioneer share price has dropped 19% in a month
• The lithium explorer (along with a joint ventur partner) has made advancements in the construction of its US-based site
• The US site aims to become “an integral part of the US electric vehicle supply chain”

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The Ioneer Ltd (ASX: INR) share price has seen a significant drop within the last month.

Between the market closes on January 4 and February 4, Ioneer shares fell 19.28%. However, they climbed 4.69% today to close at 67 cents.

So what’s been going on with the company, which describes itself as “an emerging American lithium-boron supplier”?

Let’s dive in…

How has ioneer been performing?

Last week, the explorer released its activities and cash flow report for the quarter ending 31 December.

Most notable was a strategic investment from US-based Sibanye-Stillwater to develop Ioneer’s flagship Rhyolite Ridge lithium-boron project in Nevada, described as the “most advanced lithium project in the US”.

The company reported cash and equivalents at $149 million, and activities as follows:

• Silbanye-Sillwater’s US$70 million strategic investment in Ioneer;
• “Major progress” on its goal of achieving secondary listing of Ioneer shares by CY 2022;
• Advancement in offtake discussions directed at the US supply chain, which are expected to conclude by CY 2022;
• “Engineering and procurement activities” for site construction at advanced stage; and
• Ioneer invited into due diligence by the US Department of Energy’s (DOE) Loan Programs Office.

Since 31 December, the Ioneer share price has decreased by 16%.

What’s going on with Ioneer?

Despite the drop in the Ioneer share price, the explorer is remaining positive on its flagship operations.

The financing from Sibayne-Stillwater (which has entered into a joint venture with the company), tied with the invite from the DOE, signifies a major step towards the lithium project becoming “an integral part of the US electric vehicle supply chain”.

However, the Ioneer share price saw a 14.5% drop between the DOE’s invitation on December 20 and its activities report on January 25.

Ioneer managing director Bernard Rowe said Sibayne-Stillwater “share our vision of becoming a major force in the battery materials supply chain” and that the “investment further aligns our two companies as we look to bring the Rhyolite Ridge project to production”.

It aims to be construction-ready by Q4 2022.

Further, Rowe said:

We continue to see increased demand globally for lithium products and are well positioned to capitalise on the US Government’s efforts to secure critical minerals supply chains for end uses like EVs and renewable energy infrastructure in the US.

The uptick in inbound enquiries from potential offtake parties has only strengthened this quarter, as lithium supply is short, and prices have been rising.

Ioneer share price snapshot

Over the past 12 months, the Ioneer share price has increased by 63%. It saw its lowest price of 28 cents in late June and its highest price of 85 cents in mid-December.

The company has a market capitalisation of $1.31 billion and 2.05 billion shares issued.

The post Why the Ioneer (ASX:INR) share price has dropped 19% in a month appeared first on The Motley Fool Australia.

More reading

• Amcor (ASX:AMC) shares are ‘a terrific defensive position’: expert
• Is Bitcoin a good way to diversify an ASX share portfolio?
• Rio Tinto (ASX:RIO) share price withstands the drama to surge 15% in a month. Here’s why
• Here are the top 10 ASX shares today
• This ASX share can give investors access to the compelling cybersecurity world

Motley Fool contributor Alice de Bruin 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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Key points

• Bitcoin and other cryptocurrencies have long divided opinions
• Some see the asset as digital gold, others consider it worthless
• Let’s take a look at what this investing expert reckons…

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Most investors would now acknowledge that Bitcoin (CRYPTO: BTC) and other cryptocurrencies are now very much part of the mainstream investing zeitgeist. But that doesn’t mean cryptocurrencies aren’t still enormously divisive and controversial assets.

There is still a large camp of investors convinced that Bitcoin and other cryptos are on course to change the world as we know it. But there is still another large camp that consider Bitcoin to be one of the biggest investing hoaxes of all time.

Hamish Douglass of Magellan Financial Group Ltd (ASX: MFG), for example, falls into the latter camp. Last year, we discussed his remarks describing cryptocurrencies as having “zero intrinsic value” and “one of the greatest irrationalities I’ve seen in a very, very long period of time”.

Hero or zero?

So even if one doesn’t fall into one of the two camps described above, how does one view Bitcoin? Is it an asset class that can provide some positive diversification to your average ASX investing portfolio?

Investors often use different asset classes to diversify their own portfolios. For example, many investors invest in both shares and property because these markets largely move independently from each other. The same goes for gold or government bonds.

Some investors do indeed think that Bitcoin can fulfil this role. Many describe Bitcoin as ‘digital gold’, an inflation hedge or an effective store of value. Those traits would indeed likely give it a useful role in portfolio diversification. But let’s see what an investing expert reckons. Mike Young, of Mason Stevens, recently shared his views on this matter on Livewire.

Does Bitcoin give a portfolio diversification?

Mr Young was asked about the role that Bitcoin could play in diversifying a portfolio. He makes some interesting observations. Young points out that Bitcoin is not as ‘uncorrelated’ to other asset classes as people think, especially over short periods of time:

Over the long run, [diversification using Bitcoin] makes sense – as cryptocurrencies purport to reshape global financial systems – and therefore will be beholden to different narratives.

However, it has become increasingly more obvious over the last two years that cryptocurrencies are still very much affected by the incumbent financial system – particularly over the last few months as cryptocurrencies have fallen lockstep with equity markets.

Bitcoin can serve as an effective point of diversification within investor profiles over longer-term time horizons, where the factors that shape long term valuations differ greatly from traditional markets.

It’s that distinction between ‘short-term correlation’ and long-term correlation’ that is interesting. In short, Young seems to be saying that Bitcoin won’t help protect your portfolio from market volatility. But it can still be useful as a long-term diversification instrument.

There is no easy answer here. Bitcoin’s future is arguably more uncertain than any other asset class due to its currency-like structure, and its relatively recent ascension. Perhaps that’s why Young cites billionaire hedge fund manager Ray Dalio’s recommendation of a portfolio allocation to Bitcoin at around 2%.

But only more time will tell as to what role Bitcoin will play in our financial system. And what role it should play in our investing portfolios.

 

The post Is Bitcoin (CRYPTO:BTC) a good way to diversify an ASX share portfolio? appeared first on The Motley Fool Australia.

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• Cryptocurrency crash fails to put a dampener on cash-raising fiesta
• Is Bitcoin using lots of energy actually a good thing?
• Bitcoin price slides again. Here’s what crypto investors are watching
• Why these five cryptos could leave Bitcoin in the dust in 2022
• What are Stablecoins and how do they differ from other cryptocurrencies?

Motley Fool contributor Sebastian Bowen owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. 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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Key points

• Rio Tinto shares have surged nearly 14% in a month
• The company has recently executed a deal on its Oya Tolgoi copper mine
• But Rio has been rocked by Serbia revoking an exploration licence, and a workplace culture report

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The Rio Tinto Limited (ASX: RIO) share price has performed well over the past month despite multiple challenges.

The mining giant’s shares have gained 15% since market close on 4 January. In today’s trading, the company’s share price closed 0.41% higher at $114.61.

Let’s take a look at why the Rio Tinto share price has surged this month.

Why has Rio Tinto beat the storm?

The Rio Tinto share price has risen steadily in the past month with a few minor bumps along the way.

The shares fell on January 24 amid Serbia revoking Rio Tinto’s exploration licences on its $2.4 billion lithium project. The Serbia Prime Minister stated “all permits were annulled…we put an end to Rio Tinto in Serbia”, the BBC reported.

In response, Rio chief executive Jakob Stausholm expressed Rio was “very concerned” about the comments made by the Serbian PM, Reuters reported.

I’m very proud of what we’ve done there. We have always followed the laws and regulation in Serbia as we focused on that amazing project.

On Monday, the company released a review of its workplace culture. The report included findings of bullying, racism, and sexual assault.

Leadership is promising to implement change and put in place all recommendations of the report. WA Mines Minister Bill Johnston has urged other companies to follow Rio Tinto’s lead, the Western Australian reported.

The report does not seem to have adversely impacted the company’s share price, with Rio Tinto shares gaining around 5% since February 1.

A lot has also gone right for the company in the past month.

On January 25, Rio announced it had made a deal with stakeholders to restart work at its Oyu Tolgoi copper mine in Mongolia. This is predicted to be the fourth biggest copper mine in the world by 2030.

Rio’s share price inched slightly higher on the back of its quarterly trading update. Pilbara iron ore shipments fell 5% to 84.1 million tonnes (Mt).

Copper and aluminum volume also declined. However, Rio forecast iron ore shipments of 320Mt–335Mt in 2022 and copper production of 500kt–575kt.

The iron ore price increased from US$117 per tonne at market close on 4 January to US$143.50 per tonne on 3 February. That’s a 22.6% increase. Copper has also edged 0.44% higher in the same time period.

Rio Tinto share price snap shot

The Rio Tinto share price has only risen about 0.3% in the past 12 months but has increased nearly 5% in the past week alone.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past 12 months.

Rio has a market capitalisation of $42 billion based on its current share price.

The post Rio Tinto (ASX:RIO) share price withstands the drama to surge 15% in a month. Here’s why appeared first on The Motley Fool Australia.

More reading

• Is now the time to buy shares of ASX 200 iron ore giants? Expert weighs in
• Do any ASX lithium shares pay dividends?
• Rio Tinto (ASX:RIO) boss: ‘This is not the type of company we want to be’
• Rio Tinto (ASX:RIO) vs Traditional Owners: $400m battle continues
• These were the best performing ASX 200 shares last week

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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Today, the S&P/ASX 200 Index (ASX: XJO) surged into the close to post a green finish to the week. At the end of the session, the benchmark index finished 0.59% higher at 7,120.1 points.

Prior to the last hour, the Aussie index had been swinging between positive and negative consistently throughout the day. The indecision came to an end as most of the red sectors flipped and proceeded to rally into the close. Industrials and tech led the gains today, despite a harrowing performance across US tech companies last night.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, AVZ Minerals Ltd (ASX: AVZ) was the biggest gainer today. Shares in the mineral exploration company rallied 6.21% without any obvious catalyst. Shares AVZ Minerals are now up more than 315% in the last year. Find out more about AVZ Minerals here.

The next biggest gaining ASX share today was Liontown Resources Ltd (ASX: LTR). The battery metals explorer served up a solid 6.18% gain today. This upwards move came amid the company announcing the successful completion of its share purchase program, raising $12.9 million in the process. Uncover the latest Liontown Resources details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
AVZ Minerals Ltd (ASX: AVZ)	$0.77	6.21%
Liontown Resources Ltd (ASX: LTR)	$1.46	6.18%
Qantas Airways Ltd (ASX: QAN)	$5.19	4.85%
Virgin Money UK PLC (ASX: VUK)	$3.83	4.08%
South32 Ltd (ASX: S32)	$4.11	3.27%
Ebos Group Ltd (ASX: EBO)	$37.46	3.20%
Zip Co Ltd (ASX: Z1P)	$3.00	3.09%
Nine Entertainment Co Holdings Ltd (ASX: NEC)	$2.75	3.00%
Paladin Energy Ltd (ASX: PDN)	$0.71	2.90%
Super Retail Group Ltd (ASX: SUL)	$12.14	2.79%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• Freaky Friday: Why was the ASX 200 so indecisive today?
• Expert sounds the warning bell on ASX ETFs… Here’s why
• These 3 ASX 200 shares are topping the volume charts on Friday
• ‘Strong support’: Here’s why the Liontown (ASX:LTR) share price is pouncing higher today
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Super Retail Group Limited and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Super Retail 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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Key points

• The global cybersecurity industry is a growing sector due to to the rising amount of cybercrime as more activity and information is online
• Betashares Global Cybersecurity ETF is an ASX share that allows investors to invest in a quality group of cybersecurity businesses
• It has plenty of the world’s biggest players in the portfolio such as Cisco Systems, Accenture, Palo Alto Networks and Crowdstrike

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Betashares Global Cybersecurity ETF (ASX: HACK) is an ASX share that can give investors exposure to some of the world’s leading cybersecurity businesses in an exchange-traded fund (ETF) structure.

Why is cybersecurity a growth industry?

Worldwide spending on cybersecurity is predicted to increase to almost US$250 billion.

The PWC 2022 global digital trust insights report showed that around 70% of entities which responded expect to grow their cybersecurity spending in 2022. Just over a quarter said they were expecting to increase cyber defence expenditure by at least 10%.

Around the world, cybercrime continues to rise. According to Australian statistics, there were over 67,500 cybercrime reports in FY21, an increase of nearly 13% from the previous financial year. The self-reported losses from cybercrime totalled more than $33 billion.

Approximately one quarter of the reported cyber security incidents affected entities associated with Australia’s critical infrastructure.

Fraud, online shopping scams and online banking scams were the top reported cybercrime types.

In FY21, there was an increase in the average severity and impact of reported cybersecurity incidents, with nearly half categorised as ‘substantial’.

By 2023, the global cybersecurity market is expected to rise to US$248.26 billion.

How does the Betashares Global Cybersecurity ETF fit in?

The HACK ETF portfolio owns many of the businesses involved in the hardware and software that is keeping organisations and individuals safe (or at least safer) in the digital world.

Readers may have heard of some of the 35 businesses in the ETF’s top holdings. These are the biggest 10 positions: Cisco Systems, Accenture, Palo Alto Networks, Crowdstrike, Check Point Software, Juniper Networks, VMware, Akamai Technologies, Leidos and Cloudflare.

The above businesses offer services like firewalls, secure logins, cybersecurity accreditation, important equipment and so on.

Getting exposure to this industry through the HACK ETF comes with an annual management fee of 0.67%.

Performance of the ETF

Past performance is not a reliable indicator of future performance. However, since inception the Betashares Global Cybersecurity ETF has produced net returns of an average of 22.3% per annum to December 2021. In the past three years, the ETF’s net returns have been an average of 30.5% per annum.

The post This ASX share can give investors access to the compelling cybersecurity world appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX tech shares for investors in February
• 3 high quality ETFs for ASX investors in February
• 2 excellent ETFs for ASX investors in February
• 2 strong ETFs for potential growth
• 2 popular ETFs for ASX investors in 2022

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. 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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Key points

• The ASX 200 Index floated between gain and loss multiple times today
• Despite a reduction in volatility, investors are having a hard time deciding on whether or not now is the time to buy
• Uncertainty around interest rates could be playing a role

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The S&P/ASX 200 Index (ASX: XJO) had a rollercoaster of a day on Friday. Since market open this morning, the benchmark index swung between negative and positive seven times in the session.

At market close, the index tracking the top 200 listed Australian companies finished the day at 7,120.1 points, up 0.60%. An improvement from its position a week ago, when the index was tracking below 7,000 points for the first time since May 2021.

However, the wobbly behaviour of the market suggests that investors were drawn in two directions today.

Here’s a look at what might have aided in the swinging of sentiment on Friday.

Contending ways of looking at the ASX 200 today

Investors showed signs of difficulty in deciding whether they want to buy or sell ASX 200 shares today. None of the 11 sectors made substantial moves in either direction.

This follows an apparent peak in the volatility index on 27 January. Since then, the velocity of moves in either direction of the ASX 200 has trended lower, as shown in the chart below. The milestone coincided with another, the index officially crossing into correction territory.

However, the ASX 200 has since been able to find its footing and avoid further losses. Meanwhile, investors have been watching two different stories being played out in the world of monetary policy.

Last week, Federal Reserve chair Jerome Powell sent shivers down the spine of market participants as he hinted at a potential rate rise as early as March. In contrast, Reserve Bank of Australia governor Philip Lowe remained relatively dovish on Tuesday.

Our own central bank maintained that it was too early to raise interest rates. Although, the next day it seemed Lowe backtracked to a degree, saying a rate rise this year was “plausible”. The governor did add that while there is a chance, it remains “extremely unlikely”.

The conflicting takes on inflation and the potential of rate rises possibly have investors unsure until further notice.

The post Freaky Friday: Why was the ASX 200 so indecisive today? appeared first on The Motley Fool Australia.

More reading

• Expert sounds the warning bell on ASX ETFs… Here’s why
• These 3 ASX 200 shares are topping the volume charts on Friday
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets
• Should you buy ASX shares now or wait just a little bit?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Mitchell Lawler 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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Key points

• The Nitro share price has fallen out of favour with investors but Goldman Sachs thinks it’s too cheap to ignore
• The ASX tech shares operate in a US$34bn market that has a positive growth outlook
• The broker initiated coverage on its shares with a ‘buy’ recommendation and $2.95 price target

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The Nitro Software Ltd (ASX: NTO) share price rebounded on Friday after Goldman Sachs listed the company as its latest ASX tech ‘buy’ idea. This comes after Nitro ended the previous two days in the red.

Shares in the global document productivity software company jumped 1.85% to close at $1.93 apiece.

In contrast, the S&P/ASX 200 Index (ASX: XJO) ended the day up 0.59% at 7,120 points.

Nitro share price falls from grace

The threat of interest rate hikes is weighing on ASX tech shares but Goldman Sachs believes the Nitro share price is cheap.

The broker initiated coverage on the company and pointed out that its total addressable market (TAM) stands at US$34 billion.

“Nitro operates in large, underpenetrated markets supported by structural growth tailwinds including remote work, enterprise digitisation, and e-signing adoption,” said the broker.

“We estimate Nitro can increase its TAM penetration from 0.15% to 1.4% by FY40 implying 9x uplift to Nitro’s current revenue base.”

That assumption may sound too aggressive to some, but Goldman believes it’s achievable for three reasons.

First is Nitro’s core competitive advantages. Its products are cheaper, easy to use, and come with good customer service.

Further, there is strong underlying market growth. Additionally, the large market leaves plenty of room for Nitro and its competitors to grow sales.

The fact the Nitro share price has fallen so hard shows how much investors are underappreciating its growth potential.

How much is the Nitro share price worth?

Goldman noted the Nitro share price trades at around a 70% discount to its software-as-a-service (SaaS) peers.

The broker’s 12-month price target is $2.95 a share. This implies a 53% upside to the current share price.

But investing in Nitro isn’t without risks. Competition from larger rivals and other challengers and execution risks are some of the factors investors should be cognisant of.

Other concerns highlighted by Goldman include higher-than-expected investment levels and currency risks.

The post ‘Plenty of uplift’: Here’s why the Nitro (ASX:NTO) share price took off today appeared first on The Motley Fool Australia.

More reading

• 3 excellent ASX tech shares Goldman Sachs rates as buys
• Why AnteoTech, Newcrest, Nitro, and ResMed shares are falling
• Here’s why the Nitro (ASX:NTO) share price is backtracking 6% today
• 3 exciting small cap ASX shares to watch
• 2 buy-rated ASX tech shares with 100% upside in 2022

Motley Fool contributor Brendon Lau 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 Nitro Software 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 rise of the exchange-traded fund (ETF) has been one of the most prominent investing themes of the ASX over the past decade or so.

From the humble beginnings of the index fund, ASX ETFs now cover almost every sector and theme imaginable on the share market. ETFs have also exploded in popularity in recent years. In fact, 2021 was the best year ever for the sector which saw both record inflows and funds under management.

But one investing expert is sounding the warning bell for ASX ETF investors.

Investment strategist and former chief investment officer at JB Were, Giselle Roux recently appeared on The Australian‘s Money Cafe podcast to discuss the emergence of ETFs in Australia.

She made some interesting points about the modern structure of the ETF market.

So a common misconception amongst some investors is that ETFs are all structured in a similar way, or even that all ETFs are index funds. That was perhaps more or less true once upon a time but is certainly not in 2022.

The rise of the ‘active ETF’ poses challenges

Roux said that the ETF sector has been increasingly seeing more ‘active ETFs’. These ETFs function in a manner similar to a managed fund, rather than an index fund.

Roux called out this phenomenon as ‘trying to have the best of both worlds’. She explained that they harness the ‘passive-nature’ reputation of ETFs but use active stock selection to build portfolios.

Roux said:

What you have seen is the ETF space had diversified to where in many cases a lot of the ETFs currently on offer are arguably active funds, because they have narrowed their universe to a set of companies in an industry or to a factor… Then you’re starting to muddy the water between the purest ETF, a simple index tracker… versus an active manager that does fundamental research and makes a decision on stocks that is not based on an algorithm.

She pointed to how ETFs such as the BetaShares Robotics and Automation ETF (ASX: RBTZ) and the ETFS S&P Biotech ETF (ASX: CURE) have recently taken tumbles far nastier than the S&P/ASX 200 Index (ASX: XJO) as an example of this playing out.

Roux stated that some of these ‘thematic ETFs’ hold very concentrated portfolios. This can give the provider liquidity issues if there are large volumes of inflows or outflows at any given time.

So, some things to think about when you’re considering your next ASX ETF investment!

The post Expert sounds the warning bell on ASX ETFs… Here’s why appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Friday
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets
• Should you buy ASX shares now or wait just a little bit?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares 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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It has been a difficult couple of years for the Transurban Group (ASX: TCL) share price.

With its toll roads becoming a ghost town during the height of the pandemic, its earnings and distributions have suffered and this has put significant pressure on its shares.

Is the TCL share price about to get some TLC?

According to the team at Morgans, the Transurban share price could be heading a lot higher from current levels.

The note reveals that Transurban is one of its best ideas at the moment and could offer investors significant upside potential.

Morgans currently has an add rating and $14.57 price target on the toll road giant’s shares. This implies potential upside of almost 13% over the next 12 months based on the current Transurban share price.

In addition, the broker is expecting the company to reward its shareholders with a 35 cents per share distribution in FY 2022. If we add this into the equation the total return stretches to beyond 15%.

And it is also worth noting that Morgans expects a big recovery in its distribution in FY 2023, with its analysts pencilling in a 58% increase to 55.3 cents per share.

Why is Morgans positive on Transurban share price?

Morgans is positive on the company due largely to its exposure to regional population and employment growth and urbanisation trends.

It explained: “TCL owns a pure play portfolio of toll road concession assets located in Melbourne, Sydney, Brisbane, and North America. This provides exposure to regional population and employment growth and urbanisation. Given very high EBITDA margins, earnings are driven by traffic growth (with recovery from COVID) and toll escalation (roughly half at CPI and the remainder fixed c.4% pa).”

“We think TCL will continue to be attractive to investors given its market cap weighting (important for passive index tracking flows), the high quality of its assets, management team, balance sheet, and growth prospects. Watch for rapid recovery in DPS alongside traffic recovery and WestConnex acquisition prospects,” it concluded.

The post Here’s why Transurban (ASX:TCL) shares could be in for some investor TLC appeared first on The Motley Fool Australia.

More reading

• Morgans names 4 more of the best ASX shares to buy in February
• Broker names 2 ASX 200 dividend shares to buy in February
• Why has the Transurban (ASX:TCL) share price tumbled 12% so far in 2022?
• 2 ASX dividend shares Morgans rates as buys
• Brokers name 2 ASX 200 dividend shares to buy

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

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The REA Group Limited (ASX: REA) share price has edged lower despite the company’s impressive half-year results released earlier today.

In its report, the real estate classifieds company recognised a 37% year-on-year gain in revenue and a similar jump in net profit and earnings per share (EPS).

Not only that, but REA’s board declared a juicy 75 cents per share interim dividend for shareholders to bite into – a spike of 27% on the last payment.

The REA share price ended today’s session at $142.83, down 0.65% after a wild ride today.

Earlier this morning, the REA share price soared by 5.5% to $151.99. In intraday trading though, it dropped as low as $139.83, representing a 2.9% decline on yesterday’s close.

With such a strong business performance clearly on display, and a fluctuating share price, is REA a buy right now? Let’s see what these experts have to say.

Is REA Group a buy?

According to analysts at investment bank Citi, REA is worth considering for ASX investors.

The broker said REA’s strong performance took the market by surprise, as it beat expectations on both revenue and expenditure.

Of particular note was the circa 25% growth in turnover from financial services. This was alongside the company’s outsized growth in its India operations, both of which impressed the broker.

Even though REA missed Citi’s forecasts on commercial developer revenues by approximately 10%, it reckons this half’s outcome is sure to result in a suite of analyst upgrades on FY22 estimates.

Not only that, but the earnings surprise should bode well for the REA share price, Citi says. This is especially because market pundits were baking in lower results from the company.

As such, analysts at Citi recommend REA as a buy and price the company at $144.04 per share.

Analysts at Citi weren’t the only ones chiming in with an update on REA today.

Andrew McLeod of Morgan Stanley also reaffirmed their overweight/attractive rating for REA shares, assigning a $182.50 price target in the process.

However, the team at Barrenjoey Markets were less constructive, leaving a neutral rating on REA. They have a $175 per share valuation. That’s substantially lower than other price targets, but curiously, higher than the bullish Citi’s valuation.

According to a list of analysts provided by Bloomberg Intelligence, more than 56% of coverage has REA as a buy. Just 1 broker has it as a sell.

The consensus price target on the company is $165.54 (ex-dividend), suggesting a potential 16% upside.

REA share price snapshot

The REA share price has collapsed by 17% since 1 January amid a broad market sell-off in classifieds shares.

However, the trend has been in situ for some time, with classifieds shares tumbling over the previous quarter to trade at around 52-week lows. Other classifieds shares caught up in the sell-off include Carsales.com Ltd (ASX: CAR) and Seek Limited (ASX: SEK), which are down 13% and 17% respectively.

The post Stellar earnings beat but REA (ASX:REA) share price dips… Do brokers say buy? appeared first on The Motley Fool Australia.

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Citigroup 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 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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