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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 1.1% to 7,086.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is up 4% to $4.32. This appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded the telco’s shares to an outperform rating with a $5.00 price target. Although the company fell short of Credit Suisse’s first half estimates, it believes recent share price weakness has created a buying opportunity.

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price has jumped 7% to $1.77. This follows news that the artificial intelligence chip company has been awarded another patent in the United States. This patent protects the basic structure and function of a digital neuron consisting of multiple synapse circuits connected to a soma circuit.

Talga Group Ltd (ASX: TLG)

The Talga share price is up 6% to $1.60. Investors have been buying this graphite company’s shares in response to an update on drilling activities at its Vittangi Graphite Project. According to the release, recent drilling has delivered further spectacular graphite grades over substantial widths, with all deposits remaining open along strike and at depth.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is up 1.5% to $4.00. This morning the telco giant announced two new telecom projects costing up to $1.6 billion that are set to improve connectivity nationwide. One of the projects involves a collaboration with global communications company Viasat to provide Australians with higher data and video streaming speeds.

The post Why Aussie Broadband, BrainChip, Talga, and Telstra shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share price climbs on new $1.6 billion ‘nation-building’ projects
• What’s driving the BrainChip (ASX:BRN) share price 14% higher today?
• Broker names 2 ASX 200 dividend shares to buy in February
• Why Aussie Broadband, BHP, Brambles, and Champion Iron shares are dropping
• Here are the 3 most heavily traded ASX 200 shares this Tuesday

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 Aussie Broadband Limited. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Aussie Broadband 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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Shares in computer hardware and software distributor Dicker Data Ltd (ASX: DDR) are edging lower in today’s session, now trading down 0.9% at $13.24 apiece.

The Dicker Data share price has lost support in the last few months, tumbling from a high of $15.60 back in early November.

While there’s been nothing remarkable from the company in that time, ASX tech shares have led the broad market losses this year. That’s amid a widespread tremor in global equity markets since December.

Dicker Data certainly hasn’t been immune to the selloff. Its shares hit 3-month lows of $12.05 just last week.

However, there’s life in the company’s stock once again with its share price gaining 5.56% in the past week.

Let’s take a look at what’s behind the price action.

What’s up with the Dicker Data share price this week?

Even as Dicker Data struggled in January, in the past few days, its shares have reversed course and rallied as much as 11% since Australia Day last week.

As well, the company also released an update today regarding a new distribution agreement with Autodesk, Inc (NASDAQ: ADSK) for Australia and New Zealand (ANZ). While the announcement isn’t price-sensitive, it contains important updates regarding Dicker Data’s growth plans.

Specifically, the company advised it has been appointed as the non-exclusive Autodesk distributor for both the ANZ regions. It’s part of a 3-year deal that took effect yesterday, 1 February.

“Whilst it is not possible to quantify the revenue impact the new distribution agreement will have at this stage, it is expected to be material and significant over the course of the three-year period,” the company said.

This deal follows Autodesk’s strenuous review and planning process underway in recent months. It saw the company consolidate its ANZ distributors to just 1 entity. Dicker Data first began distributing Autodesk in 2014 following the acquisition of Express Data Holdings.

Dicker Data chair and CEO David Dicker commented on the agreement:

This is a particularly satisfying outcome for our company that clearly demonstrates our strength in software and subscription distribution models.

It’s pleasing to see these strengths recognised at a global and regional level with the confidence technology giants such as Autodesk, and others, place into us as their only distributor in ANZ.

The recent price action in Dicker Data shares has caught the attention of analysts at Evans & Partners, according to a recent note from the broker.

Its analysts initiated coverage of Dicker Data with a “positive” rating – akin to a bullish stance.

Evans & Partners values the company at $15.10 per share, suggesting a potential upside of 13%.

The consensus price target on Dicker Data is also conveniently $15.10 per share, according to Bloomberg Intelligence.

Dicker Data share price snapshot

In the last 12 months, the Dicker Data share price has gained more than 15% after a strong display in 2021.

This year to date, however, the company’s shares have plunged 10%. Hence, this week’s gains provide welcome respite for Dicker Data shareholders.

The post Here’s why the Dicker Data (ASX:DDR) share price is having such a great week appeared first on The Motley Fool Australia.

More reading

• An ASX XI to take on the world
• 2 ASX 200 shares that could be top buys for dividends
• Top ASX dividend shares to buy in 2022

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. owns and has recommended Dicker Data Limited. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Autodesk. 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 technology and financial services provider Computershare Limited (ASX: CPU) are surging higher today and now trade more than 5% in the green at $20.72.

After a slight stumble, the Computershare share price went vertical in late January, soaring off a low point of $19.12 to trade back near its record highs once again.

All of this price action has caught the attention of analysts at Swiss Investment bank UBS in a note today. The broker revised its Computershare rating from neutral to buy today. Let’s take a closer look.

Are Computershare shares a buy?

According to the team at UBS, the recent pullback in Computershare’s stock presents as a potential buying opportunity for investors.

UBS adds that the prospects for capital gains are further increased now that Computershare has settled the spate of acquisitions and portfolio updates it recently made.

Now that the fog has cleared on these transactions, UBS reckons the company’s earnings profile is far more visible – a fact that had been compressing the share price in the broker’s estimation.

Not only that, the broker forecasts that several of these acquisitions will be beneficial to liftoff margin pressures throughout the company’s P&L. It also likes Computershare’s market position to capture shifting consumer trends in the mortgage market.

The broker upgraded its rating on Computershare to a buy and raised its valuation on the company by 27% to $22.50 in its most recent model update.

Morgan Stanley is also bullish on the company, rating the stock a buy as well. Analysts at the firm reckon that management could upgrade earnings per share (EPS) growth forecasts above the current 2% target.

According to a previous analysis by The Motley Fool, “the broker also bakes in its views on interest rates, treasury yields and cost-budgeting efforts by the company that could materialise in FY22 to support its thesis. This is relevant to Computershare given its exposure to interest rates at the belly of the interest rate curve, particularly up to 5-years, which are incredibly attractive to Morgan Stanley”.

As such, the broker estimates a 10% growth in EPS for the company from each year into FY22–FY24 and values the company at $21.50 per share.

Computershare share price snapshot

In the last 12 months, the Computershare share price has gained more than 44% after rallying 4% in the past month.

Shares have started the year strongly and have climbed more than 8% this past week, outpacing the benchmark S&P/ASX 200 Index (ASX: XJO)’s return in that time.

The post The Computershare (ASX:CPU) share price is leaping 5%. Top broker says buy now appeared first on The Motley Fool Australia.

More reading

• What happened to ASX tech shares today?
• Why did the Computershare (ASX:CPU) share price set another record high today?

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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Key points

• Sandfire announces completion of its US$1.87 billion MATSA acquisition, making it one of the biggest ASX copper-focused miners
• Sandfire share price rises after the news, but lags its peers
• Management reassures investors that the integration is going well and that the company’s balance sheet remains strong

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The Sandfire Resources Ltd (ASX: SFR) share price is rallying today after the company announced it has finalised the acquisition of the MATSA mining complex in Spain.

The US$1.87 billion (AU$2.6 billion) transaction will transform Sandfire into one of the largest ASX copper-focused miners.

The Sandfire share price jumped 1.2% to $6.79 during lunchtime trade, although it’s lagging behind its peers.

The OZ Minerals Limited (ASX: OZL) share price and Aeris Resources Ltd (ASX: AIS) share price gained around 3% each.

New era for the Sandfire share price

Nonetheless, the completion of the MATSA acquisition is a major milestone for Sandfire and the ASX miner has full operational control over the Spanish target as of yesterday.

The deal was finally consummated after the miner gained key approvals from relevant Spanish Government authorities. This included the Foreign Direct Investment and Competition Authority in late December 2021.

More significantly, management reported that the integration of MATSA is well progressed. Bedding down acquisitions is always challenging, especially such a large one.

How Sandfire’s balance sheet looks post acquisition

The takeover was funded through existing cash reserves, last year’s $1.3 billion capital raise, and a $1.1 billion debt.

However, Sandfire assured investors that it still holds a strong balance sheet. Post the transaction, Sandfire has $384 million for working capital, and that’s not including the cash held by MATSA.

The acquisition, announced on 23 September last year, gives Sandfire control of an asset in the world-class Iberian Pyrite Belt in the Huelva Province of Andalusia in south-western Spain.

MATSA is a substantial polymetallic mining complex. It comprises three underground mines and a 4.7Mtpa central processing facility.

Exploration upside for the Sandfire share price

MATSA also includes exploration rights covering 2,450km square in Spain and neighbouring Portugal. Sandfire pointed out that this gives it long-term exploration upside and organic growth opportunities.

“Today marks the beginning of an exciting new era for Sandfire, with our business expanding to an organisation with a workforce of around 3,800 direct employees and contractors around the globe,” said Sandfire’s managing director, Karl Simich.

“Our vision for Sandfire is to become an international diversified and sustainable mining company, and the completion of this transaction represents a major step closer to realising this aspiration.”

The post Sandfire (ASX:SFR) share price firms after completion of $2.6b acquisition appeared first on The Motley Fool Australia.

More reading

• Time to sell? Macquarie just downgraded these 3 ASX shares from buys
• The OZ Minerals (ASX:OZL) share price has dumped 11% this week. Is it a bargain?
• OZ Minerals (ASX:OZL) share price slips despite record $2 billion revenue
• 2 ASX shares to guide you out of this bloodbath: expert
• Top brokers name 3 ASX shares to sell next week

Motley Fool contributor Brendon Lau owns OZ Minerals Limited and Sandfire Resources NL. 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 National Australia Bank Ltd (ASX: NAB) share price is pushing higher on Wednesday.

In afternoon trade, the banking giant’s shares are up over 0.5% to $27.80.

Today’s gain means the NAB share price is up almost 15% over the last 12 months.

Where next for the NAB share price?

The good news for shareholders is that one leading broker believes the NAB share price can still climb meaningfully higher from here.

According to a note out of Goldman Sachs this morning, the broker has retained its conviction buy rating and $31.15 price target on its shares.

Based on the current NAB share price, this implies potential upside of 12% over the next 12 months for investors before dividends.

And if you include the $1.43 per share fully franked dividend the broker is forecasting in FY 2022, which represents a 5.1% yield, the total potential return stretches to over 17%.

What did the broker say?

Goldman named three reasons why it is bullish on the NAB share price. These include its cost management initiatives, its position as the largest business bank, and its balance sheet momentum.

The broker explained: “NAB remains our preferred major bank exposure, reflecting NAB’s cost management initiatives, which seem further progressed relative to peers, have freed up investment spend to be more directed towards customer experience (50% in FY22 from 39% in FY21) as opposed to infrastructure. Given NAB’s position as the largest business bank, we believe it will benefit more from the continued economic recovery (management is seeing all segments in its Business & Private Bank exhibiting solid growth without sacrificing margin, and asset quality remains pristine). Good balance sheet momentum with NAB expecting at or above system growth across all divisions.”

The post 3 reasons Goldman Sachs thinks NAB (ASX:NAB) shares are a conviction buy appeared first on The Motley Fool Australia.

More reading

• How are ASX bank shares responding to the RBA’s interest rate call?
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• How does the Macquarie (ASX:MQG) dividend compare to the big four banks?
• Here’s what higher interest rates could mean for ASX bank shares
• What to expect from the NAB (ASX:NAB) Q1 update next month

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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Key Points

• Lumos Diagnostics shares rise 15% following strong support from Victorian government
• $17.2 million intended to be invested in developing local manufacturing capability of RATs
• Subject to approvals, the facility is expected to be up and running in the second-quarter of 2022

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The Lumos Diagnostics Holdings Ltd (ASX: LDX) share price is roaring higher today on the back of a positive company update.

During afternoon trade, shares in the medical diagnostics company are up 14.97% to $1.075 apiece. In comparison, the All Ordinaries Index (ASX: XAO) is 1.24% higher to 7,403.7 points.

What did Lumos Diagnostics announce?

Investors are buying up Lumos Diagnostics shares in hope that the company’s manufacturing capability will be significantly expanded.

In its release, Lumos Diagnostics advised that the Victorian government intends to support a diagnostics manufacturing facility and innovation hub. The $17.2 million package will see the company establish manufacturing capability of Rapid Antigen Tests (RAT) in Victoria.

Subject to meeting a number of requirements, the facility could be producing RATs as early as the second-quarter of 2022. However, hurdles such as securing approval from the Australian Therapeutic Goods Administration (TGA) need to be checked off first.

With COVID-19 cases soaring in the past few months, Australia has faced critical shortages of COVID-19 RAT tests. This highlighted the need to develop a local capability for manufacturing rapid diagnostics within the country.

If the TGA green lights Lumos Diagnostics’ CoviDx RAT, the next step will be finalising a legal agreement with the Victorian government.

Once the production and assembly facility are set up, up to 1 million RATs will be produced initially each year. This is expected to increase up to 50 million RATs through the introduction of greater automation and expanding production lines.

Lumos Diagnostics noted that RATs can also be used for influenza, infectious diseases, reproductive health and chronic disease management.

What did management say?

Sam Lanyon, executive chair of Lumos Diagnostics, commented:

Lumos Diagnostics is proud to collaborate with the Victorian Government to manufacture and deliver critical, rapid diagnostic tests. Lumos will leverage its existing partnerships and global experience that has seen it create critical infrastructure and world-class technology in North America, to support the establishment of a Victorian manufacturing and innovation hub for rapid diagnostics.

We are thrilled that as an organisation that was founded in Victoria, we can support the creation of local jobs whilst future proofing Victoria’s needs for rapid testing.

Lumos Diagnostics share price snapshot

Over the last 12 months, the Lumos Diagnostics share price has descended by around 20% in value. However, when looking at year to date, its shares are up almost 2%.

Lumos Diagnostics has a market capitalisation of roughly $152.05 million, with approximately 150.55 million shares on its books.

The post Why the Lumos Diagnostics (ASX:LDX) share price is up 15% today appeared first on The Motley Fool Australia.

More reading

• AnteoTech (ASX:ADO) share price gains 42% in a week amid RAT race
• Lumos diagnostics (ASX:LDX) share price climbs amid RAT mania

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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Key points

• Investors are eyeing ASX banks shares amid rate rise expectations
• The banks underperformed the benchmark following yesterday’s RBA announcement
• Macquarie’s bullish outlook

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ASX bank shares have been under review in recent weeks with the prospect of higher interest rates ahead.

As we looked at on Monday (see the full story here), ASX banks shares would receive some tailwinds from higher rates in the form of increased lending margins. But some of that benefit would be eroded with higher rates negatively impacting the banks’ lucrative mortgage markets.

Yesterday the Reserve Bank of Australia (RBA) opted not to follow the hawkish lead flagged by the US Federal Reserve.

At 2:30 pm AEDT the RBA said that while it was halting its bond purchase program on 10 February, the official cash rate would remain unchanged at the current record low 0.10%.

RBA governor Philip Lowe said, “The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target.”

How are ASX bank shares responding?

In the 30 minutes directly after the RBA’s decision to keep rates at record lows, the S&P/ASX 200 Index (ASX: XJO) gained 0.5%. At time of writing the index is now up 1.3% since the announcement.

As for ASX banks shares, the Commonwealth Bank of Australia (ASX: CBA) share price gained 0.6% immediately following the announcement. CBA shares remain up 0.6% at time of writing as well. 

Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares also leapt 0.6% in the half hour after the RBA’s rate decision. They’ve since pulled back a tad to be up 0.4%.

Turning to the National Australia Bank Ltd. (ASX: NAB), the NAB share price gained 0.3% immediately after the announcement and is now up 0.4%.

Which brings us to Westpac Banking Corp (ASX: WBC). Like its peers, Westpac shares gained on the announcement, up 0.5% by 3 pm. At the time of writing, shares are up 0.4% since 2:30 pm yesterday.

How will the banks fare when rates do rise?

Macquarie for one believes banks should be on investors’ radars as rates inevitably head higher.

According to the broker (quoted by the Australian Financial Review):

Considering evolving macro trends, rising inflation, and increasing likelihood of rate hikes, it appears increasingly risky to be underweight banks.

Banks benefit from higher rates, and while we believe the market tends to overestimate the ultimate upside, we see the risk of banks outperforming ahead of and during the early phase of the rate rise cycle.

With ASX banks shares trailing the benchmark since the RBA’s decision to keep the cash rate on hold, the pending rate rise cycle is worth keeping an eye on. 

The post How are ASX bank shares responding to the RBA’s interest rate call? appeared first on The Motley Fool Australia.

More reading

• Morgans names the best ASX financial shares to buy in February
• 3 reasons Goldman says the CBA (ASX:CBA) share price is a sell
• 5 things to watch on the ASX 200 on Wednesday
• Own Westpac (ASX:WBC) shares? Outlook ‘highly uncertain’ says this broker
• ASX 200 shares offer 12% upside after sell-off: JP Morgan

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 Westpac Banking Corporation. 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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As we continue into 2022, one theme that is certainly emerging as a dominant one this year is that of inflation. With hefty inflation numbers now coming out of Australia, the US and many other countries around the world, investors have been fretting over protecting their wealth from inflation’s corrosive effects. That is arguably one of the reasons we have seen such volatility across global markets over the past month or two.

So how does one protect a share portfolio from inflation? Here are two ASX exchange-traded funds (ETFs) that arguably have inflationary protections built into them.

2 ASX ETFs that could help fight off inflation

BetaShares Global Energy Companies ETF (ASX: FUEL)

This ETF from BetaShares represents a basket of global shares from the energy sector. Over 90% of its (current) 42 holdings are involved in oil and gas. Integrated companies, as well as exploration, refining, equipment and transportation companies, are present here.

Energy is arguably an inflation-resistant industry since it is such an inelastic and essential input into every economic industry. We all need energy and, as such, most of us are forced to pay whatever the going rate for electricity, petrol, diesel, or gas may be. That makes the companies that produce and sell energy arguably useful to own in an inflationary environment.

Some of FUEL’s top holdings include Exxon Mobil Corp (NYSE: XOM), Chevron Corporation (NYSE: CVX), and BP plc (LON: BP).

The BetaShares Global Energy Companies ETF charges a management fee of 0.57% per annum. It has returned an average of 1.44% per annum since its inception in 2016. It offers a trailing dividend distribution yield of 4%.

BetaShares Global Banks ETF (ASX: BNKS)

As you might imagine, this ETF is similar in nature to our previous option. But this one only invests in bank shares. BNKS currently has 59 underlying shares in its portfolio. These are spread across the United States, Canada, Britain, China, Japan, Singapore, and Europe (no ASX banks though).

Because a bank is so heavily influenced by interest rates, it arguably has an inflation hedge built in. A bank will almost always keep its interest rates (both on debt and on credit) ahead of the official cash interest rate set by the central bank. And because central banks usually adjust cash rates in accordance with inflation, they can be resistant to its wealth-eroding effects.

Some of BNKS’ top holdings include Bank of America Corp (NYSE: BAC), Wells Fargo & Co (NYSE: WFC), JPMorgan Chase & Co (NYSE: JPM), and Royal Bank of Canada (TSE: RY).

The BetaShares Global Banks ETF charges a management fee of 0.57% per annum. It offers a trailing dividend distribution yield of 3.6%.

The post These 2 ASX ETFs could help your portfolio crush inflation appeared first on The Motley Fool Australia.

More reading

• How are ASX bank shares responding to the RBA’s interest rate call?
• Morgans names the best ASX financial shares to buy in February
• Oil prices are at an 8-year high, so why isn’t the Woodside (ASX:WPL) share price?
• When to buy into new ASX listings. Hint: not during an IPO
• Here’s why the Renascor (ASX:RNU) share price is rocketing 19% today

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen owns JPMorgan Chase. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BetaShares Global Energy Companies ETF – Currency Hedged. 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

• Crude oil has rocketed over the past month, and is now at its highest level since 2014
• Energy shares have been rising
• Woodside is still a long way off its old highs. So, what’s going on?

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The Woodside Petroleum Limited (ASX: WPL) share price is enjoying a solid day so far this Wednesday. At the time of writing, Woodside shares are up a healthy 3.05% at $25.82 a share. That’s a handy beat of the S&P/ASX 200 Index (ASX: XJO), which has risen a still-robust 1.25% so far today.

As we covered earlier this week, ASX 200 energy shares have been some of the best performers on the entire share market over 2022 thus far. That’s in stark contrast to many energy shares’ lacklustre performances last year. In Woodside’s case, this oil driller is up a pleasing 17% or so year to date. That’s very favourable compared to the ASX 200’s loss of 4.76% (including today’s gains).

Crude oil hits 8-year high

Most of the credit for this outperformance can likely be laid at the feet of crude oil prices. Oil has been on fire recently. According to Bloomberg, the price of Brent crude has risen from under US$70 a barrel two months ago to almost US$90 a barrel today. That’s the highest price oil has commanded for years. The last time we saw US$90 for a barrel of oil was back in 2014.

Yet we haven’t seen the same enthusiasm spill over into the Woodside share price. Sure, Woodside shares are today reaching their highest levels since February 2020, just prior to the COVID-induced market crash of that year. But we are a long way from the highs this company has seen in the past. Back in early 2020, Woodside shares were going for close to $35, a good 26% from where they are today.

But back then, oil was a lot lower than it is today. And back in 2014, when crude was at levels similar to what we see today (albeit if not higher), Woodside shares were hitting highs over $42 a share. And let’s not even mention 2008, when Woodside hit its current reigning all-time high of over $66 a share.

So what’s going on here?

Well, it could be down to a few factors.

Why haven’t Woodside shares kept up with crude?

The first is that Woodside is just a different company today compared to what it was a few years ago. Last year, Woodside announced that it would acquire the petroleum/energy assets of BHP Group Ltd (ASX: BHP) in an all-stock merger.

It’s also been dabbling in the emerging hydrogen industry.

Secondly, investing in energy companies like Woodside is a lot different than it used to be. With many investors now placing ethical and environmental, social and corporate governance (ESG) concerns at the top of their agenda, investing in fossil fuel companies like Woodside has arguably lost its glamour.

There is now a wide range of popular ethical investment products on the ASX, and the trend is still experiencing strong growth. Most funds that invest with an ethical or ESG mandate will not even consider buying Woodside shares, regardless of pricing. This could lead to compression of Woodside’s price-to-earnings (P/E) multiples, which in turn could be holding the Woodside share price down, even though its fundamentals might be improving.

This could be another reason why Woodside shares have yet to reclaim their former glory, despite higher energy prices.

We can’t say for sure why Woodside shares have not followed oil prices to an eight-year high. But even so, investors have just enjoyed one of the best months they’ve had in years.

At the current Woodside share price, this ASX 200 energy share has a market capitalisation of $25 billion, with a trailing dividend yield of 2.25%.

The post Oil prices are at an 8-year high, so why isn’t the Woodside (ASX:WPL) share price? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Rates unchanged, a gain for the ASX and travel stocks soar. Scott Phillips on Nine’s Late News
• Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen
• Will a growing dividend help the AFIC (ASX:AFI) share price?
• 5 things to watch on the ASX 200 on Wednesday

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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Once a month the team at Morgans picks out its best ideas. These are the shares that it believes offer the highest risk-adjusted returns over a 12-month timeframe and are supported by a higher-than-average level of confidence.

On this occasion, let’s take a look at the top picks in the financial sector:

Macquarie Group Ltd (ASX: MQG)

Morgans has this investment bank on its best ideas list. The broker believes its shares are “relatively inexpensive” and likes Macquarie’s “exposure to long-term structural growth areas such as infrastructure and renewables.” Though, its analysts acknowledge that the bank could “face earnings pressures from the impact of soft economic conditions” in the near term.

While it may be on this list, Morgans currently only has a hold rating and $200.00 price target on Macquarie’s shares.

QBE Insurance Group Ltd (ASX: QBE)

This insurance giant has been named as one of Morgans’ best ideas. It like the insurance giant due to its attractive valuation and margin expansion potential.

The broker commented: “We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE’s balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on 11x FY22F PE.”

Morgans has an add rating and $14.32 price target on QBE’s shares.

Westpac Banking Corp (ASX: WBC)

A final ASX share in the financial sector that makes the list is Westpac. It is Morgans’ “preferred major bank” with “the most compelling valuation” in the group.

Morgan added: “In terms of quality of overall risk profile, we believe WBC is a close second to CBA. On credit risk, we believe WBC is positioned relatively defensively due to its loan book being more skewed to Australian home lending.”

The broker currently has an add rating and $29.50 price target on Westpac’s shares.

The post Morgans names the best ASX financial shares to buy in February appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 Macquarie Group Limited and Westpac Banking Corporation. 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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