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Key points

• Premier Retail had a better half than most retailers despite losing 42,000 trading days
• Strong performances from Peter Alexander and Smiggle drove modest sales growth
• Margin expansion underpinned earnings growth

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The Premier Investments Limited (ASX: PMV) share price is on the move on Thursday morning.

At the time of writing, the retail conglomerate’s shares are up 9% to $28.86.

Why is the Premier Investments share price jumping?

Investors have been bidding the Premier Investments share price higher today following the release of a first half trading update for its retail businesses.

According to the release, the Premier Retail business has navigated the tough operating conditions and the loss of 42,000 trading days to deliver growth during the first half.

On the top line, the company expects Premier Retail’s sales to come in at $769 million for the six months ending 29 January. This represents a 0.5% increase over the prior corresponding period and was driven largely by strong online sales growth. Online sales are expected to be $195 million for the half, up 27% over the prior corresponding period.

Pleasingly, unlike what other retailers have reported, Premier Retail’s margins have improved during the six months. So much so, the business expects to report earnings before interest and tax (EBIT) of $209.5 million to $211.5 million. This represents a 4.2% to 5.3% increase over the prior corresponding period.

Management advised that a key driver of this performance was a rebound in the Smiggle global business as children returned to school and COVID-19 restrictions eased. This was supported by strong performances from its Peter Alexander and Portmans businesses and disciplined cost control. The latter includes rent abatements.

Premier Retail’s CEO, Richard Murray, commented: “Premier Retail has delivered another strong result despite the volatile trading environment. 1H22 remained challenging as businesses and consumers navigated their way through prolonged government mandated lockdowns.”

“The Group has weathered the numerous logistical challenges during the half through meticulous planning and by taking full advantage of Premier’s owned Australian Distribution Centre. Reviews of the Group’s distribution centre capabilities in both Australia and New Zealand continue as part of a long-term strategy to meet ongoing demand as customers change their shopping behaviour in the wake of COVID-19,” he added.

Mr Murray also revealed that the company plans to exit four stores in Mid-City Arcade in the Sydney CBD. Three of these (Peter Alexander, Smiggle and Portmans) will happen in March and one (Just Jeans) will occur no later than July 2023.

He explained: “These closures demonstrate the Group’s previously announced intention to walk away from stores where landlords seek rents which are unrealistic and which do not reflect the market, particularly in those centres where customer foot traffic has been decimated by the pandemic.”

Audited half year results will be released in March.

The post Premier (ASX:PMV) share price jumps 9% after solid growth despite losing 42,000 trading days appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments 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 Life360 Inc (ASX: 360) share price is pushing higher on Thursday morning.

In early trade, the family-focused technology company’s shares are up 2% to $7.80.

Life360 share price higher after reporting further Q4 growth

• Underlying Q4 revenue growth of 46% to US$33.1 million excluding acquisitions and 54% to US$35 million including Jiobit acquisition
• Full year revenue of US$112.6 million, which is at the top end of its guidance range of US$109 million to US$113 million
• Global monthly active users (MAU) reached 35.5 million at the end of December and US MAU reached 23.7 million
• Annualised monthly revenue (AMR) ahead of guidance and up 51% year on year at US$135.7 million
• Underling earnings before interest, tax, depreciation and amortisation (EBITDA) loss was better than guidance at US$13.1 million

What happened in the fourth quarter and full year?

Life360 continued its strong form during the fourth quarter, delivering further top line and user growth.

For the three months ended 31 December, the company’s revenue grew 51% over the prior corresponding period to US$35 million. This took its full year revenue to US$112.6 million, which compares to its guidance range of US$109 million to US$113 million.

Things were even better for its annualised monthly revenue (AMR), which came in ahead of guidance. Life360’s AMR grew 51% year on year at US$135.7 million. This compares to its guidance of US$125 million to US$130 million.

This strong growth was underpinned by a further increase in its global user base, which rose 1.7 million during the fourth quarter to 35.5 million. This represents a year on year increase of 34%.

The strongest growth was achieved in the US, with user numbers growing 1.5 million or 7% to 23.7 million. International users were 11.8 million at the end of December, which was up 1% quarter on quarter and 24% year on year.

Another positive is the increasing monetisation of Life360’s user base. Global paying circles grew 11% during the quarter and 39% year on year to 1.2 million. And even better is the fact that the revenue it is generating from these circles is improving on a per circle basis. Average revenue per paying circle grew 3% quarter on quarter and 22% year on year.

And while this couldn’t stop Life360 from posting an EBITDA loss of US$13.1 million for the year, this was better than its guidance for a loss of US$14 million to US$18 million.

Life360 finished the year with a cash balance of US$231.3 million.

Management commentary

Life360’s Chief Executive Officer, Chris Hulls, said: “This was another milestone quarter for Life360, where we set new records across many key metrics, and made significant progress on our strategic roadmap with the acquisition of Tile. We delivered our third consecutive quarter of record subscriber additions, reaching more than 1.2 million Paying Circles, with underlying revenue growth of 46% year-on-year and underlying Annualised Monthly Revenue growth of 51%. Direct revenue increased 62%, driven by the continued success of our Membership offering, providing a strong leading indicator of our growth momentum.”

“Monthly Active Users increased 5% from the third quarter to 35.5 million. Life360 is experiencing accelerating growth despite the impact of the Omicron variant in the US and other countries. While Omicron has had some impact on movement – and therefore membership usage – in our primary markets this appears to be much less significant than previous COVID-19 variants. Year-on-year US MAU increased 39% and international MAU grew 24%. In the face of challenging external circumstances, we are seeing continued strengthening of retention and engagement from our users, with the proportion of Returning Monthly Active Users (RMAU) reaching a new record,” he added.

The post Life360 (ASX:360) share price pushes higher after reaching 35.5m users in Q4 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. 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 Telstra Corporation Ltd (ASX: TLS) share price closed the session 3% down on Tuesday, and is set to open at $3.93 after a spell on Australia day.

Shares in the telco giant are a favourite in the coverage universe of investment bank JP Morgan, who are overweight on the stock with a buy rating.

The broker recently updated its modelling for Telstra following the company’s release on 13 January, although remained firm in its bullish posture in doing so.

Broker reckons Telstra is a buy

JP Morgan says that Telstra is the “best placed in the Australian mobile market” to deliver returns in 2022 from a fundamental perspective.

The company’s “headstart on the rollout of 5G infrastructure should see market share gains of lucrative postpaid subscribers” the broker says.

“Additionally, product bifurcation through the establishment of sub-brands (such as Telstra’s Belong) should protect higher-quality services from further price degradation”.

JP Morgan has Telstra as a high conviction name within its telco coverage, noting a strong growth outlook in EBITDA earnings and segment profitability for the company.

Despite its strong performance over the recent months – where it has rallied from $3.80 in November to trade as high as $4.26 in January – shares have plunged this past week, in sync with a selloff in ASX tech-weighted shares.

Still, the company has “guided to strong EBITDA growth in the medium term driven by higher profitability in Mobile and productivity gains”.

“Furthermore, there is the potential for further monetisation of assets through the much larger InfraCo business which we value at 22x or A$32 billion (100% and prior to capital gains tax)”, the broker says.

Capital inflows from asset sales and good free cash flow could “drive scope for further distributions”, leading analysts to increase the valuation on Telstra to $4.85 per share, signifying a 23% margin of safety at the open today.

The horizon isn’t risk-free however, with the company still facing challenges in its fixed broadband segment, particularly as the telco could lose market share to lower-cost substitutes.

“As the NBN rollout continues into metro regions and more well-capitalized operators sign up as NBN resellers” analysts at JP Morgan said, “Telstra could start to lose market share to new entrants that may offer much lower pricing to consumer”.

“Even if Telstra maintains a steady share of broadband subscribers, pricing pressure from new entrants such as MyRepublic, which is known for its aggressive pricing in Singapore, could lower the potential NBN offset to its ADSL and PSTN revenue losses”.

Telstra is also relying on “growth from the Mobile, GES and NAS segments as potential offsets” to alleviate pressures on margins, the broker says, which could be difficult to achieve.

Nevertheless, JP Morgan likes management’s cost reduction efforts and is constructive on the shares given current valuations, and rates it a buy.

“With the stock price well below our DCF valuation, we are Overweight”.

Telstra share price snapshot

The Telstra share price has slipped 6% this year to date amid a heavy selloff in ASX shares, however has still climbed over 25% in the last 12 months.

The pressure has extended this week and shares are down over 6% in the past 5 days of trading, leading the S&P/ASX 200 Index (ASX: XJO)’s loss of 5%.

The post Telstra (ASX:TLS) ‘best placed in the Aussie mobile market’ says JP Morgan appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation 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

• Rio Tinto shares withstand market pressure
• Management looking at legal options to overturn the Serbian Government’s decision
• Rio Tinto aiming to become a top-tier lithium player

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The Rio Tinto Limited (ASX: RIO) share price has managed to stay in positive territory for 2022, despite the volatility on the ASX.

In January, the mining heavyweight’s shares have risen by almost 7% in value. In contrast, the S&P/ASX 200 Index (ASX: XJO) has sunken 6.5% over the same time frame.

At Friday’s closing bell, Rio Tinto shares finished the day down 0.82% to $107.08.

A quick recap on the Serbian lithium exploration licences fiasco

Last week, relations between Australia and Serbia hit an all-time low following the ill-treatment and deportation of Novak Djokovic.

In response to Australia’s handling of the crisis, the Balkan nation decided to revoke Rio Tinto’s lithium exploration licences.

Serbian environmentalists protested for several weeks against the potential development of the lithium mine by blocking main roads and bridges. If the project went ahead, pollution would run through nearby land and water, affecting valuable farmland.

Furthermore, with the general election just 3 months away, the Serbian Prime Minister would be looking to shore up support.

During a televised address to the nation, Serbian Prime Minister Ana Brnabic said:

We have fulfilled all the requests of the environmental protests and put an end to Rio Tinto in the Republic of Serbia.

Everything is finished. It’s over.

A short time after, Rio Tinto stated that it was extremely concerned by the Serbian Prime Minister’s statement, and is reviewing legal options.

What cards is Rio Tino holding?

The latest move by the Serbian Government has no doubt put Rio Tinto on the backfoot.

The Anglo-Australian miner is in unfamiliar territory and doesn’t have many options on the table to overturn the decision.

One option though could see Rio Tino sue for breach of the fair and equitable treatment provision under the bilateral investment treaty. Both Serbian and the United Kingdom are signatories of this pact along with other European member states.

The purpose of a bilateral investment treaty is to stimulate foreign investments by reducing political risk.

Of course, this course of action could only prevail if the Serbian Government formally terminates the license without good cause. Nonetheless, whatever the outcome, this would likely cause permanent damage to relations between Rio Tinto and Serbia.

Another option would be to hope that pro-mining politicians win the general election and reinstate the exploration licences. Notably, in the last 2020 general election, the Serbian Progressive Party (SNS), lost a large number of its voters. This was because of its strong support of mining in the country.

Rio Tinto has already spent around $450 million on pre-feasibility and other studies for the Serbian lithium project. In total, the mining giant planned to invest up to $2.4 billion in construction and development activities.

If approved, it would have become the biggest lithium mine in Europe and one of the largest in the world.

Experts estimated the mine to have a 40-year life, producing 2.3 million tonnes of lithium carbonate per year.

Rio Tinto share price snapshot

Despite travelling 7% higher in 2022, it has been a disappointing 12 months for Rio Tinto shareholders. The company’s shares have lost around 12% in value since this time last year.

Based on today’s price, Rio Tinto has a market capitalisation of $39.75 billion and approximately 371.22 million shares outstanding.

The post Own Rio Tinto (ASX:RIO) shares? What options does the company have in response to the Serbian government’s decision 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 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

• Fund manager GQG Partners has seen its share price drop in recent weeks
• Broker Morgans sees longer-term growth potential in the business, with ongoing FUM growth
• GQG is also expecting to pay a sizeable dividend in the coming years

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Is the GQG Partners Inc (ASX: GQG) share price an opportunity during this ASX share market correction?

What is GQG Partners?

GQG is one of the largest fund managers on the ASX. It’s fairly new to the ASX, having listed in October 2021.

It describes itself as a global boutique asset management business, it’s focused on active equity portfolios. GQG was co-founded by executive chair and chief investment officer Rajiv Jain and CEO Tim Carver.

GQG has four main investment strategies – global equities, US equities, non-US international shares and emerging markets shares.

What’s happening to the GQG share price?

It has been a tough time for GQG shareholders recently. On Tuesday alone GQG fell by 5.5%. Since 8 November 2020 it has fallen by 20%. That’s despite the business displaying ongoing funds under management (FUM) growth.

Indeed, at 31 December 2021 GQG had managed to grow its FUM to a total of US$91.2 billion. That was an increase from US$87.3 billion at 30 November 2021 and $85.8 billion at 30 September 2021, respectively.

However, it may be worthwhile noting that most of the share market has been going through difficulties in 2022 as investors worry about inflation and quicker-than-expected interest raises, as well as a possible conflict between Ukraine and Russia.

What do brokers think of the company?

Morgans is one of the brokers that has provided its thoughts on GQG in its early life on the ASX.

The broker thinks that the business looks good value, with a buy rating on the GQG share price.

Morgans reckons that it’s attractive considering the growth opportunity it has, as well as its quality profit and net inflows.

Combining the net inflows of US$3.2 billion in the first quarter of FY22 and $3 billion in the second quarter, the first half of FY22 to December 2021 showed net inflows of US$6.2 billion for the ASX share.

GQG says that it continues to see business momentum across multiple geographies and channels. It’s regularly winning new clients and relationships. Its newer strategies and products are seeing strong adoption.

One interesting thing that the company noted is that its management fees continue to comprise the vast majority of its net revenue, as opposed to performance fees.

The largest shareholders in GQG are the management team, which remains highly aligned with all shareholders, and are “acutely focused on and committed to GQG’s future”.

At the current GQG share price, it’s valued at 16x FY23’s estimated earnings.

Potential to be an ASX dividend share

In its prospectus, GQG said that the directors intend to target an annual payout ratio of between 85% to 95% of GQG’s distributable earnings. This dividend is expected to be paid quarterly. The first dividend is expected to be paid in March 2022.

Looking at Morgans’ estimate for the dividend, GQG is expected to have an unfranked dividend yield of 8.7% in FY23.

The post Is the GQG (ASX:GQG) share price a buy in this volatility? appeared first on The Motley Fool Australia.

More reading

• Goldman Sachs names GQG Partners (ASX:GQG) shares as a buy with 32% upside

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. 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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If you’re looking for some growth shares to add to your portfolio this week, then you may want to look at the ones below.

Here’s what you need to know about these highly rated ASX growth shares:

Life360 Inc (ASX: 360)

The first ASX growth share to consider buying is Life360. It operates in the digital consumer subscription services market, with a focus on products and services for digitally native families, where all members of the household are connected by smartphones. That’s most families these days.

The company’s key offering is the increasing popular Life360 app, which offers families features such as communications, driver safety, and location sharing.

In addition, Life360 has also just expanded into the wearables and items tracking market via the acquisitions of Jiobit and Tile. This gives the company significant cross-selling opportunities to its large subscriber base of over 30 million active users (and growing).

The team at Bell Potter is very positive on Life360. As a result, they currently have a buy rating and $15.00 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX growth share to consider buying is Xero. It is a leading cloud-based business and accounting software provider with a focus on small to medium sized businesses.

Over the last few years, the Xero platform has evolved from a simple accounting solution into a full service small business solution. This has led to millions of small to medium sized businesses globally subscribing and running their businesses through its platform, which has underpinned strong revenue and profit growth.

Like Life360, Xero is looking to monetise its growing subscriber base. This is by selling value added services from in-house or third party developers to users via its app marketplace.

Combined with its huge addressable market, the ongoing shift to cloud solutions, and its international expansion, Xero has been tipped to grow at a strong rate over the long term by Goldman Sachs.

In light of this, it currently has a buy rating and $158.00 price target on the company’s shares.

The post 2 ASX growth shares analysts love appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. and Xero. The Motley Fool Australia owns and has recommended 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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Key points

• The share prices of both Airtasker and Lovisa have fallen in recent weeks. Brokers think they look like attractive buys
• Global affordable jeweller Lovisa is growing its store network and is expected to achieve growing margins
• Airtasker is growing its volume quickly, whilst also expanding overseas to the UK and the USA

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The recent market plunge has now made some of the most compelling ASX growth shares seem great value, according to some leading brokers.

A fall in the price of companies can make the potential growth on offer more attractive for investors.

With that in mind, these are two ASX shares that now seem like they are even better opportunities:

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a worldwide retailer of affordable jewellery which is targeted at younger shoppers.

This company is liked by several brokers, with one of the latest buy ratings coming from UBS.

The Lovisa share price has fallen by 25% since 19 November 2021. UBS has a price target on the business of $21.25. That’s an implied upside of more than 20% over 2022.

One of the things that the broker appreciates about the ASX growth share is its global network of stores. There are currently around 570 stores in the worldwide Lovisa store network, with 31 stores opened since the end of FY21 and five closures. Within the store opening numbers, it has recently opened two new franchise stores in Cyprus, bringing its geographical coverage to 21 countries.

Some of the places it operates includes: Australia, South Africa, the USA, France, the UK, Germany New Zealand and Singapore.

COVID-19 is currently impacting things like the store rollout as well as global freight costs and capacity. However, scale benefits and COVID effects subsiding can assist the business in 2022.

UBS thinks the current Lovisa share price is valued at 29x FY23’s estimated earnings.

Airtasker Ltd (ASX: ART)

Airtasker has seen its share price severely punished over the last couple of months. In 2022 the Airtasker share price has dropped 28% and in the past three months it has fallen 46%.

The business was hurt by lockdowns in its two main markets of Sydney and Melbourne in the first quarter of FY22 . Despite that, Airtasker was able to achieve gross marketplace volume (GMV) growth of 6.2% in the first quarter.

When the business held its annual general meeting (AGM) in November it said that it had experienced a sharp bounce back, with GMV reaching all-time highs of $3.9 million per week, or approximately $200 million on an annualised run rate basis.

Whilst the ASX growth share may be spending substantial cash to generate growth for the long-term, FY21 showed that the underlying business is/can be cashflow positive after generating $5.5 million of operating cashflow.

The broker Morgans currently rates Airtasker as a buy with a price target of $1.27. That suggests a potential increase of more than 100% over 2022.

Airtasker also said at its AGM that it’s seeing strong positive movement in its average task value. Initially, this was due to the labour shortage with 600,000 temporary visa holders leaving Australia. COVID means it will take some time for the labour shortage to normalise, meaning this trend could continue for the medium and longer-term.

Aussies are also turning to Airtasker for increasingly complex and therefore higher value tasks. This is due to customers trusting Airtasker thanks to a positive first time experience, which is an important growth factor and one that Airtasker is highly focused on.

It’s looking to expand in both the UK and USA, which are much larger markets than Australia due to their larger populations.

The post 2 compelling ASX growth shares that are now great value: brokers appeared first on The Motley Fool Australia.

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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. has recommended Airtasker Limited. The Motley Fool Australia has recommended Lovisa Holdings Ltd. 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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Share markets both in Australia and the US are in turmoil at the moment.

In fact, the S&P/ASX 200 Index (ASX: XJO) has sunk 8.7% since 4 January as investors abandon their shares in anticipation of interest rates rises in the US.

In such times of economic uncertainty, it’s prudent to take a look at what financial services Australians might need.

Medallion Financial Group analyst Jean-Claude Perrottet certainly took this angle, picking out 2 ASX shares to buy that will serve vastly different clientele:

‘Consistent revenue growth in the past decade’

Credit Corp Group Limited (ASX: CCP) is a debt buyer and collector. As such, its business could increase in times of economic distress, like when interest rates head up.

Perrottet told The Bull that the company operates in the US and New Zealand, as well as Australia.

“Credit Corp has generated consistent revenue growth in the past decade,” he said.

“CCP has lifted earnings and investment guidance for fiscal year 2022 following the recent acquisition of Radio Rentals. The acquisition could continue to provide significant upside moving forward.”

Credit Corp shares ended Tuesday at $32.15.

The stock is up more than 10% over the past year, and pays out a handy 2.24% dividend yield.

‘Bright outlook for the future’

Shares for fintech RAIZ Invest Ltd (ASX: RZI) have arguably been frustrating to own the past 12 months.

Despite excellent growth numbers for its micro-investment app, both in terms of user numbers and funds under management, the stock price was up and down over 2021.

And with an 18.6% drop over the past week or so, it’s only 7.7% higher than where it was a year ago.

Perrottet still has faith that the growth numbers will start to filter through to investor enthusiasm.

“In December, management confirmed an impressive 70.8% increase in funds under management to $1 billion amid significantly increasing the number of clients,” he said.

“Positive metrics paint a bright outlook for the future.”

Raiz shares finished Tuesday at $1.40.

The post 2 cheap financial ASX shares to buy right now appeared first on The Motley Fool Australia.

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• These 3 ASX 200 shares are topping the volume charts on Tuesday

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Shaw and Partners portfolio manager James Gerrish explains why ASX shares in the resources sector are so appealing to him at the moment.

Biggest convictions

The Motley Fool: What are your two biggest holdings?

James Gerrish: Right now BHP Group Ltd (ASX: BHP) and Oz Minerals Limited (ASX: OZL) are our two biggest holdings in our Flagship Growth Portfolio. Obviously two very high quality companies in the resource sector, which is an area we are bullish on over the next few years.

They’re very much from a bigger picture thematic. While we believe inflation is transitory, it still is there and it’s still going to be there. In an inflationary environment, resources tend to do reasonably well.

In an environment where there’s this large energy transition that’s happening, obviously as we move more towards renewable sources of energy, that does have a huge requirement for raw materials. So that’s going to be supportive of the resource side as well.

Then you overlay that with [how] the major resource companies around the world have been pretty reticent to make large scale investments in new supply over the last couple of years. Obviously there are some, but you’ve got a situation where you’ve got lower increases in supply, meeting a period of higher demand, with a backdrop of higher inflation, which I think is going to be really supportive of resources, in the timeframe of the next 3 years or so.

I think probably the easy money in the resources is probably gone if we take a short term view. So, in the short term, I wouldn’t be surprised to see some reversion out of resources into tech. But I don’t sit here and go, we need to be buying technology here for the next 3 or 4 years. I think that’s a shorter-term trade. Whereas, resources, I think are a longer-term, 3-plus year trade.

MF: Is it ironic that, as we’re moving to a lower carbon and greener future, resources companies are actually becoming more important?

JG: Yes, it is. But also the right resources companies.

This is why it creates a higher barrier to entry for newer resource companies, the way the end customer is requiring resources to be mined and produced.

If you think of the requirements that Tesla Inc (NASDAQ: TSLA) puts on their suppliers, [it] is hugely onerous. The ability to track all the different stages from an ESG point of view is really difficult, and it requires a lot of investment. These incumbents that have got scale, are going to be more highly valued in my mind. It will allow them to buy supply from juniors that don’t.

The ASX share for a comfortable night’s sleep

MF: If the market closed tomorrow for 4 years, which stock would you want to hold?

JG: The resource sector is the area we are most bullish on over that time frame. For an active style investor like ourselves to commit to a stock for the next 4 years, quality would be a very important metric to consider. While it’s not cheap at current levels, Oz Minerals is one of the highest quality copper companies in the world and we think they can deliver decent returns over that time period.

The post 2 ASX shares to guide you out of this bloodbath: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Are you looking for ASX dividend shares to buy? If you are, then you may want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone right now:

Super Retail Group Ltd (ASX: SUL)

The first ASX dividend share to look at is Super Retail. It is the retail conglomerate behind the popular BCF, Macpac, Rebel, and Super Cheap Auto brands.

While trading conditions have been tough in FY 2022 because of COVID enforced store closures and Super Retail is largely expected to post an earnings decline with its half year results, the long term remains very positive.

It is for this reason that the team at Citi has a buy rating and $16.00 price target on its shares. This compares very favourably to the latest Super Retail share price of $11.31.

As for dividends, the broker expects fully franked dividends per share of 67 cents in FY 2022 and then 64.5 cents in FY 2023. This will mean yields of 5.9% and 5.7%, respectively.

Citi also sees meaningful upside for the Super Retail share price. It has a buy rating and $16.00 price target on its shares.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share that could be in the buy zone right now is Westpac. Especially after the shares of Australia’s oldest bank dropped to a 52-week low earlier this week.

The team at Morgans certainly believe this is a buying opportunity. The broker recently put an add rating and $29.50 price target on the bank’s shares. This implies potential upside of over 40% over the next 12 months.

The broker also believes there will be some big dividend yields coming for income investors in the coming years. It has pencilled in fully franked dividends per share of $1.23 in FY 2022 and then $1.62 in FY 2023. Based on the current Westpac share price of $20.21, this will mean yields of 6.1% and 8%, respectively.

The post 2 buy-rated ASX dividend shares with big yields and huge upside potential appeared first on The Motley Fool Australia.

More reading

• Why Westpac (ASX:WBC) and these other ASX shares are trading at 52-week lows
• What’s happening to ASX bank shares today?
• Here’s when Westpac (ASX:WBC) expects the RBA to raise the cash rate
• 2 buy-rated ASX 200 dividend shares with great yields
• Westpac (ASX:WBC) share price in focus after raising loan interest rates again

Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Super Retail Group Limited. The Motley Fool Australia owns and has recommended Super Retail Group Limited. 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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