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It has been a difficult month for growth investors. But every cloud has a silver lining. That lining is that the shares of some quality companies have pulled back meaningfully, potentially making them attractive investment options today.

Three ASX growth shares that could be in the buy zone are listed below. Here’s why they are rated as buys:

Adore Beauty Group Limited (ASX: ABY)

The first growth share to look at is Australia’s leading online beauty retailer, Adore Beauty. Although the company has been growing at a rapid rate since being founded in a Melbourne garage in 2020, it still has only a modest slice of the Australian beauty and personal care (BPC) market. This market is estimated to be worth $11.2 billion a year at present. This means Adore Beauty has a long runway for growth, which will be supported by the structural shift online and its growing customer base which is approaching 1 million.

UBS currently has a buy rating and $6.00 price target.

Goodman Group (ASX: GMG)

Another growth share to look at is Goodman Group. It is a leading integrated commercial and industrial property company which focuses on investing in and developing high quality industrial properties in strategic locations. These are global locations close to large urban populations, particularly around major gateway cities, where demand is strong and transformational changes are driving significant opportunities. This strategy is working wonders and has been driving strong and sustainable growth for years.

Citi believes Goodman is well-placed to continue its growth and is tipping it to outperform its earnings guidance in FY 2022. The broker has a buy rating and $27.50 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another ASX growth share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider connecting consumers with over 30,000 trusted tradies. It was a strong performer in FY 2021, delivering a 22% increase in revenue to $55.8 million. Pleasingly, it built on this with a 14% increase in first quarter revenue to $14.9 million despite lockdowns. Looking ahead, the company has an enormous market to grow into, which bodes well for the future.

Goldman Sachs is very bullish on its growth prospects and sees opportunities for Hipages to win a significant share of industry advertising spend. As a result, it currently has a buy rating and $5.15 price target on its shares.

The post 3 ASX growth shares to buy after the market meltdown appeared first on The Motley Fool Australia.

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• 2 outstanding ASX 200 blue chip 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. owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Adore Beauty 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

• Some quality ASX shares have taken a dive in recent weeks
• Fast food business Collins Foods is achieving compelling progress in Europe
• Pro Medicus shares have seen a sharp decline, but profit and its client base continue to grow

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January 2022 has been a rough month for plenty of ASX shares. Does that make them now buys?

Well, just because a share price drops it doesn’t automatically make it better value or a buy. Sometimes shares of businesses drop because they genuinely are worth less than they used to be because of a problem.

However, a decline in the share price can provide an opportunity to buy good businesses at better prices.

With that in mind, here are two that have suffered recently:

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price has fallen by 16% since 4 January 2022.

Collins Foods is a large franchisee of KFCs. It has 260 outlets in Australia, 16 in Germany and 35 in the Netherlands. But it also has a small but growing network of Taco Bells in Australia as well, there are 13 in Queensland, four in Victoria and one in Western Australia. Its goal is to expand these networks across the regions it operates.

At the end of November, the company reported another period of growth for the first of FY22. It said that the result was underpinned by a return to growth in its European operations. Total revenue increased 8.5% to $534.2 million, whilst underlying net profit after tax increased 31.6% to $28.9 million.

Collins Foods also recently announced its corporate franchise agreement in the Netherlands commenced on 31 December. It now has full responsibility for developing, marketing, operating and support the KFC business in the Netherlands.

Is the ASX share a buy now? Macquarie thinks so, with an ‘outperform’ rating and a price target of $14.80. The broker notes that inflation and other short-term issues could be problematic, but continuing growth of its restaurant numbers will help in the longer-term.

Macquarie’s projections put the Collins Foods share price at 21x FY22’s estimated earnings.

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price has fallen 28% since 4 January 2022.

This business is a healthcare IT company which specialises in enterprise imaging and radiology information system (RIS) software.

It has a global presence which is growing, particularly in the US as well as the EU. In FY21 it had six major client wins, with five in North America. The business also received FDA clearance for the breast density algorithm.

Pro Medicus has a very high earnings before interest and tax (EBIT) margin, it was 63.2% in FY21. This helped underlying revenue rise by 19.5% whilst profit after tax jumped 33.7%. The company is debt free and continues to grow its full year dividend by double digits.

Its cloud services give it a “huge strategic advantage” over competitors according to the company. Pro Medicus also believes it’s strategically positioned to leverage AI. Management are expecting to win more contracts – the pipeline continues to grow strongly.

Morgans currently rates the ASX share as a hold. However, the price target is $54.49, which implies a rise of around 20% over the next year.

The post Are these 2 beaten-up quality ASX shares now buys? appeared first on The Motley Fool Australia.

More reading

• Here are 4 ASX shares insiders are putting their money behind
• These were the worst performing ASX 200 shares last week
• Why Accent, Careteq, Pro Medicus, and Xero shares are dropping
• ASX 200 (ASX:XJO) midday update: AGL and Novonix shares shoot higher
• What’s going on with the Pro Medicus (ASX:PME) share price?

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 Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Collins Foods 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 BrainChip Holdings Ltd (ASX: BRN) share price had an eventful week.

The artificial intelligence technology company’s shares were up as much as 56% at one stage to a record high of $2.34 before closing the day 17% higher for the week at $1.76.

When the BrainChip share price reached its peak, it took its market capitalisation to approximately $4 billion.

Why did the BrainChip share price rocket?

Investors were bidding the BrainChip share price higher following the release of a couple of announcements.

One was the granting of a new patent in the US which protects the company’s neuromorphic processor. In particular, it covers a function that revolves around performing complex tasks on a digital input data, which allows artificial intelligence to process images.

Another announcement that got investors excited revealed that the company has begun taking orders for the first commercially available Mini PCIe board leveraging its Akida advanced neural networking processor. It notes that this rounds out its suite of AKD1000 offerings.

Is BrainChip the real deal?

Given how the BrainChip share price rise last week took its valuation to approximately $4 billion at its peak, investors may be wondering if BrainChip is the real deal. Particularly given its tiny revenues and competition with some of the biggest tech companies in the world on only a relatively small research and development (R&D) budget.

In respect to competition, a few of the company’s most prominent rivals are tech behemoths IBM, Intel, Nvidia, and Qualcomm. They are among the leaders in their fields, have a combined market capitalisation of over US$1.1 trillion, and spend billions of dollars each year on R&D.

For example, in 2020 Intel spent US$13.56 billion on R&D, in FY 2021 Nvidia spent US$3.9 billion on R&D, IBM spent US$6.33 billion on these activities, and Qualcomm put US$7.2 billion into R&D in FY 2021. As a comparison, BrainChip spent just $5.15 million on R&D during 2020.

Among the most exciting chips under development is Intel’s Loihi 2 neuromorphic chip.

Late last year, the company stated: “Advances in Loihi 2 allow the architecture to support new classes of neuro-inspired algorithms and applications, while providing up to 10 times faster processing, up to 15 times greater resource density with up to 1 million neurons per chip, and improved energy efficiency.”

“Benefitting from a close collaboration with Intel’s Technology Development Group, Loihi 2 has been fabricated with a pre-production version of the Intel 4 process, which underscores the health and progress of Intel 4. The use of extreme ultraviolet (EUV) lithography in Intel 4 has simplified the layout design rules compared to past process technologies. This has made it possible to rapidly develop Loihi 2.”

Why hasn’t BrainChip being taken over?

Another concern that some investors have about BrainChip’s technology is the lack of M&A interest. The theory goes that if BrainChip’s technology is a game-changer like management suggests, then why didn’t its larger rivals acquire the company 18 months ago for a fraction of today’s valuation?

For example, both pre and post the emergence of COVID-19 in 2020, BrainChip’s shares were trading at a lowly 5 cents per share. As its technology was no secret then to those in the industry, see here, the company could have been picked up for chump change in comparison to today’s valuation.

Only time will tell if these tech giants missed out with BrainChip.

The post Is BrainChip (ASX:BRN) the real deal? appeared first on The Motley Fool Australia.

More reading

• Why are BrainChip (ASX:BRN) shares smashing ASX 200 trading volumes today?
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• Why did the BrainChip (ASX:BRN) share price have such a stellar year in 2021?
• Why BrainChip, Harvey Norman, HUB24, and Lake Resources shares are pushing higher
• Could BrainChip (ASX:BRN) crack into the ASX 200? Here’s what it takes

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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Are you looking for dividend shares to buy? If you are, then you might want to look at the shares listed below that have been named as buys by the team at Morgans.

Here’s why these ASX 200 dividend shares could be worth considering right now:

Telstra Corporation Ltd (ASX: TLS)

The first ASX 200 dividend share to look at is Australia’s largest telecommunications company. It could be a quality option due to its increasingly positive outlook after years of earnings declines and dividend cuts brought about by the rollout of the NBN.

The key to its positive outlook will be the T25 strategy, which has management targeting solid and sustainable growth in the coming years. Combined with the arrival of 5G and rational competition, some analysts believe the company will soon be in a positive to increase its dividend for the first time in almost a decade.

The team at Morgans are fans of Telstra. It has an add rating and $4.55 price target on its shares. The broker also continues to forecast dividends of 16 cents per share in FY 2022 and FY 2023. Based on the current Telstra share price of $4.09, this will mean yields of 3.9%.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that Morgans is positive on is this banking giant. It believes the recent weakness in the Westpac share price is unwarranted and has created a buying opportunity for investors.

Particularly given its belief that Westpac can cut its cost base in line with its plans. All in all, Morgans notes that its shares are the cheapest among the big four and offer the biggest forecast dividend yields.

Morgans 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 $20.98, this will mean yields of 5.9% and 7.7%, respectively.

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

The post 2 buy-rated ASX 200 dividend shares with great yields appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares this Thursday

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 owns and has recommended Telstra Corporation 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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Key points

• Some of the underrated ASX dividend shares could be good options for income
• Sims is one of the world’s largest metal recycling businesses
• Metcash is a leading supplier to independent supermarkets and liquor stores, as well as owning Mitre 10, Total Tools and Home Timber & Hardware

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Some ASX dividend shares are very well known by investors. However, there are others that may be unknown but still be able to offer attractive income over time.

Analysts look at most businesses on the ASX to consider if they are opportunities. A company that is both good value and offers a good yield might be able to achieve decent total returns.

With that in mind, here are two ideas:

Sims Ltd (ASX: SGM)

Sims is best known for being a global leader in metal recycling. It has operations in several countries, with a network of processing facilities, some with deep-water port access, supported by an extensive network of feeder yards.

Sims Metal buys, processes and sells ferrous and non-ferrous metal to manufacturers in 30 different countries. It says it sells around 10 million tonnes of secondary metals annually. It buys that metal from metal dealers, peddlers, auto wreckers, demolition firms and others who generate obsolete metal, and from manufacturers who generate industrial metal.

The ASX dividend share said it was seeing strong earnings momentum in the first half of FY22. Underlying earnings before interest and tax (EBIT) for the first half of FY22 is expected to be between $310 million to $350 million, driven by strong margins which was achieved through good market prices and “sound margin management” across all businesses.

However, freight supply costs and general inflation are offsetting some of the gains.

Sims has been busy making acquisitions including the assets of Atlantic Recycling Group, a US recycling business in Baltimore, Maryland. This cost US$37 million plus working capital adjustments.

Citi currently rates Sims as a buy with a price target of $18.50. Excluding the effect of franking credits, the broker is expecting Sims to pay a dividend yield of 3.6% in FY22 and 2.3% in FY23.

Metcash Limited (ASX: MTS)

Metcash is another ASX dividend share that could be worth thinking about.

It’s the business that supplies IGAs around the country, as well as liquor businesses including Cellarbrations, The Bottle-O, IGA Liquor, Duncans and Thirsty Camel. The hardware segment is growing profit particularly quickly, it includes Total Tools, Mitre 10 and Home Timber & Hardware.

The business is now targeting a dividend payout ratio of around 70% of underlying net profit after tax. In the recent FY22 half-year result it increased the interim dividend by 31% to 10.5 cents. The hardware division saw EBIT surge 53.3%. In hardware, it’s upgrading and expanding its store network.

The ASX dividend share is working on the digital side of its overall business. In HY22, group online sales were around $60 million, which was an increase of 46%. Metcash says there is “substantial growth potential” here.

The broker Ord Minnett rates the Metcash share price as a buy, with a price target of $5. This broker reckons Metcash will pay a grossed-up dividend yield of 7.6% in FY22.

The post 2 underrated ASX dividend shares to think about: analysts appeared first on The Motley Fool Australia.

More reading

• 2 big-name ASX shares to buy right now
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• ASX 200 (ASX:XJO) midday update: Afterpay hits 52-week low, energy shares rise
• 2 ASX dividend shares that could be buys with yields above 5%
• Now’s a small window to buy this booming ASX share: expert

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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

ASX Ltd (ASX: ASX)

According to a note out of Morgan Stanley, its analysts have downgraded this stock exchange operator’s shares to an underweight rating and cut the price target on them to $72.50. The broker doesn’t see value in the company’s shares compared to global peers. Particularly given the risks it is facing. This includes potentially higher costs from its CHESS replacement project. The ASX share price ended the week at $84.78.

Sandfire Resources Ltd (ASX: SFR)

A note out of Ord Minnett reveals that its analysts have downgraded this copper miner’s shares to a sell rating with a $5.60 price target. This follows the release of a mixed fourth quarter update this month. Ord Minnett notes that Sandfire’s production was strong during the quarter, but its costs were disappointing. In light of this and a strong share price rally over the last three months, the broker has no option but to downgrade its shares. The Sandfire share price was fetching $6.88 at the end of the week.

Zip Co Ltd (ASX: Z1P)

Analysts at Macquarie have retained their underperform rating and slashed their price target on this buy now pay later provider’s shares to $3.40. This follows the release of a second quarter update which fell short of the broker’s forecasts. Macquarie appears concerned by its slowing momentum in the US. This has led to its analysts downgrading their earnings estimates for the coming years, resulting in the reduction in its price target. The Zip share price ended the week at $3.33.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Why Allkem, Nuix, Whitehaven Coal, and Zip shares are sinking today
• Zip (ASX:Z1P) share price sinks 8% to 52-week low after brokers weigh in on its Q2 update
• Why BrainChip, GrainCorp, Redbubble, and Zip shares are dropping today
• Top brokers name 3 ASX shares to sell today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ZIPCOLTD FPO. 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

• Small cap ASX shares can have plenty of growth potential
• City Chic is a globally-growing retailer of apparel for plus-size women which is growing strongly in the US
• Volpara is a breast screening health technology business which is growing its subscription revenue at fast pace, with a gross profit margin

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Small cap ASX shares may be able to provide an attractive amount of capital growth because they are starting from a relatively small base compared to the current size of the ASX’s blue chips.

Not every small business is destined to go on and achieve strong returns.

However, expert analysts have concluded that these two options look very compelling:

City Chic Collective Ltd (ASX: CCX)

City Chic is one of the world leading specialist retailers that sells plus-size clothing, footwear and accessories to women. It sells through a number of brands and websites including City Chic, Evans and Avenue.

In recent weeks the City Chic share price has been dropping, offering more value for prospective investors. Since 22 November 2021, City Chic shares have dropped 23%.

The broker Macquarie currently rates this small cap ASX share as a buy with a price target of $7.10. That suggests a potential rise of the City Chic share price of more than 40% over the next year.

City Chic recently provided a trading update for the 26 weeks to 26 December 2021. It included sales revenue growth of 49.8% to $178.3 million, namely thanks to growth of 62% in the Americas to $77.2 million. Both the City Chic USA and Avenue websites are performing strongly.

However, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be roughly flat and in a range of between $22.5 million to $23.5 million for HY22. Management said this was pleasing because of a $4 million EBITDA hit due to store closures, the impact of acquisitions and COVID-19 related market and cost reduction measures taken in the prior corresponding period.

Macquarie puts the City Chic share price at 26x FY23’s estimated earnings.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara’s mission is to save families from cancer. It is well progressed with its breast cancer screening services and it is also working on a lung cancer offering as well.

Over 13.4 million US women are now using at least one Volpara product, as well as many women across Australia and New Zealand. In America, the small cap ASX share has a market share of around a third.

The healthcare technology business says that its strategic commercial partnerships set the stage for greater reach in not only genetic testing for breast cancer (which helps reduce risk for the patient) but also expansion into the US lung cancer market where AI and software offer the prospect of saving many lives.

Volpara continues to report a very high gross profit margin, it was higher than 91% in the first half of FY22. It also saw its subscription revenue jump 35% to NZ$11.8 million – an increase of 42% in constant currency terms. Annual recurring revenue (ARR) reached NZ$29 million at the end of the period.

The small cap ASX share is working on several ways to increase its average revenue per user (ARPU), which includes upselling more of its platform to the same clients so that they can provide a better service for clients and perform more efficiently.

Over the last three months the Volpara share price has dropped by around 30%.

Morgans currently rates the company as a buy with a price target of $1.94. That implies a potential upside over the next 12 months of almost 120%. In a recent newsletter, the company said that its third quarter of FY22 (to December 2021) has already beaten its previous best third quarter in terms of net new ARR added.

The post 2 small cap ASX shares with a lot of potential: experts appeared first on The Motley Fool Australia.

More reading

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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. owns and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Macquarie 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating but cut their price target on this artificial intelligence data services company’s shares to $14.80. Citi highlights that Appen has not provided the market with an end of year trading update. In light of this, it feels no news is good news and suspects that the company has achieved its guidance in FY 2021. As a result, it thinks that market consensus estimates could be too low. The Appen share price was trading at $10.12 at the end of the week.

Qantas Airways Limited (ASX: QAN)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $6.10 price target on this airline operator’s shares. While the broker has reduced its earnings estimates to reflect the disruption caused by the Omicron spread, it remains positive on its medium term outlook once the pandemic passes. The Qantas share price was fetching $4.89 at Friday’s close.

REA Group Limited (ASX: REA)

Analysts at Ord Minnett have upgraded this property company’s shares to a buy rating with an improved price target of $165.00. According to the note, the broker believes recent market weakness is an opportunity to pick up some quality shares at good prices. One of those shares is REA Group, which it feels has decent upside potential from the current level. The REA Group share price was trading at $146.83 at the end of the week.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• Is the REA Group (ASX:REA) share price a clear buy after dropping 14% in less than 3 weeks?
• Analysts name 2 excellent ASX 200 shares to buy
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• Why Anteotech, Appen, Boral, and Kogan shares are rising today
• ASX travel shares are nosediving today amid border opening delays

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. 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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One increasingly popular way to invest is using exchange traded funds (ETFs). And it isn’t hard to see why. ETFs provide investors with opportunities that were unattainable a decade ago.

With that in mind, listed below are two ETFS that are popular with investors right now. They are as follows:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ETF to look at is the BetaShares Global Cybersecurity ETF. This popular ETF gives investors exposure to the leading companies in the growing cybersecurity sector. This includes Accenture, Cisco, Cloudflare, Crowdstrike, Okta, Palo Alto Networks, and Splunk. These companies appear well-placed for growth over the 2020s due to increasing demand for cybersecurity services.

One of the companies you’ll be owning a slice of is Palo Alto Networks. It is the global leader in cybersecurity solutions. It offers advanced firewalls and cloud-based products that extend firewalls to cover other aspects of security. It has over 85,000 customers across over 150 countries. From these customers it generated US4.3 billion of revenue in FY 2021, which was up 25% year on year.

Over the last five years, the ETF has delivered a 23% per annum return for investors. This would have turned $10,000 into $28,000.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF for ASX investors to consider is the VanEck Vectors Morningstar Wide Moat ETF.

This ETF gives investors easy access to a diversified portfolio of companies that are fairly priced and have sustainable competitive advantages. This mirrors the investment approach of legendary investor Warren Buffett. And given the returns that he has generated over several decades, it could be a great approach to follow.

At present, there are a total of 46 US based stocks in the fund. This includes Amazon, Bank of America, Berkshire Hathaway, Intel, Mercado Libre, Microsoft, Philip Morris, Walt Disney, and Wells Fargo.

The index the VanEck Vectors Morningstar Wide Moat ETF tracks has beaten the market and generated a return of 21.5% per annum over the last 10 years. This would have turned $10,000 into $70,000.

The post 2 popular ETFs for ASX investors in 2022 appeared first on The Motley Fool Australia.

More reading

• 2 excellent ETFs for ASX investors to buy this month
• 2 market-beating ETFs for ASX investors in January
• Here are 2 ASX tech ETFs to buy after recent weakness
• How did the VanEck Morningstar Wide Moat ETF (ASX:MOAT) more than double the ASX 200’s returns in 2021?
• 2 ETFs for ASX investors to check out this 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. owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors Morningstar Wide Moat ETF. 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 Pilbara share price is in focus after some bad news for one of its competitors in the lithium space
• Rio Tinto has had its permits revoked for the lithium project in Serbia called Jadar
• Supply and demand could have an influence on future lithium prices

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The Pilbara Minerals Ltd (ASX: PLS) share price will be under the spotlight after the latest decision in Serbia regarding the Rio Tinto Limited (ASX: RIO) Jadar project.

Pilbara is one of the largest lithium miners with a market capitalisation of $11.3 billion according to the ASX.

Rio Tinto is by far the larger miner of the two. But it has intentions to grow its exposure to the battery material lithium.

Supply and demand is a very important factor when it comes to commodity prices. In theory, the more supply there is the more pressure there is on the price. However, the opposite can also be true. If there’s less supply then prices could improve.

Over the last 12 months there has been strong demand for lithium, pushing up the price.

Pilbara said in December that, lithium market conditions were strong, with high demand and constrained supply leading to record product pricing, which was still trending higher.

But in future years, more lithium projects are scheduled to come online.

What has happened with Rio Tinto?

According to reporting by the Sydney Morning Herald, the Serbian Prime Minister Ana Brnabic has revoked Rio Tinto’s permits.

There has been sustained campaigning by locals about the Rio Tinto Jadar project because of concerns regarding the potential environmental impacts of the mine.

The Serbian Prime Minister said according to the Sydney Morning Herald:

We are listening to our people and it is our job to protect their interests even when we think differently.

All decisions [linked to the lithium project] have been annulled. As far as project Jadar as concerned, this is an end.

What is Rio Tinto going to do about this? A spokesman said:

Throughout our work on the Jadar project we have always operated in compliance with the laws of the Republic of Serbia.

Rio Tinto is reviewing the legal basis of this decision and the implications for our activities and our people in Serbia.

How important was Jadar for the lithium market?

Jadar was expected to be a big project. Rio Tinto recently committed $2.4 billion to the lithium-borates project. It said it was one of the world’s largest greenfield lithium projects. It was expected to be one of the largest industrial investments in Serbia, contributing 1% directly and 4% indirectly to GDP.

Rio Tinto said it could supply enough lithium to power over one million electric vehicles per year. Full production was expected to be around 58,000 tonnes of lithium carbonate per year.

As Rio Tinto points out, lithium demand is expected to grow by between 25% to 35% per annum over the next decade.

If the Jadar project does not go ahead, then all of that lithium supply will not happen. There would be less total global supply, which may assist Pilbara.

Analyst rating on the Pilbara share price

Despite going up by around 200% over the past year, Pilbara is still rated as a buy by Macquarie with a price target of $3.70. The thought is that demand for electric vehicles can continue to keep the lithium price high.

The post Here’s why the Pilbara (ASX:PLS) share price is on watch 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie 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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