Tag: Motley Fool

Key points

• Booming e-commerce conditions are helping some ASX shares
• Goodman is benefiting from the huge demand of e-commerce industrial properties
• Brickworks is involved with a big pipeline of industrial real estate like distribution warehouses

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E-commerce has boomed over the last two years. Some ASX retail shares have directly profited from this. Whilst other strong stocks are profiting indirectly.

There are several ways to benefit from the huge rise in online shopping. Businesses don’t need to have a website selling products to profit to profit from e-commerce..

Some other businesses are also offering services like distribution centres or e-commerce support services.

Here are two ASX shares benefiting from e-commerce:

Goodman Group (ASX: GMG)

Goodman is one of the world’s largest industrial integrated property groups with operations in Australia, New Zealand, Asia, Europe, the UK, North America and Brazil. It owns, develops and manages industrial properties.

The business says that well-located industrial real estate is recognised as essential infrastructure for the digital economy, making it a highly sought-after asset class. Significant rental growth is expected to support valuation growth in FY22.

At 30 September 2021, it had $62 billion of assets under management (AUM). Goodman is expecting AUM to continue growing to around $70 billion by June 2022. It revealed rental income growth of 3.2% when it released its update for the three months to September 2021.

The high demand is helping the ASX share’s occupancy remain high at 98.4% as customers seek to improve their supply chains.

Project completions and deployment of capital into increased development activity is expected to support additional growth in earnings. At the end of September 2021, work in progress (WIP) was $12.7 billion, with an annual production rate for the year expected to average approximately $6.8 billion.

Pre-commitments have a long weighted average lease expiry (WALE) of 14 years. The WIP has a forecast yield on cost of 6.8%.

Citi currently rates it as a buy, with a price target of $26.

Brickworks Limited (ASX: BKW)

Brickworks may be well-known for its bricks, roofing and other building products. It could also be famous for its long-term shareholding of investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

However, the business is making a lot of progress with its joint venture industrial property trust which it shares with Goodman.

This trust is where Brickworks sells excess land no longer needed by the building products division into the trust. Goodman then prepares the land for a quality industrial property to be built on it. Once a lease pre-commitment is secured, the serviced land can then be used as security with debt funding to cover the cost of constructing the facilities.

Brickworks says that it has seen strong demand and sustained growth in the value of the property trust over a number of years. Management believe the COVID-19 pandemic has only fuelled this growth, by accelerating industry trends towards online shopping and increasing the importance of well-located distribution hubs and sophisticated supply chain solutions.

The ASX share should have recently completed one of Australia’s biggest warehouses for one of the world’s biggest e-commerce companies – Amazon. Brickworks is also building a huge distribution warehouse for Coles Group Ltd (ASX: COL). The Coles facility is expected to be completed towards the end of 2022.

In the last several months, a number of new tenants have pre-committed to facilities at the Oakdale West industrial estate. That includes a 35,500 square metre facility for Woolworths Group Ltd (ASX: WOW), a 32,000 square metre facility for Australia Post and an 11,000 square metre warehouse for Xylem.

The completion of these facilities, and the long pipeline of other pre-committed developments, will result in an increase in leased assets of around $1.2 billion and an increase of gross rent of $50 million within the property trust over the next two years.

The post 2 strong ASX shares profiting from the e-commerce boom appeared first on The Motley Fool Australia.

More reading

• What happened to the Brickworks (ASX:BKW) share price 2021?
• These 2 ASX real estate shares could be the best way to invest in property
• Why this expert sees an opportunity for ASX property shares in 2022
• An ASX XI to take on the world
• Why Brickworks (ASX:BKW) shares are an ASX dividend favourite

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Brickworks, COLESGROUP DEF SET, and Washington H. Soul Pattinson and Company 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

• Sydney Airport share price slightly down 0.12% to $8.64
• Slow recovery in travel market, affected by COVID-19
• Year to date numbers have not improved

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The Sydney Airport (ASX: SYD) share price is edging lower today, dragged down by the broader market.

Earlier this morning, the company released its monthly traffic update for December along with a brief outlook for 2022.

At the time of writing, the airport operator’s shares are down 0.12% to $8.64. In contrast, the S&P/ASX 200 Index (XJO) is 0.07% lower to 7,327.3 points.

How is Sydney Airport travelling?

The Sydney Airport share price is struggling today following the release of its passenger traffic performance for last month.

In its update, the company advised that total passenger traffic numbers stood at 1.2 million, down 69.7% on December 2019 levels.

Furthermore, domestic passenger traffic figures were 949,000 last month, down 56.9% from exactly two years ago.

In terms of international passengers, 248,000 people passed through Sydney Airport for the final month of 2021. This reflected a loss of 84.5% when compared to the December 2019 traffic report.

The latest results failed to meet management’s expectations of a quick recovery across the sector. A surge in Omicron cases impacted traveller demand which led to cancellations and lower load factors. 

Fast-forward to 2022, the first 15 days of January indicate a drop off in both international and domestic passenger traffic. Provisional data suggests a loss of 85% and 58%, respectively when compared against the December 2019 report.

Sydney Airport is blaming the stunted growth on tightly-controlled inbound international travel, entry requirements and restrictions into overseas markets, and the recently announced domestic flight cancellations.

Sydney Airport share price summary

Since accelerating on the back of a takeover offer in July 2021, the Sydney Airport share price has gradually ascended.

Over the last 12 months, its shares are up by more than 40% for investors, but are flat year to date. Nonetheless, this year’s share price marks the highest it has been since the pandemic began in February 2020.

Sydney Airport commands a market capitalisation of roughly $23.32 billion, ranking it as the 18th largest company on the ASX.

The post Own Sydney Airport (ASX:SYD) shares? Here’s how the company is tracking in the skies appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here’s why 2021 was a stellar year for the Sydney Airport (ASX:SYD) share price
• Exactly who will own Sydney Airport (ASX:SYD) following its takeover and why does it matter?
• Why is the Sydney Airport (ASX:SYD) share price worth keeping an eye on?
• Here are the 3 most heavily traded ASX 200 shares on Friday

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

• After a period of gut-wrenching volatility, the QBE share price is up by almost 6% over the past month
• Citi forecasts strong revenue growth for the insurer’s full-year results to be announced on 18 February
• This result could lead to a further share price “advance” for QBE investors, Citi says

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Shares in QBE Insurance Group Ltd (ASX: QBE) are down 0.33% today to $12.04. However, the QBE share price has had a great month of trading and is up 5.99%.

After a 3-month period of gut-wrenching volatility, during which time QBE shares closed as high as $12.41 and as low as $11.29, the stock appears to be regaining strength.

With the onboarding of new CEO Andrew Horton in September 2021, the team at investment bank Citi is feeling positive. Citi is eagerly awaiting the insurer’s next earnings announcement for the full year ending 31 December. This is currently scheduled for 18 February.

Let’s take a look.

Why is Citi bullish on QBE?

After a robust outperformance in 2021, when the QBE share price climbed 33%, momentum slowed in December.

However, it has regained steam in the new year and is inching closer to its 52-week high of $12.72.

Citi notes the price change is likely underpinned by QBE’s fundamentals, which are backed by the current macroeconomic climate.

The broker reckons that QBE’s new chief will keep it simple for his first results announcement. They expect Horton to focus on key numbers like revenue growth and the group’s combined operating ratio.

In its own modelling, Citi forecasts strong revenue growth flowing through to lift the pressure off margins down the P&L.

Citi says: “Overall we are optimistic a strong FY result should lead to further share price advance”.

Citi is joined by Macquarie and Morgans, who are each bullish on the QBE share price. Both rate it as a buy.

Macquarie, for instance, recently upgraded QBE to outperform on a $13.90 valuation. It estimates a 92% operating ratio in the insurer’s upcoming results.

Morgans also sees a period of revenue growth that is expected to impact positively on margins.

The broker also notes that QBE has grown its top line at around 9% in recent times. It likes QBE’s valuation and has a price target of $13.70.

QBE share price sentiment

In a list provided by Bloomberg Intelligence, 92% of analysts covering QBE say buy. Only 1 says hold.

The consensus price target on QBE is $14.70, which indicates a 22% margin of safety.

Credit Suisse is most bullish and values QBE at $16.60 per share.

The post Leading broker tips the QBE (ASX:QBE) share price to ‘advance’ in 2022 appeared first on The Motley Fool Australia.

More reading

• Own QBE (ASX:QBE) shares? Macquarie just upgraded ‘outperform’. Here’s why
• Top broker names 2 ASX 200 dividend shares to buy
• Here’s why the QBE (ASX:QBE) share price surged 30% in 2021
• Morgans names 2 ASX 200 shares to buy
• Why is the IAG (ASX:IAG) share price underperforming QBE in 2021?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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Key points

• Shares in banking giant Westpac Banking Corporation are edging lower today.
• The bank’s chief economist, Bill Evans posted a research note outlining its changes to interest rate forecasts.
• The RBA reckons there is close to zero probability of a rate hike occurring any time in 2022.
• In the last 12 months, the Westpac share price has fallen over 2% in the red.

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Shares in banking giant Westpac Banking Corp (ASX: WBC) are edging lower today and now trade less than 1% in the red at $21.05.

Whilst there’s been no market-sensitive news released out of the major’s camp today, the bank’s chief economist, Bill Evans posted a research note outlining its changes to interest rate forecasts. Let’s take a closer look.

What’s Westpac saying about interest rates in 2022-24?

Evans expects the Reserve Bank of Australia (RBA) central bank will begin tightening interest rates in August this year, ahead of previous estimates of a February 2023 hike.

“Developments since then have now prompted us to bring forward that tightening date to the meeting on August 2, 2022”, Evans noted in the report.

The economist reckons the central bank will kick things off with a 15 basis point hike in August due to hot-running inflation, followed by another 25 basis points increase in October.

In fact, in the research note released today, Evans explained that he forecasts 5 rates by the RBA from 2022 through until 2024, a step above previous expectations, and above his estimates for the US Federal Reserve.

This revised timing for the first move “is still well short of market pricing which is for the first hike to occur in June”.

The RBA isn’t so sure. Governor Phillip Lowe, who heads up the RBA outfit, reckons there is close to zero probability of a rate hike occurring any time in 2022.

In fact, the RBA alluded to a period of flat wages growth and mediocre inflation until 2023, a direct contrast from other viewpoints on the direction of the economy.

With respect to inflation, Evans notes that Westpac forecasts underlying inflation to reach 2.4% in 2021 and 2.9% by midway through 2022.

This is important, according to Evans, as it means that “by the time of the August [RBA monthly] meeting the [RBA] board will have observed three consecutive quarters in which annual underlying inflation has achieved or exceeded its target (around the mid-point of the 2-3% range)”.

How did he get here? Using the latest figures outlining payroll data from the Australian Bureau of Statistics (ABS), Evans notes that wage growth is occurring faster than the RBA recognises.

For instance, the most recent payrolls report out of the ABS showed the total wage bill grew 9% year over year in December, implying a circa 6% lift in the wage price index.

But the data also excludes key metrics like bonuses, hours worked and changes in the workforce, and the “sharp increase in this annual growth measure in recent months certainly bears consideration”, according to Evans.

“We expect quarterly growth in the Wage Price Index to increase from 0.6% in the September quarter to 0.7% in the December quarter, to be followed by 0.8% in the March quarter”.

Concluding the report, Evans noted:

Our forecast revisions reflect a much faster lift in inflation and wages growth than envisaged last June. While we have shaved our growth rate in 2022 due to the omicron-related contraction in consumer spending in January we do not see that as being significant for our wages/inflation/ employment profile. The FOMC has now acknowledged that the conditions for a tightening of policy have arrived and, while less urgent, we think the RBA will do the same by August.

In the last 12 months, the Westpac share price has fallen over 2% in the red, after sliding another 1% from January 1.

The post Westpac (ASX:WBC) share price wobbles, bank predicts 5 rate hikes in 2022-24 appeared first on The Motley Fool Australia.

More reading

• How are ASX bank shares performing today?
• What to expect from Westpac (ASX:WBC) during earnings season
• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?
• Analysts name 3 ASX 200 shares that could generate strong returns
• Neck and neck: Macquarie (ASX:MQG) bumps Westpac to become third-largest Aussie bank

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with brokers right now.

Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why they are bearish on them:

Ramsay Health Care Limited (ASX: RHC)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating and cut their price target on this private hospital operator’s shares to $61.00. The broker has been looking over the healthcare sector and picked out its winners and losers. It feels investors should avoid Ramsay and focus on healthcare shares that are more reasonably priced. The Ramsay share price is trading at $66.15 this afternoon.

Rio Tinto Limited (ASX: RIO)

A note out of UBS reveals that its analysts have retained their sell rating and $80.00 price target on this mining giant’s shares. This follows the release of a fourth quarter update that fell a touch short of the broker’s expectations. In addition, the broker was disappointed with Rio Tinto’s guidance for FY 2022. This was particularly the case with its aluminium and iron ore guidance. UBS also sees downside risk to iron ore prices, which could weigh on its performance. The Rio Tinto share price is fetching $112.93 today.

Sandfire Resources Ltd (ASX: SFR)

Analysts at Goldman Sachs have downgraded this copper miner’s shares to a sell rating with a $6.10 price target. According to the note, the broker believes Sandfire’s shares are overvalued at 1.2x net asset value. In addition, the broker feels the company’s current valuation implies a long run copper price of US$4.8 per pound, which is notably higher than its forecast of US$4.1 per pound. The Sandfire share price is trading at $7.29 on Thursday afternoon.

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

More reading

• The Sandfire (ASX:SFR) share price lifts on positive quarterly results
• What are brokers saying about the Rio Tinto (ASX:RIO) 2022 production update?
• Why the Rio Tinto (ASX:RIO) share price will be in focus today
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks

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 Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The Nico Resources share price debuted on the ASX on Wednesday after raising $12 million in its IPO
• The ASX newbie’s stock is currently trading 55% higher than yesterday’s close at 56 cents
• That’s 195% higher than its offer price of 20 cents

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The Nico Resources Ltd (ASX: NC1) share price is continuing its breathtaking rally in its second day of trading on the ASX.

The nickel and cobalt explorer floated at midday yesterday (AEDT) after an initial public offering (IPO) that saw its shares sold for 20 cents apiece.

At the time of writing, the Nico Resources share price is 59 cents, 63.89% higher than its previous close and 195% higher than its offer price.

However, earlier today it was trading at a new record high of 69.5 cents – representing a 93% gain on its previous close and a 247.5% gain on its offer price.

Let’s take a closer look at how the company has performed on the ASX so far.

Nico Resources share price continues its upwards momentum

The Nico Resources share price is taking off once more as the market continues to warmly welcome its newest face.

Since its ASX debut, 16 million of the company’s shares have swapped hands. For context, Nico Resources expected to list with around 91 million outstanding shares.

It seems many in the market are as optimistic about Nico Resources as its management. Talking on the company’s float, its CEO and managing director Rod Corps commented:

Nico Resources is well placed to be able to partner with some of the largest end users in the world to create a long-term supply option for the rapidly growing EV sector…

The board believes that with the increasing demand for both nickel and cobalt associated with the battery minerals sector requires a substantial increase in environmentally and ethically sustainable nickel production.

The company’s Wilgellina Project, located within its Central Musgrave Project, is a large undeveloped nickel deposit.

As of its first close, Nico Resources had a market capitalisation of around $31.4 million, according to CommSec.

Assuming it does indeed have 91 million shares on offer, the current Nico Resources share price would leave the company with a valuation of around $53 million.

The post The Nico Resources (ASX:NC1) share price just surged 93% on second day of trade appeared first on The Motley Fool Australia.

More reading

• Nico Resources (ASX:NC1) launches 82% following IPO
• These 3 companies are set to IPO on the ASX next week

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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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As one of the famous big four ASX bank shares, investors have come to expect a lot out of Australia and New Zealand Banking Group Ltd (ASX: ANZ) when it comes to dividends and franking credits. The banks are perhaps the most famous dividend-paying shares on the ASX. That reputation has been honed by decades of strong and fully franked yields that have flowed out of ANZ shares, as well as the other banks like Commonwealth Bank of Australia (ASX: CBA).

But, as many banking investors would remember, 2020 was a horrid year for ASX banks. Not only did the big four, including ANZ, experience nasty share price drops. But that year also saw dividends from the ASX banking sector all but dry up – largely thanks to the onset of the coronavirus pandemic. Take ANZ. It managed to fork out $1.60 in dividends per share in 2019. But only 60 cents per share made its way into investors’ bank accounts in 2020.

Fortunately, this drought didn’t last much longer than a year. Last year in 2021, we saw ANZ boost its dividends dramatically. May saw an interim dividend of 70 cents per share doled out to investors. While November recorded ANZ’s final dividend of 72 cents per share. That’s a 2021 total of $1.42 in dividends per share. Not quite back to the glory days of yore. But certainly a large improvement on 2020’s dismal payouts.

What kinds of dividends will the ANZ share price yield in 2022 and beyond?

So now that we’ve put 2021 behind us, what might ANZ have up its sleeve for income investors in 2022? Well, of course, we don’t yet know for sure. But, we can have a listen to what one ASX broker is predicting.

As my Fool colleague James covered earlier this week, broker Morgans is currently bullish on ANZ shares, partly due to an expectation of higher dividends going forward. Morgans has rated ANZ as an ‘add’, with a 12-month share price target of $31. That implies a potential future 12-month upside of around 9% on current pricing.

This broker reckons ANZ will pay out a total of $1.47 in fully franked dividends per share in FY2022. As well as $1.64 per share, also fully franked, in FY2023. The latter would exceed ANZ’s 2019 dividend, and as such would be presumably very welcome to shareholders if it came to pass. A $1.61 per share payout would give the ANZ share price a forward yield of roughly 5.66% on current pricing. So there you have it. At least one broker is expecting dividend rises from ANZ in 2022 and into 2023.

As it stands today, ANZ shares currently have a market capitalisation of $80.08 billion, with a trailing dividend yield of 4.99%. 

The post Will ASX big four bank ANZ (ASX:ANZ) raise its dividend in 2022? appeared first on The Motley Fool Australia.

More reading

• Netwealth (ASX:NWL) share price lifts on record net inflows of $3.6bn
• How are ASX bank shares performing today?
• Analysts name 2 ASX dividend shares to buy
• 2 ASX shares with growing fully franked dividends
• ANZ (ASX:ANZ) will lag other majors on this key growth metric in 2022 says top broker

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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Key points

• The Macquarie Group share price is down almost 5% this week
• All ASX bank shares have fallen in the past 48 hours
• The S&P/ASX 200 Financials Index is in the red today

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The Macquarie Group Ltd (ASX: MQG) share price has been a standout performer on the ASX in the past year, but this hasn’t been a good week.

Shares in the investment bank are currently trading at $196.61, down 4.89% so far this week. The company’s shares are down 1.3% today.

Let’s take a look at what may be impacting the company this week.

Wall Street woes

The Macquarie share price may be falling this week, but it is not alone. Most of this fall has taken place within the last 48 hours. Since market close on January 18, the company’s shares have fallen 4.95%.

In the same time frame, the Commonwealth Bank of Australia (ASX: CBA) share price has fallen 3.02%, National Australia Bank Ltd (ASX: NAB) shares have dropped 2.32%, the Westpac Banking Corp (ASX: WBC) share price has slumped 1.64% and Australia and New Zealand Banking Group Ltd (ASX: ANZ) has dropped 1.01%.

The performance of financial shares in the United States appears to have weighed on Australian bank shares including Macquarie. The Dow Jones US Financial Index fell 1.53% overnight and has fallen 3.31% in the past two days.

Goldman Sachs Group (NYSE: GS) fell 8.79% in the first two days of trading in the US this week. Investors reacted to the company’s profit dropping 13% on the previous year, the New York Times reported.

There has also been speculation that the US Federal Reserve is considering fast-tracking interest rate rises due to inflation concerns. This has the potential to affect ASX shares, as the Reserve Bank of Australia can take its lead from the US.

Back home, the S&P/ASX 200 Financials Index (ASX: XFJ) is 1.05% in the red today and has dropped 2.31% since market close on 18 January.

Macquarie bumped Westpac to become Australia’s third-largest Aussie bank on Wednesday last week. However, at the time of writing, Westpac has edged out Macquarie Bank again with a higher market capitalisation.

Macquarie share price snapshot

The Macquarie share price has soared 41.95% in the past year but is down 4.32% this year to date.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned about 8% in the past year.

Macquarie Group has a market capitalisation of about $76.4 billion based on its current share price.

The post Why is the Macquarie (ASX:MQG) share price falling this week? appeared first on The Motley Fool Australia.

More reading

• How are ASX bank shares performing today?
• Is the NAB (ASX:NAB) share price an undervalued smart buy for dividends?
• 2 buy-rated ASX dividend shares
• An ASX XI to take on the world
• Neck and neck: Macquarie (ASX:MQG) bumps Westpac to become third-largest Aussie bank

Motley Fool contributor Monica O’Shea 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 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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Key points

• Novonix has signed a technology development agreement with Phillips 66
• The two companies are aiming to commercialise next-generation anode materials for lithium-ion batteries
• This is part of its plan to establish a North American supply chain to power the growing battery sector and facilitate a sustainable future

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The Novonix Ltd (ASX: NVX) share price is falling on Thursday despite the release of a positive announcement.

In afternoon trade, the battery materials company’s shares are down 1% to $9.14.

What did Novonix announce?

This morning Novonix announced a technology development agreement with US energy giant and major shareholder Phillips 66.

According to the release, the two parties will work together to advance the production and commercialisation of next-generation anode materials for lithium-ion batteries.

The release notes that the agreement will see Phillips 66 and Novonix leverage their industry-leading positions, as well as existing intellectual property and research and development capabilities, to drive commercial development of optimised feedstocks and lithium-ion anode materials with reduced carbon-intensive processing.

Phillips 66’s Vice President of Energy Research & Innovation, Ann Oglesby, commented: “This agreement builds on our strategic investment in NOVONIX and is a natural next step for two companies committed to innovation and a lower-carbon future. It sets the framework for the companies to work closely and collaboratively to accelerate the development of next-generation materials for the U.S. battery supply chain.”

This sentiment was echoed by Novonix CEO, Chris Burns.

He said: “We are excited to further our relationship with Phillips 66, and together we plan to develop integral processes, from manufacturing precursor materials to producing high-capacity long-life synthetic graphite anode material intended to improve battery performance, lower cost and decrease environmental impact.”

“We believe NOVONIX is currently the only supplier with plans to provide large volumes of synthetic graphite anode material in the U.S., and this partnership will accelerate our mission to establish a North American supply chain to power the growing battery sector and facilitate a sustainable future,” he added.

The post Novonix (ASX:NVX) share price down despite Phillips 66 technology development agreement appeared first on The Motley Fool Australia.

More reading

• The Novonix (ASX:NVX) share price just tanked 10%. What’s going on?
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Here are the top 10 ASX shares today
• Why AGL, Genetic Signatures, Liontown, and Novonix shares are charging higher
• ASX 200 (ASX:XJO) midday update: AGL and Novonix shares shoot higher

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

• The Netwealth share price is in the green today following its quarterly update
• Further growth across all of the platform’s major metrics were reported
• A new arrangement with the ANZ bank will see cash account margins shrink to 50 basis points

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The Netwealth Group Ltd (ASX: NWL) share price is being embraced by investors today. This follows the release of the financial services platform provider’s December quarterly update.

Following the release this morning, the Netwealth share price opened slightly higher, at $16.45. At the time of writing, shares in the Aussie fintech are now commanding a price of $16.63, up 1.22% from its previous close.

Netwealth share price up on sustained growth momentum

• Total funds under administration (FUA) reach $56.6 billion, up 46% year-on-year
• Net inflows increase 41% from prior corresponding period to $3.6 billion
• Funds under management (FUM) surge 48.3% year-on-year to $13.8 billion
• Managed account balance increase 53.9% year-on-year to $11.7 billion
• Category market share improves to 5.2% at the end of September 2021
• Increase to FY22 FUA net inflows guidance, now to exceed $13.5 billion.

What else happened in the second quarter?

Netwealth shareholders will be happy to see the platform notched up additional account number growth in the December quarter. According to the update, accounts increased to 107,103 at the end of the period — this represents a 21.4% increase from the same time last year.

Furthermore, Netwealth also disclosed additional details surrounding the arrangement for its cash deposits. The arrangement currently in place with Australia and New Zealand Banking Group Ltd (ASX: ANZ) gives the company a margin of 95 basis points above the official cash rate.

A new deal with ANZ will see Netwealth take a 50 basis point margin on all cash accounts from 25 March 2022. When the company announced the termination of its previous agreement with ANZ in March 2021, the Netwealth share price took a 15% haircut.

What’s next?

Looking forward, Netwealth expects margins to improve as the Reserve Bank of Australia increases the cash rate. If the official rate were to bounce back to 50 basis points, the company estimates margins would exceed the 105 basis points currently received.

Notably, the platform provider has upgraded its FUA net inflows guidance for FY2022. This has been done based on the favourable conditions being experienced within the sector. As a result, the forecast is now for in excess of $13.5 billion in net inflows.

Netwealth share price snapshot

The Netwealth share price has been trading sideways since hitting an all-time high in October 2020. In the past year, the company’s shares have lifted a poultry 4.4% compared to the S&P/ASX 200 Index (ASX: XJO) rising 8.1%.

Based on the current valuation, Netwealth is offering up a 12-month trailing dividend yield of 1.13%.

The post Netwealth (ASX:NWL) share price lifts on record net inflows of $3.6bn appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Netwealth. The Motley Fool Australia owns and has recommended Netwealth. 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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