Tag: Motley Fool

Key points

• The Flight Centre share price has gained 7% over the past month
• It’s outperformed its ASX 200 travel share peers
• COVID-19 Omicron fears continue to impact the travel industry

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The Flight Centre Travel Group Ltd (ASX: FLT) share price has been up and down over the past month but has taken off overall.

Shares in the travel company are currently trading at $17.66, up 7.29% in the past month.

Let’s take a look at what’s making this share price take flight during the month.

What’s been happening at Flight Centre?

The Flight Centre share price gained 13% between market close on 20 December and 4 January. Since then, it’s been bouncing up and down as COVID-19 Omicron fears continue to impact the travel industry.

The opening of interstate borders including Queensland and South Australia appeared to weigh positively on the company’s shares in the lead-up to Christmas and the New Year. International arrival restrictions also eased in late December for arrivals into New South Wales and Victoria.

However, Omicron fears and rising case numbers appeared to impact Flight Centre and its travel share peers in mid-January. Between market close on 12 January and 14 January, the travel agency’s shares fell 6.84% before bouncing back.

On January 17, Flight Centre CEO Graham ‘Skroo’ Turner said he believed the reopening of Queensland’s borders signalled the “beginning of the end” of the pandemic. The company’s shares jumped 3.87% on the news.

Flight Centre has narrowly outperformed its S&P/ASX 200 Index (ASX: XJO) travel share counterparts in the past month. Qantas Airways Limited (ASX: QAN) has gained 6.07%, while Webjet Limited (ASX: WEB) has gained 4.37%.

Meanwhile, Helloworld Travel Ltd (ASX: HLO) has risen 3.08%, and Corporate Travel Management Ltd (ASX: CTD) has climbed 0.14%.

Flight Centre share price snapshot

The Flight Centre share price has returned 14.5% in the past 12 months and is flat this year to date.

For perspective, the ASX 200 has returned about 8% in the past year.

The company has a market capitalisation of about $3.6 billion based on its current share price.

The post Why did the Flight Centre (ASX:FLT) share price gain 7% in a month? appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 travel shares down today?
• Flight Centre (ASX:FLT) share price gains after boss anticipates ‘beginning of the end’ of COVID
• These are the 10 most shorted ASX shares
• Why did the Flight Centre (ASX:FLT) share price slump on Thursday?
• Why did the Flight Centre (ASX:FLT) share price have such a volatile year in 2021?

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 Flight Centre Travel Group Limited and Webjet 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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Key points

• BKI Investment has reported its half-year earnings
• The LIC managed to double its revenues for the 6 months to 31 December
• Shareholders will enjoy a hefty dividend raise too

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The BKI Investment Co Ltd (ASX: BKI) share price is falling today, but not by as much as the broader market. BKI shares are currently down by 0.3%, trading at $1.68 at the time of writing.

That comes as the Listed Investment Company (LIC) released its earnings results for the half-year ending 31 December yesterday before market open.

BKI Investment share price steady after solid half-year result

• Investment revenues of $31.5 million, up a pleasing 90% from the $16.6 million recorded for the first half of the 2021 financial year (1H21).
• Revenues from operating activities also rose by 90%, going from $16.2 million in 1H21 to $32.2 million.
• Net profit after tax boosted by 104% to $29.5 million.
• That translates into an earnings per share (EPS) metric of 3.98 cents per share, up 103% from the previous 1.96 cents per share.
• Including special investment revenue, BKI reported $55.7 million in net operating profit after tax of $55.7 million, up 273% from last year’s $14.9 million. It also lifted the company’s EPS to 7.53 cents per share, also up 273%
• BKI’s interim dividend to be 3.5 cents per share, a 75% increase on last year’s interim payment of 2 cents per share. Additionally, BKI will be forking out a special dividend of 50 cents per share.
• Dividends to be paid on 3 March (with the ex-date on 11 February).

What else happened in the first half?

As a LIC, BKI only invests in a portfolio of other ASX shares for the benefit of its shareholders. There weren’t too many developments with BKI over the reporting period. However, the company did announce that its total shareholder return for the full 2021 calendar year came to 13%, almost exactly mirroring the S&P/ASX 200 Index (ASX: XJO). Including BKI’s issued franking credits, this total return jumps to 14.6%.

Over the six months to 31 December, BKI also reported that it made several adjustments to its portfolio. These included buying Washington H. Soul Pattinson and Co Ltd (ASX: SOL). As well as adding to BHP Group Ltd (ASX: BHP) and APA Group (ASX: APA), amongst others.

In their place, BKI reduced positions in ASX Ltd (ASX: ASX), Commonwealth Bank of Australia (ASX: CBA) and Woolworths Group Ltd (ASX: WOW). It sold out of Brambles Limited (ASX: BXB), Platinum Asset Management Ltd (ASX: PTM) and Magellan Financial Group Ltd (ASX: MFG).

What did management say?

Here’s some of what the company had to say on its 1H22 results:

During the first half of FY2022, we added to existing positions, all of which offered significant grossed up dividend yields. They are positions well known to the BKI Investment Committee and provided a very good opportunity to increase BKI’s Investment Revenue and Net Profits…

BKI exited positions in Brambles, Platinum Asset Management and Magellan Financial, with these sales prompted by a reduction in our confidence for these companies to increase dividends over the short to medium term.

What’s next?

Going forward, BKI’s management says that the company is focused on investing in high-quality companies with pricing power that BKI believes will be best-placed to overcome “issues involving inflation, a lack of service and labour shortages”.

Management says that the company “continues to be well positioned with a portfolio of high-quality dividend paying stocks, available cash and no debt’.

BKI Investment share price snapshot

BKI Investment is a LIC that was spun out of Brickworks Ltd (ASX: BKW) around 20 years ago. Since then, it has managed to give its investors a slow-and-steady return, averaging a total return of 8.6% per annum over the past 10 years.

The LIC charges a management fee of 0.17% per annum. At the current BKI Investment share price of $1.68, the company has a market capitalisation of $1.25 billion, with a trailing dividend yield of 2.97%.

The post BKI Investment (ASX:BKI) share price slips as revenue surges 90% appeared first on The Motley Fool Australia.

More reading

• Record quarterly sales can’t stop the Woodside (ASX:WPL) share price falling today
• Whispir (ASX:WSP) share price wobbles as cash receipts grow 125% in Q2
• Why the Northern Star (ASX:NST) share price is surging 7% today
• Santos (ASX:STO) share price lower despite record FY 2021 performance
• Can Ethereum reach $5,000?

Motley Fool contributor Sebastian Bowen 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 APA Group, Brickworks, 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

• Woodside shares are falling despite record quarterly revenues
• The energy producer has been benefiting greatly from high energy prices
• Woodside is planning to merge with BHP’s petroleum assets in 2022

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The Woodside Petroleum Limited (ASX: WPL) share price is falling today.

In morning trade, the energy producer’s shares are down slightly to $25.38.

Why is the Woodside share price falling today?

The Woodside share price is falling today despite the announcement of record revenues in FY 2021.

According to the release, for the fourth quarter of FY 2021, Woodside delivered an 86% quarter on quarter increase in sales revenue to US$2,852 million. This was driven by a 22% increase in sales volume to 31.8mmboe and a 53% lift in its average realised price to US$90 per barrel of oil equivalent.

For the full year, revenue is expected to be US$6,973 million. This is almost double the revenue of US$3,612 million recorded in the previous year.

Potentially holding back the Woodside share price today was its production, which came in at 22.6mmboe. While this was up 2% quarter on quarter, it was down 9.2% from the prior corresponding period. This took its full year production to 91.1mmboe, which is down from the record production of 100.3mmboe it achieved a year earlier.

Looking ahead, management expects its production to improve in FY 2022, though it doesn’t expect to reach the record levels of FY 2020. It has guided to production of 92mmboe to 98mmboe, excluding any impact from the proposed merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

Management commentary

Woodside’s CEO, Meg O’Neill, was pleased with the quarter and the full year.

She said: “The 86% increase in sales revenue for the quarter was underpinned by a 22% increase in sales volume as well as significantly stronger average realised prices. We achieved our highest quarterly sales revenue on record. The upward trajectory in global oil and gas prices resulted in a portfolio realised price of $90 per barrel of oil equivalent and a strong realised LNG price of $93 per barrel of oil equivalent. This increase in realised price demonstrates the continued strong demand for LNG and improvement in the trading environment over the course of 2021.”

O’Neill also spoke positively about the proposed merger with BHP’s petroleum assets.

She said: “We signed a binding share sale agreement for the merger of BHP’s oil and gas portfolio with Woodside. The merger will deliver increased scale, diversity and resilience to better navigate the energy transition and will provide the financial strength to help fund planned developments in the near-term, invest in future energy opportunities and return value to our shareholders through the cycle.”

The post Record quarterly sales can’t stop the Woodside (ASX:WPL) share price falling today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here’s why BlackRock plans to keep these carbon intensive ASX 200 shares
• Woodside (ASX:WPL) share price on watch following sell-down of onshore LNG asset
• 5 things to watch on the ASX 200 on Wednesday
• Woodside (ASX:WPL) share price struggles amid hydrogen project update

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

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The Whispir Ltd (ASX: WSP) share price is seesawing on Thursday morning.

The cloud-based communications company’s shares shot up almost 4% to $2.70 soon after the market open. However, they have since retreated and at the time of writing are swapping hands at $2.56, down 1.54% on yesterday’s closing price. This follows the release of Whispir’s second-quarter FY22 update.

Let’s take a closer look at how the company performed in the December-ending quarter.

Whispir share price gets a boost from quarter of growth

• Annualised recurring revenue (ARR) up 26.6% year-on-year to $60 million
• New customer growth increased 199% year-on-year with 127 new customers
• Cash receipts up 125% from prior corresponding period to $25.4 million
• Reaffirms previously upgraded FY22 guidance
• Half-year results and presentation are slated for 22 February 2022

What happened in the second quarter for Whispir?

The Whispir share price has been up and down this morning as investors digest the company’s quarterly update. Positively, the release highlighted a period of growth for its operations.

According to the update, Q2 involved a significant boost in new customers acquired. Across the company’s various regions, new customers added reached 127.

Additionally, both new and existing customers drove increased utilisation of the Whispir communications platform. This underpinned solid growth in ARR and cash receipts during the second quarter.

Specifically, ARR increased 26.6% year-on-year to $60 million. Whereas, cash receipts witnessed a substantial 124.6% increase to $25.4 million. However, the company still burned through $3.1 million of cash through its operating activities.

At the end of December Whispir remained debt-free with a further $38.1 million of cash and equivalents to its name.

Management commentary

Speaking to shareholders, CEO and Whispir founder Jeromy Wells said:

Our sales function continues to mature, and the investment in our people is producing serious results. Over the past quarter we have acquired new customers with high-growth potential in North America, ANZ and Asia.

As announced to the market in December, the Singtel deal provides us with an unmatched competitive advantage in the APAC market and confidence that our strategy and product roadmap are absolutely aligned to the aspirations of large enterprise customers.

Whispir share price in review

The last 12 months have been a painful time for shareholders. While the S&P/ASX 200 Index (ASX: XJO) has gained around 8%, the Whispir share price has tumbled 34%.

According to past releases, Whispir took a hit to its operations at the hand of COVID-19. As the company has explained, the unforgiving virus has created delays to Whispir’s activations with new customers.

However, the company has been bouncing back more recently. In the past month, the Whispir share price has accrued a 46% gain.

The post Whispir (ASX:WSP) share price wobbles as cash receipts grow 125% in Q2 appeared first on The Motley Fool Australia.

More reading

• Experts tip the ASX sectors that are set to outperform in 2022
• 3 exciting small cap ASX shares to watch in 2022
• Why Magnis, Pilbara Minerals, Syrah, and Whispir shares are storming higher
• Why is the Whispir (ASX:WSP) share price shooting 8% higher?

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 Whispir Ltd. The Motley Fool Australia has recommended Whispir 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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Key Points

• Northern Star shares up 6.86% to $9.35
• Strong performance by Kalgoorlie and Yandal, but operations at Pogo lagging behind
• On track to meet guidance for FY22

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The Northern Star Resources Ltd (ASX: NST) share price is up and away on Thursday. This comes after the company released the results for its second quarter of FY22.

At the time of writing, the Australian gold miner’s shares are up 6.86% to $9.35.

Let’s take a look to see how Northern Star performed over the 3-month period.

What’s did Northern Star report?

The Northern Star share price is on the move in early morning trade following the company’s latest performance report.

For the quarter ending 31 December, Northern Star revealed a modest result whilst managing COVID-19 impacts.

Gold sold during the three months totalled 392,655 ounces at an all-in sustaining cost (AISC) of $1,631 per ounce.

Northern Star noted that Kalgoorlie and Yandal continue to perform in line with expectations. On the other hand, Pogo delivered below expectations but is well-positioned to increase mining rates in the second-half of FY22.

Despite the small hiccup, the company advised it is on track to meet its FY22 guidance of 1.55 million ounces to 1.65 million ounces. AISC is also expected to be in the range of $1,475 to $1,575 per ounce.

Net mine cash flow for the quarter came to $175 million. This is due to the company investing $150 million in growth capital and $28 million in exploration activities.

Northern Star declared a healthy balance sheet with $774 million in liquidity, excluding $700 million in undrawn available facilities. Cash and bullion stood at $588 million, along with $300 million in corporate bank debt.

The company’s hedge book (total outstanding contracts and transactions) is at 1.13 million ounces at an AISC of $2,405 per ounce.

Management commentary

Northern Star managing director, Stuart Tonkin touched on the company’s performance, saying:

During the quarter we safely advanced our growth strategy towards becoming a 2Mozpa producer and entered into a convertible funding agreement with Osisko Mining that we believe has the potential to deliver significant value for shareholders.

We remain on track to meet our FY22 guidance, which incorporates the current WA border closure and associated labour and cost impacts. Our experience at Pogo in Alaska has provided examples of the disruption we may face in WA and the mitigating actions required to reduce operational impact.

About the Northern Star share price

Over the last 12 months, Northern Star shares have failed to take off, dropping more than 30%. In 2022 alone, the company’s shares are relatively flat.

Based on valuation grounds, Northern Star is ASX’s 50th largest company with a market capitalisation of approximately $10.82 billion.

The post Why the Northern Star (ASX:NST) share price is surging 7% today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is the Northern Star (ASX:NST) share price trading at attractive levels?
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Aaron Teboneras owns Northern Star Resources Limited. 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

• Santos had a record year in 2021 and was able to take advantage of strong energy prices
• The merger with Oil Search completed late in the year
• This sets Santos up to “deliver even stronger outcomes in 2022”

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The Santos Ltd (ASX: STO) share price is on the move on Thursday morning.

At the time of writing, the energy producer’s shares are down slightly to $7.18.

Why is the Santos share price falling?

The Santos share price is falling today despite the release of its fourth quarter update which revealed a record performance in FY 2021.

According to the release, Santos achieved production of 22.9mmboe during the fourth quarter. This was up 5% quarter on quarter but a touch short of the market’s expectations. Nevertheless, this took its full year production to a record of 92.1mmboe, which is up 4% year on year. This includes 1.7mmboe from Oil Search assets following the completion of their merger on 11 December.

The energy giant also revealed a 7% increase in sales volume to 26mmboe for the quarter. Though, this wasn’t enough to stop the company from posting a 3% decline in annual sales volume to 104.2mmboe.

Pleasingly, thanks to stronger pricing, Santos still recorded a 34% increase in quarterly sales revenue to US$1,532 million and a 39% lift in annual sales revenue to US$4,714 million.

And while Santos reported a 62% increase in annual capital expenditure to US$1,387 million, that couldn’t stop the company from generating US$1.5 billion in free cash flow for the year. This was a record and more than double 2020’s level.

Santos’ Managing Director and Chief Executive Officer, Kevin Gallagher, commented: “Our disciplined, low-cost operating model continues to drive strong performance across the business and has positioned us to take full advantage of the increase in commodity prices. The completion of the Oil Search merger delivers us the size and scale to deliver even stronger outcomes in 2022 and beyond.”

“Our merger with Oil Search delivers increased scale and capacity to drive a disciplined, low-cost operating model and unrivalled growth opportunities over the next decade – with a vision of becoming a global leader in the energy transition,” he added.

Guidance for FY 2022 will be provided with its full year results next month.

The post Santos (ASX:STO) share price lower despite record FY 2021 performance appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here’s why BlackRock plans to keep these carbon intensive ASX 200 shares
• Own Santos (ASX:STO) shares? Top broker thinks it ‘can pay higher dividends’
• Is this driving Santos (ASX:STO) and Woodside (ASX:WPL) shares higher on Monday?
• 5 things to watch on the ASX 200 on Monday

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Two months ago, it seemed inevitable that Ethereum (CRYPTO: ETH) would break through the $5,000 ceiling. The popular cryptocurrency hit an all-time high just below $4,900 in mid-November, and momentum was on its side. But it didn’t happen.

Digital currencies have corrected sharply in recent weeks, and Ethereum has tumbled along with most of the market. With the digital currency trading at roughly $3,150 on Wednesday morning, it would have to climb 59% to hit $5,000. A milestone that seemed so attainable and obvious just a couple of months ago now seems so far away.

Ethereum can still get there. There’s never a dull moment for the world’s second-most-valuable cryptocurrency. It’s just no longer a foregone conclusion that it will happen anytime soon. Let’s break down the bullish case for Ethereum hitting $5,000 as well as the roadblocks that could stop that from happening.

Eyes on the prize 

Ethereum didn’t plant the flag on crypto; it didn’t arrive on the market until the summer of 2015. But it did raise the bar when it comes to what crypto’s blockchain could do. Ethereum made smart contracts possible, and in the process has become the cornerstone to thousands of the market’s decentralized apps. There are plenty of smaller cryptocurrencies that run circles around it in terms of speed, bandwidth, and cost, but right now it continues to be the undisputed top dog in this niche.

A popular metric for sizing up protocols in the world of decentralized finance is total value locked, or TVL. Ethereum currently has $138 billion in TVL, representing the value of the assets that are currently being staked in a specific protocol across all decentralized finance apps worldwide. Ethereum has 60% of the market, and its TVL is nearly eight times greater than its closest rival. 

The problem with 60% in TVL is that Ethereum’s share of the market has been shrinking. A lot of the faster and cheaper protocols are gaining ground on it, and that’s what makes the next phase of its migration to proof of stake so important.

Ethereum is currently proof of work, a mining method that has its advantages but ultimately makes it costly to do business with and an eco-unfriendly drain on energy resources. The rivals that are gaining ground on Ethereum are proof of stake, and its migration to the new protocol (currently expected to happen in June, but we’ve seen timelines get bumped before) will help it compete more effectively with the cryptocurrencies nibbling away at its market share. 

If Ethereum hits $5,000 later this year, it will likely require a successful move to proof of stake. Delays will give smaller players more opportunities to grab market share, and the Ethereum bullish case will be harder to justify if it’s no longer the obvious lead horse in the smart-contract revolution. 

Naturally, Ethereum itself isn’t immune to the wild price swings of the crypto market. All but 2 of the 15 most valuable crypto tokens have moved sharply lower over the past month. There was a time when crypto was disconnected from growth stocks, but both markets have been weak since November. Cryptocurrencies would sometimes move higher when inflation reared its head, but that hasn’t been a bullish catalyst these days. 

History has been kind to Ethereum in its less than seven years of trading, and buying the dip has been a smart call in the past. But with rival denominations piling up use cases, and uncertainties heading into the crucial phase of the Ethereum 2.0 migration, it isn’t the golden child it was last year. Doubt isn’t a bad thing, and if anything, it gives Ethereum investors a wall of worry to climb higher if it’s able to execute its goals in 2022.

Hitting $5,000 is within reach this year, and that would be a spectacular return of nearly 60% from today’s starting line. The risks are high as well, but crypto investors know that going in — the moment they buy into the volatile world of digital currencies. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Can Ethereum reach $5,000? appeared first on The Motley Fool Australia.

More reading

• Is Ethereum losing steam in 2022?
• Bitcoin (CRYPTO:BTC) takes most popular crown, here are 3 cryptos hot on its heels
• Crypto is crashing: Should you invest now?
• Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover
• Why Bitcoin, Ethereum, and Dogecoin plunged today

Rick Munarriz owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Ethereum. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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If you’re looking for options in the resources sector then you may want to take a look at the South32 Ltd (ASX: S32) share price.

This is because this mining giant has been named as one of the best options for investors in the sector by the team at Goldman Sachs.

Is the South32 share price good value?

Goldman recently named four reasons why Fortescue Metals Group Limited (ASX: FMG) could be a sell, you can read about that here.

Whereas on this occasion, the broker has named four reasons why the South32 share price is in the buy zone.

According to the note, the broker has a conviction buy rating and $4.60 price target on the miner’s shares. This implies potential upside of over 12% before dividends.

And if you include the very generous dividends Goldman is forecasting in FY 2022, the potential total return increases to over 23%.

Why is the broker bullish?

The four reasons that Goldman is bullish on the South32 share price are its valuation, strong free cash flow outlook, increased capital returns potential, and positive project news flow.

In respect to its valuation, the broker notes that the miner’s shares are trading at an attractive 4x forward EV/EBITDA excluding the yet to complete acquisition of a 45% stake in the Sierra Gorda copper mine in Chile.

As for its free cash flow, the broker commented: “We forecast a more than doubling in EBITDA in FY22 and a compelling FCF yield of c. 18%/17% in FY22 & FY23 (over 20% at spot), driven mostly by exposure to base metals (aluminium & alumina c. 50% of FY22 EBITDA zinc/nickel c. 20%), and the restart of the Alumar aluminium smelter in Brazil & recent acquisition of a minority stake in the Mozal aluminium smelter in Mozambique.”

A third reason to be positive is the prospect of capital returns. Goldman explained: “We assume the buyback continues to be extended (at US$250mn p.a) and S32 continues to pay out 70% of earnings (40% ordinary, 30% special dividend component). On our estimates, S32 is on a dividend yield of c. 11-12% in FY22 & FY23.”

Finally, Goldman notes that there is positive project news flow on the horizon which could boost the South32 share price.

It said: “We highlight the potential for capex on the US$800mn Dendrobium next domain (DND) met coal project to be reduced (which we would view as a positive). S32 is currently selling a base metal royalty portfolio (no value in our model).”

The post 4 reasons Goldman says the South32 (ASX:S32) share price is a conviction buy appeared first on The Motley Fool Australia.

More reading

• These ASX shares could be buys for value investors
• Leading fund manager says these blue-chip ASX shares are buys right now
• 5 things to watch on the ASX 200 on Tuesday
• Why Beforepay, Firefinch, Kogan, and South32 shares are dropping
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise

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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ASX shares will be heavily impacted by the direction of interest rates in the coming year, according to IML Investors Mutual.

This means that it’s now more important than ever to avoid the speculators and buy up businesses that actually have firm growth prospects.

“We expect central banks to raise interest rates fairly sharply over the next 18 months to more ‘normal’ levels,” read a memo to clients from IML analysts.

“As such, we continue to steer away from the riskier parts of the sharemarket and remain focused on identifying and holding what we assess to be good quality companies, are well managed, which offer sound value, and which can grow their earnings and do well over the next 3 to 5 years.”

Here are 2 such examples from IML’s Australian Smaller Companies Fund:

The company you’ve never heard of, but actually have

The name HT&E Ltd (ASX: HT1) — short for Here, There and Everywhere — may not be familiar to many investors.

But they have likely heard the company’s product sometime — in their car, on their smart speaker or even while shopping.

The company owns the Australian Radio Network, which runs many popular radio stations like the KIIS network, Chemist Warehouse Remix and the Pure Gold network.

It also runs outdoor advertising, from its roots as APN News & Media.

The IML team loved HT&E’s $308 million acquisition of regional radio network Grant Broadcasters late last year.

“This acquisition is an excellent fit for HT1 as it creates a truly national radio network that will give the company added reach and the enhanced ability to fulfil national briefs for agencies and larger advertisers.”

The memo also noted that HT&E had resolved its dispute with the Australian Taxation Office for “less than half the amount originally sought”. 

“With buoyant ad market conditions expected to continue into 2022, HT&E remains good value on a PE of 12 times FY22 and a yield of over 4%.”

HT&E shares are up about 11% over the past year. They closed Wednesday at $1.99.

Agricultural feed is a timeless demand

Ridley Corporation Ltd (ASX: RIC) is another ASX share that may not be immediately recognisable to retail investors.

The company, which produces animal feed and nutrition products, has seen its share price climb 66% over the past 12 months.

The IML team noted Ridley presented positive numbers at the annual general meeting late in the year.

“To November 2021, year to date EBITDA growth in both of Ridley’s reporting segments had exceeded the 16% growth seen in the prior corresponding period,” the memo read.

“In support of continued earnings growth, AGM commentary also highlighted further progress on delivering various business improvement initiatives, with the associated profit growth still to come.”

Despite the negative impact of COVID-19 on some of its customers, Ridley itself has navigated the pandemic ably.

“While the spread of Omicron seems hard to avoid, safety practices and employee buy-in has resulted in little lost time to date,” stated IML analysts.

“Despite the robust share price performance over the last 12 months, Ridley continues to look cheap, trading on a one-year forward PE of just 13x with a 3.8% dividend yield.”

Ridley shares closed Wednesday at $1.56.

The post 2 cheapie ASX shares looking pretty for 2022 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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Key points

• The Origin share price has surpassed its 52-week high 6 times in the last fortnight
• Its also gained 10% since the final close of 2021
• However, its underperforming against many of its energy sector peers

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The Origin Energy Ltd (ASX: ORG) share price has been on top of its game so far this year, having already gained 10% since the final close of 2021.

The boost has also seen the company’s stock hitting a new 52-week high 6 times. Its latest 12-month record was broken during yesterday’s session.

As of Wednesday’s close, the Origin share price is $5.78.

Let’s take a look at what might be moving the energy producer’s stock in the new year.

What’s boosting the Origin share price in 2022?

2022 is shaping up to be a good year for the Origin share price. That’s despite no news having been released by the company.

In fact, the last time the market received a price-sensitive announcement from the S&P/ASX 200 Index (ASX: XJO) energy provider was on 20 December. Then, it announced its $42 million acquisition of WINconnect.

Still, having started the year with a 52-week high of $5.48, the Origin share price’s 12-month high point has now been pushed to $5.84 – yesterday’s intraday high.

It was also boosted on Monday and 4 times last week.

Origin isn’t the only ASX 200 energy company performing well in 2022. In fact, year to date, much of the S&P/ASX 200 Energy Index (ASX: XEJ) is outperforming its stock.

The Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) share prices are leading the index. They’ve respectively gained 17% and 15% since the end of 2021.

Those of Santos Ltd (ASX: STO), Worley Ltd (ASX: WOR), and Whitehaven Coal Ltd (ASX: WHC) are also out in front of the energy provider’s stock.

For context, the ASX 200 has slipped 1.5% since the final close of last year.

The energy sector’s gains have likely been helped along by surging oil prices and rising coal prices amid an Indonesian export ban.

The post The Origin (ASX:ORG) share price has hit 6 52-week highs in 2022. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here’s why BlackRock plans to keep these carbon intensive ASX 200 shares
• Why is the Origin (ASX:ORG) share price hitting new highs today?
• In the green: the 5 best ASX renewable shares of 2021
• How did the Origin (ASX:ORG) share price perform in 2021?
• ASX 200 (ASX:XJO) midday update: Afterpay hits 52-week low, energy shares rise

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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