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A disappointing finish to the week led to the S&P/ASX 200 Index (ASX: XJO) recording a 0.8% decline to 7,393.9 points last week.

While a number of shares dropped with the market, some fell more than most. Here’s why these were the worst performing ASX 200 shares last week:

Pro Medicus Limited (ASX: PME)

The Pro Medicus share price was the worst performer on the ASX 200 last week with a 13.9% decline. This was despite the team at Morgans upgrading the health imaging company’s shares to a hold rating just days after downgrading them to a reduce rating. The broker has a price target of $54.49. The Pro Medicus share price ended the week at $46.59.

ARB Corporation Limited (ASX: ARB)

The ARB share price was out of form last week and sank 13.7% over the five days. This 4×4 parts company’s shares came under pressure after being downgraded by analysts at Credit Suisse. According to the note, Credit Suisse has downgraded its rating to underperform with a price target of $38.00. While the broker is forecasting a strong result in February, it expects margin pressures and slower growth thereafter.

Pendal Group Ltd (ASX: PDL)

The Pendal share price was a poor performer and crashed 12.7% last week. All of this decline occurred on Friday following the release of a disappointing quarterly update. That update revealed that Pendal experienced net fund outflows of $6.8 billion during the first quarter of FY 2022. This led to its funds under management (FUM) falling 2.5% to $135.7 billion during the December quarter despite the benefits of favourable market movements.

Reece Ltd (ASX: REH)

The Reece share price wasn’t far behind with an 11.2% decline. This was despite there being no news out of the plumbing parts company. Though, it is worth noting that Reece’s shares hit a record high in the previous week. This could have led to some profit taking from investors last week.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Pendal (ASX:PDL) share price ends disastrous day of trade down 16%
• Why this expert sees an opportunity for ASX property shares in 2022
• Here are the 3 most heavily traded ASX 200 shares this Friday

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 Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended ARB Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Fund manager Wilson Asset Management (WAM) has outlined two ASX shares with potential
• The first stock is pathology business Australian Clinical Labs which is benefiting from the high level of COVID testing
• The second company is building and restoration services Johns Lyng which is growing market share and opening up new growth opportunities

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Leading fund manager Wilson Asset Management (WAM) has named two ASX shares in its portfolios that it thinks are buys.

Every month, WAM talks about some of the businesses that have performed well and outlines the bullish factors for thinking about the stocks.

Two of the featured ASX shares this month comes from WAM Research Limited (ASX: WAX) and WAM Capital Limited (ASX: WAM), which sometimes target opportunities from the smaller end of the ASX, like these two:

Australian Clinical Labs Ltd (ASX: ACL)

Australian Clinical Labs is described as a leading provider of pathology services in Australia, with 86 accredited laboratories performing services for more than 8 million people annually.

In December, Australian Clinical Labs upgraded its expectations for the FY22 first half net profit after tax (NPAT) to between $116.3 million to $128 million. This was increased from the previous guidance of between $86.3 million to $94.9 million.

The fund manager notes that the ASX share is experiencing strong demand for coronavirus testing, particularly during the Omicron variant outbreak and recently completed the acquisition of Medlab Pathology, doubling its market share to 20.4% in New South Wales.

WAM thinks that Australian Clinical Labs is a high-quality pathology business that can continue to grow organically through market share gains, due to its “superior technology and processes”. The fund manager notes that Australian Clinical Labs has a very strong balance sheet and it also sees the potential for acquisitions in the future that can add to profit.

Johns Lyng Group Ltd (ASX: JLG)

Another ASX share that WAM likes is Johns Lyng which provides building and restoration services across Australia for properties and contents damaged by insurable events, including impact, weather and fire events.

It operates in all major metropolitan areas and in high risk regional areas, such as Far North Queensland.

WAM pointed out that in December, the company announced the acceleration of its US growth strategy through the acquisition of Reconstruction Experts, a leading provider of insurance-focused vendor managed repairs services for US$144 million.

This acquisition, called highly strategic, adds to the company’s EPS and equated to 7.8x earnings before interest, tax, depreciation and amortisation (EBITDA) for the 12 months to 30 June 2021.

The fund manager decided to invest in Johns Lyng Group based on the view that as the largest and most sophisticated provider of emergency building works, the company will continue to grow through market share gains and acquisition.

WAM believes that with the recent acquisition, the company has added another material growth pillar that will underpin longer term aspirations and earnings growth.

The post This top fund manager just called these leading ASX shares a buy appeared first on The Motley Fool Australia.

More reading

• WAM (ASX:WAM) share price unmoved despite victory in PAF acquisition fight
• Did you miss this ASX growth share already making a profit?
• 2 ASX 200 shares benefitting from the surge in COVID tests
• In the green: Here are the 5 best ASX healthcare shares of 2021
• Own WAM Capital (ASX:WAM) shares? Here’s how the share price performed in 2021

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 Australian Clinical Labs 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 Altium share price gained 33% in 2021
• Altium rejected an offer from US software giant Autodesk in June
• The technology company’s share price recovered from September to December

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The Altium Ltd (ASX: ALU) share price had a stellar 2021 after a slow start to the year.  

The company’s share price soared from $33.99 to $45.19, a 32.95% gain. Altium outperformed the S&P/ASX 200 Index (ASX: XJO) by about 46%.

Let’s take a look at what has weighed on the Altium share price in 2021.

Ups and downs with a strong finish

The Altium share price had a sluggish start to the year before blasting ahead in June. The share price then had its ups and downs in the second half of 2021 but finished on a high.

In the first five months of the year, the Altium share price sank. Between market close on 31 December 2020 and 28 May, the shares in the tech company dived 17%.

In May, the Altium share price dropped 19% in the first two weeks — between market close on 30 April and14 May. This was in line with the S&P ASX All Technology Index (ASX: XTX), which fell 13.41% in the same time period.

However, in June the company’s shares changed direction, lifting 39% between market close on 4 June and 7 June alone.

Driving this massive uplift was news a takeover offer from US software giant Autodesk Inc (NASDAQ: ADSK) had been rejected at the $38.50 per share price. The company believed the proposal undervalued the company.

In August, Altium shares slumped again by 16.69% between 25 August and 30 August. This price shed appeared to be driven by investor reaction to the company’s FY21 earnings report. Altium’s revenue increased by 1%, but its profit before tax declined by 7%.

The Altium share price then gained 44.93% between market close on 9 September and 31 December. Investors reacted well to the company’s annual meeting update in November.

CEO Aram Mirkazemi expressed optimism the company was on track to achieve its FY 2022 guidance of 16-20% revenue growth. Altium was also rated as a “buy” by multiple brokers.

Share price snapshot

The Altium share price has fallen 9% in the past month and nearly 4% in the past week.

Year to date, the company’s shares have fallen roughly 12%. In comparison, the All Technology Index has also fallen 8% since the start of the year.

Altium has a market capitalisation of about $5.2 billion based on its current share price.

The post Why did the Altium (ASX:ALU) share price gain 33% in a year? appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Down 10% already in 2022. Is the Altium (ASX:ALU) share price now a buy?
• 5 things to watch on the ASX 200 on Wednesday
• 3 fantastic ASX growth shares rated as buys
• 2 excellent ASX tech shares to buy after the market meltdown

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

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If you’re interested in adding some S&P/ASX 200 Index (ASX: XJO) shares to your portfolio in January, then the three listed below could be worth considering.

These ASX 200 shares have been named as buys and tipped to generate strong returns for investors. Here’s what you need to know about them:

NEXTDC Ltd (ASX: NXT)

The first ASX 200 share to look at is NEXTDC. It is a leading data centre operator with a collection of world class centres across key capital city locations throughout Australia. Together with its potential expansion into Asia and Edge data centres and the structural shift to the cloud, NEXTDC has been tipped by a number of brokers to grow strongly in the coming years.

One of those is Citi. It is positive on the company’s outlook and has a buy rating and $15.40 price target on NEXTDC’s shares. This compares to the latest NEXTDC share price of $11.22.

SEEK Limited (ASX: SEK)

Another ASX 200 share to look at is this leading job listings company. It appears well-positioned for growth in the coming years thanks to its leadership position, pricing power, and exposure to Australia’s recovery from the pandemic.

The team at Credit Suisse is bullish on SEEK. Its analysts currently have an outperform rating and $39.50 price target on its shares. This compares to the most recent SEEK share price of $29.65.

Westpac Banking Corp (ASX: WBC)

A final ASX 200 share that could be in the buy zone is Westpac. Australia’s oldest bank has been named as a buy by the team at Morgans. Its analysts believe the company’s shares offer “considerable value” following a recent decline. And while the broker acknowledges that Westpac’s margins have re-based notably lower, it remains positive due to its “expectation of significant cost out by FY24F.”

Morgans has an add rating and $29.50 price target on the bank’s shares. This compares to the current Westpac share price of $21.45.

The post Analysts name 3 ASX 200 shares that could generate strong returns appeared first on The Motley Fool Australia.

More reading

• Neck and neck: Macquarie (ASX:MQG) bumps Westpac to become third-largest Aussie bank
• Is Westpac (ASX:WBC) going to be the best big 4 bank for dividends in 2022?
• 2 buy-rated ASX 200 dividend shares with big yields
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• The NEXTDC (ASX:NXT) share price has tumbled 12% so far this year. Is it a buy?

Motley Fool contributor James Mickleboro owns NEXTDC Limited, SEEK Limited, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK 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

• ASX hydrogen shares have just come off a roaring year, but there’re not without risks
• Acorn Capital portfolio manager Risk Squire warns the sector’s participants will likely face growing pains
• He cautions would-be investors to keep an open mind and consider the risks of buying into a changing space

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Hydrogen shares were all the rage in 2021, with some ASX small caps involved in the energy commodity surging as much as 1,300% – recorded by Province Resources Ltd (ASX: PRL) – last year.

But are shares focused on the low-carbon energy source still a good investment?  

That question was recently addressed by Acorn Capital portfolio manager Rick Squire. Here’s what Squire believes those that are bullish on hydrogen in 2022 should look out for.

What risks might face those investing in ASX hydrogen shares?

There’s no denying the future for hydrogen looks bright. As the world looks to decarbonisation, hydrogen – particularly, ‘green’ hydrogen, made using renewable energy – appears to hold answers to many tricky questions.

But, while no investment can be guaranteed, there are certain risks that come from investing in new industries.

In a piece published by Livewire, Squire offered 2 key insights that could be useful for ASX investors looking to get involved before hydrogen shares go ‘mainstream’.

The first, be aware of the market’s need for growth and the time that growth will likely take.

As Squire said, the market for hydrogen is currently small and it’s costly to manufacture the element.

While such issues are being actively addressed by those working in the space, others aren’t as easy to get around. Squire commented:

[H]ydrogen gas is highly flammable, has very low density, requires ultra-low temperatures to keep it liquid and has a propensity to leak and to weaken metal or polyethylene pipes. This makes storage and long-distance transportation less efficient than for liquified natural gas.

Bypassing these fundamental challenges will likely take time. Additionally, applications for hydrogen in key sectors, and even methods to commercially produce the element, could be a while away. Squire wrote:

[Fortescue Metals Group Limited (ASXL:FMG)] modified a dump truck to operate on green hydrogen, but it only ran for 20 minutes. Therefore, the initial application of green hydrogen will probably be very limited and small in scale. It will scale-up, but this will take time.

The second warning Squire gives to investors looking at ASX hydrogen shares points to the history of innovation. He noted:

When you look back at the adoption of major new technologies in the resources and energy sectors… the early movers were rarely the biggest winners.

Squire said his fund hasn’t ruled out investing in ASX hydrogen shares. Rather, it’s “consider[ing] the risks when playing with something very explosive”.

He also advised keen market watchers to keep an open mind when deciding where in the hydrogen space to invest.

While green hydrogen is seemingly all the rage, blue hydrogen ­– created using natural gas or coal-fired power – may well be “an important and commercially viable stepping-stone for the sector,” said Squire.

Paired with carbon capture and storage, he believes blue hydrogen could embody many of the emission-reduction benefits of its green sibling.

The post Are ASX hydrogen shares still a good investment in 2022? appeared first on The Motley Fool Australia.

More reading

• Why the Ardea Resources (ASX:ARL) share price rocketed 50% today
• These 2 beaten-down growth ETFs could be a buy today
• Why has the AGL (ASX:AGL) Energy share price climbed 18% in a week?
• Own QBE (ASX:QBE) shares? Macquarie just upgraded ‘outperform’. Here’s why
• 2 ASX shares with growing fully franked dividends

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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Key points

• The Ardea share price hit a new 52-week-high this week

• The miner has made a significant discovery at its Emu Lake site

• The company has found another fertile exploration space at the site

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The Ardea Resources Ltd (ASX: ARL) share price has seen a relatively stable 12 months… until now.

This morning, the miner released a positive report regarding its Western Australia exploration site, driving its share price up by as much as 58%.

It has since settled back down to close 77 cents — an increase of 50%.

So what’s so exceptional about this announcement that made the Ardea share price skyrocket?

Let’s take a look…

Significant drill discovery for Ardea

To bring you up to speed — Ardea is a multi-commodity miner with interests in Western Australia.

Its primary focus is to export its resources to the lithium-ion battery sector — meeting the growing demand for electric vehicles and storage.

Its main interests are the Kalgoorlie Nickel Project, the Goongarrie Hub (both being the largest source of nickel-cobalt in the developed world), and its exploration of nickel sulphide within the Eastern Goldfields — all located in WA.

This morning, Ardea announced had “confirmed a high-grade massive nickel-copper-PGE sulphide discovery” at its Emu Lake site within the Eastern Goldfields.

It has successfully found 2.72m at 5.42% nickel and 0.85% copper from a drill hole at 391.04 metres.

According to the miner, the drill site has shown “increased massive nickel and copper sulphide grade and thickness on an intact, basal dacite contact”.

Other zones discovered

It’s not just the sulphide discovery that has Ardea excited.

The company has also opened up an exploration incentive scheme to test the down plunge extension of today’s winning drill hole — an exercise which has been co-funded with the WA government.

It is set to commence exploration once a rig is made available.

Further, CSIRO is set to study the mineralisation of the nickel sulphite found at Emu Lake, determining the massive sulphide within the site.

In addition, the miner has found a precise new fertile target to pursue — deemed the Western Ultramafic-Dacite contact — in which it controls 20km of strike.

Ardea managing director, Andrew Penkethman said:

With Ardea holding 20km of fertile komatiite strike at Emu Lake, there is significant scope to extend this nickel sulphide discovery and make additional discoveries.

I acknowledge the Ardea team and partners such as CSIRO and Newexco for their input which has assisted in developing the Emu Lake “Thermal Erosion” nickel sulphide model which is a major exploration breakthrough for the company, as it has opened up a new search space.

Ardea Resources share price snapshot

Before today, the Ardea share price saw its largest spikes of the last 12 months in February and June 2021.

The first jump came after the miner announced the sale of its Bedonia East project to Moneghetti Minerals Limited, in order to focus on its Kalgoorlie site. The Ardea share price rose 15% in a few days, before dropping again, with announcing a 60 million tonne at 1.0% nickel resource estimate at Goongarrie.

Prices surged again in June, after the miner announced a large interception of nickel sulphide at Emu Lake.

At these two high points, the Ardea share price was at 60 cents and 59 cents respectively.

The company has a market capitalisation of $70.80 million and over 138 million shares issued.

The post Why the Ardea Resources (ASX:ARL) share price rocketed 50% today appeared first on The Motley Fool Australia.

More reading

• These 2 beaten-down growth ETFs could be a buy today
• Why has the AGL (ASX:AGL) Energy share price climbed 18% in a week?
• Own QBE (ASX:QBE) shares? Macquarie just upgraded ‘outperform’. Here’s why
• 2 ASX shares with growing fully franked dividends
• New Hope (ASX:NHC) share price slides following CEO resignation

Motley Fool contributor Alice de Bruin 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 ASX 200 may have had a good year in 2021, but not all ETFs did
•  2 ASX growth-focused ETFs have been beaten down
• Market distaste for tech and Chinese companies could be worth a deeper dive

As most investors would be aware of, 2022 has certainly brought a boatload of volatility and unpredictability to the markets. Fresh off a robust 13% performance from the S&P/ASX 200 Index (ASX: XJO) in 2021, 2022 has been a tale of a different nature thus far. But even though the past few months have generally been good to investors, the prosperity hasn’t extended to all corners of the market.

So here are 2 ASX exchange-traded funds (ETFs) that have taken a beating recently. Both ETFs could be described as ‘growth-focused’, and have given investors some very strong returns until recently. Let’s dive in.

BetaShares Nasdaq 100 ETF (ASX: NDQ)

Our first ETF is more of an index fund. NDQ mirrors the NASDAQ-100 (INDEXNASDAQ: NDX), an index that follows the 100 largest shares on the US Nasdaq market. The Nasdaq is known for being the exchange that largely houses the US’s tech sector. Most of the prominent US tech companies that we all know are housed here, including Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Netflix Inc (NASDAQ: NFLX) and Tesla Inc (NASDAQ: TSLA). Thus, these companies are the ones that dominate the BetaShares Nasdaq 100 ETF’s top holdings.

But NDQ has taken a bit of a beating over the past few months. It’s already down more than 7% in 2022 so far, as well as losing almost 7.5% since reaching its last all-time high back in early December. Despite this, NDQ has still averaged a 36% return or so on average over the past 3 years (as of 31 December).

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

Another tech-focused ETF, this Asia Technology Tigers ETF from BetaShares has also found itself on struggle street recently. Unlike NDQ however, ASIA has been battling what is now quite an extended slump. This ETF last peaked back in February last year. Since its all-time high of $14.26 a unit, the fund is now asking just $9.30 on today’s closing pricing. That’s worth a drop of 35% or so.

The BetaShares Asia Technology Tigers ETF invests in a basket of tech-focused shares from… Asia. A large proportion of these shares hail from China’s markets, which have been in something of a malaise since early 2021. We can see this in ASIA’s top holdings. Two of its top five shares are Tencent Holdings Ltd and Alibaba Group Holding Group Ltd. Tencent’s Hong Kong stock is now around 40% off of its all-time high, whereas Alibaba has lost more than 50%. 

That probably largely explains the woes ASIA has suffered through over 2021 and more recently. Even though ASIA has given back some of its highs, this ETF has still given investors a 23.65% average annual return over the past 3 years (also as of 31 December). 

The post These 2 beaten-down growth ETFs could be a buy today appeared first on The Motley Fool Australia.

More reading

• An ASX XI to take on the world
• Here are the worst performing ASX ETFs of 2021
• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?
• 2 excellent ETFs for ASX investors to buy and hold
• 3 excellent ASX shares for growth investors in January

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS and Tesla. The Motley Fool Australia has recommended Amazon, Apple, BetaShares Asia Technology Tigers ETF, and Netflix. 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 AGL share price has soared 18% in a week
• The ASX 200 energy Index is also outperforming
• AGL benefited from rising energy commodity prices and broker upgrades

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The AGL Energy Ltd (ASX: AGL) share price is rising this week despite no price sensitive news from the company.

Shares in the company were swapping hands at $7.47, up 2.75% today and 18% higher since last Friday. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down nearly 1% in a week.

Let’s take a look at what might be impacting AGL Energy shares?

What’s happening at AGL Energy?

Despite falling nearly 40% in the past year, the AGL Energy price appears to have turned a corner lately and has been surging this past week. There are a few factors that might be at play, including broker upgrades and rising natural gas and coal prices.

The S&P/ASX 200 Energy Index (ASX: XEJ) is also performing well this week, up 4.21% to 8,585.90 points at the time of writing.

Thermal coal prices have been rising after Indonesia banned coal exports. The price of coal has increased by 23.5% since the start of the year and is now trading at US$209.50 per tonne.

Natural gas has also picked up this year, up 15% since the start of the year to be currently trading at US$4.2950 per MMBtu.

The team at Credit Suisse also promoted the energy company’s share outlook to an outperform rating from neutral this week.

Analysts at Credit Suisse gave the AGL share a price target of $8.50 per share. That’s 15% more than the current share price.

Meanwhile, an ASIC report Australian Securities and Investments Commission report released in late December revealed only 1.47% of the company’s shares are being shorted.

As My Foolish colleague Aaron noted, back in November 4.52% of its share was shorted.

AGL’s power generation focus includes thermal coal along with renewable sources such as hydro, wind, landfill gas and solar power.

Share price snapshot

The AGL share price is up 12% in the past 5 days and 25.76% in the past month.

Despite this, the share has performed nearly 49% below the benchmark ASX index in the past year.

The company commands a market capitalisation of about $4.6 billion based on the current share price.

The post Why has the AGL (ASX:AGL) Energy share price climbed 18% in a week? appeared first on The Motley Fool Australia.

More reading

• 3 reasons the AGL Energy (ASX:AGL) share price failed to illuminate in 2021
• Dividend beasts: 5 ASX 200 shares with the highest dividend yield
• Here are the top 10 ASX shares today
• Why AGL, Genetic Signatures, Liontown, and Novonix shares are charging higher
• Here’s why the AGL (ASX:AGL) share price is surging 8% today

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

• Macquarie have upgraded QBE to ‘outperform’ from ‘neutral’ in a recent note
• The broker likes QBE’s valuation and reckons it can see margin expansion in FY22
• Analysts estimate the insurer’s operating ratio to come in at 92%
• QBE closed the week less than 1% up at $12.06 but was in the red today.

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Shares in insurance giant QBE Insurance Group Ltd (ASX: QBE) inched lower today to finish less than 1% in the red at $12.05.

The insurance industry has been catching headlines these past few months amid a flurry of serious weather events and the ongoing impacts of COVID-19 lockdowns.

As such, price dispersion has been wide reaching for the QBE share price these past 3 months, with shares trading as high as $12.41 and as low as $11.29 in that time.

Near term, shares have climbed 6% since January, and analysts at Macquarie have subsequently upgraded their rating on the QBE share price to ‘outperform’ in a note to clients yesterday. Let’s take a look.

Why is QBE tipped to outperform?

Macquarie reckons that QBE is positioned to benefit from a healthy collection of tailwinds in the global insurance pricing cycle and rising bond yields.

Whilst the broker acknowledges that QBE won’t be immune to challenges in the reinsurance market – which it states is tightening and offering less return – the above macroeconomic factors should help decompress margins for the insurer into FY22, it says.

It upgraded the insurance giant to a ‘buy’, citing reasons of valuation in the weighting of its decision. For instance, the bank noted at the time that QBE was trading at a 12% weighted discount to its international peer group, below its 3-year normalised value of 8%.

Not only that, with recent strengths on the chart and ‘portfolio remediation’ measures in place, Macquarie reckons that disconnect could reduce, leading the QBE share price to outperform its peers in 2022.

“As underperforming portfolios continue to be remediated”, Macquarie says, in reference to the above, “QBE’s long-term discount versus peers should reduce, in our view”.

The broker upgraded its rating and raised the valuation by 11% to $13.90 per share in its note to clients.

Macquarie joins fellow broker Morgans who reckons that QBE is a buy right now as well. It says that QBE could carry positive underlying momentum this year, and expects the insurer to pay a 64.8 cents per share dividend in FY22.

Not only that, Morgans notes the company has been “putting through top-line rate increases of around 9%” which should, like Macquarie said, assist margin expansion this year.

The broker also points out QBE’s “relatively inexpensive valuation” of approximately 12.8x estimated FY22 P/E at the time of the release – 12.41x at the close on Friday.

It too sees potential upside in QBE and values the company at $13.70, representing a 14% margin of safety at the time of writing.

QBE share price snapshot

In the last 12 months, the QBE share price has climbed more than 38% after rallying 4% in the last month. This year to date it has fared well too and is 6% in the green.

Each of these returns has outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)’s return in that last year.

The post Own QBE (ASX:QBE) shares? Macquarie just upgraded ‘outperform’. Here’s why. appeared first on The Motley Fool Australia.

More reading

• 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?
• Where are QBE (ASX:QBE) shares headed in 2022?

The author has no positions 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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Investors that are interested in boosting their income portfolio with some dividend shares might want to look at the ones listed below.

Here’s what you need to know about these top dividend shares:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

The first ASX dividend share to buy is ANZ. It could be a good option in the banking sector due to its strong position in commercial banking. This gives it some protection from the margins pressures in retail banking from aggressive competition for mortgages.

It is for this reason that Macquarie currently has an outperform rating and $30.00 price target on the bank’s shares. As for dividends, the broker is forecasting dividends per share of 145 cents in FY 2022 and 150 cents in FY 2023.

Based on the current ANZ share price of $28.39, this equates to fully franked yields of 5.1% and 5.3%, respectively, over the next two years.

Bapcor Ltd (ASX: BAP)

Bapcor could be an ASX dividend share to buy. Through brands including Autobarn, Burson Auto Parts and Midas, it is Australia’s leading provider of vehicle parts, accessories, equipment, service and solutions.

Its shares have come under significant pressure in recent weeks following the unceremonious exit of its CEO. While this is disappointing for shareholders, it could be a buying opportunity for non-shareholders.

That’s the view of the team at Credit Suisse. It recently retained its outperform rating with a trimmed price target of $7.90. The broker remains positive on Bapcor’s earnings and dividend outlook. In respect to the latter, the broker is forecasting fully franked dividends of 23 cents in FY 2022 and 24.6 cents in FY 2023.

Based on the current Bapcor share price of $6.92, this will mean yields of 3.3% and 3.6%, respectively.

The post 2 ASX shares with growing fully franked dividends appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) will lag other majors on this key growth metric in 2022 says top broker
• Is Westpac (ASX:WBC) going to be the best big 4 bank for dividends in 2022?
• Could this impact the performance of ASX 200 banks more than interest rates in 2022?
• These were the top 5 ASX 200 bank shares in 2021
• Broker names 2 ASX dividend shares to buy in January

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 Bapcor. 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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