Tag: Motley Fool

The Webjet Limited (ASX: WEB) share price faced a challenging year in 2021. The online travel agent ended last year on a morbid note as COVID-19 cases caused rampage across the country.

Since the beginning of 2021, the company’s shares moved marginally higher, up 2%. In comparison, the S&P/ASX 200 Index (ASX: XJO) gained roughly 13% over the same period.

For the final day of 2021, Webjet shares closed 1.71% lower to $5.17 apiece. It’s worth noting that in early October, its share price touched a 52-week high of $6.89 before treading lower.

What happened with the Webjet share price last year?

The Webjet share price was turbulent during 2021 followed by uncertainty relating to the recovery of the travel market.

While Australia managed to control the spread of COVID-19 early last year, Webjet shares breathed a sign of life. During March 2021, the company’s share price hit a 52-week high of $6.33 at that time.

However, investor confidence turned negative when outbreaks of COVID-19 began to prop up across the country in mid-2021. This caused Webjet to go back in hibernation mode and weather out the storm as Australia went into hard lockdown.

The turmoil drove investors to the exits, sending the travel agent’s shares to a 52-week low of $4.36 in May.

Fast-forward to November, the outlook for the travel industry became rosy again as COVID-19 had been on a steady decline. Furthermore, the Australian government’s long-awaited re-opening of international travel excited investors, sending Webjet shares to yearly highs.

But yet again, a new Omicron variant caused widespread panic across the globe due to its highly infectious nature. It is said to have 30 spike proteins which is double of what has been detected in the delta variant. This means it could easily bypass current defences from the existing COVID-19 vaccines.

As such, several counties have gone back into lockdown, and Australia has re-reintroduced restrictions because of the record number of cases. This has led investors to remain cautious given the unpredictable timing of when COVID-19 will permanently recede.

Should you buy Webjet shares?

A number of brokers that recently weighed in their thoughts believe that the Webjet share price is fairly valued.

Analysts at Morgan Stanley raised the 12-month price target for Webjet shares by 16% to $5.00 apiece.

On the other hand, Credit Suisse slashed its outlook on the online travel agent’s shares by 5.3% to $5.40.

Leading Australian investment firm, Morgans had a more bullish outlook. The broker lifted its view on Webjet shares by 6.5% to $6.60. Based on the current share price of $5.46, this implies an attractive upside of almost 21% for investors.

Also following suit, the team at Macquarie cut their 12-month price target on Webjet shares by 8.3% to $6.10 apiece.

Webjet share price summary

Year to date, the Webjet share price has risen by 5% despite Australia experiencing record COVID-19 cases in the background.

Based on valuation grounds, Webjet has a market capitalisation of around $2.08 billion, with approximately 380.51 million shares on issue.

The post How did the Webjet (ASX:WEB) share price perform in 2021? appeared first on The Motley Fool Australia.

More reading

• When did Webjet (ASX:WEB) last pay a dividend and when might the next one be?
• These are the 10 most shorted ASX shares
• Is the Webjet (ASX:WEB) share price an opportunity with a 14% global market share goal?
• Analysts name 2 excellent ASX shares to buy now
• Potential buys: 2 excellent ASX shares

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 recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3FvPaJH

Looking back at 2021, the CSL Limited (ASX: CSL) share price took investors on a rollercoaster ride.

In the 12 months of trading, the global biotech’s shares have gained roughly 2.6%. By compassion, the S&P/ASX 200 Index (ASX: XJO) leapt by more than 13% during the same timeframe.

At Thursday’s market close, CSL shares finished the day 0.51% lower to $281.70 apiece.

What happened to CSL during 2021?

The volatility in the CSL share price last year was driven by the company’s strong financial performance against a backdrop of difficult conditions brought on by the global COVID-19 pandemic.

Despite the uncertainty and complexities which CSL faced, its Behring and Seqirus businesses maintained all critical operations, delivering life-saving medicines. COVID-19 presented challenges for the collection of plasma, an essential raw material used in the production of its therapies.

Nonetheless, the company continued to implement multiple initiatives to mitigate this. This included opening new facilities to attract lapsed and new donors as well as marketing programs to draw back its existing customer base.

Furthermore, CSL highlighted that it spent more than US$1 billion on R&D activities in the past financial year. This consisted of new product development, market development, and life cycle management products.

A number of therapeutics were approved for use across Japan, the United States, Europe, Russia and Mexico. Most of these products came from CSL’s immunology and haematology portfolio.

To put this into perspective, the immunology division recorded $4,238 million in revenue, almost half of CSL’s entire revenue for FY21 ($8,547 million). On the other hand, haemophilia accounted for $1,107 million.

In addition, the company announced an institutional placement to raise $6.3 billion to purchase Vifor Pharma in December. This was Australia’s second largest equity raise, behind Telstra Corporation Ltd (ASX: TLS) for 2021.

The company also launched a $750 million share purchase plan, offering the same terms to retail investors at $273 apiece.

Although, when CSL shares came out of a trading halt on 16 December, investors dumped the share price by 8.16%. This was the company’s biggest one-day decline since the beginning of the pandemic in March 2020.

Understandably, with more shares being added to CSL’s books, this has inevitably diluted shareholder value.

Is CSL shares attractively valued?

A couple of brokers weighed in on the CSL share price during the final months of 2021.

Leading Australian investment firm, Morgans raised its 12-month price target by 3.2% to $334.70 for CSL shares. Based on the current share price, this implies an upside of about 18.8% for investors.

Analysts at Citi had a more bullish outlook on the company’s shares, improving its rating by 4.6% to $340. From where CSL trades as of yesterday, it represents an uplift of 20.7% over the next 12 months.

Clearly, both brokers believe that there is strong value in the CSL shares at current levels.

A recap on the CSL share price

No doubt it has been a frustrating 12 months for CSL shareholders. Traditionally, its shares outperform the broader market, however, this has not been the case since the onset of COVID-19.

While hitting a low of $242 in March last year, the company’s shares have staged a choppy rebound for now. There is currently a support level around the $275 mark for CSL shares.

The post Why did the CSL (ASX:CSL) share price have such a lousy year in 2021? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Experts tip the ASX sectors that are set to outperform in 2022
• Own CSL (ASX:CSL) shares? Here’s how the $17bn Vifor Pharma acquisition will boost its growth
• Top brokers name 3 ASX shares to buy today
• Why did Pro Medicus (ASX:PME) and 2 other ASX 200 healthcare shares fall today?

Motley Fool contributor Aaron Teboneras owns Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3qpOVvx

When it comes to share market investing, it’s relatively easy to buy ASX shares. Since we ah, live in Australia (I presume), any brokerage service operating here typically offers full access to the Australian share market and the shares on it. As you would expect.

But when it comes to overseas markets, the picture is a little cloudier. These days many brokerage services offer full access to the US markets. This makes sense, seeing as the ‘land of the free’ is also home to the largest financial market in the world, as well as top-tier companies like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZ).

But what of other markets? If you’re lucky you can find a broker that offers access to some other major share markets. These might be the European markets, or else the stock exchanges of London, Tokyo or Hong Kong, for example. But if you want to invest in the world’s emerging markets, the outlook is even cloudier again. Good luck trying to find an Australian broker that will offer share trading on the Argentinean stock exchange, for example. Or that of Russia, Mexico or Thailand. If they do, it will probably come with a very expensive price tag.

So how do you invest in emerging markets on the ASX?

So how does one simply and cheaply invest in emerging markets? These markets can be useful from a diversification standpoint, as well as offering access to some of the highest-growth economies of the world. Well, an exchange-traded fund (ETF) could be an option worth examining. The ASX is home to a couple of ETFs that cover emerging markets. There’s the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE). But the most popular is the iShares MSCI Emerging Markets ETF (ASX: IEM).

This ETF from iShares invests in more than 5,200 companies from various emerging economies around the globe. Its most prominent countries are China and Taiwan, housing 31.89% and 16.14% of the total fund’s holdings respectively. However, IEM also includes companies hailing from India, South Korea, Brazil, Russia, Saudi Arabia, South Africa, Mexico and Thailand, amongst others.

All of this can be available through a single ETF and ticker code. IEM isn’t the cheapest ETF on the market, but its annual management fee of 0.68% still arguably looks competitive against some managed funds’ fees. So if you’re after some emerging markets in your portfolio for diversification or a long-term growth play, ETFs might be the easiest (and even cheapest) path to explore.

The post How to invest in emerging markets on the ASX appeared first on The Motley Fool Australia.

More reading

• 2 ASX mining shares given conviction buy ratings
• Down 13% in 9 days, is the Xero (ASX:XRO) share price now an undervalued buy?
• Own Rio Tinto (ASX:RIO) shares? Jefferies says they’ll outperform ‘in the near term’
• Here’s how the Afterpay (ASX:APT) share price performed in 2021
• Analysts name 2 excellent ASX growth shares to buy right now

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 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 Amazon and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/31V6xWH

One area of the market that has been tipped to perform strongly this year is the mining sector. This is thanks to the positive commodity price backdrop and favourable valuations, as mentioned here.

In light of this, if you’re looking for exposure to the mining sector in 2022, then you may want to check out the two shares listed below. Both of these ASX mining shares have been given conviction buy ratings by the team at Goldman Sachs. Here’s why it is bullish:

Iluka Resources Limited (ASX: ILU)

The first mining share to consider is this mineral sands company. Goldman believes it could be a top option for investors due to the favourable outlook for mineral sands and its exposure to rare earths.

The broker explained: “We are Buy rated on mineral sands/rare earth producer ILU and add the company to our Conviction List (CL) on attractive valuation and compelling Zircon and TiO2 price upside and Rare Earth growth potential. ILU is trading at a >50% discount to RE peers and >10% discount to min sands/pigment peers on an EV/EBITDA basis. Iluka recently released a larger-than-expected maiden resource on the Wimmera rare earth (RE) & zircon deposits in Victoria containing over c.1Mt of rare earth oxides (REO) and 10.6Mt of zircon. The Wimmera deposit is an important part of ILU’s rare earth growth strategy.”

Goldman has a conviction buy rating and $12.40 price target on Iluka’s shares.

South32 Ltd (ASX: S32)

Another ASX mining share that Goldman has on its conviction list is South32. The broker likes this diversified miner due to its attractive valuation, strong free cash flow outlook, capital return potential, and positive project news flow.

Goldman explained: “We are Buy rated on S32.AX (on Conviction List) with strong FCF (19% base case for FY22), exposure to base metals (aluminium & alumina c. 50% of FY22 EBITDA; we are bullish aluminium on a multi-year view, zinc/nickel c. 20%), and earnings upside from the Sierra Gorda copper acquisition (c. 15% upside to our EBITDA; not in our numbers pending deal completion; expected 1Q22).”

The broker currently has a conviction buy rating and $4.70 price target on its shares.

The post 2 ASX mining shares given conviction buy ratings appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Why BrainChip, Crown, Objective, and South32 shares are racing higher
• ASX 200 (ASX:XJO) midday update: Crown jumps, miners rally, Sonic sinks
• Goldman Sachs says buy Rio Tinto and South32 shares but sell Fortescue now
• Why is the South32 (ASX:S32) share price hitting all-time highs today?

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.

from The Motley Fool Australia https://ift.tt/3qnJNbp

The Xero Limited (ASX: XRO) share price has dropped by around 13% in less than two weeks. Could the ASX tech share now be an undervalued buy?

There are plenty of ASX growth shares that have suffered over the past couple of weeks as investors reduce how much they are willing to pay for ASX shares that are growing quickly.

For example, since the start of the year the Altium Limited (ASX: ALU) share price has dropped around 10%, the WiseTech Global Ltd (ASX: WTC) share price has fallen around 8% and the Afterpay Ltd (ASX: APT) share price has dropped 8%.

After Xero’s recent decline, the last 12 months shows that the share price hasn’t really gone anywhere – shares have dropped by around 3% over the past year. However, the long-term has been full of gains. The last five years shows a gain of around 630% for the Xero share price.

After its decline, is the Xero share price an opportunity?

Opinions are mixed on the business.

In response to the FY22 first half result, different brokers have different opinions about the cloud accounting company. For example, the broker Credit Suisse currently rates the business as a buy with a price target of $160. That’s a potential upside of around 25% over the next year if the broker is right.

However, at the other end of the sentiment scale is UBS which actually rates Xero shares as a sell. The price target from UBS is $88. That implies a potential drop of Xero shares of around 31% this year.

Credit Suisse thinks that Xero is going to be able to grow its average revenue per user (ARPU) to help drive revenue upwards.

HY22 growth

In the first half of HY22, the ARPU increased by 5% to $31.32. This helped operating revenue grow by 23% to $505.7 million, annualised monthly recurring revenue went up 29% to $1.13 billion and the total lifetime value of subscribers went up 61% to $9.94 billion.

Xero said that while conditions varied across its markets, the strength of Xero’s performance “is evident in a number of Xero’s software as a service (SaaS) metrics, which trended positively over the period.”

UBS is expecting the ASX tech share to continue spending for growth, in areas like advertising and development

The ASX tech share continues to monitor the macroeconomic economic environment, and is positive about the critical role that small business will continue to play in the global economic recovery.

However, despite the good things the ASX tech share is achieving, UBS thinks that the Xero share price is overvalued

Whilst expenses are expected to rise as the business invests for growth, the gross profit margin continues to improve. In the first six months of its FY22, the Xero gross profit margin grew by 1.4 percentage point to 87.1%.

The post Down 13% in 9 days, is the Xero (ASX:XRO) share price now an undervalued buy? appeared first on The Motley Fool Australia.

More reading

• Here’s how the Afterpay (ASX:APT) share price performed in 2021
• 5 things to watch on the ASX 200 on Friday
• Are Afterpay (ASX:APT) shares a buy before they convert into SQ2 shares?
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Why Afterpay, Appen, Liontown, and Nickel Mines shares are surging higher

Motley Fool contributor Tristan Harrison owns Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited, Altium, WiseTech Global, and Xero. The Motley Fool Australia owns and has recommended Afterpay Limited, WiseTech Global, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3zYIuD6

Shares in Rio Tinto Limited (ASX: RIO) have reclaimed territory after bottoming in November and are now trading at 3-month highs.

At market close on Thursday, shares in the mining and resources giant are fetching for $111.70 apiece after spiking 4.13% on the day.

It was a fairly lacklustre year for Rio in 2021, with shares walking sideways the majority of the year – but not without the fair share of volatility.

Then in August, after peaking at a record high of $134.40, the floor fell out of iron ore markets and the impulse saw Rio get chewed up all the way down to its 52-week low of $87.51.

Now that shares have regained momentum, analysts at investment bank Jefferies have chimed in on the investment debate.

Near-term bullish, but retains ‘hold’ rating

The firm notes that the support underneath Rio’s share price is largely assigned to renewed strength in the iron ore markets that’s been in situ since November last year.

After racing down from its peak, the price of iron ore itself bottomed in late November and has since made a reversal back above its 3-month highs.

It is now trading at US$126.50/tonne, having shot up 50% from its low in 2021.

Aside from that, the broker reckons that Rio could be the beneficiary of rival BHP Group Ltd (ASX: BHP)’s planned exit from the Financial Times Stock Exchange (FTSE).

Each of these short-term catalysts could bode in well for the Rio share price, Jefferies says, but not necessarily over an extended horizon.

“We prefer pure-play copper and aluminium producers over iron-ore miners” Jefferies notes, showing its current philosophy on ASX resources shares.

“But we do believe iron ore and Rio can continue to outperform in the near term”.

Even still, it rates the stock a ‘hold’ and values the company at $100 per share.

What about other brokers?

Goldman Sachs is bullish on the company and has it as a buy on a $125.60 valuation, whereas Morgan Stanley tips Rio to outperform as well.

Meanwhile, Macquarie and Credit Suisse also reckon that Rio is set to outperform this year on the back of a more buoyant iron ore market.

In fact, in a list of analysts provided by Bloomberg Intelligence, the sentiment appears to be fairly evenly split for the ratio of buy to holds.

For instance, 47.1% have Rio as a buy whereas 41.2% have it as a hold according to that list. Only two firms recommend Rio sell their Shares.

There is a 132% spread in price targets in this analyst group with Evans and Partners and Macquarie Group most constructive at $146 and $133 respectively.

In the last 12 months, Rio Tinto shares have slipped more than 7% in the red. However, it is up almost 17% in the past month after rallying 12% since January 1.

The post Own Rio Tinto (ASX:RIO) shares? Jefferies says they’ll outperform ‘in the near term’ appeared first on The Motley Fool Australia.

More reading

• Own Rio Tinto (ASX:RIO) shares? Here’s why the miner’s new chair appointment is making waves
• Goldman Sachs says buy Rio Tinto and South32 shares but sell Fortescue now
• 5 things to watch on the ASX 200 on Thursday
• Attention Rio Tinto (ASX:RIO) shareholders: Here are the key dates to note in 2022
• Dividend beasts: 5 ASX 200 shares with the highest dividend yield

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.

from The Motley Fool Australia https://ift.tt/3I4DTSo

There’s no doubt over the last few years Afterpay Ltd (ASX: APT) became the poster child for how ASX shares can make people wealthy reasonably quickly.

The buy now, pay later provider issued shares at $1 apiece during its initial public offer (IPO) back in 2016. It closed 2020 at $118, meaning a phenomenal 11,700% return for those lucky folk.

So if you had bought $10,000 of shares at IPO, they were worth $1.18 million on 31 December 2020. 

But how did the stock fare in a very eventful 2021?

A historic year for Afterpay, in multiple ways

Unfortunately for investors, last year was the first time in Afterpay’s history that its share price ended lower than where it started.

The stock closed 2021 at $83.01, meaning a 29.65% loss over the calendar year.

Notwithstanding this, the Afterpay business had a massive year.

The biggest news came in August when US fintech Block Inc (NYSE: SQ) — then named Square — announced it would wholly acquire the Australian firm for what was then $39 billion.

As it is an all-scrip deal, ever since then, Afterpay shares have risen and fallen in synchronisation with the Block stock price.

But the bad news for investors was that Block has been caught up in the general technology sell-off in the US over the past few months.

In fact, Black shares have lost almost 45% since late October. The Afterpay stock price has plunged more than 40% over the same period.

Now that takeover is worth about $23 billion, not $39 billion.

The Nasdaq Composite (NASDAQ: .IXIC) has only dipped about 3% over that time, thanks to a handful of mega-cap tech giants cancelling out the losses of smaller constituents.

Will Afterpay shares rally in 2022?

As The Motley Fool’s James Mickleboro first reported, Atlas Funds Management chief investment officer Hugh Dive is not at all confident about a recovery in Afterpay stock as it nears its conversion to Block ASX shares.

“As we have no unique insight into Square’s global merchant payments activities and are alarmed at its price-earnings ratio of 156x, it is tough to pick AfterPay as the sharp recovery candidate in 2022,” he wrote on the Atlas blog.

Block has also been criticised for giving away new shares to its employees like coffee, regularly diluting existing shareholders’ value.

According to the Australian Financial Review, Block had 235 million shares on issue when it listed in 2015. By June last year, that had ballooned to an eye-watering 523 million.

The post Here’s how the Afterpay (ASX:APT) share price performed in 2021 appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Are Afterpay (ASX:APT) shares a buy before they convert into SQ2 shares?
• Here’s why ASX 200 tech shares (ASX:XTX) outperformed today
• Why Afterpay, Appen, Liontown, and Nickel Mines shares are surging higher
• ASX 200 (ASX:XJO) midday update: Afterpay-Block deal approved, Fortescue downgraded

Motley Fool contributor Tony Yoo owns Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and Block, Inc. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3fjjEUS

Looking for some additions to your portfolio? Listed below are two ASX growth shares that have been given buy ratings.

Here’s why analysts rate them highly right now:

Breville Group Ltd (ASX: BRG)

The first ASX growth share to look at is Breville. It is the leading appliance manufacturer behind the Sage, Kambrook, Baratza, and Breville brands.

Thanks to its ongoing investment in product development, Breville’s brands have been resonating extremely well with consumers for many years. This has been underpinning solid sales, earnings, and dividend growth.

The good news is that this solid form looks set to continue due to the strength of its product portfolio, favourable trading conditions and consumer preferences, and its ongoing global expansion.

Morgans is a big fan of Breville. While it acknowledges that its shares are not cheap, it believes the premium is justified given “the prospect for multi-year, globally-derived organic revenue growth at or above 10%.”

The broker currently has an add rating and $34.00 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX growth share that could be in the buy zone is ResMed.

It is a medical device company with a focus on sleep treatment and respiratory products that treat disorders including sleep apnoea and chronic obstructive pulmonary disease (COPD).

These are significant and growing markets to target. For example, upwards of 1 in 5 people are believed to suffer from sleep apnoea, with the vast majority currently undiagnosed. This bodes well for ResMed’s future growth, particularly given its industry-leading products, high level of research and development, and wide distribution network.

Another positive for the company is the recent product recall by its biggest rival Philips. An update this week reveals that the Dutch healthcare giant has now expanded its recall to 5.2 million devices from 3 million to 4 million. This is expected to tie Philips up with repairs for some time and also damage its brand.

Macquarie is positive on the company. It currently has an outperform rating and $39.00 price target on ResMed’s shares.

The post Analysts name 2 excellent ASX growth shares to buy right now appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ASX growth shares rated as buys
• 3 excellent ASX shares for growth investors in January
• Here’s what this broker thinks of the ResMed (ASX:RMD) share price
• 5 things to watch on the ASX 200 on Monday
• 3 buy-rated ASX growth shares

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 shares of and has recommended Life360, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3njW3Yz

Key Points

• The Baby Bunting share price has fallen in recent weeks, but analysts still like the company
• Brokers such as Citi and Morgan Stanley rate it as a buy, with double digit potential upside of the share price this year
• Baby Bunting is seeing a recovery of sales, a growing profit margin, an expanding store network and more private label and exclusive products being sold

---

The Baby Bunting Group Ltd (ASX: BBN) share price is well-liked by a number of analysts right now.

Australia’s biggest baby and toddler product retailer is seeing ongoing growth and brokers think that it could be an opportunity.

Two of the brokers that like Baby Bunting right now includes Citi and Morgan Stanley. Both of them have price targets that could see the business achieve double digit share price growth this year.

What do the brokers like about the Baby Bunting share price?

The latest look that analysts had at the business performance was the annual general meeting (AGM) a few months ago. There were a number of things that Citi and/or Morgan Stanley noted as positives.

Baby Bunting revealed that its gross profit margin continued to increase, with a rise of 120 basis points to 38.7% in the year to date (to 3 October 2021). A higher gross profit helps increase the profitability of other profit lines of the company.

The increase in the gross profit margin has been largely down to growth of private label and exclusive products, the product mix and supply chain efficiencies.

After a slow start to FY22, Baby Bunting’s sales continued to strengthen, with comparable store sales only down by 1.3% in the year to date. Excluding NSW and ACT stores, comparable store sales were up 4.7%. Total sales for the year to date showed growth of 1.5%.

Online sales continue to perform strongly, with growth (including click and collect) of 37.7% for the year to date, despite cycling growth of 126% in the prior corresponding period.

Its store network continues to grow in size. In FY22 it’s expecting to open between six to eight new stores in Australia, as well as two new stores in New Zealand in the second half of FY22.

Price targets on the Baby Bunting share price

Looking at how much brokers think that Baby Bunting shares could rise in 2022, one of the most positive is Morgan Stanley’s price target of $6.90. That’s a potential rise of more than 30% over this year.

Citi on the other hand has a price target of $6.11. It’s not as high, but still implies a potential mid-teen return in share price terms.

Despite the lower price target, it’s Citi that actually has the more optimistic earnings projection for FY23. On Citi’s numbers, the Baby Bunting share price is valued at 19x FY23’s estimated earnings. Citi’s forecast means Baby Bunting shares are valued at 24x FY22’s estimated earnings.

Areas of focus

Baby Bunting shares have fallen more than 10% since the start of November 2021. However, the business is investing in its new website, leveraging its new e-commerce architecture, improving its loyalty program, investing in the customer experience and increasing online fulfilment efficiency. The ASX share is hoping to have 90% of metro sales orders fulfilled in the same day.

The post Here’s why the Baby Bunting (ASX:BBN) share price is rated as a compelling buy appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy in January
• 2 ASX growth shares to buy this month: experts
• 2 ASX dividend shares named as buys
• Brokers rate these ASX dividend shares as buys
• 2 ASX shares rated as strong buys by brokers

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

from The Motley Fool Australia https://ift.tt/3rkSgvn

Bitcoin (CRYPTO: BTC) has hit some turbulence in recent months, falling more than 34% since its November high.

Now investors are watching to see whether this dip will turn into a mass sell-off.

According to the chief of cryptocurrency exchange Dacxi, Ian Lowe, the dreaded “death cross” could be a possibility.

“Speculation now falls as to whether Bitcoin will hit the ‘death cross’ of the 50-day moving-average moving below the long-term 200 day moving average,” he said. 

“We rather hope that it does!”

Why a death cross could be beneficial

Rather than sending investors into mourning, Lowe feels a death cross could provide a tempting entry point for, especially, younger punters.

He cited Dacxi research that 56% of investors in Australia are seeking to put money into crypto for the long term.

“The mood is shifting away from fly-by-night investors looking to get rich quick.”

Other research points to similar sentiment.

A recent DeVere Group poll showed that crypto investors were not panicked at all by the current correction and still believed they would outperform shares in 2022.

Even DeVere chief Nigel Green was “taken aback” by that result.

“Investors are predicting that the markets in 2022 will perform in a similar way to 2021. That’s to say that cryptocurrencies, even despite the slump in December, had a remarkable year,” he said.

“Bitcoin ended the year up almost 65%, meanwhile, the S&P 500 Index (SP: .INX) — the benchmark index of the world’s largest economy – managed around 28%, and gold was down around 7%.”

According to Lowe, Bitcoin “is a bit like Lazarus”.

“Bitcoin has come back from a Death Cross as recently as March 2020 and has rallied significantly since then,” he said.

“Many will remember this and be willing to jump in and see if there’s another rally ahead this time too.”

Reasons to be bullish on crypto

Lowe also cited Australia’s long-running obsession with property as another reason why crypto will remain tempting to millennials.

“Eye-watering real-estate prices mean crypto’s slow start this year makes it the only game in town for Australian investors looking for assets with both a low barrier to entry and potential for growth.”

Also, the mainstream investment community is starting to become convinced that cryptocurrencies actually have some intrinsic value, both economically and socially.

“The future of crypto is no longer closely tied to institutional adoption of any particular coin, as the blockchain continues to prove its utility and the reality and possibilities of Web3 become more obvious.”

The current dip is “healthy”, Lowe added, and would remind investors to diversify in crypto as much as shares.

“There is a lot of value in diversifying your cryptocurrency holdings by purchasing bundles of different cryptocurrencies, not just a single asset.”

Green felt like investors are cooling on shares after a buoyant 2020 and 2021.

“Stocks, which have always traditionally made up the bulk of successful investors; portfolios, are falling out of favour, it seems, as a way to create and build wealth, with digital assets taking over.”

The post Bitcoin could hit ‘death cross’ soon! Expert explains why this is great appeared first on The Motley Fool Australia.

More reading

• Is Bitcoin making share prices more volatile?
• Bitcoin, Ethereum, and Dogecoin surge higher as crypto markets recover
• Why Bitcoin, Ethereum, and Dogecoin plunged today
• Forget Bitcoin! These were the 5 crypto assets you wish you’d held in 2021
• Bitcoin and Ethereum are crashing: Is now the time to invest?

Motley Fool contributor Tony Yoo owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3tqVAYn