Tag: Motley Fool

The BlueScope Steel Ltd (ASX: BSL) share price has reclaimed some territory in December and jumped by 4% yesterday to close at $21.91.

The price of steel rebar has bounced off a low of 4303 Chinese Yuan per tonne (CNY/T) to now trade at more than 4651 CNY/T in December. That gain has inflected positively for the BlueScope share price.

Zooming out over a wider timer frame, it’s clear there’s been an all-out war between the bulls and the bears since late September.

BlueScope shares have traded within a tight range of around $1 over that time, meaning the trend channel has been largely sideways. Prices have been capped at $21 at the upper resistance mark and have hit and/or nudged past that level 10 times in the last 3 months. Meanwhile, prices have had good support at the $20 level from the bottom as well.

With this in mind, and with mixed commentary around the price of steel, let’s look at what the experts are saying about the outlook for BlueScope as an investment in 2022.

What are the brokers saying?

According to the team at Jefferies, BlueScope could be a buy right now. The firm recently upgraded it to a buy, and now values the company 7.4% higher at $24.60 per share.

Jefferies notes that it overshot its estimates on how quickly spreads would compress when it downgraded BlueScope to a hold back in September.

Analysts at the firm reckon market expectations on steel and BlueScope are too pessimistic. They note that “estimates look much too low and seemingly ignore the growth initiatives being actively pursued by BSL across its portfolio”.

These initiatives are yet to be priced in by the market, Jefferies says. It reckons 2022 might be a year of inflection for the BlueScope share price given the recent volatility, which could offer opportunities.

JP Morgan agrees with its fellow broker and also retained its buy rating in a recent note to clients. The firm has “factored in the latest forward curves for steel prices, along with lower iron ore prices”, even when downgrading its CY22 iron ore price by 12% to $92/tonne.

The firm also made both 13% and 9% cuts to East Asia and US hot-rolled coil (HRC) prices that reduce its FY22/23 earnings before interest and taxes (EBIT) estimates by 6% and 25%, respectively. These now sit at 7% and 10% above the consensus figure, according to the release.

JP Morgan is heavily bullish on the BlueScope share price. It reckons the company will continue to top up its $500 million share buyback program by another $500 million–$750 million with the February results (equivalent to over 10% of market capitalisation).

It subsequently revised its free cash flow yield estimates to 29% in FY22 and 15% in FY23 – figures that help prop up BlueScope’s buyback program – and adjusts its valuation on the company to $30 per share.

In fact, in the list provided by Bloomberg Intelligence, 62% of the brokers covering BlueScope support it as a buy coming into 2022. The remainder have it as a hold or sell.

The consensus price target is $25 from this list, implying around $3 of upside potential at the time of writing.

BlueScope share price summary

Despite the recent volatility, the BlueScope share price has climbed by more than 23% in the last 12 months. It has also rallied 25% this year to date.

In the last month, it has gained around 5%, beating the benchmark S&P/ASX 200 index (ASX: XJO)’s return in that time.

In early trade today, it is slipping 0.78% to $21.74.

The post Is it a buy? Here’s what brokers are predicting for the BlueScope (ASX:BSL) share price in 2022 appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why this broker is tipping 58% upside for Bluescope (ASX:BSL) shares
• ASX 200 (ASX:XJO) midday update: AMP shares jump, Collins Foods impresses
• Why has the Bluescope (ASX:BSL) share price had such a tough time in November?

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/3FiC9E7

The Australian Clinical Labs Ltd (ASX: ACL) share price has hit a record high on Tuesday morning.

At the time of writing, the pathology services provider’s shares are up 10% to $5.47.

Why is the Australian Clinical Labs share price charging higher?

Investors have been bidding the Australian Clinical Labs share price higher this morning after it upgraded its guidance for the first half of FY 2022.

According to the release, the company expects its first half revenue to be between $497.3 million and $517.2 million. And on the bottom line, Australian Clinical Labs’ net profit after tax (NPAT) is expected to come in at between $116.3 million and $128 million.

As a comparison, the company’s previous guidance was revenue of $437.5 million to $454.9 million and NPAT of $86.3 million to $94.9 million.

At the mid-point of all ranges, this represents an upgrade of 13.7% for its revenue guidance and 35% for its NPAT guidance.

What drove the upgrade?

Management advised that the revenue guidance upgrade reflects continued strong demand for COVID-19 testing, particularly in VIC and NSW, as well as a sustained resilient performance of the non-COVID-19 business.

Whereas the profit guidance upgrade was driven by a combination of revenue growth and expanding margins from increased scale and operating leverage.

Positively, while the company has not provided guidance for the full year, management appears confident demand for testing will remain strong in the second half.

Australian Clinical Labs’ Chief Executive Officer, Melinda McGrath, commented: “We anticipate heightened volumes of COVID-19 testing to continue during the remainder of FY22 due to the impact of new variants and outbreaks, the lifting of travel restrictions and increased demand for both commercial and travel testing.”

The post Why the Australian Clinical Labs (ASX:ACL) share price is up 10% to a record high appeared first on The Motley Fool Australia.

More reading

• Why Australian Clinical Labs, Humm, Neometals, and Viva Energy are rising
• Analysts are tipping huge gains for these small cap ASX 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. 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.

from The Motley Fool Australia https://ift.tt/3EjY38B

The Healius Ltd (ASX: HLS) share price has been bouncing around in recent trading sessions.

This has been caused by a mixed reaction to a new acquisition, with some analysts questioning the price it paid.

What did Healius acquire?

Last week Healius announced an agreement to acquire leading bioanalytical laboratory business Agilex for an enterprise value of $301.3 million.

Agilex is expected to generate revenue and EBITDA in the range of $36-40 million and $14-16 million, respectively, in calendar year 2022. This values the transaction at 20x forward EBITDA.

Though, management does note that Agilex has strong future earnings growth potential and is expected to deliver low single digit earnings per share accretion in the first full year of ownership.

The reaction

The team at Citi was not overly impressed with the deal. In response the broker retained its neutral rating and $5.10 price target on Healius’ shares.

Citi commented: “We place a lot of emphasis on ROIC when assessing businesses because high excess returns have a positive compounding effect on valuations. We estimate the proposed HLS acquisition of Agilex was priced at a ~20x EBITDA or CY22E EBIT ROIC of <5%, well less than the cost of capital. It is not obvious to us that this acquisition is so strategic that it justifies the price paid.”

Elsewhere, Morgans has a few concerns over the price paid, but not enough to stop it from upgrading Healius’ shares to an add rating with a $5.79 price target.

Morgans commented: “Healius is acquiring Agilex Biolabs, a leading Australian bioanalytical laboratory, for A$301.3m in cash funded via existing debt. We see limited conditions to close (Jan-22), with the transition expected to be low single digit EPS accretive in the first full year. However, paying a peak multiple (20x EV/EBITDA) in a frothy market sees return metrics fall short and reliant on future above market growth for shareholder value.”

Nevertheless, thanks to strong COVID-19 testing demand, the broker has upgraded its earnings estimates and recommendation accordingly.

The broker concluded: “While we view adding a pricey clinical testing company adds another layer of complexity as the company continues to transition to a specialist diagnostic and day hospital operator, the near term remains all about COVID testing, with Omicron driving a new phase of the pandemic which we view as underappreciated by the market.”

In early trade on Tuesday, the Healius share price is up over 1% to $5.36.

The post Healius (ASX:HLS) share price higher despite analysts questioning acquisition value appeared first on The Motley Fool Australia.

More reading

• 2 value ASX shares ready for a big 2022: fund manager
• 2 fantastic blue chip ASX 200 shares to buy next week
• ASX 200 (ASX:XJO) midday update: BNPL shares sold off, Corporate Travel returns
• Healius (ASX:HLS) share price falls despite $300m acquisition
• 3 fantastic ASX growth shares to buy right now

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/3EfEIFF

The Goodman Group (ASX: GMG) share price has kept rising this month. It has notched up several all-time highs in December 2021. What’s going on?

Goodman is one of the world’s biggest industrial property groups. It has a presence in Australia, New Zealand, Asia, Europe, the UK, North America and Brazil. Goodman aims to create innovative property solutions that meet the individual requirements of customers, whilst finding long-term returns for investors.

What’s going on with the Goodman share price?

Since the start of the month, Goodman shares have risen another 6.5%.

The business has been benefiting from structural trends for a while now and COVID-19 effects are accelerating those trends.

Indeed, Goodman says that it has been deliberately positioning its portfolio over the last decade to adapt to and leverage the changes in the digital economy. Those changes are now being realised. Customer demand for high-quality properties close to consumers has never been greater, according to Goodman.

Those trends are helping Goodman’s rental growth, increased development activity and higher valuations.

The rental side of the business is seeing very high levels of utilisation. At 30 September 2021, Goodman had an occupancy rate of 98.4% with a portfolio weighted average lease expiry of 4.7 years. Its 12-month like for like net property income growth was 3.2% in the last quarter.

The assets under management (AUM) had increased to $62 billion.

Further growth is expected

Goodman is benefiting from increased customer demand, which has resulted in an acceleration of development, particularly in infill locations.

At 30 September 2021, its work in progress (WIP) had reached $12.7 billion, with an annual production rate for the year expected to average approximately $6.8 billion. The strong demand is driving “strong margins” and the yield on cost is currently at 6.8%. These are some of the underlying factors that may be helping the Goodman share price.

The pre-commitments have a long WALE of 14 years.

Regeneration of existing brownfield sites is providing more sustainable development opportunities closer to consumers. Goodman expects this activity to continue to be a major source of development into the future.

Goodman said that its outlook is strong and it’s expecting its AUM to grow to around $70 billion by June 2022. Last month, Goodman acknowledged that COVID disruptions have been managed so that they have had less impact on the business than initial assumptions.

The property business also said that due to the strength of development projects, leasing success and stronger-than-expected performance of its partnerships, it increased its FY22 market guidance for operating earnings per security (EPS), which is now expected to be at least 15%.

Broker rating on the Goodman share price

There are still quite a few buy ratings on the business. However, Goodman shares have risen to those price targets.

One of the highest price targets at the moment is from Morgan Stanley, which has a target of $26.50 on the business. That’s only slightly higher than where it is now, suggesting the price may not move much over the next year if the broker is right (or doesn’t change the target).

The post The Goodman Group (ASX:GMG) share price has notched up 8 all-time highs this month. Here’s why appeared first on The Motley Fool Australia.

More reading

• 2 fantastic blue chip ASX 200 shares to buy next week
• Own the Vanguard Australian Property ETF (ASX:VAP)? Here’s what you’re invested in
• 2 highly rated ASX 200 shares to buy
• 2 market-leading ASX shares rated as strong buys by brokers
• ‘Close your eyes’: ASX share you can buy and forget

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

from The Motley Fool Australia https://ift.tt/32c89vr

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.

What happened

The price of Ethereum (CRYPTO: ETH), the world’s second-largest cryptocurrency by market cap, was slipping today on a broader sell-off in crypto and stocks.

As of 2:31 p.m. ET, Ethereum was down 1% over 24 hours after losing as much as 4% earlier in the day.

So what

The only Ethereum-specific news out today was positive, as the Ethereum Foundation launched the Kintsugi Merge testnet, a step in the process to Ethereum’s Merge, which is its transition to Eth2, a set of upgrades that will make the cryptocurrency more scalable, secure, and sustainable.  

However, that news wasn’t enough to push the token’s price higher as Ethereum instead pulled back with the rest of the crypto and stock markets. Most high-profile cryptocurrencies and stocks were down today on fears of the omicron variant, which is already driving a spike in cases in the New York area. Investors are fearing that it could cramp the global economy, especially ahead of the busy holiday travel season.

The explanation for cryptocurrencies being down on the omicron news is less direct. You might expect another COVID-19 outbreak to drive gains in cryptocurrencies, as digital currencies benefitted from the initial phases of the pandemic and related lockdowns.

However, that hasn’t been the case. The new asset class has largely moved in tandem with big stock market moves because investors still view crypto as a risk asset. It goes up as risk appetites increase and it goes down as investors look for safer assets. 

Now what

There are few fundamental drivers when it comes to cryptocurrencies as the asset class is devoid of metrics that guide other productive asset classes like stocks or real estate.

However, Ethereum, which is the network on which most non-fungible tokens (NFTs) are bought and sold, has more real-world utility than any other crypto, and that along with its usage should help guide its value.

Still, it’s helpful to remember that cryptocurrencies are still likely to move with the broader direction of the stock market, and increased worries about omicron and an extended sell-off in stocks will likely push Ethereum lower. 

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

The post Why the Ethereum price was sliding today appeared first on The Motley Fool Australia.

More reading

• Gas fees could be Ethereum’s kryptonite
• What crypto investors should know about these ‘Ethereum killers’
• Aussie crypto sector tipped to be worth $68 billion this decade
• Ethereum (CRYPTO:ETH) is up 419% in 2021. Here’s what’s ahead for 2022
• Bitcoin (CRYPTO:BTC) and Ethereum fall hard again. What’s going on?

Jeremy Bowman 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.

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

With interest rates at virtually zero, bank deposits are not even counted as investments these days.

For example, at the Commonwealth Bank of Australia (ASX: CBA), you can lock away your money for 5 years and it would only earn 0.25% per annum.

That’s actually shrinkage in real terms, as inflation would likely run much higher than that.

So if an ASX shares fund declared that it’s on track for 10% gross income this financial year, a few eyebrows would be raised.

But that’s exactly what Plato Australian Shares Income Fund did this month.

Buybacks and miners handing out cash like there’s no tomorrow

Senior portfolio manager Dr Peter Gardner said multiple factors had come together to form a tsunami of yields.

“Because we manage our portfolio specifically for low tax investors such as retirees, we have been able to take advantage of off-market buybacks undertaken by key portfolio holdings including CBA, Woolworths Group Ltd (ASX: WOW) and Metcash Limited (ASX: MTS).”

After buybacks, ASX shares in the mining sector had treated investors well too.

“While the retraction in the iron ore price has worried investors, we’ve seen companies such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) generate exceptional cash and franking credits for investors in recent months and many of these strong companies remain highly profitable,” said Gardner.

“Looking ahead, there will be further tax-effective income opportunities in the sector. In particular, we think the BHP and Woodside Petroleum Limited (ASX: WPL) merger could result in BHP’s petroleum assets being spun-off in the form of a special dividend with franking credits attached.”

Don’t worry about Omicron

Even with the COVID-19 Omicron raging across the world, Gardner reckons the Australian economy looks strong heading into 2022.

“There appears to be little political appetite for widespread lockdowns in the foreseeable future and while variants bring uncertainty, we feel the strong economic bounce-back we’ve seen over the past year is sustainable,” he said.

“So when you look at financials, a return to pre-COVID levels of dividends looks likely over the next year and many of the leading banks have robust balance sheets.”

And with consumers armed with a cash stockpile after lockdown, retail ASX shares have much potential in 2022.

“We expect strong retail trading over Christmas to benefit select retailers such as JB Hi-Fi Limited (ASX: JBH) and Super Retail Group Ltd (ASX: SUL),” Gardner said.

“The retail sector is another area that could generate strong income in the second half of the financial year.”

Gardner added that an actively managed portfolio is critical to maximise the yields currently on offer.

“We do think investors are in the midst of a bonanza year for dividends.”

Over its 10-year life, the Plato Australian Shares Income Fund has returned 9.4% of income per annum including franking credits.

The post Fed up with term deposits? How to get 10% income from ASX shares appeared first on The Motley Fool Australia.

More reading

• 2 value ASX shares ready for a big 2022: fund manager
• 5 things to watch on the ASX 200 on Tuesday
• Why is the BHP (ASX:BHP) share price having such a lousy start to the week?
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• Wesfarmers (ASX:WES) share price rises amid latest push for API

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. owns and has recommended Super Retail Group Limited. The Motley Fool Australia owns and has recommended Super Retail Group 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/30NKZLe

The short interest in Zip Co Ltd (ASX: Z1P) shares fell in early December and has remained flat since.

According to The Motley Fool Australia’s weekly breakdown of the ASX’s most shorted shares, the buy now, pay later (BNPL) company ended November with 9.4% short interest.

As of yesterday, the most recent data sees the company with a short interest of 9%.

So, what might be making short sellers slightly more bullish on the Zip share price? Let’s take a look.

Why did the short interest in Zip shares drop?

Short sellers likely had a field day on the Zip share price in November – it tumbled 20% over the course of last month.

But things seemed to be looking more favourable for Zip in early December. The dip in its short interest could have been strengthened by a positive update released earlier this month.

On 7 December, Zip announced it saw its monthly transaction volume grow to $906.5 million in November – a 52% increase of the same month of 2020. It also saw the number of transactions using its service jump 86% to 7.5 million.

However, the broader BNPL sector’s movements have been weighing heavily on the Zip share price lately. Of course, that’s fantastic news for short sellers.

The company’s stock has hit numerous new 52-week lows in December.

First, a particularly bad day for ASX tech shares saw the Zip share price tumble 10% to a new 12-month low of $4.34.

It also slumped 6% to another low of $4.05 on Friday amid news from a United States regulator.

The nation’s Consumer Financial Protection Bureau had ordered Zip, along with 4 of its popular peers, to provide it with the pros and cons of its offerings. The companies’ answers will help make up an inquiry into the BNPL industry.

All in all, those holding Zip’s 9% short interest are probably having a joyous December – the company’s share price has tumbled another 20% since the month began.

The post Why has the short interest in Zip (ASX:Z1P) shares fallen in December? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These were the worst performers on the ASX 200 last week
• Here are the 3 most heavily traded ASX 200 shares this Friday
• Latitude (ASX:LFS) boss warns many ASX BNPL companies “will go out of business”
• BNPL whacked! Why the Afterpay (ASX:APT) share price is down 7% to a new 52-week low today

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

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

Today is payday for the shareholders of Westpac Banking Corp (ASX: WBC), with the banking giant planning to pay its final dividend of FY 2021 this morning.

Westpac dividend being paid today

At the start of November, Westpac released its full year results for FY 2021 and reported a 138% increase in statutory net profit to $5,458 million and a 105% jump in cash earnings to $5,352 million.

This was driven largely by a 144% increase in Business segment cash earnings to $1,789 million, which was supported by a more modest 12% increase in Westpac’s Consumer business cash earnings to $3,081 million.

Together with its strong balance sheet, this allowed Westpac to announce a $3.5 billion buyback and declare a fully franked final dividend of $2.2 billion or 60 cents per share.

The latter brought its full year dividend to a total of 118 cents per share, which represents an increase of 280% over the COVID-impacted FY 2020 dividend and a payout ratio of 62%.

Dividend outlook

The good news for Westpac shareholders is that a number of brokers expect further dividend increases in the years to come.

For example, the team at Morgans has pencilled in a fully franked Westpac dividend of 123 cents per share in FY 2022 and then 162 cents per share in FY 2023.

Based on the current Westpac share price of $21.01, this implies very generous yields of 5.9% and 7.7%, respectively, for investors over the next two financial years.

Morgans also sees plenty of upside for Westpac’s shares. It currently has an add rating and $29.50 price target, which suggests they could climb as much as 40% over the next 12 months.

The broker commented: “Westpac is our preferred major bank. While WBC stock is now being priced like it is a value trap, we do not believe it is a value trap.”

The post The final Westpac (ASX:WBC) dividend is being paid today. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Westpac (ASX:WBC) share price falls despite asset sale announcement
• Top brokers name 3 ASX shares to buy next week
• Is it a buy? Here’s what Macquarie is saying about the Westpac (ASX:WBC) share price
• 2 high yield ASX 200 dividend shares to buy

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

from The Motley Fool Australia https://ift.tt/3pf7aDr

The Boral Limited (ASX: BLD) share price has been a strong performer in 2021.

Since the start of the year, the building products company’s shares have risen 21%.

Is it too late to invest?

The broker community remains extremely divided on the Boral share price.

In one corner you have Macquarie Group Ltd (ASX: MQG) and Citi which believe Boral’s shares can rise from here.

In the other corner you have Morgan Stanley and UBS that believe Boral shares are fully valued now.

Where next for Boral share price?

Macquarie and Citi currently have buy and neutral ratings, respectively, with price targets of $7.20 and $7.15. Based on the current Boral share price, this represents upside of 19% to 20%.

While Macquarie was disappointed with the sale price of Boral’s fly-ash business, which it notes has a lot of potential due to fly ash’s key role in the green concrete process, it remains positive due to the strengthening infrastructure demand environment and its transformation plan.

Elsewhere, the teams at Morgan Stanley and UBS currently have underweight and neutral ratings, respectively, with $6.10 price targets. This is broadly in line with where the Boral share price trades today, which suggests its shares are fully valued at the current level.

While UBS acknowledges that infrastructure demand is strong, it believes this is being offset by higher costs due to higher freight and labour expenses.

Morgan Stanley appears to agree with this view. In fact, it expects Boral to deliver a very disappointing half year result early next year. According to a recent note, the broker has pencilled in first half earnings decline of approximately 40% in FY 2022. In light of this, Morgan Stanley doesn’t appear to be in a hurry to change its rating on the Boral share price.

Which brokers make the right call, time will tell.

The post Is the Boral (ASX:BLD) share price already fully valued? appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• Why Boral, Metcash, Silver Lake, and Strike Energy shares are pushing higher
• Boral (ASX:BLD) share price jumps on $1bn fly ash sale
• Why is the Boral (ASX:BLD) share price having such a lousy month?

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

from The Motley Fool Australia https://ift.tt/3e7gBi1

Webjet Limited (ASX: WEB) shares are among the most shorted on the ASX. The company’s short interest reached 9.3% this week.

That makes it the fourth most shorted Australian stock.

But what does that actually mean? Let’s take a look at the implications of Webjet’s considerable short interest.

What does Webjet shares’ short interest mean for investors?

The Webjet share price is still under short attack, and it might be bad news for those invested in the company for growth.

To put it simply, short selling is a way for large-scale investors to profit from share price falls.

To ‘short’ a stock, a person must borrow it from another investor for a designated amount of time. The borrower then sells those loaned shares on the market.

The idea is the borrower will take the cash from selling the loaned shares and sit on it for a time.

If all goes well for the short seller (and poorly for long term investors), the share price of the borrowed stock will fall.

That will let the short seller buy the loaned shares back for less than they sold them for, before returning the stock to their owner.

The short seller can then pocket the difference as profit.

So, what is short interest? It’s how many of a company’s shares are currently involved in short selling operations.

Thus, 9.4% of Webjet’s outstanding shares are currently being wagered on its share price falling in the short to medium term.

Of course, that figure is probably worrying to many long-term investors.

Still, there’s always a chance the share price will go up and short sellers will have to fork out more than they earned to return the shares.

Interestingly, that’s what many brokers seem to expect will happen.

As The Motley Fool Australia recently reported, Morgans and Goldman Sachs both expect to see growth out of the company.

Goldman Sachs has a price target of $6.90 on the travel company’s stock, while Morgans has slapped it with a target of $6.60.

As of Monday’s close, the Webjet share price is $5.04, leaving the brokers predicting it has an upside of 30% to 36%.

The post Webjet (ASX:WEB) shares have a 9% short interest. What does this mean? appeared first on The Motley Fool Australia.

More reading

• How high will ASX travel shares fly in 2022?
• These are the 10 most shorted ASX shares
• Analysts say these ASX shares are buys
• How might the Webjet (ASX:WEB) share price perform in 2022?
• 2 buy-rated ASX travel shares that could take off

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 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/32mccF0