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November was a quiet month for Woolworths Group Ltd (ASX: WOW), although its share price managed to clock up an extra 7.2%.

Over the course of the month, Woolworths’ stock grew from $38.08 at its final close of October to finish November trading at $40.82.

For context, the S&P/ASX 200 Index (ASX: XJO) slipped 0.92% over the same period.

There wasn’t a lick of price-sensitive news from the supermarket giant last month. However, there were a few factors that might have boosted its shares’ value.

A month of gains for the Woolworths share price

The first happening that likely impacted the Woolworths share price in November actually occurred in late October.

Then, the company released its earnings for the first quarter of financial year 2022.

Woolworths reported its supermarket leg had boomed during lockdowns affecting much of Australia and New Zealand over the 3 months ended 30 September.

Though, its Big W business saw sales tumble 18% year-on-year.

The company’s CEO Brad Banducci said the period was the most challenging COVID-19-impacted quarter so far for the company.

Over the 3 days following the release of its results on 27 October, the Woolworths share price tumbled 5.9%. Thus, it started November in a dip. That was probably favourable to the stock’s performance last month.

The supermarket also made a few moves towards becoming a ‘greener’ business in November.

It launched a BYO container program in all its Tasmanian stores and one Queensland store.

Customers of those stores can now bring their own storage solutions for products from Woolworths’ deli, meat, and seafood counters, avoiding the single-use plastic containers and wrappings dispensed by the supermarket.

The launch followed a single store trial in 2020 and more stores will follow suit in New South Wales and Victoria next year.

Woolworths also ditched single-use plastic cutlery, cups, bowls, and plates from its shelves last month.

As of the end of November, the Woolworths share price was 20.45% higher than it was at the start of 2021.

It has since dipped 0.5% amid its takeover bid for Australian Pharmaceutical Industries Ltd (ASX: API).

The post Why did the Woolworths (ASX:WOW) share price have such a great month in November? appeared first on The Motley Fool Australia.

More reading

• Drinking and gambling: 3 ASX shares to buy now
• Top brokers name 3 ASX shares to sell next week
• Could this be a fly in the ointment for Woolworths’ (ASX:WOW) push into healthcare?
• Can Wesfarmers (ASX:WES) win the battle to take over API?
• ASX 200 (ASX:XJO) midday update: Afterpay sinks, Woolworths bids for API

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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The BHP Group Ltd (ASX: BHP) dividend might be amplified next year.

The world’s second largest miner has handsomely rewarded shareholders over the years with consistent payouts. However, the upcoming demerger of its petroleum and coal assets could lead to a bumper dividend.

At Monday’s market close, BHP shares finished the day down 1.59% to $39.59.

A quick refresher on the BHP dividend

After reporting its FY21 full-year results, the board declared a record fully-franked final dividend of US$2 (A$2.7152) per share. Coupled with its interim dividend of US$1.01 (A$1.31), this brings the total FY21 dividend to US$3.01, a 151% increase on FY20.

Based on the last closing BHP share price, this implies a trailing dividend yield of 10.17%.

Is a higher dividend payment on the cards?

Last month, BHP announced that it is selling its 80% interest in BHP Mitsui Coal (BMC). 

Stanmore Resources will acquire metallurgical coal mines, the South Walker Creek and Poitrel coal mines. 

The US$1.35 billion purchase price is made up of US$1.2 billion in cash and a potential follow-up payment of up to $150 million after two years linked to the performance of coal prices.

The transaction is said to be consistent with BHP’s decarbonisation strategy as it pulls away from fossil fuels.

In August, the company unveiled a deal with Woodside Petroleum Limited (ASX: WPL) to offload oil and gas operations in exchange for new shares.

In June, BHP agreed to the sale of the Cerrejon thermal coal mine to Glencore Plc for around $294 million.

A strong free cash flow coupled with BHP’s balance sheet could mean that shareholders are rewarded with an increased dividend. This is because of the reduced capital expenditure due to the divestments, and the company’s dividend policy. The latter states that a minimum of 50% of underlying earnings are returned to shareholders each year.

While BHP will be a smaller company in terms of revenue, the ample free cash flow could see its dividend payout ratio actually rise above 80%. This is subject to the price of iron ore remaining stable for the foreseeable future. 

It’s anyone’s guess how much BHP will give, but any increase is likely to be supplemented in the mid-2022 dividend.

About the BHP share price

Since the beginning of the year, the BHP share price has moved in circles following a volatile market environment. Its shares are slightly in the red, down 5% for the past 12 months.

This is a stark contrast from when its shares were tracking almost 30% higher for the year-to-date period during August.

Based on today’s price, BHP presides a market capitalisation of roughly $116.80 billion and has approximately 2.95 billion shares outstanding.

The post Could the BHP (ASX:BHP) dividend be set for a boost? appeared first on The Motley Fool Australia.

More reading

• BHP (ASX:BHP) share price struggled on Monday despite acquisition talks ‘progressing’
• These are the 10 most shorted ASX shares
• Evergrande admits it may not meet debt repayments
• These were the best performing ASX 200 shares last week
• ASX 200 (ASX:XJO) midday update: BHP higher on unification plans, TPG tumbles

Motley Fool contributor Aaron Teboneras owns shares of Woodside Petroleum Ltd. 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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All eyes will be on the Bank of Queensland Limited (ASX: BOQ) share price today.

Why is the Bank of Queensland share price on watch?

The Bank of Queensland share price will be on watch today after it released a trading update ahead of its annual general meeting.

According to the release, the regional bank has started FY 2022 in a positive fashion in respect to volume growth. It revealed that its growth momentum has continued throughout the first quarter, with strong application volumes across both the housing and business lending portfolios.

Furthermore, it advised that its housing portfolio across the Bank of Queensland and Virgin Money brands increased by ~$1 billion for the quarter, continuing above market growth. Whereas its ME Bank brand returned to growth for the month of November, with application volumes in the first quarter up 62% compared to the FY 2021 average.

Positively, management revealed that Business Banking lending grew by ~$200 million during the first quarter, with the asset finance business also performing well.

In addition, the company highlights that the growth in retail and business remains disciplined and high quality, with low levels of >90% LVR lending in mortgages and a focus on SMEs in the business bank.

Taking the shine off the update…

One slight disappointment, though not entirely unexpected, is that Bank of Queensland has not be immune to net interest margin (NIM) pressures from tougher trading conditions and increased home lending competition. As a result, its FY 2022 NIM is expected to be lower than previously guided.

But the good news is that management is aiming to offset this with a 1% reduction in expenses in FY 2022 through additional productivity benefits.

Management commentary

Bank of Queensland’s Managing Director and CEO, George Frazis, commented: “BOQ continues to execute on its strategy, digital transformation and the ME Bank integration. We remain firmly focused on delivering against our strategy to transform BOQ into a digital bank with a personal touch.”

Mr Frazis also revealed that the bank is reaffirming its FY 2022 guidance of at least 2% positive jaws (income growth exceeding expense growth).

The post Bank of Queensland (ASX:BOQ) share price on watch amid FY22 guidance update appeared first on The Motley Fool Australia.

More reading

• Why the Bank of Queensland (ASX:BOQ) share price hit reverse in November?
• Should Bank of Queensland (ASX:BOQ) shares be on your Christmas list? Here’s what top brokers think
• What’s JP Morgan saying about ASX 200 bank shares?
• Are Bank of Queensland (ASX:BOQ) shares really going to pay a 10% dividend yield?
• Here’s why Morgans tips 30% upside for the Bank of Queensland (ASX:BOQ) share price

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

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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Alphinity Investment Management client portfolio manager Alfreda Jonker tells of the 2 ASX shares set to cash in on long-term themes.

Investment style

The Motley Fool: How would you describe your fund to a potential client?

Elfreda Jonker: Alphinity Investment Management is a boutique-sized active fund manager based in Sydney. We run 5 different equity strategies. We’ve got two Australian core funds, one global core fund, and then we also have an Australian sustainable fund and a global sustainable fund.

All these funds are managed using the same investment philosophy. We invest in quality companies, that are in an earning upgrade cycle, that we can buy at a reasonable valuation. So all our funds are pretty much concentrated, style-agnostic with a core focus on delivering consistent, strong, alpha through different market cycles.

MF: In the context of the ASX shares we’ll talk about today, they’re from one of the core Australian funds?

EJ: Yes. The Australian share fund, which is around 35 to 55 companies normally.

Biggest convictions

MF: What are your two biggest holdings?

EJ: If we exclude the really large caps like BHP Group Ltd (ASX: BHP) and the big banks, I think it’s probably more interesting to talk about our biggest active weights. And currently, two of those names would be Macquarie Group Ltd (ASX: MQG) and Medibank Private Ltd (ASX: MPL). 

Macquarie probably does not need a huge amount of an introduction, but effectively it’s a banking advisory investment and funds management business. It’s been one of our core holdings in our portfolio since 2012, which has just consistently been in an earnings upgrade cycle, and really is one of those companies that can stand a portfolio for a number of years. If you look at the current situation of Macquarie, it is definitely seeing very strong growth in assets under management, which is driving the fee growth. There’s lots of demand for infrastructure-style investments, which they clearly benefit from the high-interest rates.

Then, specifically at the moment, they’ve just continued positive asset realisation from a long-term period of equity investments coming across. They’ve got energy, transport, technology infrastructure — a lot of the investments that they’ve been making over the last number of years are all really coming to realisation now. 

They’re also really benefitting from the commodity business… benefitting from the energy crisis and volatility in commodities this year. Their banking business is deploying technology to take material market share in the retail banking space. 

Then of course the big thing is also their green energy assets. They’re, in our view, one of the leaders in that space and one of the world’s largest funders and developers. So they’re really perfectly positioned to benefit from this whole energy transition.

MF: Macquarie shares have done pretty well this year, haven’t they? Recently Macquarie became one of the big four banks.

EJ: Yeah, absolutely. It’s been a phenomenal rally. It’s up, I think, 168% since the COVID trough — and up around 43% in the last 12 months. So it has done very well. 

If you look at the valuation, it’s trading on a PE [ratio] of around 19 times, so that’s ahead of its long term average of around 16. But in our view, we do think that the way they are busy changing the business model and really just expanding the different business avenues that they’re in, we think this company can continue to generate really strong earning scores, particularly over the next number of years. 

We do see the potential to also expand that multiple even further potentially. So even after the last big run-up that we’ve had, we very much view it as a longer-term quality holding in our portfolio overall.

MF: How about Medibank?

EJ: Medibank, that’s effectively a health insurance business. They offer private health insurance coverage for hospital and ancillary services. They also offer a wide range of health insurance products like health, travel, [and] pet insurance. 

One of the big things that they are doing is that they are now really transforming the business, focusing on health support and wellbeing. So rather than just being an insurance company, they’re also trying to really drive to be a health company. And that’s really the exciting thing for us is that they are really transforming this business model as well. 

If you think about the 2 sides of the business on the insurance side, they are definitely benefitting from lower claims [volume] in the last 2 years through COVID and all the shutdowns.

Also, they’re returning some benefits to customers through lower pricing so that they’re cementing that recent brand improvement and the return to customer growth. We are seeing that insurance side of the business really benefitting from some of the larger trends that we’ve seen in the insurance space. 

But also, specifically to them, I think they’ve done a lot to really focus on their brand and also using a lot of the provisioning to smooth over the results in the next 2 years. Also, I think the focus on the health side, health support and wellbeing, is this really big growth spot of the market. Specifically, growth and in-home care businesses is where we think they’re specifically underestimated by the market. They’ve got very big plans to grow that part of the market.

At the moment, the market is probably more focused on just the insurance business and giving them a lot of benefit for that. But I think this whole health side that they’re focusing on… that’s just the trend of the future. 

So that’s really where we are seeing a lot of potential upsides. They’re really enjoying a lot of earnings upgrades, which, as I’ve mentioned, is one of the key things that we look at. But also from here onwards, we think there’s a very strong underlying gross margin, but also then just strong earnings growth from the whole Medibank health side.

MF: There’s a perception with the private health insurance sector that they’re at the whim of changes in regulations and how the government of the day feels at the time. Are you worried about that for Medibank?

EJ: No, I think Medibank specifically over the last number of years has really worked very hard at that… to improve the relationships and really to improve that perception in general. 

I think any sector always has some sort of risk from a regulation perspective. And that definitely goes for banks as well as general insurance and health insurance sectors. 

But I think at this point in time, we do think that that sort of risk is priced. And specifically, Medibank has really worked so hard in building the brand and building those relationships and to smooth over some of the historic issues that might have been. 

So we are not particularly concerned about any immediate or really rising risks in the shorter term, that can really negatively impact them. But I do think that it is something that investors always need to bear in mind when you do look at the valuation of the company, is that risk price at the current levels.

The post 2 ASX shares that tick all the right boxes for the long term: expert appeared first on The Motley Fool Australia.

More reading

• How did the Macquarie (ASX:MQG) share price stack up in November?
• Did the Rio Tinto (ASX:RIO) share price start a recovery in November 2021?
• Macquarie (ASX:MQG) share price gains as former RBA governor named chair
• ASX shares to buy for the Omicron COVID outbreak
• What’s JP Morgan saying about ASX 200 bank shares?

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

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With interest rates unlikely to increase until 2023, the Australian share market looks set to remain one of the best places to generate a passive income for some time to come.

But which dividend shares should you buy to boost your income? Below are two dividend shares analysts have named as buys:

Coles Group Ltd (ASX: COL)

The first ASX 200 dividend share to look at is Coles. It is of course one of the big two supermarket operators. It could be a top option for income investors thanks to its defensive qualities, solid growth prospects, and focus on automation.

In respect to the latter, Coles is constructing new smart distribution centres with automation giant Ocado in an effort to cut costs and boost its online business. If all goes to plan, Coles will be a much stronger business and well-placed for the future.

Citi is positive on its outlook. Its analysts are forecasting solid earnings and dividend growth over the coming years. For example, Citi has pencilled in fully franked dividends of 65 cents per share in FY 2022, 72 cents per share in FY 2023, and then 77 cents per share in FY 2024.

Based on the current Coles share price of $17.81, this will mean yields of 3.65%, 4%, and 4.3%, respectively.

Citi has a buy rating and $19.60 price target on its shares.

Westpac Banking Corp (ASX: WBC)

The Westpac share price has fallen heavily since the release of its full year results. While this is disappointing for shareholders, it could be a buying opportunity for everyone else.

The team at Morgans certainly believe this is the case and feel the selling has been severely overdone.

It commented: “WBC shares have been sold off heavily following the FY21 result announcement, such that out of the major banks, WBC is now trading on the lowest FY22F P/NTA multiple, the lowest FY22F P/E multiple and the highest FY22F dividend yield. Such multiples or yields could only be justified if WBC is a value trap, which we think it is not.”

Morgans has therefore reiterated its add rating and $30.50 price target on the banking giant’s shares. Its analysts are also forecasting fully franked dividends per share of $1.23 in FY 2022 and then $1.62 in FY 2023.

Based on the current Westpac share price of $20.72, this will mean yields of 5.9% and 7.8%, respectively.

The post These ASX 200 dividend shares have generous fully franked yields appeared first on The Motley Fool Australia.

More reading

• What is the outlook for interest rates in Australia? Here’s what Westpac thinks
• 5 things to watch on the ASX 200 on Tuesday
• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?
• Is the Westpac (ASX:WBC) share price a value trap or a bargain buy?
• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks

Motley Fool contributor James Mickleboro owns shares of 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 owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Brickworks Limited (ASX: BKW) share price has a potential upside of around 30% according to one of the leading brokers in Australia.

Brickworks is a building products business with operations across a number of sectors.

In bricks, where it’s the leader in Australia, it has brands like Austral Bricks and Bowral Bricks. Within its masonry division, it has businesses like Austral Masonry and Urban Stone. Bristle Roofing is a key player in the roofing space for the ASX share.

Terracade is Brickworks’ business for specialised building systems. Austral Precast is a leading provider of concrete building solutions. Capital Battens is a provider of timber battens.

Broker thoughts on the Brickworks share price

Citi currently rates it as a buy, with a price target of $30. That suggests a possible rise of 30% if the broker is right.

FY21 was better than the broker was expecting thanks to the strong property performance and it’s expecting further strong performance into the future.

Based on the FY22 numbers, Brickworks shares are priced at 15x FY22’s estimated earnings.

What is expected from the property division in the next couple of years?

For readers that don’t know, Brickworks as a 50% property joint venture with Goodman Group (ASX: GMG) where excess Brickworks land is sold into the trust.

Once a lease pre-commitment is secured, the serviced land can then be used as security, with debt funding used to cover the cost of constructing the facilities.

At the end of FY21, the total value of leased assets held within the property trust stood at $2 billion, generating $89 million of gross annual rent. Brickworks’ 50% share of net assets, after including debt and assets under development, was $911 million at the end of the year.

Brickworks says that there is strong demand for prime industrial property, which is being fuelled by structural tailwinds, resulting in an “unprecedented” development pipeline. Those developments are increasingly complex, with features like robotics, automation and multi-storey. These are a critical competitive advantage for many businesses in the new economy.

The trust is currently building huge warehouses, including one for Amazon. Other large facilities have been committed for Woolworths Group Ltd (ASX: WOW), Australia Post and Xylem.

Completion of the above facilities, and the “long pipeline” of other pre-committed developments, will result in an increase in lease assets of around $1.2 billion and gross rent of $50 million within the property trust over the next two years.

Brickworks dividend

At the current Brickworks share price, it has a grossed-up dividend yield of 3.75%.

Brickworks says that it’s proud to be one of the few S&P/ASX 200 Index (ASX: XJO) companies to increase the dividend to shareholders during COVID-19 in 2020.

It has maintained or increased its normal dividend every year for the last 45 years.

The post Top broker tips 30% upside for the Brickworks (ASX:BKW) share price. Here’s why appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Monday
• What do Wesfarmers (ASX:WES) and Amazon.com have in common?

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. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks. 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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Later today, the Reserve Bank of Australia will meet to discuss the cash rate.

Unfortunately for savers and income investors, no action is expected to be taken at this meeting. In fact, many economists believe there will still be some time to wait until the cash rate moves from the record low of 0.1%.

What is the outlook for interest rates?

According to the latest economics report from Westpac Banking Corp (ASX: WBC), its team continue to believe that the central bank will keep rates on hold until early in 2023. It is only at this point that the bank feels the two main drivers of rate increases – inflation and wage growth – will be at levels that support a rate hike.

Westpac’s Chief Economist, Bill Evans, commented: “We expect the RBA to begin raising the cash rate in February 2023. That will be in response to rising inflation (core inflation reaches 2.8% by end 2022) and increasing wage pressures (wages growth to 2.8% by year’s end).”

Mr Evans expects this to be underpinned by strong demand and constrained supply setting the scene for rising prices.

After which, by the end of 2023, Australia’s oldest bank believes the Reserve Bank will have lifted the cash rate to 0.75%.

What about house prices?

Westpac appears to expect house prices to pull back as the outlook for rate hikes improves.

“Those interest rate increases will be coincident with falling house prices. However, just as we have not factored in a significant positive wealth effect in 2022 given the ample income and savings boost to demand, we would expect the fall in prices to impact confidence and future activity although household spending will hold up, particularly in the first half of 2023,” Evans said.

What should you watch for at today meeting?

As for today’s meeting, Westpac suggests investors keep an eye on the central bank’s wording.

It commented: “The RBA is expected to keep policy settings unchanged at its last meeting of 2021. As such, the focus will again be on the wording of the Governor’s decision statement, particularly any assessments of the latest round of economic data, including the Q3 national accounts, and the shifting external environment, particularly with respect to price inflation in developed economies.”

“Westpac remains comfortable with our view that the bank’s first move will come in February 2023 although markets are anxious for a mid-2022 move while the Governor himself is still open to waiting till 2024,” it concluded.

The post What is the outlook for interest rates in Australia? Here’s what Westpac thinks appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?
• Is the Westpac (ASX:WBC) share price a value trap or a bargain buy?
• Why ANZ Bank (ASX:ANZ) is losing market share to other big ASX banks
• Here are 6 of the worst performing ASX shares of November

Motley Fool contributor James Mickleboro owns shares of 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.

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There are some top ASX shares that are rated as buys by leading brokers in December 2021.

Businesses that are liked by brokers could be opportunities for investors to consider for the longer-term with their growth plans.

One of these companies has global growth plans, whilst the other has a strong domestic outlook.

Here are two ASX shares that are rated as buys:

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine Estates is a global wine business. It’s rated as a buy by Citi, with a price target of $13.80. If the TWE share price does get there over the next year, then it could increase by almost 20%. Citi notes the global growth moves of the Penfolds brand.

TWE says that it’s working on plans to support future growth for Penfolds in key global markets. Management said that the early momentum behind these plans is encouraging, particularly in Australia and Asian markets outside Mainland China where the Penfolds Bin revenue grew 15%.

With Penfolds, the ASX share is executing a multi-country origin strategy that will include propositions sourced from the US and France. It also said that an acquisition of additional winery and vineyards in Bordeaux that will provide incremental sourcing and production capacity for Penfolds.

Last month, TWE announced the acquisition of Frank Family Vineyards in the US for US$315 million. It’s a highly-acclaimed luxury wine business based in the Napa Valley, California with a track record of “strong revenue and EBITS growth, in addition to EBITS margins in the range of 35% to 40%.”

Management said this portfolio is highly complementary to Treasury Americas, filling a key portfolio gap for luxury chardonnay.

Based on Citi’s numbers, the TWE share price is valued at 20x FY23’s estimated earnings.

Adairs Ltd (ASX: ADH)

Adairs is a leading homewares and furnishings business. The recent acquisition of Focus on Furniture now makes it a sizeable competitor in the Australian furniture market too.

It’s currently rated as a buy by the broker UBS (among others). The price target from UBS is $5.90, so the implied upside is around 70% over the next year if the broker is right.

UBS likes all of the positives from the ASX share’s Focus acquisition and is expecting double digit growth of earnings per share (EPS) over the next few years.

Prior to the announced acquisition, Adairs said that growing store floor space through new and up-sized stores will continue to drive store sales. It’s expecting to grow its floor space by 8% in FY22 and at least 5% per annum for the following five years through those new and upsized stores.

For Adairs, the Focus acquisition gives “growth opportunities from a national store roll out, online growth and category/range expansion.”

Management thinks the ASX share can reach sales of more than $250 million over the next five years.

After the acquisition, Adairs CEO and managing director Mark Ronan said:

The Adairs Group now comprises a highly profitable and aligned portfolio of brands with significant growth potential targeting the middle market in the home category in Australia and New Zealand.

Based on the UBS estimates, the Adairs share price is valued at 8x FY23’s estimated earnings with a potential FY23 grossed-up dividend yield of 12.3%.

The post Brokers say these 2 top ASX shares are buys in December 2021 appeared first on The Motley Fool Australia.

More reading

• Drinking and gambling: 3 ASX shares to buy now
• Can Treasury Wine (ASX:TWE) ever fill the hole left by Chinese exports?
• Brokers name 3 ASX shares to buy today
• Are these 2 ASX dividend shares buys in December 2021?
• What happened with the Adairs (ASX:ADH) share price today?

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. owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia has recommended Treasury Wine Estates 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with the smallest of gains. The benchmark index rose a few points to 7,245.1 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rebound on Tuesday. According to the latest SPI futures, the ASX 200 is expected to open the day 33 points or 0.45% higher this morning. This follows a solid start to the week on Wall Street, which in late trades sees the Dow Jones up 2.1%, the S&P 500 up 1.5%, and the Nasdaq trading 1.25% higher.

RBA meeting

The Reserve Bank of Australia is meeting for the final time this year to discuss the cash rate. While the market isn’t expecting the central bank to increase rates just yet, it could provide an idea of when its first hike will occur. According to Westpac Banking Corp (ASX: WBC), its economics team expect the RBA to begin raising the cash rate in February 2023.

Oil prices jump

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a strong day after oil prices stormed higher. According to Bloomberg, the WTI crude oil price is up 4.2% to US$69.00 a barrel and the Brent crude oil price has risen 4% to US$72.65 a barrel. Oil prices rose amid hopes that Omicron isn’t as severe as feared.

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a subdued day after the gold price edged lower. According to CNBC, the spot gold price is down 0.2% to US$1,780.40 an ounce. The precious metal fell after investors switched back into risk assets.

Magellan CEO resigns

The Magellan Financial Group Ltd (ASX: MFG) share price could come under pressure today after the struggling fund manager announced the exit of its CEO. After the market close, Magellan advised that Dr Brett Cairns has resigned for personal reasons and will be leaving the company. He will be replaced on an interim basis by its CFO Ms Kirsten Morton.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of 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.

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The White Rock Minerals Ltd (ASX: WRM) share price was drowning in a sea of red today, reaching a 52-week low after the company announced an $11 million capital raise.

At market close, the White Rock Minerals share price was down 22.58%, trading at 24 cents.

White Rock Minerals is a mineral explorer going for gold at the Woods Point Gold Project in Victoria.

What is White Rock Minerals up to?

In its release today, the company advised it planned to raise $11.3 million before costs via a $2.25 million share placement and $9.1 million entitlement offer.

Capital raises can be a catalyst for a share price plunge (akin to today’s performance) due to share dilution. Indeed, the company said in its release the share offer represented a 23% discount on the trading price before the capital raise of 31 cents.

White Rock said eligible shareholders would also be offered a 1 for 4 pro-rata non-renounceable entitlement offer.

The money will be used for gold exploration at the Woods Point Gold Project. The company acquired this project via a merger with AuStar Gold in August 2021.

The exploration area of 660km is located in one of Victoria’s largest historic goldfields, 120km east of Melbourne.

Management commentary

White Rock managing director and CEO Matt Gill said:

This capital raise will see White Rock continue this aggressive exploration focus on the significant in-mine and regional exploration potential of the project.

The board is very appreciative of the support shown from current shareholders and the interest and support being shown from the new investors now joining the White Rock journey through this equity raising.

White Rock Minerals share price snapshot

White Rock Minerals share price has fallen 56.36% over the past 12 months and 59% in the year to date. The share price is currently trading at a 52-week low of 24 cents.

The company has a market capitalisation of about $34 million.

The post The White Rock Minerals (ASX:WRM) share price plunged 23% today appeared first on The Motley Fool Australia.

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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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