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The Woolworths Group Ltd (ASX: WOW) share price is falling this morning after outbidding rival Wesfarmers Ltd (ASX: WES) for Australian Pharmaceutical Industries Ltd (ASX: API).

At the time of writing, the retail conglomerate’s shares are down 1% to $39.51.

In respect to the others, the Wesfarmers share price is down 0.5% and the API share price is up almost 14%.

What’s happening?

Wesfarmers has been dealt a major blow in its quest to acquire the Priceline pharmacy chain operator.

According to an announcement, Woolworths has submitted a non-binding transaction proposal to API to acquire it for a cash offer price of $1.75 per share by way of a scheme of arrangement.

This values API’s equity at $872 million and represents a 20 cents per share or 12.9% increase over the offer tabled by Wesfarmers last month.

Woolworths has also revealed that it is willing to explore potential alternative control transaction structure options. This includes a takeover bid with a minimum acceptance condition of 50.1%, in order to deliver more value and certainty for API shareholders.

Though, any such alternative transaction structure option would only be pursued by Woolworths with the approval of the API directors.

The good news for Woolworths, but not for Wesfarmers, is that the API Board believes the offer is more favourable to API shareholders than the Wesfarmers scheme. For these reasons, the API Board has determined that the Woolworths proposal is reasonably likely to be a superior proposal, as defined in the Wesfarmers scheme implementation deed.

Accordingly, the API Board has decided to allow Woolworths to undertake confirmatory due diligence to facilitate a binding offer.

Why would Woolies acquire API?

Woolworths Group CEO, Brad Banducci, explained the rationale for acquiring API.

He said: “There is a compelling strategic rationale to support Woolworths Group’s acquisition of API. Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem. If successful, we will continue to support API’s community pharmacy partners to deliver better experiences for both customers and pharmacists. We will also work to strengthen API’s wholesale and distribution business to ensure that all Australians continue to have timely, cost-effective access to a full range of PBS and other medicines, via their community pharmacy, regardless of where they live.”

“The combination of the two businesses is expected to lead to material shared benefits and synergies, much of which will be reinvested back into strengthening and growing API and its pharmacy partners. If successful, the transaction is expected to be funded from the Group’s existing balance sheet capacity and to deliver attractive returns for Woolworths Group shareholders over the medium term,” he concluded.

The Woolworths share price is up almost 17% in 2021.

The post Woolworths (ASX:WOW) share price falls after outbidding Wesfarmers for API appeared first on The Motley Fool Australia.

More reading

• Why did the Woolworths (ASX:WOW) share price tumble today?
• Here’s why ASX retail shares are in the spotlight on Tuesday
• How does the Wesfarmers (ASX:WES) share price typically perform in the lead up to Christmas?
• This sector could be a $50 trillion investment opportunity: expert
• Is the Woolworths (ASX:WOW) share price a buy in the lead up to Christmas?

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 owns shares of and has recommended Wesfarmers 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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The Premier Investments Limited (ASX: PMV) share price is under pressure on Thursday morning.

In morning trade, the retail conglomerate’s shares are down 2.5% to $29.45.

Why is the Premier Investments share price falling?

Investors have been selling down the Premier Investments share price on Thursday after a broad market selloff offset the release of an upbeat trading update ahead of its annual general meeting.

According to the release, the company notes that since the beginning of FY 2022, the Premier Retail business has been forced to close more than 50% of its global store network for significant periods of time due to government mandated shutdowns. This led to the company losing over 42,000 trading days so far this financial year.

Positively, over the past three weeks, Premier Retail was able to open all stores globally for the first time this financial year. Combined with a product range that is resonating well with customers, this has led to a rebound in sales. Premier Retail reported a 10.1% lift in sales over the prior corresponding period during the three weeks ending 27 November.

This ultimately means that sales during the first 17 weeks of FY 2022 are now down just 3.5% over the prior corresponding period. This is a big improvement on the 9.5% decline in sales during the first seven weeks of the financial year, as reported with its full year results release in September.

And while management acknowledges that there are some significant trading weeks ahead, it highlights that the positive customer reaction to its product provides it with confidence for the remainder of the half. Premier expects to release its half year results in late March.

The Premier Investments share price is still up 23% in 2021 despite today’s decline.

The post Premier Investments (ASX:PMV) share price falls despite upbeat trading update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• Is the Premier Investments (ASX:PMV) share price a bargain buy?
• Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit
• 2 ASX shares that could be buys for both growth and dividends

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 Premier Investments 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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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.

Bitcoin (CRYPTO: BTC) has nearly doubled in value so far in 2021 with just a month to go until the new year. It’s been a wild ride getting there, though. After a big surge last winter, the original cryptocurrency was halved in price over the summer, only to reclaim all-time highs again in the autumn.

But with the new omicron coronavirus variant sending investment markets into turmoil again, the arbitrary but long-awaited $100,000 Bitcoin milestone (74% higher than the going price as of this writing) is still a ways off at this point and looks unlikely to be reached in 2021.  

But cryptocurrency prices are volatile, both on the way down and the way up. It’s possible Bitcoin could reach the $100,000 mark in 2022. Here’s how it could happen.

Three catalysts for another Bitcoin run higher

Bitcoin enjoys first-mover status since it launched in 2009, six years ahead of what is now the second-largest cryptocurrency, Ethereum (CRYPTO: ETH). With a market cap of over $1 trillion, Bitcoin also sits high atop the crowded cryptocurrency field and has picked up plenty of adopters among individual and institutional investors alike.

But since it’s a type of scarce resource (presently, nearly 18.9 million coins have been mined, out of a long-term maximum of 21 million coins), Bitcoin could go higher if demand increases. Here are three catalysts that could edge it to $100,000 next year:  

• Bitcoin is viewed as a store of value if inflation persists.
• Adoption spreads among companies, institutional investors, and sovereign nations.
• Increased adoption of the Bitcoin network as a decentralized finance (DeFi) solution after the Taproot update.

A better value-storing alternative to cash?

With prices for basic goods and services soaring in 2021 due to the effects of the pandemic, Federal Reserve Chairman Jerome Powell frequently called inflation a “transitory” event. I, too, have thought of inflation as being temporary, and perhaps it could start to ease in 2022. But with supply chains still constrained, that “transitory” adjective has been retired for now at the Federal Reserve as we enter the second year of an inflationary environment.  

As inflation erodes the buying power of cash, one reason many investors have begun to accept Bitcoin as a legit asset class is its potential to keep up with (or outpace) higher prices in the economy. That’s because of the cap on the number of coins that can ever be mined, versus fiat currencies like the U.S. dollar that have no limit to how much can be printed. If inflation concerns persist in 2022, more investors might seek out Bitcoin as an alternative to their cash, which could help send it toward that $100,000 goal line. 

More adoption by big investors

All indications point to a growing list of big institutional investors getting involved with the cryptocurrency industry. For example, the bank Silvergate Capital (NYSE: SI) operates an exchange (called SEN) that facilitates digital currency payments 24/7, a crucial capability for cryptocurrency investors and traders since the market is always open. SEN had 1,305 institutional users at the end of the third quarter, up from 1,224 three months prior and only 928 in the year-ago period.

Besides big investors, the Central American republic of El Salvador recently became the first country to accept Bitcoin as legal tender. Other countries, especially in Latin America, have also expressed interest in following suit one day. And a handful of big companies have also replaced some or all of the cash on their balance sheet with Bitcoin.

Paired with institutional investor support, these cryptocurrency adopters could also spur on smaller retail investors. A boost in demand from all of the above could push the value of Bitcoin toward $100,000 in 2022.

An update to Bitcoin’s everyday functionality

In November 2021, the Bitcoin blockchain network underwent its first major update since 2017. Known as Taproot, the upgrade is aimed at making Bitcoin a more viable solution for everyday DeFi services and apps (online-based digital payments, lending, etc.). This is an area Bitcoin has struggled in, as features of its blockchain have made it difficult to use for an everyday payments solution. In contrast, Ethereum was purpose-built for DeFi and dominates on this front.

It took years for the last major Bitcoin update (known as SegWit) to be adopted by miners and other holders of the cryptocurrency. Nevertheless, Taproot received overwhelming support among its ecosystem of users and investors, and a gradual update to the ecosystem could attract developers who are building new financial services and products using cryptos. More daily use of Bitcoin as a means of transacting business would also be good news for its value in 2022.  

Should you invest in Bitcoin for 2022?

What I’m not saying here is that you should pile into Bitcoin. Investing in cryptocurrencies of any kind — including the original and largest token on the block — isn’t for everyone. Even if Bitcoin should arrive at $100,000 in 2022, it’s going to be a wild ride. If you do invest in this volatile space, keep those bets a small percentage of your total investable net worth.

And if you decide to replace any cash position in your investment portfolio with Bitcoin, don’t use up all your dollars. Inflation does eat away at your buying power over time, but cash has its merits. It doesn’t fluctuate in value as cryptocurrencies do, and having some cash laying around affords the opportunity to buy on the inevitable dips in investment values. 

Nevertheless, Bitcoin is picking up interest from all sorts of big organizations around the globe, and a rally higher in 2022 is quite possible. If you’re interested in investing in cryptocurrencies, Bitcoin is a great place to start. 

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

The post Can Bitcoin reach $100,000 in 2022? appeared first on The Motley Fool Australia.

More reading

• Australia’s first direct Bitcoin and Ethereum ETFs are launching
• Here’s what happened with Bitcoin’s record-breaking November
• Why Bitcoin, Ethereum, and Dogecoin are all surging today
• Can Bitcoin edge out gold and bonds as a future store of value?
• Why did the Omicron crypto just rocket 900% and what is it doing now?

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

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

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The Openpay Group Ltd (ASX: OPY) share price has bounced back after hitting a 52-week low on Wednesday.

In morning trade, the buy now pay later (BNPL) provider’s shares are up 3% to $1.00.

Why is the Openpay share price pushing higher?

Investors have been bidding the Openpay share price higher today after it announced a new partnership.

According to the release, Openpay has signed an initial 12-month agreement with leading multinational financial services company American Express (NYSE: AXP). This will see Openpay’s US business Opy accept American Express as a payment method for plans in the US.

The partnership will initially focus on the Healthcare and Automotive sectors.

Management expects the offering to deliver additional value to American Express merchants by connecting them to Opy’s merchant and consumer-friendly solution. Additionally, American Express Card Members will be able to enter into Opy plans in the US and make repayments funding them via their American Express card.

The release notes that the two parties will also explore opportunities to collaborate on product development initiatives that would leverage Opy’s B2C and B2B platforms.

“Thrilled”

Opy USA CEO and Openpay Global Chief Strategy Officer, Brian Shniderman, commented: “We’re thrilled to be partnering with American Express, a company that helps their merchants and consumers make sound, savvy decisions. We are excited to offer our innovative products to American Express merchants and Card Members alike, particularly for larger, more meaningful life purchases.”

American Express’ President of Merchant Services US, Colleen Taylor, added: “We are constantly striving to drive additional value to our Card Members and merchants. With Opy, we are pleased to offer another payment option for customers who make and accept larger healthcare, auto repair, and maintenance purchases.”

Despite today’s gain, the Openpay share price is down 57% in 2021.

The post Openpay (ASX:OPY) share price pushes higher on American Express deal appeared first on The Motley Fool Australia.

More reading

• Can Bitcoin reach $100,000 in 2022?
• Australia’s first direct Bitcoin and Ethereum ETFs are launching
• How did the Sydney Airport (ASX:SYD) share price perform in November?
• The Beach Energy (ASX:BPT) share price dropped 15% in November. December is also off to a lousy start
• Why have investors been saying goodbye to Helloworld (ASX:HLO) shares lately?

American Express is an advertising partner of The Ascent, a Motley Fool company. 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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Finally it’s happening.

For the very first time, Australian investors will be able to invest in Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) without actually buying the cryptocurrencies themselves.

Local provider ETF Securities is the first to make this happen for the Australian market, in conjunction with European cryptocurrency manager 21Shares.

The two funds will be called ETFS 21Shares Bitcoin ETF (Chi-X: EBTC) and ETFS 21Shares Ethereum ETF (Chi-X: EETH).

“Australians wanting to buy Bitcoin and Ethereum have historically been forced onto unregulated crypto exchanges,” ETF Securities stated in an email to customers.

“But with the launch of Bitcoin and Ethereum ETFs, investors will be able to trade on highly regulated exchanges.”

While the two ETFs are coming soon, an exact launch date has not yet been disclosed as some regulatory red tape is still pending.

The cryptocurrency revolution is not happening on the ASX

The Motley Fool has confirmed the funds will be hosted on Australia’s second biggest market Chi-X, rather than the ASX.

Chi-X shares are available on most online stockbroking platforms, such as CMC Markets, Superhero, Selfwealth Ltd (ASX: SWF), NABTrade, AusieX, CommSec and Pearler.

It is understood there are still some regulatory hurdles with listing blockchain and cryptocurrency-related shares on the ASX.

ETFS head of distribution Kanish Chugh told The Motley Fool last month that ETFS Fintech & Blockchain ETF (Chi-X: FTEC) debuted on Chi-X to get the product out to market faster than its rivals.

“We felt there were potentially some hurdles, at the time, with the ASX,” he said.

“We really wanted to say ‘Investors want this strategy — how can we get it to market?’ And Chi-X were working quite closely with us around that… we’d get this out to investors quicker.”

New cryptocurrency research centre for Australians

21Shares has nearly US$3 billion of funds under management across 20 European cryptocurrency exchange-traded products already.

“Once we had decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with,” ETF Securities executive chair Graham Tuckwell. 

“They are the cutting edge of crypto ETPs in the world today.”

The two partners are also launching a cryptocurrency “research and education centre” for Australian investors.

The information hub will cover not just Bitcoin and Ether but the more obscure currencies such as Solana (CRYPTO: SOL), Polygon (CRYPTO: MATIC) and Avalanche (CRYPTO: AVAX).

“The research centre will explain in simple English how the often-complicated world of blockchain works,” stated ETF Securities.

“It will also feature the bleeding edge news on crypto, various blockchain metrics, price action and important news on miners, custodians and other companies in the supply chain.”

The post Australia’s first direct Bitcoin and Ethereum ETFs are launching appeared first on The Motley Fool Australia.

More reading

• Here’s what happened with Bitcoin’s record-breaking November
• Why Bitcoin, Ethereum, and Dogecoin are all surging today
• Can Bitcoin edge out gold and bonds as a future store of value?
• 3 reasons why Solana could just be getting started
• Why did the Omicron crypto just rocket 900% and what is it doing now?

Motley Fool contributor Tony Yoo owns shares of Bitcoin and Ethereum. 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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November was a big month for Sydney Airport (ASX: SYD), even if its share price didn’t reflect the enormity.

The airport’s long-discussed takeover finally got the green light early last month.

Despite the exciting happening, the Sydney Airport share price only gained 1.34% over the course of September. It ended the month 11 cents higher than it started, trading at $8.30.

Though, that blew the performance of the S&P/ASX 200 Index (ASX: XJO) out of the water – it tumbled 0.92% last month.

 Let’s take a closer look at the month that was for the major Australian airport.

What drove the Sydney Airport share price last month?

Sydney Airport accepted an $8.75 per share takeover offer posed to it by the Sydney Aviation Alliance – a consortium of infrastructure investors – on 8 November.

As The Motley Fool Australia reported, the deal puts the airport’s enterprise value at $32 billion – a $2 billion premium.

The Sydney Airport share price rose 2.8% following the takeover’s acceptance.

Though, the purchase will now face scrutiny by local and global watchdogs.

The alliance will need to get merger clearance from the European Union before the takeover can be finalised.

Australian bodies will also be casting their eye over the deal.

The Australian Competition and Consumer Commission and the Australian Foreign Investment Review Board will both get a say on the takeover.

There’s also the issue of Australia’s airport cross-ownership laws. Some members of the alliance already own significant stakes in other major Australian airports.

Entities can only own more than 15% of either Sydney, Brisbane, Melbourne, or Perth’s airports.

Whether the alliance can bypass the law is yet to be seen.

Finally, Sydney Airport released promising – albeit not price-sensitive – news on 19 November when it provided its traffic data for October.

While October didn’t see an influx of travellers, the airport noted it saw an uptick in passengers in early November.

Australia’s international borders opened on 1 November, making the data particularly significant.

As of the end of November, the Sydney Airport share price was 29% higher than it was at the start of 2021. Additionally, it gained 39% over the 12 months ended 30 November.

The post How did the Sydney Airport (ASX:SYD) share price perform in November? appeared first on The Motley Fool Australia.

More reading

• Sydney Airport (ASX:SYD) investors urged to speak up or forever hold their peace
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Sydney Airport (ASX:SYD) share price edges higher as traffic lifts
• These 3 ASX 200 shares are topping the volume charts this Wednesday
• $6m shareholder says Sydney Airport (ASX:SYD) selling too cheap, calls for board spill

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 Beach Energy Ltd (ASX: BPT) share price continued its poor form from last month and has tumbled at the start of December. This comes after the company announced a couple of negative announcements that weighed on investor sentiment.

At Wednesday’s market close, the energy producer’s shares added more pain, finishing the day down 0.84% to $1.175.

What’s happening with Beach Energy?

At the start of November, the company announced the departure of its managing director and CEO, Matt Kay.

The news sent the Beach Energy share price almost 4% lower as the board appointed a temporary replacement.

Chief financial officer, Morné Engelbrecht took over the reins while the company conducts a search process for a permanent CEO. No one has yet to take the top job.

A few days later, Beach Energy held its annual general meeting (AGM), highlighting a strong start to FY22.

The company reaffirmed its plan to achieve production of 28 million barrels of oil equivalent (mmboe) by FY24. In contrast, Beach Energy recorded production of 25.6 mmboe in FY21 – down 4% from the previous year.

However, looking at the near term, Beach Energy expects to have 8 gas plants producing from 5 basins by the end of 2023. The plants will deliver gas to 4 markets including the East Coast gas market and the global LNG market.

Lastly, the company is focused on its approach to sustainability, focusing on becoming a net zero emissions producer by 2050. It is already delivering emissions reductions across its operated assets.

Despite the overall positive update, Beach Energy shares failed to gain traction, losing about 5% in the days following.

More recently, the company was hit with two separate class action lawsuits from Slater & Gordon Lawyers and Shine Lawyers. Both firms are representing shareholders who acquired an interest in ordinary shares in Beach Energy between 17 August 2020 and 29 April 2021.

The company stated that it has at all times complied with its disclosure obligations and denies any wrongdoing.

Beach Energy share price summary

Over the last 12 months, the Beach Energy share price has fallen around 30%, with year-to-date dropping almost 35%. Its shares hit a 52-week low of $1.01 in September before rebounding. However, since late October, Beach Energy shares have been on a downward trend.

Beach Energy presides a market capitalisation of roughly $2.68 billion, with approximately 2.28 billion shares on hand.

The post The Beach Energy (ASX:BPT) share price dropped 15% in November. December is also off to a lousy start appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• Biden taps oil reserve. What could this mean for ASX oil shares?
• 5 things to watch on the ASX 200 on Wednesday

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 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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Shares in Helloworld Travel Ltd (ASX: HLO) have been struggling over the past month.

Investors have been dumping the travel management company as concerns of further COVID-19 ramifications spread. In turn, the Helloworld share price has tumbled 22% in the last month.

Like many other ASX-listed travel-exposed companies, Helloworld’s operations remain heavily impacted by travel restrictions. Unfortunately, the latest Omicron concerns have only added to the bleak operating environment for such businesses.

What’s the travel situation?

Many countries have gone back into a defensive approach in response to the new COVID-19 development. The new variant comes at a time when the Northern hemisphere had already been experiencing a substantial increase in case numbers as it enters the colder season.

The situation for Helloworld shares isn’t ideal as governments reintroduce added restrictions. For Australia, the government has imposed new border security measures effectively immediately. These include:

• Anyone who is not a citizen or permanent resident of Australia who has been in African countries where the Omicron variant has been detected — within the past 14 days — will not be able to enter Australia.
• Australia citizens and permanent residents arriving from the affected countries will need to go into supervised quarantine for 14 days.
• Anyone who has arrived from the affected countries in the past 14 days will need to self-isolate and receive a COVID-19 test.
• All flights from the 9 southern African countries will be suspended for 14 days, beginning 27 November 2021.

With a new variant on the loose, demand for travel has likely taken a blow. Currently, there are 6 confirmed cases of Omicron in Australia. The latest confirmed case is a fully vaccinated person who had arrived back from southern Africa.

Furthermore, the latest variant puts uncertainty on when travel companies might resume ‘normal’ operations. The question is an important one as Helloworld burns through its cash. In FY21, Helloworld shares came under pressure as it posted a $35.5 million net loss.

The company reported a cash balance of $131 million at the end of June 2021.

Helloworld shares in review

The S&P/ASX 200 Index (ASX: XJO) has made for a better investment so far this year. Exposure to industries less impacted by COVID-19 has allowed the benchmark index to gain 8.3%. In contrast, Helloworld shares have shaved off 15.4% since the beginning of the year.

Lastly, Helloworld’s market capitalisation has yet to recover to its pre-pandemic level. The company was previously worth around $630 million prior to the 2020 market crash. However, restrictions took a toll on Helloworld. As a result, the company is now valued at approximately $330 million.

The post Why have investors been saying goodbye to Helloworld (ASX:HLO) shares lately? appeared first on The Motley Fool Australia.

More reading

• Why is the Helloworld (ASX:HLO) share price tumbling 6% on Friday?
• Here’s why ASX 200 travel shares are getting hammered today

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Helloworld 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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The Westpac Banking Corp (ASX: WBC) share price was well and truly out of form in November.

The banking giant’s shares were among the worst performers on the S&P/ASX 200 Index (ASX: XJO) last month with a 20.1% decline.

What happened to the Westpac share price?

Investors were selling down the Westpac share price last month following the release of its full year results.

For the 12 months ended 30 September, Australia’s oldest bank reported a 138% increase in statutory net profit to $5,458 million and a 105% jump in cash earnings to $5,352 million.

As strong as this looks on paper, it was still a touch short of the market’s expectations. As was the announcement of a $3.5 billion off-market share buyback.

However, that was not the real reason for the Westpac share price weakness. That weakness was driven largely by management’s net interest margin outlook.

Westpac’s CEO, Peter King, commented: “For our business, loan growth is expected to be sound as the economy rebounds, although net interest margins will remain under pressure from low interest rates and competition.”

Combined with similarly cautious margin commentary from fellow retail-focused bank Commonwealth Bank of Australia (ASX: CBA), analysts were quick to downgrade Westpac’s shares and suggest investors switch to business banking-focused banks.

The teams at Credit Suisse, Goldman Sachs, and Morgan Stanley were among those that downgraded Westpac’s shares following its results.

Is this a buying opportunity?

One leading broker that sees a lot of value in the Westpac share price following the selloff is Morgans.

It currently has an add rating and $30.50 price target on the bank’s shares. This implies potential upside of approximately 48% for investors. The broker also expects a generous fully franked 6% dividend yield in FY 2022 based on the current Westpac share price.

Morgans commented: “We find the management of the margin-volume tradeoff in Australian home lending in FY21 to be disappointing and we hope for better management of this tradeoff going forward. Having said this, our view has been that the stock was not being priced for perfection and was offering considerable value. While the NIM has now re-based notably lower, we continue to see considerable value in the stock particularly due to our expectation of significant cost out by FY24F.”

The post The Westpac (ASX:WBC) share price sank 20% in November: Time to buy? appeared first on The Motley Fool Australia.

More reading

• Morgans names 2 of the best ASX share ideas for December
• ASX shares to buy for the Omicron COVID outbreak
• What’s JP Morgan saying about ASX 200 bank shares?
• These were the 5 worst performing ASX 200 shares in November
• Here’s why some ASX 200 bank shares are having a terrific Tuesday

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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one, Medallion Financial managing director Michael Wayne revealed the 3 ASX shares that have gone gangbusters for him. Today, he explains why he’s getting his clients to buy 3 ASX shares in particular.

Hottest ASX shares

The Motley Fool: What are the 3 best stock buys right now?

Michael Wayne: One that we’ve been buying consistently really over the last couple of years with some degree of success has been Audinate Group Ltd (ASX: AD8). 

We continue to like this company, particularly as we emerge from lockdown. Audinate’s involved in the audio digital space. It essentially allows different pieces of electronic equipment to communicate without the needs for cords and cables. So if you think about a Bose sound system, or Toshiba, all these different brands effectively embed this protocol that Audinate creates called Dante. 

And about 80% of new products coming to market incorporate this Dante product. So they’ve got a pretty strong market position. The adoption rate of their technology is about 18 times the nearest competitor. They’re also now moving into the visual-digital space as well, so that would be a new market for them. 

Obviously COVID wasn’t great for them, because if you think about outdoor concerts or large sporting events, they were on the backburner. But we’re now coming out of that, and this is a company that should benefit from that.

One caveat — and they have been under a little bit of pressure recently, although they’re starting to bounce back now — is that they are having some supply issues, like many other businesses across numerous industries at the moment, which is making it a bit difficult for them to meet their demand. But the good thing is their order backlog is very, very juicy, and it’s growing very, very quickly. So as long as they can continue to meet that demand, they should be in a pretty good position.

MF: This is a long term investment?

MW: Yeah. I mean, long term as long as something can be long term. Obviously, we’re reviewing the updates and the annual reports and half-year reports, et cetera, but we would like to see this one as a long term hold for sure. 

The balance sheet’s improving a lot. They’ve spent a lot on research and development in recent years and that’s starting to come to fruition for them. So we see no reason why this can’t be an unregulated monopoly of sorts… So yeah, we think it’s a long term buy.

Second one on the list is a company called XRF Scientific Limited (ASX: XRF). 

Although it is a smaller company, it’s not trading on the lofty multiples that you would normally associate with the tech space. 

XRF Scientific’s effectively a mining services company. They sell machines to mining companies so that they can conduct tests on their core samples. And what’s good about that is not only do they sell the machines, they then sell them the chemicals which are used in those tests, and the chemicals are consumable in nature. So once they’re used once, they’ve got to be replenished and bought again.

It’s a good recurring revenue stream for them. They’ve obviously been benefitting from the boom that we’ve been seeing across most commodity suites at the moment. 

Pays a good solid dividend yearly, about 3.5%. It’s got a strong balance sheet. They too have spent a lot on research and development in recent years and that’s started to pay off for them. A multiple of 25, 30 times earnings, as well, isn’t too challenging for a company that is growing quite nicely.

MF: Its clients are mining companies, so are there any worries about their cyclical nature?

MW: Look, that is definitely one element of concern, being in the mining space. They do have applications for other industries as well. But the fact is they are growing quickly enough too, we think, offsets any sustained downturn in the mining space. 

That’s definitely something you’ve got to be conscious of. But we’re pretty confident that the commodities space will hold up. I mean, commodities are very, very cyclical, as you say, and almost impossible to predict, but looking across the board, not just at your typical iron ore and coal, et cetera, but some of these newer type commodities that are emerging and becoming more and more prevalent, we think will support that going forward.

MF: And the third one?

MW: The third one, I’m going to go a bit more boring here. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) is one that we have been buying for clients in the last couple of days, for those that don’t already hold it, and for some clients even topping up. 

They had a very good update. Obviously, being in the respiratory and acute care, they’ve been benefiting from the COVID situation. But much of the market was predicting that that COVID boost would fade, but as it turns out, although the numbers have come back a little bit, their results delivered far in excess of expectations across the market. 

We think that that COVID story, as we’re seeing in Europe and Africa, won’t necessarily disappear overnight, and is going to be a lot more sustained than people originally thought, so we think that Fisher & Paykel will continue to benefit from that.

They’re also seeing some good sales outside of the typical markets of US and Europe, which we think bodes well for future growth drivers, those emerging markets. There have been some strong signs in their nasal high flow therapy adoption as well, which we think is promising for them. 

Also, Fisher & Paykel [has] one of the highest quality balance sheets on the market, and at the moment, it is trading on a PE multiple at the bottom end of its long term average.

We think it’s not a bad time to be looking to pick up a very good quality growth business at a multiple that is very challenging by traditional metrics, but for this business, it’s on the lower end of that scale. For a company that’s growing as quickly as they are, they can very quickly justify and grow into that multiple.

The post 3 hot ASX shares to buy right now: advisor appeared first on The Motley Fool Australia.

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• ASX 200 (ASX:XJO) midday update: EML rockets, NAB given ACCC green light
• Fisher & Paykel Healthcare (ASX:FPH) share price higher on half year results

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 shares of and has recommended AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO. 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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