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The S&P/ASX 200 Index (ASX: XJO) was out of form again last week. Over the five days, the benchmark index lost 1.6% of its value to end the period at 7,279.3 points.

While a good number of shares tumbled lower last week, some fell more than most. Here’s why these were the worst performers on the ASX 200:

Appen Ltd (ASX: APX)

The Appen share price was the worst performer on the ASX 200 last week with a 21.5% decline. Almost all of this decline occurred on Friday when Macquarie downgraded the artificial intelligence data services company’s shares to an underperform rating and cut the price target on them to $9.50. Macquarie has been speaking to industry participants and notes that there is an emerging trend which has seen some big tech companies look to bypass Appen and directly crowdsource for data annotation services.

Bapcor Ltd (ASX: BAP)

The Bapcor share price wasn’t far behind with an 18.3% decline over the period. Investors were selling the auto parts retailer’s shares after it announced the exit of its Chief Executive Officer and Managing Director, Darryl Abotomey. According to the release, Mr Abotomey is stepping down on 28 February 2022 after a decade leading the company. Ord Minnett downgraded its shares on the news. It appears concerned by the timing of the CEO’s exit.

TechnologyOne Ltd (ASX: TNE)

The TechnologyOne share price was out of form and tumbled 13.9% last week. The catalyst for this was the release of the enterprise software company’s full year results. For the 12 months ended 30 September, TechnologyOne delivered a 43% increase in SaaS ARR to $192.3 million and a 19% lift in profit before tax to $97.8 million. However, this wasn’t enough for both Macquarie and UBS. In response, both brokers downgraded TechnologyOne’s shares to sell ratings.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price was under pressure last week and fell 13.2% over the five days. Investors were selling this travel agent’s shares amid concerns over a new COVID-19 variant that has emerged in South Africa. This has sparked fears that the travel market recovery could be derailed just as it was starting to normalise.

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

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• Here are the top 10 ASX shares today
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• What is going so wrong for the Flight Centre (ASX:FLT) share price today?
• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Bapcor and Flight Centre Travel 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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There are a certain number of ASX dividend shares that are projected to pay large income payments to shareholders in FY22.

That’s based on what dividends those businesses could pay in the near future and the relatively low price/earnings ratio, allowing for an attractive dividend yield.

There are some industries that are known for their higher dividend payments. But others, such as retail, can often trade on a lower p/e ratio, which helps the yield for investors.

With that in mind, here are two ASX dividend shares:

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest furniture retailers in Australia. It recently got even bigger after announcing and completing the acquisition of Plush Sofas which has 46 showrooms.

It’s currently rated as a buy by the broker Citi with a price target of $16.80.

In FY23, the broker is expecting Nick Scali to pay an annual dividend of 68.3 cents per share, which translates into a grossed-up dividend yield of 6.6%.

Showroom growth is a key pillar of Nick Scali’s growth. In FY21 it opened three new stores and in the first quarter of FY22 it added another location in New Zealand, brining the total to 62 stores.

Management are also looking to grow the company’s digital channel and develop its capabilities, which comes with elevated profit margins.

The ASX dividend share is expecting to be able to lift Plush’s profit margins as it benefits from synergies. It’s expecting the acquisition to add to earnings per share (EPS) in FY22. Some of those synergies includes its supply chain, advertising, purchasing and management. Nick Scali reckons it can more than double the number of Plush stores in the long-term across Australia and New Zealand.

During the lockdowns, online sales order growth was “exceptional”  and October trading was “buoyant”.

According to Citi, the Nick Scali share price is valued at 16x FY23’s estimated earnings.

Adairs Ltd (ASX: ADH)

Adairs is another leading business in the retail space. It specialises in homewares and furnishings. However, it has growing exposure to furniture. The business has owned the online-only business Mocka for a while. But it has just announced the acquisition of Focus on Furniture as well, for $80 million.

The ASX dividend share is currently rated as a buy by the broker UBS with a price target of $5.90. That suggests a potential rise of the Adairs share price of more than 60% over the next 12 months, if the broker is correct.

The broker thinks there are a number of positives to the acquisition, including diversification of earnings, more exposure to customers, utilising its stores better and growing profit margins.

When Adairs told the market about the deal, it said that Focus was a strongly profitable business with growth opportunities including a national store roll out and online growth.

Management said that there is a complementary customer product overlap with opportunities to leverage strengths in store expansion, product development and last mile delivery capability.

Adairs says the Australian home furniture total addressable market is worth around $8.3 billion. It’s expecting double digit EPS accretion in FY23, the first full year of ownership, thanks to this acquisition.

The ASX dividend share still has its plan for Adairs to increase its total retail floor area with larger stores as well as growing online sales and its membership numbers.

UBS thinks Adairs could pay a grossed-up dividend yield of 11.7% in FY23. UBS numbers value the business at 9x FY23’s estimated earnings.

The post 2 ASX dividend shares expected to pay BIG income appeared first on The Motley Fool Australia.

More reading

• Could ASX 200 retail shares deliver some dividend surprises in 2022?
• Why Adairs, EML, Fisher & Paykel Healthcare, and NRW are storming higher
• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend
• Here’s why the Adairs (ASX:ADH) share price is rocketing 8% this morning
• Analysts rate these 2 ASX dividend shares as buys

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

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Woodside Petroleum Ltd (ASX: WPL) gave the green light for its mammoth new gas project in Western Australia on Monday.

The ASX 200 energy company reported that final investment decisions had been made to approve the US$12 billion (AU$16.8 billion) Scarborough and Pluto Train 2 developments. Woodside’s share of the cost, which includes new domestic gas facilities and modifications to Pluto Train 1, comes to US$6.9 billion.

On Monday, Woodside CEO Meg O’Neill said: “Today’s decisions set Woodside on a transformative path. Scarborough will be a significant contributor to Woodside’s cash flows, the funding of future developments and new energy products, and shareholder returns.”

The final decision came despite a last-minute legal challenge from environmental groups.

With the project moving forward, traditional owners have reached out to Woodside to discuss acquiring a stake in the project.

Securing the future for local traditional owners

As Reuters reports, Western Australian Indigenous group, the Murujuga Aboriginal Corp (MAC), is in discussions with Woodside over attaining a stake in the Scarborough and Pluto LNG expansion “to help secure the future of the local traditional owners”.

Woodside’s Pluto LNG plant is on Murujuga country on the Burrup Peninsula.

However, according to Reuters:

MAC and other traditional owners do not receive royalties from businesses in the Burrup as rights to part of their land were acquired in 2002 to create an industrial development area, leaving MAC instead with the title to Murujuga National Park next to the industrial land.

Commenting on MAC’s proposal to secure a stake in the Woodside expansion project, MAC’s CEO Peter Jeffries said:

This is an integral element for development on [Murujuga] country as it helps us find ways to work together, to keep us involved, and to help create long-term sustainability and stability for our members and future generations. We want to be strategically vested in any project on country.

Woodside’s O’Neil told Reuters: “I’m not going to talk about any specific conversations that we’re having with any TO [traditional owner] group. Suffice it to say that we’ve got very active engagements…”

How has the Woodside share price been performing?

The Woodside share price has struggled in 2021, down 6%. By comparison the S&P/ASX 200 Index (ASX: XJO) is up 9% year-to-date.

Over the past month shares in the energy giant are down 11%. They closed Friday’s session down 5.1% on the day to $21.60 apiece.

The post Traditional owners seek stake in $16.8bn Woodside Pluto project appeared first on The Motley Fool Australia.

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• These are the biggest opportunities on the ASX in 2022: fund manager
• 5 things to watch on the ASX 200 on Thursday
• Why Webjet, Whispir, Whitehaven Coal, and Woodside shares are pushing higher
• Biden taps oil reserve. What could this mean for ASX oil shares?

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 S&P/ASX 200 Index (ASX: XJO) is home to a large number of quality companies with the potential to generate strong returns for investors in the future.

Two that analysts are particularly positive on are listed below. Here’s why they are tipping them as buys right now:

Breville Group Ltd (ASX: BRG)

The first ASX 200 share to look at is Breville. is one of the world’s leading appliance manufacturers. As well as the eponymous Breville brand, it also has the Sage, Kambrook, and Baratza brands.

Breville has been growing at a consistently solid rate for the last decade and looks well-placed to continue this trend over the next decade. This is thanks to the popularity of its brands, its international expansion, acquisitions, favourable consumer trends, and its continued investment in R&D.

Macquarie is very positive on the company’s future and expects further strong growth in the coming years. Last week its analysts retained their outperform rating and $34.37 price target on the company’s shares. The broker notes that rival DeLonghi and one of Breville’s distributors in the US recently reported strong results. It feels this bodes well for Breville’s performance.

ResMed Inc. (ASX: RMD)

Another ASX 200 share that could be a top option is ResMed. It is a medical device company with a focus on the sleep treatment market.

Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a very strong rate over the last few years.

The good news is that thanks to its significant market opportunity, the growing prevalence of sleep disorders, and new product launches, it has been tipped to continue doing so for the foreseeable future. In addition, ResMed’s near term performance is being boosted by a major product recall from rival Philips.

Morgans is a fan of ResMed. Its analysts currently have an add rating and $40.80 price target on its shares. The broker believes ResMed is well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.

The post Analysts name 2 fantastic ASX 200 shares to buy appeared first on The Motley Fool Australia.

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• These ASX growth shares could be strong buys

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 ResMed Inc. 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 Electro Optic Systems Holding Ltd (ASX: EOS) share price has tumbled 26% over the last 30 days. Does that make the stock a buy?

Motley Fool Australia analyst Andrew Legget spoke with our chief investment officer Scott Phillips earlier this month to discuss whether the tech company is ripe for investors’ picking.

Interested readers can find their conversation in full here, on The Motley Fool Australia’s YouTube channel. Don’t forget, we post a new ‘Stock of the Week‘ video every Wednesday.

Right now, the Electro Optic share price is $2.51.

Here’s a breakdown of what Legget thinks of Electro Optic shares.

But first, what does Electro Optic do?

Electro Optic is a technology company working within the aerospace market.

Most of the company’s revenue comes from its defence division where it produces remotely controlled weapon systems, ancillary products, fire control systems, and sensor units.

It also has a communication department creating terrestrial and space communications technologies.

The company is also developing SpaceLink – a satellite relay solution.

Electro Optic is also working on other exciting up-and-coming technology within its areas of expertise.

The risks surrounding Electro Optic shares

There are some downsides to Electro Optic shares.

Firstly, as Legget notes, there will always be a level of obscurity surrounding its business. Perhaps understandably, many of its defence contracts include classified information and, therefore, investors must trust the company’s management team.

Additionally, due to geopolitical tensions, Electro Optic will likely be hemmed in to working with only a handful of countries.

Further, as Electro Optic has aligned itself with the United States, Australia, Canada, the United Kingdom, and New Zealand, Legget says it will largely be at the whim of “the big dog in that fight” – the United States.

Together with that sentiment, a drop in governments’ defence spending could prove dire for Electro Optic’s revenue streams.

Finally, the company’s fulfilment of orders was delayed by COVID-19. Thus, a backlog of orders has been hindering its short-term performance. Legget commented:

I don’t think [the backlog is] going to be a long-term issue but, again, it just shows when you’re dealing with a concentrated customer base, when something goes wrong, even if it’s not your fault, it’s going to impact your results.

Is it a buy?

Still, Legget believes Electro Optic shares will be market beaters in the long term.

He says he likes how the company found niches that allowed it a jump start on other companies working in the defence sector.

Electro Optic has also built strong relationships with weapons manufacturers. As a result, it can make sure its products work with other industry offerings.

The company has also grown significantly over the past few years. Legget noted that in 2015, it was generating about $30 million in revenue. But, come 2020, it brought in $180 million.

Electro Optic also currently has an order backlog worth around $397 million. Legget went further to say:

[Electro Optic] do this thing where they risk weight all the potential opportunities based on their likelihood of winning the contract… that risk-weighted figure of potential pipeline in the future, that adds up to $3.1 billion at the moment. So, this is showing that there’s a huge potential market out there which, if it can keep operating as it has, could mean that this company still has a lot of growth ahead of it…

[Electro Optic] is, I think, one of the most innovative businesses on the ASX. It’s operating in a market where there’s a lot of high barriers to entry and it already has an entrenched place in that market. Now, it’s also targeting some really exciting opportunities in the year ahead which, if it can continue executing like it has in the past, means that [the opportunities] should, hopefully, become very lucrative businesses in their own right, and if they do, then I think it’s worth significantly more than what it’s worth right now.

The opinions expressed in this article were as at November 2021 and may change over time.

The post The Electro Optic (ASX: EOS) share price is having a shocker of a month. Is it now a buy? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings 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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Today, the S&P/ASX 200 Index (ASX: XJO) decided to end the week in a destructive fashion. At the end of the session, the benchmark index had tumbled 1.73% to 7,279.3 points.

It was a dismal day across the board for ASX shares today. Not a single sector could manage a positive performance. Though the pain was felt most deeply by shares in the energy sector, with a few of the biggest oil and gas companies all falling ~5%.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Today, the list is small to pull from. Only 17 companies out of the 200 in the index moved higher. Without further ado, here are the ten stocks that pulled through:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Zimplats Holdings Ltd (ASX: ZIM) was the biggest gainer today. Shares in the platinum group metals miner gained 3.50% today. This was despite there being no new announcements from the company today. Find out more about Zimplats here.

The next biggest gaining ASX share today was Evolution Mining Ltd (ASX: EVN). The gold mining company climbed 1.72%% to $4.13 on the back of rising gold prices. Uncover the latest Evolution Mining details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Zimplats Holdings Ltd (ASX: ZIM)	$22.19	3.50%
Evolution Mining Ltd (ASX: EVN)	$4.13	1.72%
Home Consortium (ASX: HMC)	$7.66	1.06%
Newcrest Mining Ltd (ASX: NCM)	$24.31	1.00%
Chalice Mining Ltd (ASX: CHN)	$9.495	0.69%
Cromwell Property Group (ASX: CMW)	$0.87	0.58%
Latitude Group Holdings Ltd (ASX: LFS)	$2.03	0.50%
Ausnet Services Ltd (ASX: AST)	$2.55	0.39%
Magellan Global Fund (ASX: MGOC)	$2.84	0.35%
Sonic Healthcare Ltd (ASX: SHL)	$41.64	0.29%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Mitchell Lawler owns shares of Sonic Healthcare 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 Sonic Healthcare 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 Jumbo Interactive Ltd (ASX: JIN) share price has been gradually ascending throughout 2021.

However, the online lottery operator is still nearly 40% below its all-time high. This milestone was set back in October 2019 when shares reached $27 apiece. Soon after this, a reversal in the company’s share price saw it plummet to $8.35 in the space of 5 months.

Now, having reclaimed nearly half of its fall, is the Jumbo Interactive share price a buy?

What’s to like about the Jumbo Interactive share price?

While the Jumbo share price might be lower than where it was in 2019, the lottery operator’s revenue certainly isn’t. For the year ending 30 June 2019, the company reported revenue of $65.2 million. Two years on and Jumbo has grown that amount to $83.3 million.

This amount could be set to increase with one fund manager expecting a change to the Oz Lottery to result in bigger jackpots. As Arden Jennings from Ausbil Investment Management points out, Jumbo holds a leveraged exposure to bigger jackpots.

Furthermore, the company’s efforts to expand internationally in recent years have placed it into the UK and Canadian lottery markets. Jennings is eager to see Jumbo dip its toes into the United States market in the next year or two with a US state lottery acquisition. At the end of June, the company held $63.1 million in cash and cash equivalents on its books.

Jennings is not the only one finding the ASX lottery provider an appealing proposition at the moment. In addition, the team behind Wavestone Capital has picked Jumbo as its entry into the “The Golden Bull” stock picking competition for 2022.

The Sydney-based fund manager likes the potential in the Jumbo Interactive share price now that it has resigned its licensing. From here, the investing team thinks the company will be able to retain its newly acquired customers and beat earnings expectations.

Shares in the company have rewarded investors, returning 22% so far this year.

The post The Jumbo Interactive (ASX:JIN) share price is still almost 40% lower than its all-time high. Is it a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive 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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Some experts are warning that ASX shares have rallied beyond logic and that returns in 2022 will be relatively dismal.

Cheap money from loose monetary policy and quantitative easing (QE) have pushed global asset prices to irrational levels.

That’s the view of global fund manager Schroders, according to the Australian Financial Review.

ASX shares gone wild

“All of this liquidity is starting to drive up prices, housing markets have boomed everywhere, and stockmarkets have gone crazy,” the AFR quoted Martin Conlon, head of Australian equities for Schroders.

“[This is] not exactly what you think would happen when we have just come out of a pandemic with decimated economies.”

“A lot of areas of the stockmarket have degenerated into gambling now…. There are plenty of danger signs that would suggest that we are absolutely in a bubble market now.”

Poor returns in 2022 for ASX shares?

The concern about the overvaluation of ASX shares and the waning monetary tailwinds have prompted JPMorgan to warn investors to expect paltry returns in the new year.

The broker is forecasting returns of just 4% in 2022 for a typical portfolio that consists of 60% ASX shares and 40% bonds, reported the AFR.

It’s shares that will be doing the heavy lifting as JPMorgan is expecting this asset class to deliver 5% returns. This is significantly below the 8% average return on the S&P/ASX 200 Index (Index:^AXJO) over the last 10 years.

Tailwinds turning into headwinds

Central banks around the world, including ours, have pared their QE programs. This is where central banks purchase select assets, like government bonds, from the secondary market.

The purchases keep bond yields (and borrowing costs) down and pump trillions of dollars through the global financial system.

Record low interest rates added fuel to the fire. You only need to look at record breaking surge in Australian residential prices to see the effects of low rates and QE.

But interest rates are moving higher and this tailwind will soon turn into a headwind for ASX shares.

Where to get better returns

JPMorgan believes investors will have to look outside of traditional asset classes to get better returns.

These include investing in real assets, such as infrastructure and transport. This means instead of buying ASX shares like Qube Holdings Ltd (QUB) or Transurban Group (ASX: TCL), they should invest directly in a port or a toll road.

Of course, most retail investors won’t be able to do this directly themselves. They will need to invest via a fund – not that I am accusing JPMorgan of talking up their own book.

The post Have ASX shares “gone crazy”? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Friday
• Here’s why the Webjet (ASX:WEB) share price is getting hammered on Friday
• ANZ (ASX:ANZ) share price shrugs off ASIC lawsuit
• 5 things to watch on the ASX 200 on Friday
• 2 high quality ASX shares for a retirement portfolio

Motley Fool contributor Brendon Lau 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 Macquarie Group Ltd (ASX: MQG) share price finished the day in the red on Friday.

At the closing bell, shares in one of Australia’s largest financial institutions were down 3.22% to $195.28. The weakness follows reports shared by ABC News that Macquarie has found itself at the heart of an investigation into an $80 billion scandal.

However, Macquarie is not alone in the hot water, being one of 100 banks and financial institutions under the microscope. The scandal stems from a German tax loophole believed to have been exploited between 2001 and 2012.

What is the German tax scandal?

On Friday, the Macquarie share price fell as the tax scandal deepened. The scheme that has been dubbed the “biggest bank scandal in history” essentially involved the double-dipping of a tax refund. To do this, financial institutions engaged in rapid trading of shares in the European Union.

In short, to tax authorities, it appeared as though there were two simultaneous owners of the shares with and without dividend rights. Even foreign investors were able to claim tax reimbursements on shares that weren’t actually owned by them.

Macquarie’s involvement involves the lending of money to carry out an increased volume of such trades. In October 2010, the board of Macquarie convened to discuss a proposal to provide hundreds of millions to overseas funds. In return, the investment bank would receive up to $30 million for each lending agreement.

Despite the company’s legal team giving it the go-ahead, there was a sense of haziness around the legalities of the trades. For instance, a memo to the board for deliberation read:

The risk of reputational damage remains should the German authorities take action against the funds. lt is difficult to quantify the reputational risk associated with this transaction and we suggest [the Executive Committee] weigh this against the anticipated returns.

A blow to the Macquarie share price

Today’s revelation involves new documents found through a joint investigation between the ABC and German news outlet, Correctiv.

These documents indicate that Macquarie engaged in the German tax scheme, overlooking the risks it was presented with of reputational damage and legal issues.

For example, an email detailing the risk of transactions being classed as tax fraud was received by current CEO Shamara Wikramanayake. After forwarding to colleagues, the concerns were dismissed. Soon after the board approved the proposal to fund such trades.

It is believed Macquarie has since paid back roughly $150 million. The loophole was removed by the German government in 2012.

A Macquarie spokeswoman issued a statement to the ABC saying the bank continued to “cooperate constructively with German authorities”. However, it was “unable to comment further”.

For shareholders, the concern may lay in what the total costs could amount to with the investigation ongoing. Ironically, earlier this week the Macquarie share price had pipped another ASX bank to become one of the big four.

The post Macquarie (ASX:MQG) share price dips amid leaked emails surrounding German tax scandal appeared first on The Motley Fool Australia.

More reading

• Own ANZ (ASX:ANZ) shares? Here’s how the bank just got booted out of the big four
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Motley Fool contributor Mitchell Lawler 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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The Boral Ltd (ASX: BLD) share price has dropped into the red these last few weeks. At the time of writing, shares in the construction materials supplier are down around 2.8% since the start of November. They are now trading at $6.23 apiece.

For comparison, the benchmark S&P/ASX 200 index (ASX: XJO) has lost 1.27% over the same timeframe.

Let’s take a look a what’s been weighing the Boral share price down lately.

Sentiment is low right now

Analysts at several investment firms aren’t too rosy on the outlook for the Boral share price. For instance JP Morgan thinks earnings for Boral’s local construction materials business are at “trough” levels.

It also questioned if management can deliver on its $200 million – $250 million transformation programme in Australia. The firm also notes Boral’s language on an approximate $16 million hit from enforced lockdowns in July.

JP Morgan is also uncertain if Boral can recover lost volumes from these enforced lockdowns, given this is expected to have a drag of around $50 million in Q1.

Fellow investment bank UBS believes Boral might face challenges regaining its core margins until there is a rebound in the NSW housing market.

UBS also notes Boral has made several divestments of late, saying growth of its underlying business might suffer as a result of the slimmer operations.

Jefferies feels the same way and reckons Boral needs to do a double-check on its debt portfolio. The firm notes Boral has US$1.25 billion in debt across 8 US senior notes, with expiries ranging from November 2022 to November 2030.

Don’t forget Boral has to pay the 3% to 4.58% coupon (interest) on these bonds on each date over the next 8 years when the payments fall due.

Linking to what UBS said, Jefferies notes there will likely be no hedge against this debt, given Boral will likely make the full exit from North America.

None of this suggests good news for the Boral share price. However, the broad sector is behind as well. Just as Boral has copped it, it’s also been a bumpy ride these past 3 months for the S&P/ASX 200 Materials Index (ASX: XMJ).

The index has fallen by 14% since mid-August, although it has been recovering somewhat in recent weeks. Nonetheless, this performance indicates that investors aren’t exactly diving into the sector either.

Boral share price snapshot

Despite the headwinds this past month, over the past year Boral shares have returned around 22%. The Boral share price has also gained 26% this year to date.

This is ahead of the benchmark index’s return of around 10% in the last 12 months.

The post Why is the Boral (ASX:BLD) share price having such a lousy month? appeared first on The Motley Fool Australia.

More reading

• Why are these top brokers bearish on the Boral (ASX:BLD) share price?
• Top brokers name 3 ASX shares to sell next week
• Why UBS just downgraded its rating on Boral (ASX:BLD) shares
• Here are the top 10 ASX shares today
• Why is the Boral (ASX:BLD) share price climbing today?

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

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