Tag: Motley Fool

Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Goodman Group (ASX: GMG)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this integrated property company’s shares to $26.45. This follows the release of Goodman’s first quarter update, which revealed an increase in its FY 2022 operating earnings guidance to 15% from 10%. Macquarie remains confident its strong form can continue thanks to structural tailwinds and its development pipeline. The Goodman share price is trading at $23.74 today.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgans reveals that its analysts have retained their add rating but cut their price target on this insurance giant’s shares to $5.35. Morgans has downgraded its earnings estimates to reflect higher than expected claims costs. While this is disappointing, the broker remains positive on IAG due to premium increases and its attractive valuation. The IAG share price is fetching $4.43 on Wednesday.

Westpac Banking Corp (ASX: WBC)

Analysts at Citi have retained their buy rating but trimmed their price target on this big four bank’s shares to $27.50. This follows the release of the bank’s full year results for FY 2021. While the broker was disappointed with Westpac’s weaker than expected net interest margin (NIM) and higher than expected costs, it remains positive on the investment opportunity here. Citi feels that Westpac’s shares are cheap at the current level. The Westpac share price is trading at $23.29 this afternoon.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why is the Goodman Group (ASX:GMG) share price up 9% so far this week?
• What these leading brokers are saying about the Westpac (ASX:WBC) share price
• Here are the top 10 ASX shares today
• Westpac (ASX:WBC)’s had a shocker: This is when to buy
• Here are the 3 most heavily traded ASX 200 shares so far on 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 owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 1% to 7,398.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are surging higher:

AMP Ltd (ASX: AMP)

The AMP share price is up 8% to $1.16. Investors have been buying this financial services company’s shares after it announced the divestment of its 19.13% equity interest in Resolution Life Australasia (RLA). AMP is selling the stake to Resolution Life Group for $524 million. Doing so completes its exit from its former life insurance and mature business, AMP Life, and provides further flexibility ahead of its planned demerger of AMP Capital’s Private Markets business.

Eclipx Group Ltd (ASX: ECX)

The Eclipx share price is up 3.5% to $2.52 following the release of its full year results. In FY 2021, the salary packaging and fleet management company delivered a 3.9% decline in revenue to $648.06 million but a 156% jump in cash earnings to $86.15 million. The latter was driven by strong end-of-lease income and margin expansion.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price has jumped 26% to $2.59. Investors have been fighting to get hold of the biopharmaceutical company’s shares after the US FDA approved its investigational new drug (IND) application to proceed with a phase 3 trial. That trial aims to evaluate injectable pentosan polysulfate sodium (PPS/Zilosul) for the treatment of pain associated with knee osteoarthritis.

Praemium Ltd (ASX: PPS)

The Praemium share price has jumped 10% to $1.57. This follows speculation that this investment platform provider could soon receive another takeover approach. On Tuesday, Praemium received a $1.50 per share merger offer from Netwealth Group Ltd (ASX: NWL). However, the Praemium Board rejected the offer, believing it undervalued the company.

The post Why AMP, Eclipx, Paradigm, and Praemium shares are surging higher appeared first on The Motley Fool Australia.

More reading

• Eclipx (ASX:ECX) share price leaps on 156% increase in cash profits
• AMP (ASX:AMP) share price leaps 9% on life insurance sale
• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps
• Paradigm (ASX:PAR) share price shoots 30% higher on FDA update
• AMP (ASX:AMP) share price on watch following $500m divestment

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

from The Motley Fool Australia https://ift.tt/3q2fK9u

Shares in Australian gold miner Predictive Discovery Limited (ASX: PDI) are lifting today to now change hands 8% higher at 20 cents apiece.

Predictive Discovery shares have been on the move following a company announcement on its Bankan Gold Project in Guinea.

Here are the details.

What was announced?

Predictive advised that it has extended the high-grade zone of its gold resource “50 metres below the US$1,800/oz optimised mineral resource pit shell” at its Bankan project.

The Bankan project is located in northeast Guinea, in West Africa. It covers 356 square kilometres in area across four permit zones.

One of the permits is a joint venture with local company Argo Mining SARLU, while the other three are wholly owned by Predictive Discovery and/or its subsidiaries.

It was back in September that the company announced its mineral resource estimate, “all for a very low resource discovery cost of $4/oz” at the site.

Now, in only 17 months since inception, the company has completed more than 53,000 metres of RC and diamond drilling on the Bankan project.

From today, the announcement notes that diamond drilling is ongoing at the Bankan site with “two multipurpose drill rigs currently drilling holes at depts between 80 metres and 130 metres below [the pit shell]”.

The extension drilling of the high-grade zone continues to potentially add to the company’s maiden inferred resource of 72.8 million tonnes, averaging 1.56g/t Au for 3.65 million ounces of gold.

This comes as “more than 90% of the Bankan project [remains] untested by any drilling”.

Speaking on the announcement, Predictive Discovery managing director Paul Roberts said:

These new results have confirmed the Company’s belief that, as the shear zone is intercepted below the optimised Resource pit shell, the high-grade mineralised zone continues to depth. With every new high-grade intersection below the existing open pit shell, the underground potential becomes clearer. NE Bankan shares the best qualities of tier-1 deposits, namely outstanding grades and widths combined with excellent mineralisation continuity.

What’s next for Predictive Discovery?

Diamond drilling is ongoing at the site with two multipurpose rigs currently in place. Both rigs are now drilling holes between 450 metres to 500 metres below the Earth’s surface to explore for deeper extensions to the gold zone.

Results are still pending from more diamond drilled holes beneath the pit shell described earlier.

The company reckons this has the potential to extend the high-grade gold zone further, according to the announcement.

Predictive Discovery share price snapshot

It’s been a year of outsized returns for the Predictive Discovery share price, having climbed 233% in the last 12 months after rallying 227% this year to date.

Despite this, it has fallen 9% into the red in the past month but is still well ahead of the S&P/ASX 200 Index (ASX: XJO)’s gain of around 22% in the last year.

The post Predictive Discovery (ASX:PDI) launches 8% on gold update appeared first on The Motley Fool Australia.

More reading

• Predictive Discovery (ASX:PDI) share price leaps 15% following sell-off
• Why Ansell, Predictive Discovery, Strike Energy, & Zip shares are sinking
• Why the Predictive Discovery (ASX:PDI) share price is crashing 34% today
• Why the Predictive Discovery (ASX:PDI) share price is in a trading halt
• Why is the Predictive Discovery (ASX:PDI) share price falling 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.

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

Over the past month, the S&P/ASX 200 Index (ASX: XJO) has given investors a reasonably solid performance. Since market open on 4 October, the ASX 200 has gained a robust 3%. But one ASX exchange-traded fund (ETF) has done a few better. The BetaShares Global Cybersecurity ETF (ASX: HACK) has managed to add more than 7% to its value over the same period.

Yes, since 4 October, the HACK ETF has put on an impressive 7.27%, including the healthy 1.5% it’s managed today so far. That’s almost triple the broader market.

So what’s gone so right for this ASX ETF?

Why has the BetaShares Global Cybersecurity ETF HACKed such a good month?

Well, to answer that question, let’s check out this ETF’s top holdings. So the BetaShares Cybersecurity ETF tracks the performance of the Nasdaq Consumer Technology Association Cybersecurity Index. This aims to provide “exposure to the leading companies in the global cybersecurity sector.”

So let’s check out which companies this ETF’s portfolio is currently most heavily invested in, as of 2 November:

1. Palo Alto Networks Inc (NYSE: PANW) with a portfolio weighting of 6.3%
2. Accenture plc (NYSE: ACN) with a weighting of 6.1%
3. Cisco Systems Inc (NASDAQ: CSCO) with a weighting of 5.6%
4. Okta Inc (NASDAQ: OKTA) with a weighting of 5.5%
5. Crowdstrike Holdings Inc (NASDAQ: CRWD) with a weighting of 5.4%
6. Cloudflare Inc (NYSE: NET) with a weighting of 4.5%
7. Tenable Holdings Inc (NASDAQ: TENB) with a weighting of 3.4%
8. Zscaler Inc (NASDAQ: ZS) with a weighting of 3.3%
9. F5 Networks Inc (NASDAQ: FFIV) with a weighting of 3.1%
10. Cyberark Software Ltd (NASDAQ: CYBR) with a weighting of 3.1%

So the shares with the most weighting (and thus influence) in the HACK ETF are Palo Alto, Accenture, Cisco, Okta and Crowdstrike. Together, these companies make up 28.9% of this ETF’s portfolio. So let’s see how they’ve performed over the past month.

Since 4 October, Palo Alto shares are up a healthy 8.3%.

Accenture shares are up 13.15%.

Cisco has enjoyed gains of 6.25%.

Okta is up 12.8%.

And Crowdstrike has managed 12.2% in gains.

So with the top shelf of HACK’s portfolio enjoying such a successful month, it’s perhaps no surprise that this ETF’s pricing has commensurately appreciated.

But investors in this ETF might be used to outperformance by now. Since its inception in August 2016, the HACK ETF has averaged an annual gain of 22.47%. Over the past year alone, investors have enjoyed a gain of 39.26%.

The BetaShares Global Cybersecurity ETF charges a management fee of 0.67% per annum.

The post Why has the BetaShares Global Cybersecurity ETF (ASX:HACK) share price leapt 7% in a month? appeared first on The Motley Fool Australia.

More reading

• Why did the Zip (ASX:Z1P) share price have such a lousy month in October?
• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps
• Why is the Northern Star (ASX:NST) share price having such a lousy week?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen owns shares of Cloudflare, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS, Cloudflare, Inc., and CrowdStrike Holdings, Inc. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3CFm4an

The AVZ Minerals Ltd (ASX: AVZ) share price is marching higher again today. The ASX lithium share is up 3.66% in early afternoon trade, to 42.5 cents per share.

That puts the AVZ Minerals share price up 21% since the closing bell last Wednesday, 27 October.

Below we look at what helped drive shares higher over the week.

Booming lithium demand and project upgrades

The AVZ Minerals share price is subject to many forces.

One of the likely tailwinds the ASX lithium explorer has enjoyed is the booming demand and growth outlook for lithium.

As The Motley Fool reported last week, Tesla Inc (NASDAQ: TSLA) leapt past the psychologically important US$1 trillion market capitalisation milestone. That followed global car rental company Hertz announcing its plans to purchase 100,000 Teslas.

That news likely stirred investor bullishness on the outlook for lithium shares, with many ASX and globally-listed lithium explorers posting solid gains. The AVZ Minerals share price closed up 5.8% on 28 October.

The AVZ share price really got a boost this Monday. This followed the afternoon release of the company’s quarterly report on Friday, with its shares finishing Monday up 11.3%.

Among the highlights of the quarter, AVZ signed Suzhou CATH Energy Technologies as a cornerstone investor to develop its Manono Lithium and Tin Project, located in the Democratic Republic of Congo.

Commenting on the partnership AVZ managing director, Nigel Ferguson said:

The cornerstone investor deal with CATH marked one of the most significant days in our company’s short history and clearly indicated to the world how important our Manono Lithium and Tin Project is…

The deal with CATH will fund a significant portion of the total required project financing, whilst AVZ maintains a controlling 51% interest in the Manono Project and our position as lead developer. The deal also provides significant opportunities to advance other downstream projects, providing an exciting future for AVZ shareholders.

AVZ Minerals also completed a $40 million capital raising and upgraded its Manono JORC Proved and Probable Ore Reserves Estimate to 131.7 million tonnes. That was up 41.6% from what was reported in the definitive feasibility study (DFS) in April 2020.

AVZ Minerals share price snapshot

Over the past 12 months, the AVZ Minerals share price has left the All Ordinaries Index (ASX: XAO) in the dust. Over the full year, AVZ Minerals shares are up a whopping 490% compared to a gain of 23% posted by the All Ords.

AVZ Minerals has continued to outperform, with its share price up 26% since this time last month.

The post How has the AVZ Minerals (ASX:AVZ) share price leapt 21% in a week? appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares are surging higher on Tuesday
• Why ASX lithium shares are booming on Thursday
• How did ASX lithium shares perform in the FY22 first quarter?

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

from The Motley Fool Australia https://ift.tt/3jX9Pyn

It certainly was an eventful month for the A2 Milk Company Ltd (ASX: A2M) share price in October.

The embattled infant formula company’s shares ended the month one cent higher than where they started it at $6.25. However, that is only part of the story.

What happened to the A2 Milk share price in October?

The A2 Milk share price certainly was on a rollercoaster ride last month.

It was down as much as 7% month to date, then stormed higher to be up as much as 19% for the month, before ending the period broadly flat.

Investors were bidding the A2 Milk share price higher in the middle of October following the release of an update out of junior infant formula company Bubs Australia Ltd (ASX: BUB).

Like A2 Milk, Bubs has been struggling in recent quarters. This was due to disruption in the daigou channel, the increasing popularity of domestic infant formula brands in China, and subdued demand.

However, the company returned to form during the first quarter of FY 2022, reporting a strong increase in sales (albeit from a small base). The majority of Bubs’ growth came from channels relating to the China market. This sparked hopes that the worst was now behind A2 Milk.

However, the A2 Milk share price quickly gave back those gains following the release of its investor update late on in the month.

What was the update?

A2 Milk’s investor update laid out its expectations for the coming years. And as you may have guessed from the A2 Milk share price reaction, the next few years are not going to be as positive as many were hoping.

The company has set itself a medium term (≥ 5 years) target of growing its sales to NZ$2 billion. While this is a big increase on FY 2021’s COVID-impacted sales of NZ$1.2 billion, it is only a modest increase on FY 2020’s pre-COVID sales of NZ$1.73 billion.

In addition, management revealed that its EBITDA margins will “probably” be in the teens in the medium term due to expected market conditions, investments, and innovation. This is significantly weaker than FY 2020’s EBITDA margin of 31.7%.

Management also warned that there was still some uncertainty with these growth targets. It said that “because of these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear.”

Where next for A2 Milk shares?

Opinion is largely divided on where the A2 Milk share price will go from here.

The bulls at Bell Potter have a buy rating and $7.70 price target on its shares, whereas the bears at Macquarie have an underperform rating and $5.20 price target. This compares to the current A2 Milk share price of $6.26.

Time will tell which broker makes the right call.

The post October was a rollercoaster month for the A2 Milk (ASX:A2M) share price appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Top brokers name 3 ASX shares to sell today
• Is the A2 Milk (ASX:A2M) share price a buy after the selloff?
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Why A2 Milk, Codan, EOS, and Woolworths shares are sinking

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 A2 Milk and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

Shares in Australian investment bank Macquarie Group Ltd (ASX: MQG) have eclipsed the $200 per share barrier once more in early trade. They are currently up 2.62% from the open at $200.77 after reaching $201.50 earlier in the session.

The milestone marks the second move beyond the prestigious $200 per share mark, after the bank first hit the target late last month.

While there’s been no market sensitive information out of Macquarie’s camp today, here we uncover what’s been keeping its share price so top-heavy lately and what the experts are saying about it.

What’s up with the Macquarie Bank share price lately?

Macquarie advised it had successfully completed an equity raise of $1.5 billion via an institutional placement on Monday.

The funds are said to strengthen the bank’s balance sheet while offering additional flexibility to invest in new opportunities as they arise.

Shares were offered to institutional investors at $194 per new share, a 3.3% discount from the company’s current share price.

A share purchase plan (SPP) is set to follow the institutional placement, allowing existing shareholders to apply for an additional $30,000 of Macquarie shares.

Aside from this, the bank also released its interim report for the first half of FY22 where it recognised a robust performance.

For instance, it grew its first half net profit by 104% to $2.04 billion and expanded its assets under management (AUM) by 31% to $737 million.

This enabled the board to announce a partially franked interim dividend of $2.72 per share, an increase of 101% from the previous year’s interim dividend of $1.35 per share.

On this performance, analysts at leading investment bank JP Morgan have since chimed in with their opinion, also offering their outlook on the Macquarie share price.

Why is JP Morgan bullish on Macquarie shares?

The team at JP Morgan were impressed by the bank’s preliminary results, particularly with the performance of its Commodities and Global Markets (GCM) segment.

This was the ‘standout feature’ for the broker, given the segment delivered a 60% year on year growth in net profit after tax (NPAT) contribution.

As commodity markets continue to run hot, alongside Macquarie’s active portfolio management style, the broker expects the bank to continue growing over the coming periods.

This bodes in well for the company’s share price, according to the broker.

Specifically, JP Morgan expects Macquarie to achieve approximately 18% NPAT growth in FY22, calling for $3.56 billion at the bottom line for the bank this financial year.

Looking further ahead, it sees Macqaurie’s “annuity divisions driving strong medium-term growth, with MAM well placed to benefit from structural demand for alternative asset classes”.

It also reckons that Macquarie Investment Management (MIM) is poised to benefit from the Waddell & Reed acquisition.

At the same time, it believes the bank’s Banking & Financial Services (BFS) division has “potential to double the size of the Australian mortgage book over the next three to four years”.

Finally, the broker reckons that growth should be “well supported by the significant capital into all operating divisions that occurred in 2HFY21”.

Not only that, it forecasts a return on equity (ROE) of 15-16% in years FY22-24, meaning the bank’s “valuation looks attractive”, according to the note.

As such, it has a price target of $207 on Macquarie shares, implying an upside potential of more than $6 a share on the current market price.

Macquarie shares have climbed almost 54% in the last 12 months after rallying 45% this year to date.

The post Here’s why JP Morgan sees more growth in Macquarie (ASX:MQG) shares appeared first on The Motley Fool Australia.

More reading

• Could the Xero (ASX:XRO) share price be a quality buy?
• Which ASX bank shares were the best performers during October?
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Westpac sinks, Macquarie raises $1.5bn
• Can the Macquarie (ASX:MQG) share price break new highs over $200?

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 owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

The Eclipx Group Ltd (ASX: ECX) share price is flying out of the gates on Wednesday. The strong price appreciation comes after the fleet management and salary packaging company reported its full-year results for FY21.

At the time of writing, the company’s shares are 4.1% higher to $2.54. However, more impressively, Eclipx shares reached an intraday high of $2.72 (an 11.5% jump) soon after the commencement of trade today. It appears the initial enthusiasm has partially tempered as investors absorb the information.

Let’s inspect the full-year results for ourselves and see what kind of year it was for Eclipx.

A strong year lifts the Eclipx share price

• Revenue from operations down 3.9% year on year to $648.06 million
• Like-for-like earnings before interest, tax, depreciation, and amortisation (EBITDA) up 63% to $143.4 million
• New business writings increased 2% to $644 million
• Cash net profit after tax and amortisation surged 156.3% year on year to $86.15 million
• Net corporate debt decreased 80% compared to FY20 to $20 million
• Existing share buyback of $40 million extended to $56 million

What happened during the financial year?

Despite supply constraints on new vehicles, Eclipx managed to deliver a full year of growth in many regards. The company’s profitability during the period is eye-catching, to say the least.

An impressive 156.3% increase in cash earnings during the year was thanks to a combination of factors. Firstly, margin expansion on its revenue resulted in Eclipx realising an increased EBITDA. Strong end-of-lease income was experienced due to elevated profits per unit.

Secondly, the company took a disciplined approach to its capital in FY21. By reducing its property footprint, Eclipx lowered its depreciation costs. Likewise, a substantial slashing in corporate debt – from $99 million to $20 million – reduced interest payments.

Accounting for these adjustments, the fleet management company booked $86.1 million in cash profits. This achievement is significant considering its earnings had not previously surpassed $63 million since listing in 2015. Such a milestone could explain the improved sentiment for the Eclipx share price today.

As a result, management has decided to reward shareholders with its record earnings. The $40 million buyback program currently running will be increased to $56 million, reflecting 65% of FY21 net profit after tax and amortisation.

During the period, Eclipx booked $644 million in new business writings (NBW) and orders. While the second half experienced a lift in NBW, the company is yet to return to pre-COVID-19 levels.

What is the outlook?

The company noted it expects a continuation in the constrained supply for new vehicles. Admittedly, this would also constrain Eclipx’s NBW.

However, the group is positive about the future, boasting a strong order pipeline and recent tender wins.

The Eclipx share price is up 38.2% year to date. Based on the cash earnings of FY21, the company is now trading on a price-to-earnings (P/E) ratio of ~9.4 times.

The post Eclipx (ASX:ECX) share price leaps on 156% increase in cash profits appeared first on The Motley Fool Australia.

More reading

• Why is the Goodman Group (ASX:GMG) share price up 9% so far this week?
• Why did the Zip (ASX:Z1P) share price have such a lousy month in October?
• Why did the Bitcoin (CRYPTO:BTC) price have such a great month in October?
• AMP (ASX:AMP) share price leaps 9% on life insurance sale
• Here’s why the FBR (ASX:FBR) share price is leaping 25% 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. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

The Goodman Group (ASX: GMG) share price is up another 2% today, meaning its shares have risen by 9% this week already.

Goodman is a global property group. It owns, develops and manages industrial real estate including logistics and industrial facilities, warehouses and business parks.

Yesterday, the real estate business released its quarterly update for the first three months of FY22.

Quarterly update

Goodman said that its first quarter was the result of the deliberate positioning of its portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high-quality properties close to consumers has never been greater, according to Goodman.

The business is experiencing rental growth, increased development activity, stronger than expected performance from its partnerships and generally higher levels of profitability, leading to upgraded earnings guidance for FY22.

Goodman outlined some of the key highlights from the quarter. Its total assets under development (AUM) increased from $57.9 billion to $62 billion over the three months. That growth was driven by “strong” revaluation gains, development completions and net acquisitions. AUM growth can help the Goodman share price.

It also saw 3.2% of like for like net property income (NPI) growth in its managed partnerships. Goodman said that underlying property fundamentals remain strong globally. Management stated that the growth in demand is driving higher utilisation of space as customers seek to improve their supply chains. The occupancy rate remained “high” at 98.4% with the portfolio having a weighted average lease expiry (WALE) of 4.7 years.

Goodman continues to have a large pipeline of work. It had $12.7 billion of development work in progress (WIP).

All of the above highlights allowed the business to increase its earnings guidance for FY22 with operating earnings per share (EPS) now expected to grow by more than 15%.

What is driving the demand for Goodman properties?

Goodman said that the significant level of customer demand, combined with supply restrictions in its markets, is creating a significant shortage of available space. It’s executing on its strategy, focusing on infill markets to deliver sustainable opportunities for customers and investors, while securing cashflow growth for the long-term.

This could continue to be influential for the Goodman share price.

Greg Goodman, the CEO of Goodman Group, said:

High utilisation of space, barriers to entry and limited supply in our markets are underpinning occupancy and cash flow growth in our portfolio, with strong rental growth occurring globally. We remain focused on regeneration of existing land and buildings in our portfolio, supporting future development work and reducing our impact on the environment.

Goodman says that it’s well positioned financially, with significant liquidity and low gearing. It has the ability to grow development activity and pursue select investment opportunities.

It’s expecting AUM to continue growing to around $70 billion by June 2022.

Goodman noted that COVID-related disruptions in FY22 have been managed in such a way that they have had less impact on the full year projections than it had initially assumed. This combines with the strength of its development projects, leasing success and stronger-than-expected performance from its partnerships.

The broker Credit Suisse thinks that the Goodman share price is a buy, with a price target of $25.01, which thinks FY22 could be might even better than expected.

The post Why is the Goodman Group (ASX:GMG) share price up 9% so far this week? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Real estate shares are leading the ASX 200 on Tuesday
• Why Goodman, Praemium, Step One, and Telix shares are charging higher
• ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks
• Goodman (ASX:GMG) share price storms 5% higher on earnings guidance upgrade

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

from The Motley Fool Australia https://ift.tt/3wc78Ok

As it turns out, not too many ASX shares enjoyed a great month over October. The broad S&P/ASX 200 Index (ASX: XJO) went backwards by around 0.1% over the month just gone, with ASX resources and banking shares dragging on the ASX 200. One ASX 200 share that was particularly disappointing for investors though was the Zip Co Ltd (ASX: Z1P) share price.

Zip shares certainly had a month to forget. This buy now, pay later (BNPL) share started October at a price of $7.06 a share. But it ended up finishing the month at just $6.50 last Friday. That’s a slide of 7.93%. Ouch.

So what went so wrong for Zip over October?

Zip share price falls despite record quarterly update

Well, the centrepiece of Zip’s month was the first quarter update the company posted on 18 October. In this update, Zip told the markets that it managed to bring in a record quarterly revenue of $126.8 million, up 89% year on year. It’s quarterly transaction volume also broke records, coming in at $1.9 billion, up 101% year on year.

The company now has a customer base of 8 million, up 82%. While the number of merchants using its platform also continues to skyrocket, hitting 55,200 over the quarter, up 71%.

Despite an initial share price pop of roughly 5% when this update was released, investor sentiment cooled off very quickly in the days that followed. By Wednesday last week, the company was back below where its share price was on the day before this quarterly update was released.

Brokers and short sellers send some tough love for BNPL

This may have been spurred by some negative broker coverage of Zip that week. As my Fool colleague James covered last Tuesday, broker UBS evidently wasn’t impressed with Zip’s update. That’s given it retained a ‘sell’ rating on Zip shares with a 12-month share price target of $5.40. That implies a potential 12-month downside of close to 15% on today’s pricing. UBS pointed out that the Reserve Bank of Australia (RBA) is planning on removing the ‘no surcharge rule’ for BNPL products. The broker reckons this is an “incremental negative” for Zip Co.

As we covered last month, the RBA has indeed changed its tune on the no surcharge rules. These prevent retailers from directly passing on the higher transaction costs of BNPL payment methods to consumers. The RBA now won’t stand in the way of merchants wanting to apply a surcharge to BNPL transactions if they so wish. This, the RBA believes, will “promote competition and efficiency in the Australian payments system”.

These factors have certainly not hindered many investors’ scepticism of Zip Co. As the Fool covered last week, Zip shares remained in the top 10 most shorted ASX shares on the market.

All of these factors may have assisted in making Zip’s October one to forget. Investors in this buy now, pay later company will no doubt be hoping for a better November.

At the current Zip Co share price of $6.29, this company has a market capitalisation of $3.6 billion.

The post Why did the Zip (ASX:Z1P) share price have such a lousy month in October? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: CBA enters crypto market, AMP jumps
• Why is the Northern Star (ASX:NST) share price having such a lousy week?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• How did the Woodside Petroleum (ASX:WPL) share price perform in October?

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

from The Motley Fool Australia https://ift.tt/2ZRFNp6