Tag: Motley Fool

The Origin Energy Ltd (ASX: ORG) share price is pushing higher on Tuesday.

In morning trade, the energy giant’s shares are up over 1% to $8.25.

This means the Origin share price is now a solid 30% since this time last year, as you can see below.

Why is the Origin share price rising?

Investors have been bidding the Origin share price higher today after the company accepted an $18.7 billion takeover proposal from a consortium comprising Brookfield Asset Management and MidOcean Energy.

The consortium has tabled an offer of $5.78 per share and US$2.19 per share, which equates to a total consideration of $8.912 per share. This represents a 53.4% premium to the Origin share price prior to the first proposal on 9 November 2022.

However, this will be reduced by any dividends paid, including the interim dividend of 16.5 cents per share that was paid last week. As a result, the true consideration for shareholders is $8.747, which is a 6% premium to the current Origin share price.

This appears to reflect the fact that the deal is still subject to a few conditions. This includes shareholder approval, court and regulatory approvals (including FIRB and ACCC approval), and the independent expert’s report concluding that it is in the best interests of shareholders.

What’s next?

When it comes to the shareholder vote, the Origin board are unanimously recommending that they vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert’s report.

Origin’s CEO, Frank Calabria, is supportive of the proposal. He said:

The significant premium placed on Origin by the Consortium reflects the value of our strategy and our advantaged position to capture value from the energy transition. We believe this transaction is a great outcome not only for our shareholders, but for all stakeholders including our customers, employees and partners. We believe this transaction also stands to benefit the broader Australian community as it will unlock significant capital that can help accelerate the energy transition and deliver benefits in the form of cleaner, smarter and lower cost energy for our nation over time.

The post Why is the Origin share price pushing higher today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Origin share price on watch amid takeover agreement
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• Why APM, Macquarie Telecom, Northern Star, and Origin shares are rising today

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/LoXsM25

The share price of many S&P/ASX 200 Index (ASX: XJO) bank shares have gone down over the last few weeks. Hence, is it a good time to buy shares at the moment?

It’s interesting that so much is happening this year, but at the same time not surprising – interest rates have risen so much in a short amount of time that the knock-on effects of that are starting to play out.

I think there was a bit of mismanagement at Silicon Valley Bank (SVB), but its collapse was also unlucky – it probably wouldn’t have happened if interest rates hadn’t gone up so much and there hadn’t been a massive withdrawal of depositor funds.

Credit Suisse has been taken over by UBS, which was a sign to me that it needed rescuing.

Will there be another bank failure? It’s impossible to say at this stage, we’ll know in the coming weeks and months. But, some investors have been selling their (ASX 200) bank shares and limiting that exposure.

Local banks have actually been falling since February 2023 as investors learned that there is intense competition in the banking sector, which may lead to lower lending profits than expected.

However, after this pain, could banks be beaten-up opportunities?

How much have valuations dropped?

Share prices change every weekday, and every minute when the share market is open. Let’s look at the current situation since 14 February 2023, which was the date of the Commonwealth Bank of Australia‘s (ASX: CBA) FY23 half-year result, and where investors got a lot of insights into the local banking situation.

The CBA share price has fallen 13%.

The National Australia Bank Ltd (ASX: NAB) share price has dropped by 13%.

The Westpac Banking Corp (ASX: WBC) share price has declined 11%.

The ANZ Group Holdings Ltd (ASX: ANZ) share price has dropped around 13%.

The Bank of Queensland Limited (ASX: BOQ) share price has declined around 11%.

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has dropped around 13%.

If an investor ignores everything else and just looks at the potential purchase price, we can clearly see that share prices are substantially down from where they were a month and a half ago.

As a shorter-term idea, I’d suggest that most, perhaps all, of them are better value in the short term. But, the ASX 200 bank share prices did fall a bit further in 2022 and dropped a lot further in 2020. So, I wouldn’t call this the best opportunity of the 2020s, unless there’s a crash. More bank failures could cause that decline, so watch that space.

Which ASX 200 bank share to buy?

If we take a shorter-term approach, I think most banks may be able to deliver outperformance at this level because of the lower starting valuation and higher dividend yield as a result of the share price decline. However, in the medium term, I’m cautious about a normalisation of bank credit provisions and bad debts as households adjust to higher interest rates.

Of the banks I’ve mentioned, I’d probably prefer to choose some of the larger ones first because of their stronger balance sheets and the fact that I think Australians are less likely to withdraw their money en masse from the big four ASX 200 bank shares.

Of those four, I think the CBA share price is too expensive relative to the others, while ANZ could be distracted by its acquisition of the Suncorp Group Ltd (ASX: SUN) banking operations.

Therefore, I’d choose NAB and Westpac. I think NAB is making great progress toward becoming a high-quality bank under Ross McEwan’s leadership, while Westpac is working on cutting costs.

But, I do have to say that Macquarie Group Ltd (ASX: MQG) could be the best ASX 200 bank share to buy after its recent 13.5% drop, in my opinion. I like its global expansion and diversification, which I covered in another article.

The post Is right now a once-in-a-decade opportunity to buy ASX 200 bank shares? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Should I use the banking crisis as an opportunity to pounce on Macquarie shares?
• Investing in ASX 200 banks for dividends? Read this
• Will the turmoil among global banks trigger a stock market crash?
• Banking crisis ‘clearly not over’: ANZ
• A director is buying up CBA shares. Should you?

SVB Financial provides credit and banking services to The Motley Fool. 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 positions in and has recommended SVB Financial. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool Australia has recommended SVB Financial and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/TtVxKqB

The Pilbara Minerals Ltd (ASX: PLS) share price is soaring above the S&P/ASX 200 Index (ASX: XJO) on Tuesday. Its gains come amid news one of the lithium favourite’s peers has rebuffed multiple takeover bids from industry monolith Albemarle Corporation (NYSE: ALB).

Right now, the Pilbara Minerals share price is $3.93. That’s 14.24% higher than its previous close.

For comparison, the ASX 200 is gaining 1.21% at the time of writing.

Let’s take a closer look at what might be going right for the ASX 200 lithium icon’s shares today.

Is this driving the Pilbara Minerals share price today?

ASX 200 lithium shares, including Pilbara Minerals, are roaring out of the gates today amid news a company housed in the space has batted a takeover offer away.

Liontown Resources Ltd (ASX: LTR) has rejected a $2.50 per share takeover bid posted by Albemarle.

It was just the latest bid the US$26 billion company posted for its ASX 200 counterpart. It also faced rejection on a $2.20 bid in October and a $2.35 bid earlier this month.

The most recent offer represented a premium of 64% on the Liontown share price’s previous close – $1.52. However, the company said the bid is opportunistic, substantially undervalues it, and isn’t in shareholders’ best interests.

Not to mention, the company has uncovered some potential sleuth buying by Albemarle subsidiary RT Lithium, which now holds around 2.2% of its outstanding shares.

 Right now, the Liontown share price is roaring 50% to trade at $2.29.

And plenty of Pilbara Minerals’ other peers are also watching their share price rocket, seemingly on the back of soaring investor sentiment:

• The Core Lithium Ltd (ASX: CXO) share price is leaping 18.6%
• That of Sayona Mining Ltd (ASX: SYA) is up 13.5%
• Allkem Ltd (ASX: AKE) stock is up 12.1%
• Shares in Lake Resources NL (ASX: LKE) are jumping 12%

Today’s gain included, the Pilbara Minerals share price has risen 9% year to date. It’s also 23% higher than it was this time last year.

Comparatively, the ASX 200 has gained 1% so far this year and has fallen 5% over the last 12 months.

The post Why is the Pilbara Minerals share price rebounding 14% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Liontown share price explodes 59% on new Albemarle takeover approach
• Here are the 3 most heavily traded ASX 200 shares on Monday
• This ASX 200 lithium stock could be THE ONE to buy right now
• Here are the 10 most shorted ASX shares this week
• Could buying Pilbara Minerals shares under $4 make me rich?

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/L6Jyo1a

The United Malt Group Ltd (ASX: UMG) share price is rocketing 31.7%, currently trading for $4.53 per share.

Shares in the S&P/ASX 200 Index (ASX: XJO) maltster were placed in a voluntary trading halt yesterday, pending the company’s response to a takeover proposal.

The United Malt share price closed on Friday at $3.44.

Here’s what the company released on the takeover offer this morning.

What’s happening with the takeover proposal?

The United Malt share price is flying higher after the company reported it’s entered into a process and exclusivity deed with French maltster Malteries Soufflet.

Malteries Soufflet is the largest commercial maltster in Europe and the second-largest maltster in the world.

And Malteries Soufflet has submitted a conditional, non-binding, and indicative proposal to acquire all of United Malt’s stock for $5.00 per share in cash. That’s a heady 45% above the United Malt share price at Friday’s close.

If United Malt pays out any dividends before the proposed transaction is completed, the $5.00 per share offer price will be adjusted accordingly.

With 299.18 million United Malt shares outstanding, the deal values the ASX 200 maltster at just under $1.5 billion. On Friday, the company’s market cap was quoted at $1.01 billion.

United Malt today reported that Malteries Soufflet and its major shareholder, the InVivo Group, had previously approached it with unsolicited offers to combine the companies. United Malt provided them with limited non-public information on a confidential and non-exclusive basis.

Malteries Soufflet then submitted several confidential, non-binding, and indicative proposals to acquire all of United Malt shares.

On 16 December, Malteries Soufflet offered $4.15 in cash per share. On 6 February, it offered $4.50 in cash per share; on 8 March, it offered $4.90 in cash per share. Then, on 14 March, it submitted the indicative proposals, valuing the United Malt share price at $5.00.

United Malt has granted Malteries Soufflet the opportunity to conduct due diligence on an exclusive basis for a 10-week period.

Should Malteries Soufflet provide a binding proposal for at least $5.00 per share, the United Malt board said it would unanimously recommend shareholders vote in favour of the potential transaction, in the absence of a superior proposal.

United Malt shareholders do not need to take any action at this time, the company advises.

United Malt has also appointed Macquarie Capital as its financial adviser.

United Malt share price snapshot

As you can see in the chart below, today’s big boost has put United Malt stock up 33% in 2023.

The post United Malt share price rockets 32% on $1.5 billion takeover approach appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Guess which ASX 200 stock is on ice following a takeover approach
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bernd Struben 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/mLOJT47

It has been a stunning day for the Liontown Resources Ltd (ASX: LTR) share price.

In morning trade, the heavily shorted lithium developer’s shares are roaring 59% higher to a 52-week high of $2.42.

This is quite a turnaround for the Liontown share price, which was down as low as $1.29 just a little over a month ago, as you can see on the chart below.

Why is the Liontown share price rocketing higher?

Investors have been scrambling to buy the company’s shares this morning after it revealed that it has received and rejected a takeover approach from lithium giant Albemarle (NYSE: ALB).

According to the release, Albemarle made an unsolicited, conditional, and non-binding indicative proposal to acquire all of the shares in Liontown at a price of $2.50 per share via a scheme of arrangement.

This proposal was subject to a number of conditions before it would become binding. These include Liontown providing exclusive due diligence, the Liontown board unanimously recommending the proposal, regulatory approvals, and entry into a mutually acceptable scheme implementation deed.

Interestingly, this isn’t the first time that Albemarle has been knocking on the company’s door. It previously had two other proposals rejected by Liontown. The first was for $2.20 per share in October and the second was earlier this month on 3 March for $2.35 per share.

The release also highlights that RT Lithium, a subsidiary of Albemarle, has been building a stake in Liontown through on-market purchases. Based on the most recent share registry information available, RT Lithium holds ~2.2% of Liontown’s issued shares.

Why did it reject the offer?

Liontown has labelled the takeover proposal as opportunistic. It explained:

In coming to its decision, the Liontown Board noted the opportunistic timing of Albemarle’s Indicative Proposal, coinciding with recent softness in companies exposed to the lithium sector and the pre-production status of the Kathleen Valley Project.

Management also believes the offer fails to reflect other factors, such as the scarcity value of the Kathleen Valley Lithium Project. It notes that “there are few other lithium assets of this scale, quality and mine life this close to production in Australia, one of the most attractive mining jurisdictions in the world.”

Whether Albemarle returns with another improved offer, only time will tell. But in the meantime, the Liontown board will keep shareholders and the market fully informed of further developments as appropriate.

Furthermore, it is business as usual for the company. Management notes that the company continues to progress a number of attractive funding options for the remaining capital at the Kathleen Valley Lithium Project and expects to update the market on this front in the near term.

The post Liontown share price explodes 59% on new Albemarle takeover approach appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the 10 most shorted ASX shares this week
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• These ASX lithium shares are a buy despite explosive supply forecast: UBS
• Why Adairs, Liontown, Qantas, and Synlait shares are dropping today

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/lReKQqk

Stock in All Ordinaries Index (ASX: XAO) industrial services provider SRG Global Ltd (ASX: SRG) is gaining this morning. It comes after the company revealed its secured a $55 million contract with iron ore giant Fortescue Metals Group Limited (ASX: FMG).

The SRG Global share price is lifting 2% shortly after open to trade at 74 cents right now.

Let’s take a closer look at the latest news of the All Ords stock’s business with S&P/ASX 200 Index (ASX: XJO) giant Fortescue.

ASX All Ords stock lifts on $55m Fortescue contract win

The SRG Global share price is in the green after the company announced its new infrastructure contract with Fortescue.

The new deal sees the diversified industrial services provider having announced more than $1 billion of new contract wins since the beginning of financial year 2023.

Its latest mine site project will see it building a 21-kilometre haul road at the iron ore producer’s Eliwana Mine, located in Western Australia’s Pilbara region.

The contract is expected to kick off this month and take around nine months to complete.

It’s just the latest deal between the All Ords company and the ASX 200 mining favourite.

SRG Global signed a $150 million, five-year contract to provide services at the iron ore giant’s Pilbara operations in 2021.

Its Aboriginal joint venture Bugarrba was also awarded an approximately $40 million, five-year contract with Fortescue’s Iron Bridge in October. That was on the back of an approximately $25 million contract Bugurrba signed with Fortescue in 2021.

Commenting on today’s news, SRG Global managing director David Macgeorge said:

We are pleased to extend our longstanding relationship with Fortescue and look forward to delivering these works for Fortescue in addition to the asset maintenance works we are performing across a number of Fortescue’s site locations.

SRG Global share price snapshot

The SRG Global share price has outperformed the broader All Ords so far this year.

The stock has gained 10% since the start of 2023. It’s also currently 14% higher than it was this time last year.

For comparison, the All Ords has gained 1% year to date and has dumped 6% over the last 12 months.

The post Guess which ASX All Ords stock is lifting on a $55m deal with Fortescue appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Fortescue share price marching higher amid green iron ‘major breakthrough’
• Why did the Fortescue share price slide today?
• How big will the Fortescue dividend be in 2024?
• Guess which ASX All Ords mining share Fortescue’s Twiggy Forrest is eyeing off for $760m
• Is the Fortescue share price a buy at $21?

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/2S6bYFe

The Chalice Mining Ltd (ASX: CHN) share price has returned from its trading halt with a bang.

In morning trade, the mineral exploration company’s shares have risen 9% to $6.87.

Why is the Chalice Mining share price jumpinh?

The Chalice Mining share price is racing higher today after investors responded positively to the release of a mineral resource update at the Gonneville deposit of the Julimar nickel-copper-platinum group element (PGE) project in Western Australia.

According to the release, drilling and re-modelling have resulted in a ~50% increase in the contained nickel equivalent metal relative to the July 2022 estimate to approximately 3Mt.

Importantly, while this is a massive resource, it represents only 7% of the Julimar Complex strike length.

And it may not end there. Drilling is continuing at Gonneville outside the resource, with assays currently pending for 52 drill holes. Furthermore, two diamond rigs continue to test for extensions of high-grade mineralisation at depth and the deposit remains open beyond a depth of ~800m, with step-out drilling indicating that mineralisation extends to at least ~1,100m.

Management believes this points to a significant underground resource growth opportunity.

Chalice’s managing director and chief executive officer, Alex Dorsch, commented:

The ~50% increase in the Gonneville Resource to ~3 million tonnes of nickel equivalent is quite a remarkable achievement for the Chalice team given it is barely three years since the discovery of the Julimar Complex. Gonneville is now the 2rd largest undeveloped nickel sulphide resource in Australia.

The latest numbers continue to demonstrate the world-class endowment, scale and quality of the Gonneville Deposit, while also highlighting a compelling picture of upside along the remaining ~28km strike length of the Julimar Intrusive Complex.

What’s next?

The company revealed that it is continuing to respond to strong strategic interest in the Julimar Project and intends to commence a formal strategic partnering process.

This includes with downstream, trading and end-user parties, as well as potential mining/operating partners. The company’s aim is to explore a broad range of transactions that maximise shareholder value.

Management advised that the partnering process will continue in parallel with the progression of development studies and has the potential to influence the optimal development plan for Gonneville.

The post Why is the Chalice Mining share price jumping 9% today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Guess which ASX 200 mining share is on ice pending a mineral resource estimate
• Forget BHP and buy these ASX mining shares instead: broker
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/7Ia1Gb2

Warren Buffett. The man is the investing icon behind a US$105 billion fortune and what looks like an incredible track record of buying shares in winning businesses.

Indeed, shares in Buffett’s holding company Berkshire Hathaway roared 3,787,464% higher between 1964 and 2022 – a compounded annual gain of 19.8%.

Fortunately for us ASX investors, the billionaire is also incredibly generous with his advice.

He outlined two strategies that arguably underpinned his investing success in his recently released 2022 letter to Berkshire shareholders. And here they are.

Is this the key to Warren Buffett’s investing success?

Don’t buy shares, buy businesses

Buffett has time and time again reiterated that he and Berkshire Hathaway partner Charlie Munger “are not stock-pickers; we are business pickers”.

You likely won’t find the pair investing in the ‘trendy’ sectors that they don’t fully understand. In Buffett’s own words:

Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, 10, and 20 years from now.

Even so, Buffett doesn’t always win. In his 2022 letter to shareholders, he said Berkshire’s whopping results have come on the back of “about a dozen truly good decisions”.

Two of those decisions were made in the mid-90s. That’s when Berkshire finished buying shares in Coca-Cola and American Express – forking out US$1.3 billion for each.

By 2022, those investments provided US$704 million and US$302 million in dividends respectively. Interestingly, however, the billionaire said the dividend growth was “far from spectacular”.

Indeed, much of it came down to the stakes’ ballooning values – coming in at US$25 billion and US$22 billion at the end of last year.

Invest for the long-term

On that note, Buffett never buys shares with plans to sell in a few days, weeks, or even months. And that brings us to his second investing ‘rule’. I think Munger best summed it up, saying:

Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.

By doing so, the pair have watched the value of their investments compound time and time again.

They’ve also seen many a market correction and crash – periods in which plenty of investors panic and sell their holdings.

Perhaps that’s a lesson in patience for us unprofessional ASX investors. And, boy, has it paid off for Buffett, Munger, and Berkshire.

I’ll leave you with some final words from the billionaire investing great’s latest letter:

The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well.

The post Warren Buffett attributes his investing success to these 2 things appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How to build a $100,000 ASX share portfolio in 6 years
• As stock markets dive, here’s Warren Buffett’s advice
• I’m listening to Warren Buffett and loading up on cheap ASX shares
• Forget day trading! I’d use Warren Buffett’s ‘secret sauce’ to build wealth
• Is now the time to be bold and snap up cheap ASX 200 dividend shares?

American Express is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/FzrUHOc

The Macquarie Group Ltd (ASX: MQG) share price is down over 13% since 7 March 2023. After such a quick fall in less than a month, it’s worth considering whether the ASX financial share is an opportunity today.

There have been some serious problems with some northern hemisphere banks after the collapse of Silicon Valley Bank (SVB). Credit Suisse is being taken over by UBS. Questions are being asked about Deutsche Bank.

I hope that we don’t hear news of any more banking collapses because that wouldn’t be good news for the global banking system, jobs or depositor money.

However, just fear alone can cause significant pain to share prices. It’s that fear and uncertainty we can use to our advantage to buy shares of great businesses.

Are Macquarie shares a great opportunity?

When we look at how Macquarie shares have performed over the past 12 months, I think we can see that today’s price is fairly close to the 52-week low. When attractive businesses hit a 52-week low, my interest is heightened.

I think it’s fair to say that Macquarie has done an excellent job of growing the business since the GFC. It has diversified its earnings and improved the quality of the company.

Macquarie now has four divisions – asset management, banking and financial services, commodities and global markets (CGM) and Macquarie Capital. Some of those divisions are proving to be effective at providing ongoing earnings through the cycle, while others are good at capitalising on opportunities whilst they are there.

I believe that Macquarie’s earnings are more resilient than other investment banks around the world. So it was no surprise to me that the company’s net profit after tax (NPAT) for the nine months to 31 December 2022 was “slightly up” on the nine months to 31 December 2021.

I think that the best time to buy Macquarie is during times of sizeable market dislocation. It’s understandable that (investment) bank share prices are heavily punished during this period of market worry. Investment banking activities can dry up during lean economic times. But, as I’ve said, I think Macquarie has diversified its portfolio enough to be defensively positioned.

With the Macquarie share price trading at close to its 52-week low, and its history of impressive expansion into new areas, I think the ASX financial share is a long-term opportunity. It’s also possible it could fall further this year. We just don’t know what’s going to happen next.

Valuation

According to Commsec, the Macquarie share price is valued at around 14 times FY24’s estimated earnings, where there is a forecast of lower earnings compared to FY23.

I think that’s a reasonable estimate of what earnings could be, and it seems appealing considering the long-term global growth outlook of the business, with a good dividend and balanced dividend payout ratio.

The post Should I use the banking crisis as an opportunity to pounce on Macquarie shares? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why these 3 ASX 200 shares could be leading picks for dividends and growth
• Should ASX 200 banks pay more for this implicit government backstop?
• Buy these ASX 200 dividend shares for a second income: analysts
• 5 ASX shares I’d buy if there is panic selling
• Here are the top 10 ASX 200 shares today

SVB Financial provides credit and banking services to The Motley Fool. 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 positions in and has recommended SVB Financial. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended SVB Financial. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/guKv0eB

Everyone’s nervous at the moment.

Banks are nervous that the liquidity spotlight will turn to them, investors are nervous about further interest rate rises, and consumers are nervous about recession and unemployment.

It’s an anxious time for all concerned.

That’s why stock picking is now more fraught than ever. So it’s not a bad idea to avoid being too cute and buy ASX shares of businesses that are already exhibiting positive signs.

Here are two such examples from Medallion Financial Group director Philippe Bui:

‘Strong tailwinds heading into fiscal year 2024’

The XRF Scientific Limited (ASX: XRF) has already rocketed 18.6% year to date, but Bui feels like the climb isn’t finished yet.

“Recent half year results from this equipment and chemicals manufacturer were impressive,” Bui told The Bull.

“Sales revenue of $27.1 million was up 46% on the prior corresponding period. Net profit after tax of $3.7 million was up 34%.”

The industrial testing and chemical goods provider has a bright outlook.

“The capital equipment part of the business seems to have strong tailwinds heading into fiscal year 2024.”

Despite an almost 55% climb over the past year, Bui is not worried that XRF shares have already exhausted their run. 

“Despite share price strength, the business was recently trading on a reasonable price-earnings multiple of 18 times.”

Market yet to price in guidance upgrade

Insurance repairer Johns Lyng Group Ltd (ASX: JLG) seems to be popular among professional investors at the moment.

According to CMC Markets, incredibly all 10 analysts that follow the stock are currently rating it as a strong buy.

Bui is no different.

“First half 2023 group sales revenue of $635.6 million was up 71.2% on the prior corresponding period.”

He noted the company forecast an upgrade to its 2023 revenue by 11.2% for fiscal year 2023. 

“We believe the market is yet to fully price in the significant uptick to full year guidance,” said Bui.

“Work volumes in the next six months may surprise to the upside.”

Johns Lyng stock price has gained 5.8% so far this year. But it may still be a buying opportunity as it’s still more than 26.8% lower than where it was 12 months ago.

The post ‘Surprise to upside’: 2 ASX shares to buy now for future growth appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 ‘recession-resistant’ ASX 200 shares to start a strong portfolio: expert
• 2 ASX 200 shares to rocket from same booming industry: expert
• We still hold this ASX 8-bagger because there’s more to come: QVG
• 3 small-cap ASX shares flying high after reporting season: Elvest

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/EcWUrCz