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The S&P/ASX 200 Index (ASX: XJO) and the Australian share market have had a very rough few weeks, as most investors would be painfully aware. Over the past month or so, the ASX 200 has lost a nasty 5.4% of its value. That’s erased almost all of what were the pleasing gains of 2023 so far.

Many ASX 200 shares have done even worse. BHP Group Ltd (ASX: BHP) is down close to 10% over the past month. While ANZ Group Holdings Ltd (ASX: ANZ) shares have lost almost 8%.

With interest rates continuing to rise, not to mention northern hemisphere banks collapsing, it certainly has been a tenuous time for investors of late.

Considering all of this uncertainty in the air, we might have some investors that are keen to find some defensive ASX 200 shares.

Defensive shares can be defined as those whose earnings are non-cyclical, and more resistant than most to crises, inflation, recessions, or economic or financial shocks.

They are typically found in the healthcare, consumer staples, or gold sectors. So hospital titan Ramsay Health Care Limited (ASX: RHC), supermarket kingpin Woolworths Group Ltd (ASX: WOW), or gold mining giant Newcrest Mining Ltd (ASX: NCM) could all be described as defensive shares.

These are the kinds of companies that tend to weather recessions and other economic shocks. We all need to visit the hospital and buy food and household essentials, regardless of the economic weather. And gold, as the classic safe haven asset, tends to benefit from poor economic conditions. As we’ve dramatically seen over the past week or two.

But how do you find defensive ASX 200 shares with decent upside?

Well, one of the first things to note is that buying defensive shares when they are hot and in demand probably isn’t the best way to grab yourself a winner. The old adage of ‘fixing the roof when the sun is shining’ is appropriate here.

For example, Newcrest Mining shares have rocketed more than 6% today, and by more than 9% over the past month. This reflects the surge in gold prices that we’ve recently seen:

Buying any ASX 200 share that is in vogue for a temporary reason can be a poor decision, akin to ‘following the crowd’. In this case, buying a gold miner when gold was trading at historic lows might be a more prudent long-term investment. 

But that doesn’t mean all defensive shares are best avoided during times of turmoil. Stock market crashes, and other confidence crises, can often result in the proverbial baby getting thrown out with the bathwater. For example, Ramsay Heath Care shares fell more than 36% back in the COVID crash of 2020.

That was despite its hospitals remaining open and in high demand (for obvious reasons). Investors were quick to realise their mistake, and Ramsay shares swiftly recovered. The company gained 37% between 20 March and 29 May 2020:

We saw something similar, albeit less dramatic, with Woolworths over that same period.

Finding defensive shares at a share price that can give you upside requires both an understanding of how that business operates, and what price will get you good value. Often the best time to buy them is when no one else wants to.

So don’t make the mistake of following the crowd into a defensive share. A company’s underlying business might be defensive. But that doesn’t make its share price immune from falling.

The post Where I would go hunting for defensive ASX 200 shares with upside appeared first on The Motley Fool Australia.

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More reading

• ASX 200 gold shares are starting the week with a bang. Here’s why
• AMP share price dips despite $337m sale win
• Why I’d be happy to invest in these ASX 200 bank shares today
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Sebastian Bowen has positions in Newcrest Mining and Ramsay Health Care. 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.

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The last five years have been a wild ride for those invested in Wesfarmers Ltd (ASX: WES) shares.

The stock rocketed from around $30 in March 2018 (accounting for the spin-out of Coles Group Ltd (ASX: COL)) to a high of over $66 in August 2021. Today, it’s trading at $48.44 – marking a 61.5% return.

But what happens when we factor in the company’s dividends? Let’s take a look.

All dividends paid to those holding Wesfarmers shares since 2018

Here are all the offerings handed to the S&P/ASX 200 Index (ASX: XJO) retail conglomerate’s shareholders over the last five years:

Wesfarmers dividends’ pay date	Type	Dividend amount
October 2022	Final	$1
March 2022	Interim	80 cents
October 2021	Final	90 cents
March 2021	Interim	88 cents
October 2020	Final	77 cents
October 2020	Special	18 cents
March 2020	Interim	75 cents
October 2019	Final	78 cents
April 2019	Interim	$1
April 2019	Special	$1
September 2018	Final	$1.20
April 2018	Interim	$1.03
Total:		$10.29

As readers can see, each Wesfarmers share has yielded around $10.29 of dividends since March 2018.

That means our figurative parcel has likely provided $1,708.14 of passive income in that time.

Of course, it’s also worth remembering the spin-out of Coles Group Ltd (ASX: COL) in late 2018. Wesfarmers shareholders received 1 Coles share for each stock in the parent company they held. The Coles share price is currently $17.59.

Not to mention, all the dividends offered by the ASX 200 icon in that time have been fully franked. That means they could have brought additional benefits at tax time.

Wesfarmers shares currently boast a 3.72% dividend yield.

Excitingly, the company’s next dividend will be paid in a little over a week. Its 88 cents per share interim dividend will hit shareholders’ accounts from 28 March.

The post Invested $5,000 in Wesfarmers shares 5 years ago? Here’s how much passive income you’ve earned appeared first on The Motley Fool Australia.

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More reading

• Here’s how much I’d need to invest in Wesfarmers shares to generate a $150 monthly income
• Morgans names the best ASX dividend shares to buy now
• How much would I need to invest in ASX income shares to earn $500 a month?
• 2 ASX passive income stocks for the next 10 years and beyond
• Is right now the time to buy Wesfarmers shares for passive income?

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 positions in and has recommended Coles Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has started the week deep in the red. At the time of writing, the benchmark index is down 0.7% to 6,945.3 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Breaker Resources NL (ASX: BRB)

The Breaker Resources share price is up 31% to 38 cents. This follows news that the gold developer has accepted a takeover approach from Ramelius Resources Ltd (ASX: RMS). In the absence of a superior proposal, management and two major shareholders intend to accept the all-scrip offer which has an implied value of 40 cents per share.

Healius Ltd (ASX: HLS)

The Healius share price is up over 9% to $3.04. This morning, this healthcare company received a takeover approach from smaller rival Australian Clinical Labs Ltd (ASX: ACL). And while the offer is not at a premium, Australian Clinical Labs expects to create significant value for shareholders by merging the two companies.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is up 8% to $11.75. Investors have been piling into gold miners today after the spot gold price closed in on the US$2,000 an ounce mark. This has been driven by demand for safe haven assets and optimism that the US Federal Reserve won’t raise rates as much as previously expected due to the banking crisis.

Tietto Minerals Ltd (ASX: TIE)

The Tietto Minerals share price is up 12.5% to 63 cents. As well as getting a lift from a rising gold price, this gold miner made a positive announcement. Tietto revealed that it has completed process plant commissioning at its 100%-owned 4.5Mtpa Abujar Gold Mine in the Ivory Coast. Abujar is expected to deliver gold production averaging ~200,000 ounces per year over the first six years of production at a weighted average all in site cost (AISC) of ~US$800/oz.

The post Why Breaker, Healius, Northern Star, and Tietto Minerals shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Why is this ASX gold share rocketing 36% higher today?
• ASX 200 gold shares are starting the week with a bang. Here’s why
• Why this ASX All Ords healthcare share is defying the market weakness and zooming higher
• Healius share price jumps 7% on takeover approach from smaller rival
• 5 things to watch on the ASX 200 on Monday

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.

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Want $1,000 of monthly passive income? Yes please! I believe that by consistently investing in ASX dividend shares and making the most of compounding, I could cut back on my nine-to-five without sacrificing my financial well-being.

Here’s how I would build an ASX portfolio capable of providing $1,000 of passive income each month, starting today.

How I’d build $1,000 of monthly passive income

Imagine receiving a consistent income while enjoying hobbies, holidaying, or even sleeping. It might sound like a dream, but I think I could make it a reality by investing strategically in ASX dividend shares over the coming years.

Indeed, by investing $150 a week – around $7,800 annually – I think I could be bringing in $1,000 a month in less than two decades. And that’s before considering capital gains or franking credits.

Let’s assume I invested $150 a week in stocks capable of paying a generous (but not outlandish) average dividend yield of 6.5% and reinvested any and all dividends I received.

By doing so, I could boast a portfolio worth more than $209,000 in 16 years. Meanwhile, I would have forked out just $125,000 – that’s the power of compounding!

At that point, my ASX dividend shares could bring in $13,585 each year – or around $1,132 a month.

How I’d find ASX dividend shares to buy

But which stocks I choose to invest in could make or break my passive income investing strategy.

While buying the highest-yielding shares might seem like the best way to grow dividend income, I think the sustainability of a company’s payouts is far more important.

My passive income plan relies on long-term growth. Therefore, I’d look for shares with a strong balance sheet and a history of paying consistent dividends.

And I’d look for them in a variety of shapes, sizes, and sectors. That’s because one of the best ways to protect a portfolio over the long term is to diversify.

Finally, and perhaps most importantly, I would look for quality ASX dividend shares trading at good prices.

By buying in at a good price, I believe I could start my investment off on the right foot and potentially kickstart my returns.

However, even the most considered investment isn’t guaranteed to provide returns, and past performance doesn’t indicate future performance.

The post Passive income investing: I’d buy ASX dividends shares to make $1,000 a month without working appeared first on The Motley Fool Australia.

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More reading

• Why Breaker, Healius, Northern Star, and Tietto Minerals shares are charging higher
• Why Adairs, Liontown, Qantas, and Synlait shares are dropping today
• 2 beaten-up ASX dividend shares I’d buy for long-term income
• Why I’m avoiding term deposits right now and listening to Warren Buffett instead
• Bitcoin price rockets 28% in a week amid ‘perfect use case’

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.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decline. At the time of writing, the benchmark index is down 0.6% to 6,952.1 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Adairs Ltd (ASX: ADH)

The Adairs share price is down almost 7% to $2.07. The catalyst for this has been the furniture and homewares retailer’s shares going ex-dividend for its upcoming interim dividend this morning. Eligible shareholders can now look forward to receiving Adairs’ 8 cents per share fully franked dividend on 6 April.

Liontown Resources Ltd (ASX: LTR)

The Liontown share price is down 7% to $1.53. This may have been driven by continued weakness in lithium prices. In a note this morning, Goldman Sachs points out that spot lithium prices have continued to weaken. The 6% spodumene spot price is currently fetching US$5,040 a tonne, down from 1.3% from US$5,110 a tonne a week earlier.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 3% to $6.27. This appears to have been caused by news that the ACCC has delayed a decision on its proposed takeover of Alliance Aviation Services Ltd (ASX: AQZ). The corporate regulator has delayed making a decision for another month and will give its verdict on 20 April. Investors appear to be interpreting this as a bad sign.

Synlait Milk Ltd (ASX: SM1)

The Synlait Milk share price is down over 5% to $2.52. Investors have been selling this dairy processor’s shares after it provided very disappointing guidance and pushed back its recovery date by a year. Macquarie was disappointed and downgraded its shares to an underperform rating with a slashed price target of ~$2.44.

The post Why Adairs, Liontown, Qantas, and Synlait shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Qantas share price takes a dive amid more takeover delays
• Here are the 10 most shorted ASX shares this week
• Top brokers name 3 ASX shares to buy next week
• Is it a trap? 3 ASX shares with ultra-high dividend yields
• Why Carsales, Evolution, Kelsian, and Synlait shares are dropping

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 positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Alliance Aviation Services. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Some ASX dividend shares are trading at a cheaper price than they used to be. This could be an opportunity to buy them at a lower price and get a higher dividend yield.

If a business with a 5% dividend yield falls 10% and the dividend payment stays the same then the dividend yield becomes 5.5%. If it dropped 20% the yield would become 6%.

Dividends and distributions are not guaranteed, but businesses that say they are committed to payouts could be more likely to continue paying shareholders.

With that in mind, here are two ASX dividend shares where I think the yield and share price look good.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns a portfolio of farms that are diversified by geography, climactic conditions and farm type.

The types of farms it owns include almonds, macadamias, vineyards, cropping (sugar and cotton) and cattle.

The Rural Funds share price has fallen by around 30% over the past year and 20% in the last six months.

It’s understandable why that has happened. Higher interest rates can hurt a REIT’s property values, and hurt the rental profit due to higher interest costs.

However, I think the lower Rural Funds share price makes up for this new environment, plus the rental income that’s linked to inflation is getting a helpful boost.

The ASX dividend share aims to increase its distribution by 4% per year for investors. If the total FY24 distribution is increased by 4%, this would represent a distribution yield of approximately 6.2%.

I think farms will continue to be useful assets beyond the foreseeable future. There’s no shift to e-commerce farming or work-from-home farming to affect this segment of the REIT industry.

Medibank Private Limited (ASX: MPL)

Medibank is one of the largest private health insurers in Australia. Last year it suffered from a cyber attack and this sent the Medibank share price down as investors worried about policyholder losses.

Medibank shares have recovered but are still down by 7% over the last six months. That’s interesting considering Medibank’s underlying health insurance profit has been increasing and it can now earn stronger returns on its bond investment portfolio.

In the first six months of FY23, the health insurance operating profit increased by 8.7% to $305.2 million, while the group operating profit improved by 7.4% to $307.8 million. Its net investment income increased by 80.9% to $55.9 million.

It revealed that its net resident policyholders grew by 0.1%, or 1,700, while the net non-resident policy unit growth was 17%, or 33,400. It still achieved growth despite the cyber issues.

The ASX dividend share decided to increase its interim dividend by 3.3% to 6.3 cents per share.

With the latest two dividends, Medibank has a grossed-up yield of 5.9%.

The post 2 beaten-up ASX dividend shares I’d buy for long-term income appeared first on The Motley Fool Australia.

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More reading

• Medibank share price edges lower amid $31 million joint venture news
• 2 leading ASX 200 shares to buy that could keep outperforming in 2023: fund manager
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Buy these ASX dividend shares right now for income: analysts
• I reckon these are 2 of the best ASX income stocks to buy in March

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 positions in and has recommended Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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One of the more pleasing aspects of the rapid rises in interest rates that we’ve all had to deal with over the past year or so is the return on interest-bearing cash investments. Until the start of 2022, interest rates were at a historic low of 0.1%. This meant that it was difficult to find a savings account or term deposit yielding anything over 1%. 

Getting a 1% return on your money isn’t exactly an exciting prospect. As a result, we saw large amounts of capital flowing into the share market chasing yield between 2020 and 2022. 

But today, the picture is remarkably different. Earlier this month, the Reserve Bank of Australia (RBA) raised rates for the tenth consecutive month in a row. The cash rate now sits at 3.6%, well above the 0.1% it was at just over a year ago.

This means that cash investments are back to paying decent interest rates. In fact, today, you can nab yourself a term deposit that will pay you close to 5% per annum. That’s more than the dividend yields of Woolworths Group Ltd (ASX: WOW), Telstra Group Ltd (ASX: TLS) and even Commonwealth Bank of Australia (ASX: CBA) right now.

But I’m still avoiding investing in cash today, beyond an emergency savings account, of course. Why? Because Warren Buffett told me so.

Buffett: Cash is trash

Well, not directly. But here is a quote on the merits of cash investments (or lack thereof) from an article Buffett once wrote:

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: ‘I skate to where the puck is going to be, not to where it has been.’

Buffett wrote that in 2008, in the midst of the global financial crisis. Since then, the flagship US S&P 500 Index has risen more than 330%. It was good advice then, and it remains good advice today.

Shares are volatile, no one can deny it. The past month alone has seen the S&P/ASX 200 Index (ASX: XJO) lose more than 5% of its value – a year’s worth of term deposit returns. But this volatility is the price we pay for the outsized returns that ASX shares have given investors over a long period of time.

Let’s take an exchange-traded fund (ETF) that tracks the ASX 200 Index, the iShares Core S&P/ASX 200 ETF (ASX: IOZ).

Over the ten years to 28 February, this ETF has returned an average of 7.72% per annum, including dividend returns. Compare that with cash, and we don’t even have a contest. Even the highest interest rates in more than a decade don’t touch the returns of shares.

So when you’re tempted to give up the volatility of the share market for the ‘safety’ of cash, remember what Warren Buffett said.

 

The post Why I’m avoiding term deposits right now and listening to Warren Buffett instead appeared first on The Motley Fool Australia.

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More reading

• AMP share price dips despite $337m sale win
• Why I’d be happy to invest in these ASX 200 bank shares today
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• $400 in monthly passive income, buy 8,728 shares of this ASX 200 stock

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway and Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has positions in and has recommended Telstra Group. 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.

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The Bitcoin (CRYPTO: BTC) price is up 3% in the past 24 hours and a whopping 28% since this time last week.

At the time of writing, Bitcoin is trading for US$28,036 (AU$40,465).

That puts the world’s top crypto up some 69% so far in 2023.

And it’s not just the Bitcoin price that’s shooting the lights out this past week.

Ethereum (CRYPTO: ETH), the world’s number two crypto by market valuation, is up 12% since last Monday.

One Ether is currently trading for US$1,783.

What’s driving the Bitcoin price higher?

The Bitcoin price looks to be getting some solid tailwinds on two fronts.

First, there’s the past week’s succession of banking failures that commenced in the United States with Silicon Valley Bank’s collapse and spread to Europe to Credit Suisse and others.

As you may be aware, Bitcoin was born in the wake of the global financial crisis. Satoshi Nakamoto (the name used by the crypto’s founder or founders) wrote the white paper that launched the token when trust in the global financial system was at a low point.

Now that trust is again being tested.

“An environment where higher interest rates after a period of hyper-low interest rates are creating bank runs is about as perfect a Bitcoin use-case as one can think,” CEO of FRNT Financial Stephane Ouellette said (courtesy of Bloomberg).

The Bitcoin price also looks to be benefiting from investor expectations that the global banking woes will force the US Federal Reserve and other central banks to ease off their aggressive rate-tightening paths.

“Given the uncertainty, we are not yet seeing mass retail or institutional inflows into the market,” crypto analyst Noelle Acheson said.

“What is moving the market is the shifting liquidity environment,” she added, noting “expectations are consolidating around a much lower rate-hike ceiling than expected even a week ago. That environment is good for risk assets, and especially Bitcoin which has no earnings or credit vulnerability.”

Proceed with care

While some crypto investors have made tidy profits, many have been stung by leaping in when FOMO strikes.

While the Bitcoin price could continue to march higher from here, it could also head in the other direction.

Remember, even after this year’s remarkable rally, Bitcoin is still down more than 59% from its all-time high of US$68,790 reached on 10 November 2021.

Invest with care.

The post Bitcoin price rockets 28% in a week amid ‘perfect use case’ appeared first on The Motley Fool Australia.

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More reading

• Something strange is happening with the Bitcoin price in 2023

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 positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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While ASX gold shares are starting the week very strongly, one is standing out with a particularly strong gain.

At the time of writing, the Breaker Resources NL (ASX: BRB) share price is up a whopping 36% to a 52-week high of 39.5 cents.

Why is this ASX gold share rocketing higher?

Investors have been scrambling to buy this ASX gold share after it accepted a takeover offer from Ramelius Resources Ltd (ASX: RMS).

According to the release, the two parties have entered into a bid implementation agreement (BIA), pursuant to which Ramelius will offer to acquire Breaker by way of an all-scrip off-market takeover.

Under the terms of the offer, Breaker shareholders will receive 1 Ramelius share for every 2.82 Breaker shares they own.

This equates to an offer of 40 cents per share, which is a 39% premium to its last close price and values Breaker’s undiluted equity at $130.7 million.

What’s next?

Breaker’s directors have unanimously recommended that its shareholders accept the offer. This is in the absence of a superior offer.

Furthermore, they intend to accept the offer for all the shares they own or control. This currently represents approximately 4% of its issued shares. But they are not alone. Breaker’s two largest shareholders, Electrum Strategic Opportunities Fund and Paulson & Co, with a combined shareholding of approximately 19.92% will do the same.

Why acquire Breaker?

Ramelius revealed that acquiring this ASX gold share is in line with its long term strategy. It explained:

Ramelius’ long-term strategy has been to create shareholder value through organic and inorganic growth opportunities. The acquisition of Breaker is in line with Ramelius’ objective to execute synergistic corporate opportunities to enhance the development of a new production hub following the complementary acquisition of Apollo Consolidated Limited and its flagship Rebecca project which completed in early 2022.

The post Why is this ASX gold share rocketing 36% higher today? appeared first on The Motley Fool Australia.

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• Why is everyone suddenly talking about ASX 200 gold stocks again?
• Why are ASX 200 gold stocks like Northern Star having such a stellar run today?
• These ASX shares are being dumped from the ASX 200 index this month
• 5 things to watch on the ASX 200 on Monday
• 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.

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The investment team at Wilson Asset Management (WAM) has picked out some ASX shares that could be undervalued and prime buying opportunities.

WAM runs a number of different listed investment companies (LICs) including WAM Research Limited (ASX: WAX) and WAM Active Limited (ASX: WAA) which looks to find undervalued opportunities on the ASX share market.

In the latest monthly update, WAM revealed two of its leading ideas which could produce outperformance.

Tourism Holdings Ltd (ASX: THL)

WAM described this ASX share as a global tourism operator and the largest commercial recreational vehicle rental operator in the world.

The fund manager pointed out that the company announced “strong” FY23 half-year results and “record guidance”, which revealed that it now expects an improved underlying net profit after tax (NPAT) to be “above NZ$75 million”.

WAM said that the guidance was “reflective of the strong trading in the first half of FY23 and a positive outlook for the remainder of FY23”. The fund manager explained its positive outlook for the business:

We continue to remain positive on Tourism Holdings’ outlook as the tourism industry continues to recover and the business benefits from synergies following the merger with Apollo Tourism & Leisure.

Temple & Webster Group Ltd (ASX: TPW)

The fund manager described the ASX share as a pure play online retailer of furniture and homewares.

Last month, Temple & Webster released its FY23 half-year result, with revenue of $207 million, which was down year over year from $235.4 million in FY22. WAM also pointed out that the company noted that sales in the first five weeks of the 2023 calendar year were also down by 7%.

The fund manager pointed out that the negative result and overall market sentiment led to a decline of the Temple & Webster share price, which fell around 27% on the day of the report announcement.

WAM said:

Despite the slowing growth in home goods retail, we believe Temple & Webster Group remains in a great position to leverage the long-term opportunity to expand into the e-commerce space in the Australian furniture and homewares sector.

Temple & Webster also recently launched a share buyback of up to $30 million.

The post 2 undervalued ASX shares to buy this month: expert appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy now
• 3 ASX growth stocks down 40%-65% to buy now and hold
• Why Atlantic Lithium, Pushpay, St Barbara, and Temple & Webster shares are rising
• Temple & Webster share price higher on $30 million share buyback
• Analysts say these exciting ASX growth shares are buys this month

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 Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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