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The S&P/ASX All Ordinaries Index (ASX: XAO) is in the green today, up 0.77% to 7,256.6 points at the time of writing.

Among the market’s blazers are three ASX All Ords tech shares bouncing back from the fall-out of Silicon Valley Bank’s (SVB) collapse.

On the flip side, two ASX All Ords tech shares are tumbling, despite only small exposures to SVB.

Let’s take a look.

ASX All Ords tech shares bouncing back today

To re-cap, SVB was a commercial lender specialising in technology companies.

It was shut down by regulators in the US last Friday.

It’s the biggest bank failure in the US since the global financial crisis (GFC).

Following the news, we’ve seen a roll-out of statements from ASX All Ords tech shares disclosing their exposure to SVB.

Of these, Life360 Inc (ASX: 360) shares are screaming 7.2% higher today to trade at $5.21 at the time of writing.

As my Fool colleague James reported last week, Life360 estimates its exposure is US$5.6 million in deposits. It also has US$75.4 million in shares of money market mutual funds invested in short-term, AAA-rated US Government treasury securities that are in SVB custodian accounts.

Life360 has updated shareholders today to confirm it “has regained access to its funds in SVB
accounts, and is transacting normally”.

Sezzle Inc (ASX: SZL) shares are also up today. The Sezzle share price is currently 53.5 cents, up 0.94%.

The buy now, pay later (BNPL) company has US$1.2 million in deposits with SVB.

Sezzle shares may have extra momentum today due to the company’s plans to list on the NASDAQ.

Finally, Xero Limited (ASX: XRO) shares are up 4% to $88.52 currently.

The accounting software company’s exposure to SVB is approximately US$5 million.

The Xero share price has steadily risen since the company revealed plans to reduce costs and drive growth. Xero shares are up 12.6% since the announcement last week.

ASX All Ords tech shares that are struggling

Meantime, Siteminder Ltd (ASX: SDR) shares are down 2.42% today to $3.425 at the time of writing.

The accommodation e-commerce platform provider updated the market on its exposure to SVB today.

After transferring some of its cash holdings to other lenders upon hearing of SVB’s collapse, SiteMinder was left with a cash exposure of A$10 million.

It also has a US$20 million revolving credit facility with SVB for contingency purposes that has not been drawn on since its initial public offering (IPO).

Today, the company said:

Following actions taken by the Federal Deposit Insurance Corporation and the Bank of England to fully protect SVB and SVBUK depositors, SiteMinder no longer expects any impact to its cash holdings.

SiteMinder has received confirmation from SVB that it will honour the Group’s US$20m revolving credit facility.

SiteMinder is working with other banks to further broaden its banking arrangements.

Redbubble Ltd (ASX: RBL) shares are also in the red today, down 4.34 to 50.7 cents at the moment.

The arts online marketplace provider has an A$1.3 million exposure to SVB.

The Redbubble share price is down 66% over the past 12 months.

The post 3 ASX All Ords tech shares rebounding strongly from the SVB fallout (and 2 still tumbling) appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• If I’d invested $5,000 in Xero shares a week ago, here’s how much I’d have now!
• Why Atlantic Lithium, Life360, Neuren, and Whitehaven Coal shares are charging higher
• This ASX 200 tech share is ‘materially undervalued’: Goldman Sachs
• Top ASX 200 tech shares to buy right now: Morgans

Motley Fool contributor Bronwyn Allen has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Redbubble, SiteMinder, and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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S&P/ASX 200 Index (ASX: XJO) shares are enjoying a solid rebound today following yesterday’s sell-off.

In afternoon trade the ASX 200 is up 0.6%.

Tech shares are broadly outperforming, as witnessed by the 1.5% gains posted by the S&P/ASX All Technology Index (ASX: XTX), which contains some smaller companies outside of the ASX 200.

Today’s strong performance follows a positive day of trading in US markets yesterday (overnight Aussie time). The day saw the S&P 500 Index (SP: .INX) closing up 1.7% and the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) gaining 2.1%.

And those gains, in turn, were fuelled by investors increasingly betting that the US Federal Reserve will ease off its hawkish tightening pace sooner than feared.

Why might the Fed ease its tightening policies?

A growing number of analysts believe the Fed, the world’s most watched central bank, may take a step back from its rapid rate hike path following last week’s collapse of SVB Financial Group (NASDAQ: SIVB).

The logic here is that after ramping up interest rates at a record pace from previously record lows, SVB’s collapse is indicative of wider stress amongst financial institutions. And if the Fed wants to avoid pushing other banks over the edge, it may need to hold fire on further rate increases.

As you can with the ASX 200 movements today, any potential easing by the Fed would offer up some healthy tailwinds for further gains.

On the other side of that coin, however, the latest inflation figures out of the US showed an increase in monthly consumer prices.

Data released by the Bureau of Labor Statistics showed February’s consumer price index (CPI) increased 0.4% in February and was up 6% over the past full year. That could force the Fed’s hand in delivering another big rate hike on 22 March.

So, where does that leave us?

What can ASX 200 investors expect from the Fed next week?

For some greater insight into what ASX 200 investors can expect next Thursday on the heels of the Fed’s announcement, we turn to the experts (courtesy of Bloomberg).

Tom Essaye, a former Merrill Lynch trader, said a 0.25% hike still looks to be on the cards while earlier expectations of a 0.50% rate hike are unlikely:

Given the bank troubles, this [inflation] report isn’t bad enough to put 50 bps back on the table, but if the Fed wants to maintain credibility on inflation, then this report says they have to hike again next week and not signal they are done.

Wolf von Rotberg, equity strategist at Bank J Safra Sarasin also expects the Fed will have to scale back to a 0.25% increase.

According to von Roberg:

The CPI number is no game changer. After the events last week, a 50bps appeared unlikely going into the data print today and the slightly stronger than expected core inflation print puts speculation of a Fed pause to a rest.

The Fed is on track for another 25bps hike next week. Equities should rebound somewhat as the Fed becomes more predictable for now. But the impact from higher rates on the economy is just starting to be felt and will likely become more and more visible as the year moves on.

Ian Lyngen, rates strategist at BMO Capital Markets is on the fence about whether we’ll see a pause or a 0.25% increase.

“Overall, this is an inflation update that, taken as a sole input, would suggest that a 25 bp hike next week is a foregone conclusion,” Lyngen said. “Alas, the regional banking stress leaves next week’s decision as a wild card until there is greater clarity on the success of limiting the contagion to the rest of the banking sector from SVB/Signature.”

Meanwhile, Susannah Streeter, head of money and markets at Hargreaves Lansdown, thinks the SVB collapse could see the Fed take a breather. That would likely see another positive day of trading on the ASX 200.

“Policymakers may still feel forced to press pause on rates, despite evidence the hot inflation is still a risk, unwilling to be blamed for making a bad situation worse,” Streeter said.

“While smaller banks remain under pressure, there are concerns that bigger banks could become more risk averse in lending, which could dip the economy into a sharper downturn.”

There you have it.

Most likely next Thursday morning ASX 200 investors will find the Fed has raised rates by 0.25%. Very few experts are now forecasting a 0.50% increase, with some expecting the central bank to pause its tightening policies to assess the fallout from SVB.

The post Investing in ASX 200 shares? Here’s what to expect from the US Fed next week appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share just rebounded 15%
• Warren Buffett’s $35 billion warning to investors
• Woodside share price sinks as oil remains under pressure
• 5 things to watch on the ASX 200 on Wednesday
• Is the Westpac share price a buy below $22?

SVB Financial provides credit and banking services to The Motley Fool. 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 SVB Financial. 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.

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The S&P/ASX 200 Materials Index (ASX: XMJ) is up 0.85% in late afternoon trading, but this ASX lithium share is outperforming the index.

Atlantic Lithium Ltd (ASX: A11) shares soared 14.6% in earlier trade today from 41 to 47 cents apiece. However, the company’s share price has since given back some of its gains and is now up 8.5% to 44.5 cents. For perspective, the S&P/ASX 200 Index (ASX: XJO) is currently 0.68% higher.

So why is this ASX lithium share having such a top run today?

What’s going on?

Atlantic Lithium is developing the Ewoyaa lithium project in Ghana, West Africa. This project is funded via an agreement with Piedmont Lithium Inc (ASX: PLL).

Despite today’s gains, Atlantic Lithium’s share price has shed a mammoth 34% in the past month. It seems the company has recently been exposed to a short attack from Blue Orca.

However, as my Foolish colleague James reported today, it may be that short sellers are now closing their positions or investors believe Atlantic Lithium shares were sold off unfairly amid the attack.

Last week, Blue Orca alleged in a short-seller report that Atlantic Lithium derived key Ghana mining licenses by “making secret payments” and “promises of payment” to the immediate family of a high-level Ghana politician.

This led to both Atlantic Lithium and its partner Piedmont Lithium entering a trading halt last week.

However, on Friday, Atlantic Lithium denied the claims and described Blur Orca’s report as “false and misleading”.

Atlantic Lithium said:

The company holds valid prospecting licences with operating permits for all of its current activities, in accordance with the Ghanaian government and the Minerals Commission’s requirements, and outrightly refutes the allegations of impropriety made by the report.

Atlantic Lithium cautions investors not to make decisions based on the report, which it considers factually untrue.

Share price snapshot

The Atlantic Lithium share price has lost 23% in the last year.

For perspective, the ASX 200 has slipped 0.56% in the past 12 months.

This ASX lithium share has a market capitalisation of nearly $269 billion based on the current share price.

The post Guess which ASX lithium share just rebounded 15% appeared first on The Motley Fool Australia.

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More reading

• Warren Buffett’s $35 billion warning to investors
• Woodside share price sinks as oil remains under pressure
• Why Atlantic Lithium, Life360, Neuren, and Whitehaven Coal shares are charging higher
• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

Motley Fool contributor Monica O’Shea 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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After peaking at a 52-week high last month, Telstra Group Ltd (ASX: TLS) shares have pulled back and currently sit a touch over the $4.00 mark.

Investors may now be wondering if this has opened up a buying opportunity or if they should keep their powder dry for the time being.

Are Telstra shares a buy at current levels?

If the broker community is to be believed, now would be a great time to pick up Telstra shares.

A good number of brokers have the equivalent of buy ratings on the telco giant’s shares with price targets offering meaningful upside.

For example, Credit Suisse, Goldman Sachs, Jefferies, Macquarie, Morgan Stanley, and Morgans are all bullish and expect double-digit gains from its shares over the next 12 months.

What are brokers saying?

Over at Goldman Sachs, its analysts have a buy rating and $4.60 price target on the company’s shares. This suggests potential upside of over 13% from current levels.

The broker also expects a 17 cents per share fully franked dividend, which represents a 4.2% yield. Goldman commented:

We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful opportunity to crystalise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn.

Whereas over at Morgans, its analysts have an add rating and $4.70 price target. This suggests upside of 16% for Telstra’s shares. And with the broker also expecting a 17 cents per share dividend in FY 2023, the total return stretches beyond 20%.

Morgans agrees that asset divestments could unlock value for shareholders. It said:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders.

The post Should I load up on Telstra shares at $4 each? appeared first on The Motley Fool Australia.

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More reading

• 5 ASX 200 shares that inflation can’t touch: expert
• Here’s how much I’d need to invest in Telstra shares to generate a $200 monthly income
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks
• These are the best ASX dividend shares to own: Morgans
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 positions in and has recommended Telstra 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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S&P/ASX 300 (ASX: XKO) shares are trading higher today, up 0.65% to 7,011.6 points.

Over the past week, two company directors have sold down more than $3 million worth of shares.

Let’s find out why.

Chair of ASX 300 healthcare company sells 50,000 shares

According to a change of director’s interest notice lodged with the ASX yesterday, the chair of Pro Medicus Limited (ASX: PME), Peter Kempen, has sold 50,000 shares in the ASX 300 healthcare company.

The total consideration was just under $3.1 million.

The on-market sell-down occurred over a number of days between 7 March and 13 March through his wife’s superannuation fund. Kempen is the trustee and a member of the fund.

Pro Medicus issued a statement explaining the sale was “part of a rebalancing of the superannuation fund’s portfolio interests”.

It also said Kempen was not contemplating any further sales of Pro Medicus shares in the foreseeable future.

Kempen now holds 629,082 shares in the ASX 300 company.

The Pro Medicus share price is currently $61.81, up 1.54% today and up 13.7% in the year to date.

Key investor in EML Payments reduces stake by 2%

Alta Fox Capital Management is a long-term key shareholder of EML Payments Ltd (ASX: EML).

Until last week, Alta Fox had a 10.24% stake in the payments provider.

Then came a change in substantial holding notice last Wednesday.

It revealed that Alta Fox Capital sold almost 7.92 million EML shares in three on-market transactions between 6 March and 8 March.

The total consideration was just over $3.48 million.

This reduced its shares in the ASX 300 company from a 10.24% stake to 8.14%.

Such a large transaction warranted a statement on the news from EML Payments.

The EML statement references a letter from Alta Fox explaining the transaction.

It says:

Alta Fox confirms that following advice recently received by it, it has reduced its holding in EML in satisfaction of regulatory look-through provisions pertaining to international subsidiaries wholly owned by EML.

Alta Fox confirms that it has concluded its sales of EML shares, is a long-term investor and has no current intention to sell any additional EML shares.

Alta Fox managing director, Connor Haley, who is a non-executive director of EML, commented:

Alta Fox has a long history as an investor in EML. EML has a collection of great businesses around the world, and we look forward to supporting its continued growth.

The EML share price is currently 45.25 cents, up 1.69% today and down 27.4% in the year to date.

The post 2 ASX 300 directors who’ve each sold over $3 million of their company shares in a week appeared first on The Motley Fool Australia.

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More reading

• Investing as little as $25 a week could help me retire with $104,000 a year in passive income!
• 2 ASX 200 healthcare shares just upgraded by Citi analysts
• EML share price tumbles 15% as the walls close in even further
• Here’s why the EML share price is on ice today
• EML share price crashes 18% on half-year results but quickly rebounds

Motley Fool contributor Bronwyn Allen 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 EML Payments and Pro Medicus. The Motley Fool Australia has positions in and has recommended EML Payments and Pro Medicus. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a 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:

Carsales.Com Ltd (ASX: CAR)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating on this auto listings company’s shares with an improved price target of $27.00. Morgan Stanley was pleased with the company’s decision to increase its stake in Brazil’s Webmotors. Particularly given the strength of the global car market in tough times. The Carsales share price is trading at $21.95 this afternoon.

Life360 Inc (ASX: 360)

A note out of Goldman Sachs reveals that its analysts have reiterated their buy rating and $7.90 price target on this location technology company’s shares. Goldman believes that Life360’s shares are materially undervalued given its resilient business model and strong growth outlook. Its analysts continue to believe that an inflection point is coming, with Life360 expecting to be profitable this year. The Life360 share price is fetching $5.20 on Wednesday.

New Hope Corporation Limited (ASX: NHC)

Analysts at Morgans have retained their add rating on this coal miner’s shares with a trimmed price target of $6.65. While the broker acknowledges that New Hope’s interim dividend could disappoint next month, it believes this is due to coal miners conserving cash for potential M&A activity. Nevertheless, it still expects a full-year dividend of $1.10 per share, which represents a massive 19% yield for investors. The New Hope share price is trading at $5.33 today.

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

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More reading

• Why Atlantic Lithium, Life360, Neuren, and Whitehaven Coal shares are charging higher
• This ASX 200 tech share is ‘materially undervalued’: Goldman Sachs
• Analysts warn of future earnings downgrades for ASX 200 coal shares
• 3 ASX 200 coal shares to buy for big gains and huge yields: Morgans
• These ASX tech shares are buys: Goldman Sachs

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has recommended Carsales.com. 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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Hoping to dig into the record IGO Ltd (ASX: IGO) dividend? You’d better be quick. 

S&P/ASX 200 Index (ASX: XJO) lithium share IGO jumped onto income investors’ radars on the last day of January after the company reported very strong half-year results, including a record dividend.

The record IGO dividend won’t be available for long

With lithium prices hitting all-time highs in the latter months of 2022, the IGO board declared a fully franked interim dividend of 14 cents per share, setting a new record for the lithium producer.

Commenting on the results at the time, acting CEO Matt Dusci said, “We are delighted to report a highly successful and profitable half-year result, with the strength of our lithium business helping drive record earnings, record net profit and declaration of a record interim dividend.”

Indeed, IGO’s half-year of underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $834 million was up 269% from the $226 million reported in the first half of the 2022 financial year.

And net profit after taxes (NPAT) leapt 549% from the prior corresponding half-year to hit $591 million.

But we were talking about the IGO dividend.

Investors who want that payment to land in their bank account will need to own shares at the end of the day today.

IGO trades ex-dividend tomorrow, 16 March.

Eligible investors can expect to receive that payment on 31 March.

IGO share price snapshot

As you can see in the chart below, the IGO share price remains up 6% over the past 12 months, despite sliding from its late 2022 highs.

The post Hoping to dig into the record IGO dividend? You’d better be quick appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares trading ex-dividend on Thursday
• Why are ASX 200 lithium shares falling so hard today?
• Top brokers name 3 ASX shares to buy today
• What’s happening with ASX 200 lithium stocks this week?
• Investing in ASX 200 lithium stocks? Here’s why this 6% decline in China matters

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.

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Many big-name S&P/ASX 200 Index (ASX: XJO) shares have fallen in the last week, but Xero Limited (ASX: XRO) shares have bucked the trend.

Xero (ASX: XRO) shares have soared 11.29% from $78.62 at market close Wednesday 8 March to $87.50 at last look today.

In comparison, the benchmark ASX 200 index has slid 3.75% in the same time frame.

Let’s take a look at how much I would have now if I had invested $5,000 in Xero shares a week ago.

How much would I make?

A week ago, Xero shares were fetching $78.62. This means if I had invested $5,000 into Xero at this price, I would have received 63 shares with $46.94 in cash left over.

Now, with Xero shares trading at $87.50, these shares would be worth $5,512.5. This means, my investment in Xero would have delivered more than $500 in gains in just a week.

Xero revealed this week that it had “no material exposure” to the Silicon Valley Bank (SVB) collapse. As my Foolish colleague James reported, Xero’s total exposure to SVB was about US$5 million, which represents less than 1% of Xero’s cash and cash equivalents as of 30 September 2022.

Meanwhile, on 9 March, Xero revealed it will cut staff by 700 to 800 globally to reduce costs and drive growth. This is designed to improve Xero’s operating profit.

Commenting on this news, CEO Sukhinder Singh Cassidy said:

We have made strong progress in executing our strategy. However as we aspire to build a higher performing global SaaS company and to enable Xeroʼs next phase of growth and drive better customer outcomes, we need to streamline and simplify our organisation.

The team at Morgans has recently placed an “add” rating on Xero shares with a $97 price target. This implies an upside of nearly 11% based on the current share price.

Morgans described Xero as a “high quality cash generative business” with “impressive customer advocacy and duration”. The broker added:

Over the last 12 months rising interest rates and competition have made things harder for Xero.

However, we see the current short term weakness as a rare opportunity to buy a high quality global growth company at a discount to the life time value of its current customer base.

Xero share price snapshot

Xero shares have slid 6% in the last year. However, in the past month, they have climbed 11.41%.

For perspective, the ASX 200 has shed 0.77% in the last 52 weeks.

Xero has a market capitalisation of about $13.1 billion based on the current share price.

The post If I’d invested $5,000 in Xero shares a week ago, here’s how much I’d have now! appeared first on The Motley Fool Australia.

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More reading

• Top ASX 200 tech shares to buy right now: Morgans
• ‘Top quality’: Expert picks 2 ASX 200 shares to buy at a nice discount
• Xero share price dips 3% amid Silicon Valley Bank fallout
• These ASX tech shares have exposure to the Silicon Valley Bank collapse
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Monica O’Shea 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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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It’s no secret that ASX lithium shares like Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO) have exploded in popularity over the past year or two on the ASX.

Investors are noticing that lithium is rapidly evolving into an essential industrial metal for the 21st century – being a key ingredient in the rechargeable batteries that will soon dominate our transportation system and the electrical grid. 

But just because a commodity is useful doesn’t mean that the companies that mine it are automatic wealth generators. Many oil companies have given investors lousy returns over time, despite the fact that most of us still have to fill up our cars.

So today, let’s look at two ASX lithium shares in Core Lithium and Pilbara Minerals, and see which one might be worth investing in.

Now, I have written before about my general lack of love towards lithium shares. I don’t own any in my portfolio, and I don’t expect to.

But that means I have missed out on some impressive gains.

Over the past 12 months, the Pilbara share price has risen by 42.8%. And over the past 2 years or so, investors have enjoyed a whopping 250% gain:

Core Lithium’s short-term performance hasn’t been quite as impressive. Over the past year, this ASX lithium share has lost 14% of its value. But over two years, investors have still enjoyed gains of 290% or thereabouts:

So both shares have been impressive performers and wealth generators for investors over recent years.

But if someone forced me to choose between investing in Pilbara Minerals and Core Lithium, how would I pick the winner?

Well, it would start and end with the fundamentals.

So let’s compare the recent half-year earnings reports that these two companies have recently released.

Pilbara vs. Core Lithium shares: Which would I choose?

Starting with Pilbara, this lithium share revealed its numbers for the six months to 31 December on 23 February last month.

As we covered at the time, this saw Pilbara report $2.18 billion in revenues, up 305% from the previous year’s report. This helped boost the company’s statutory net profit after tax (NPAT) to $1.24 billion, up an extraordinary 989%.

As a result, Pilbara was able to declare its first-ever dividend payment – an inaugural dividend of 11 cents per share, fully franked. 

Let’s see how that compares to Core Lithium.

So Core reported its own earnings earlier this month, on 9 March.

But it was a bit of a different picture. Firstly, Core Lithium made a loss of $9.2 million for the period. That was up from the loss of $3.3 million over the prior corresponding half.

That translated into an earnings per share (EPS) loss of 0.52 cents per share, up from the prior loss of 0.22 cents. Unsurprisingly, no dividend was declared here.

Now, it’s important to note that these results don’t include Core Lithium’s first sale of lithium from its Finiss project, which will be booked in the second half of FY2023.

But they do show that Core lithium and Pilbara share about as similar as chalk and cheese when it comes to business maturity.

So thanks to Pilbara’s healthy profitability and dividend-paying status, I would choose to invest in Pilbara shares over Core Lithium any day if I had to pick.

I like investing in companies that make money. And while Core Lithium might get to the same level of profitability as Pilbara in a few years, it’s not something I would be prepared to bet my capital on right now.

The post Pilbara Minerals or Core Lithium shares: Which would I buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Down 24% in a month, is the Pilbara Minerals share price now a bargain buy?
• Why Bank of Queensland, Brainchip, Pilbara Minerals, and Yancoal shares are sinking today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here’s why experts rate these ASX 200 growth shares as buys

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. 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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Recent events in the United States involving Silicon Valley Bank have weighed heavily on the Australian banking sector and the Westpac Banking Corp (ASX: WBC) share price this month.

This has left the banking giant’s shares trading at $21.58, which is almost 13% lower than their 52-week high.

Is the Westpac share price good value right now?

In order to know if the Westpac share price is good value, we will have to find a way to undertake a valuation. Luckily, the team at Goldman Sachs has provided its valuation model to help us on our way.

Firstly, many investors like to use price to earnings ratios when valuing shares. However, this is not something that Goldman uses for bank shares. And there are strong arguments out there that this is the correct approach when looking at the sector.

Instead, its analysts use a “DCF & P/NTA vs. ROTE” valuation methodology. Don’t worry if that doesn’t make a lot of sense, I’ll take you through it now.

The DCF stands for discounted cash flow. This is essentially the sum of all future cash flows, discounted to take account of the time value of money. On a per share basis, Goldman Sachs estimates that Westpac has a value of $29.27 on a DCF basis.

However, this only makes up 50% of its valuation methodology. So, we still have to throw in the second part: P/NTA versus ROTE.

This is the price to net tangible assets versus its sustainable return on tangible equity. The latter is the same as return on equity but excludes intangibles such as goodwill. Goldman estimates the bank’s sustainable ROTE to be 12%.

In light of this ROTE, the broker believes Westpac’s shares deserve to trade at 1.4x NTA. Which, based on its NTA estimate of $18.70 per share in FY 2023, equates to a figure of $26.20 per share. This will make up the remaining 50% of its valuation.

If we combine the two together, we get a valuation of $27.74 for the Westpac share price.

And with its shares currently fetching $21.58, this implies material upside of greater than 28% over the next 12 months. No wonder Goldman has the bank’s shares on its conviction list with a buy rating!

The post Here’s how to value the Westpac share price appeared first on The Motley Fool Australia.

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More reading

• Is the Westpac share price a buy below $22?
• ASX 200 bank shares punished again on US bank fallout
• ASX 200 bank shares: Are they better prepared than Silicon Valley Bank?
• S&P 500 futures lift as regulators shore up SVB deposits
• Buy Westpac and this ASX dividend share next week: analysts

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. 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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