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It certainly is a very big day for Nuix Ltd (ASX: NXL) shares on Tuesday and investors will no doubt be watching them like a hawk.

What’s going on with Nuix shares?

This morning, the investigative analytics and intelligence software provider requested a trading halt before the market open.

This was because the Federal Court of Australia indicated that it plans to deliver its judgment in respect to a claim made by its former CEO, Edward Sheehy.

Mr Sheehy filed proceedings in the Federal Court in October 2020 claiming that he validly exercised 453,273 options in Nuix in January 2020 which entitled him to be issued with 22,663,650 shares.

Sheehy also claims that he would then have sold these shares long before the Nuix share price had collapsed, which caused him to suffer damage.

All up, the former CEO sought declarations as to his entitlements and an award of damages of up to $183 million plus interest.

To put that into context, at the close of play on Monday, Nuix had a market capitalisation of $287 million.

What’s the latest?

The good news for Nuix and its shareholders is that the Federal Court has dismissed the claim.

According to the AFR, Justice John Halley highlighted that this dispute had already been dealt with in the supreme court in 2019 and that these options were only exercisable if there had been a sale of the business prior to 2010.

He said: “I’m otherwise persuaded there’s been no breach of that agreement because there’s been no sale of the business of Nuix.”

What now?

Given how this very dark cloud has been hanging over the company for some time, the news that the matter is now over could give Nuix shares an almighty boost when they return to trade.

And while the company has requested a halt until Thursday, it is possible that we will see its shares resume trade later today.

The post Why is everyone talking about Nuix shares today? appeared first on The Motley Fool Australia.

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• Better buy: Core Lithium vs Pilbara Minerals shares
• Macquarie share price races higher after Q3 result shocks analysts
• Transurban share price gains on earnings, dividend guidance boost
• Retirees: 2 steady eddies to provide ASX passive income on the cheap
• 10 ASX stocks to buy before they report this earnings season: Goldman

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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It’s no secret that many Aussie investors love S&P/ASX 200 Index (ASX: XJO) lithium shares, and there are plenty to choose from. Two apparent favourites are Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO). But while they work in the same field, the pair are vastly different.

So, how do the shares differ and which is the better ASX 200 lithium buy? Let’s take a look.

Pilbara Minerals

Looking back, Pilbara Minerals shares have been an ASX growth story, through and through. This time 10 years ago, they were trading for just 2 cents each. Today, the Pilbara Mineral share price is $4.70 – marking a huge 23,400% gain in that time.

The company currently boasts a market capitalisation of around $14 billion, sits on the S&P/ASX 50 Index (ASX: XFL), and holds the Pilgangoora project – said to be the world’s largest independent hard-rock lithium production.

Not to mention, it recently posted its maiden profit. Pilbara Minerals shipped 361,305 dry metric tonnes of spodumene concentrate last financial year, bringing in $1.2 billion of revenue and leaving it $561.8 million in the green.

Core Lithium is a different beast entirely.

Core Lithium

Unlike Pilbara Minerals, Core Lithium has a long way to go before it can call itself a profitable ASX 200 share.

The company is developing its flagship Finniss Lithium Project. It’s expected to produce its first spodumene concentrate this half – just months after its first revenue event.

Thus, there’s likely a while to wait before the $2 billion lithium hopeful turns a profit.

Though, its share price has gained around 1,400% over the last decade to trade at $1.07 today.

Are Pilbara Minerals shares a better buy than Core Lithium’s?

With all that in mind, comparing shares in Pilbara Minerals and Core Lithium is a lot like comparing apples to oranges.

Personally, I think the decision could come down to risk tolerance. Unprofitable outfits typically carry more risk than their profitable peers. Though, greater risks generally bring greater potential rewards.

It’s also worth noting that materials stocks generally don’t have much control over their earnings. Instead, they’re at the mercy of commodity prices.

For instance, the higher the price of lithium, the more the producers could rake in, and vice versa.

Demand for the battery-making material has pushed its value sky-high lately. However, with more supply coming online, top broker Goldman Sachs is tipping lithium prices to fall in the coming years.

Thus, I think Pilbara Minerals shares could prove a better buy for investors wishing to take advantage of current high lithium prices.

Finally, passive income investors might prefer the look of Pilbara Minerals shares, with Macquarie tipping the company to pay its first dividend this fiscal year.

The post Better buy: Core Lithium vs Pilbara Minerals shares appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
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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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Macquarie 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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Some ASX dividend share payouts have been growing for shareholders every year for many years, which could be good for retirees. However, other dividend payers are somewhat volatile with their passive income.

If I were relying on dividend income in retirement, I don’t think I’d want to see my dividend income jump around. That’s why I’m cautious about buying names like BHP Group Ltd (ASX: BHP) and Woodside Energy Group Ltd (ASX: WDS) after a strong run.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns a portfolio of farmland around Australia including cattle, almonds, macadamias, vineyards and cropping (sugar and cotton).

With interest rates now a lot higher, it has pushed down the Rural Funds share price. Since the end of 2021, it has fallen by around 20%. This has the effect of pushing up the prospective distribution yield for the ASX dividend share.

How much passive income could the business pay? Rural Funds aims to grow its distribution by 4% per annum, which is normally faster than inflation.

It’s expected to pay a total distribution of around 12.2 cents per unit, which would be a forward distribution yield of around 5%. That’d probably be a good yield for retirees.

On the rental side, the business is benefiting from inflation because some of the rent is linked to CPI inflation.

Farmland has been a useful asset for centuries, which I think will continue for more than the foreseeable future.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

The ASX dividend share could be the steadiest eddy in terms of passive income. It has grown its dividend every year since 2000, which is the longest streak on the ASX.

Soul Pattinson is an investment house that’s invested in a variety of assets, including ASX shares like Brickworks Limited (ASX: BKW), TPG Telecom Ltd (ASX: TPG), Pengana Capital Group Ltd (ASX: PCG), New Hope Corporation Limited (ASX: NHC), Macquarie Group Ltd (ASX: MQG) and many more.

It also has a portfolio of unlisted businesses including electrical parts, agriculture, swimming schools, luxury retirement living and so on.

Soul Pattinson expands its portfolio every year while paying out a majority of its cash flow each year as a dividend.

The business’ portfolio is focused on investments that can provide good cash flow through the economic cycle, while also looking for platforms of growth. I think retirees would like this combination of dividends and growth.

How much passive income will the company pay in FY23? Commsec numbers currently suggest that Soul Pattinson could pay an annual dividend per share of 77 cents, which translates into a grossed-up dividend yield of 3.8%. The Soul Pattinson share price is down around 25% since September 2021.

The post Retirees: 2 steady eddies to provide ASX passive income on the cheap appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Tpg Telecom. 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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Earnings season is now underway and companies have started to release their report cards for the last six months.

While there will inevitably be some results that disappoint the market, history shows us that there are plenty that positively surprise.

Goldman Sachs has been busy analysing the month ahead and has named 10 buy rated ASX stocks that it believes could deliver stronger than expected updates.

Which ASX stocks could surprise?

The 10 ASX stocks that Goldman Sachs is tipping to positively surprise are as follows:

• Breville Group Ltd (ASX: BRG)
• Corporate Travel Management Ltd (ASX: CTD)
• Data#3 Limited (ASX: DTL)
• Endeavour Group Ltd (ASX: EDV)
• Judo Capital Holdings Ltd (ASX: JDO)
• Qantas Airways Limited (ASX: QAN)
• QBE Insurance Group Ltd (ASX: QBE)
• Qualitas Ltd (ASX: QAL)
• Telstra Group Ltd (ASX: TLS)
• Temple & Webster Group Ltd (ASX: TPW)

Financials

In respect to QBE, the broker has a buy rating and $16.67 price target on this insurance giant’s shares. Goldman believes that “COR guidance & underlying insurance margins for FY23 likely to surprise to the upside.”

Judo Capital could surprise thanks to its strong customer deposits growth. Goldman highlights that “JDO continues to grow materially above system levels on customer deposits (10x in the month of Nov-22). Overall, this would translate into an additional tailwind to NIM.” The broker has a buy rating and $1.70 price target on the bank’s shares.

Goldman has a buy rating and $3.45 price target on Qualitas’ shares. It is tipping a strong result from the investment company thanks to “developers and asset owners look to alternative financiers.”

Retail

Breville could deliver a stronger than expected half year and full year result in FY 2023. This is due to Goldman’s belief that “the secular trend of coffee consumption upgrade will continue globally and that BRG will stand to benefit structurally as a leader in this upgrade.” The broker has a buy rating and $23.50 price target on its shares.

Goldman believes the market is being “too negative on near-term revenue” of Temple & Webster. It has a conviction buy rating and $7.60 price target on the online furniture retailer’s shares.

The broker also believes that Endeavour finished the half better than the market was expecting. It feels this “suggests that trading in 1H23 is likely to offer positive surprise vs. consensus.” Goldman has a buy rating and $7.80 price target on the drinks company’s shares.

Tech and telco

Goldman expects Data#3 to deliver “continued strong top-line growth from digital transformation projects delayed through COVID.” The broker also expects operating leverage to flow through as it scales. It has a buy rating and $9.20 price target on Data#3 shares.

Telco giant Telstra has been named as a positive surprise candidate. This is due to “top line momentum more than offsetting the higher costs.” Goldman has a buy rating and $4.60 price target on Telstra’s shares.

Travel

Goldman Sachs is feeling positive about Corporate Travel Management’s prospects in the first half and full year. As a result, it has put a buy rating and $20.30 price target on its shares. Goldman expects “upside surprise in both 1H23 earnings vs. the Street as well as outlook statements.”

Finally, Qantas, which Goldman has a conviction buy rating and $8.20 price target on, has been tipped to have finished the first half strongly. It notes that “US airlines’ 4Q results also reflected strength in pricing in the current environment, with American Airlines, Delta Airlines and United Airlines unit revenue averaging +19% vs. pre-covid level in the quarter.”

The post 10 ASX stocks to buy before they report this earnings season: Goldman appeared first on The Motley Fool Australia.

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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 Judo Capital and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Corporate Travel Management and 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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Are you looking for ASX 200 dividend shares to buy this week? If you are, then the two listed below could be worth considering.

Both have been named as buys and tipped to provide investors with good yields. Here’s what you need to know about them:

Centuria Industrial Reit (ASX: CIP)

The first ASX 200 dividend share to consider is Centuria Industrial, which is Australia’s largest domestic pure play industrial REIT.

Centuria Industrial has a portfolio of high-quality industrial assets that are situated in urban infill locations throughout Australia and underpinned by a quality and diverse tenant base.

This is a great part of the property market to be right now given robust demand and tight supply conditions.

UBS is positive on the company and has a buy rating and $3.60 price target on its shares.

As for dividends, the broker is forecasting dividends per share of 16 cents in both FY 2023 and FY 2024. Based on the current Centuria Industrial share price of $3.52, this represents yields of 4.5% in both years.

National Australia Bank Ltd (ASX: NAB)

Another ASX 200 dividend share that has been named as a buy is NAB, which is of course one of Australia’s big four banks.

Goldman Sachs is a fan of NAB in the current environment due to its exposure to commercial lending. Its analysts “see volume momentum over the next 12 months as favouring commercial volumes over housing volumes and NAB provides the best exposure to this thematic.”

Goldman Sachs has a buy rating and $35.60 price target on its shares.

In respect to dividends, Goldman is forecasting fully franked dividends of $1.66 per share in FY 2023 and $1.73 per share in FY 2024. Based on the current NAB share price of $31.88, this implies yields of 5.2% and 5.4%, respectively.

The post Buy NAB and this ASX 200 dividend share now: brokers appeared first on The Motley Fool Australia.

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• 3 ASX dividend shares I’m backing to outperform in 2023
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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 Transurban Group (ASX: TCL) share price is on watch after the toll road operator dropped its earnings for the first half of financial year 2023.

It also announced the upcoming departure of long-term CEO Scott Charlton and a new partnership with CDPQ.

The S&P/ASX 200 Index (ASX: XJO) infrastructure share last traded at $14.03.

Transurban share price surges on record earnings

• Proportional toll revenue reached a record $1.66 billion – up 42.6% on the prior comparable period (pcp)
• Proportional total revenue jumped 41.1% on the pcp to $1.72 billion
• Proportional earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 53.7% to $1.24 billion
• Post-tax profit of $55 million– up from a $106 million loss in the pcp
• Free cash, including capital releases, increased 88% to $863 million
• Declared a 26.5 cents per share interim dividend – a 76.7% increase

Transurban saw record traffic volumes last half, with its average daily traffic (ADT) surpassing 2.5 million trips in November 2022.

The company’s record revenue and EBITDA were supported by such traffic levels, as well as inflation-linked toll increases.

Transurban continued work at many of its developments last half, with Sydney’s M4-M8 link opening last month. Work also continued at Melbourne’s West Gate Tunnel Project. The tunnel excavation is expected to be done by the middle of the year.

Transurban announces CEO resignation and new partnership

Transurban also announced its CEO of 11 years will be stepping down at the end of 2023. The company has begun a global search for a new CEO. Commenting on Charlton’s resignation, chair Craig Drummond said:

Scott has been a visionary in the industry … under his leadership, the company has grown to become an ASX 20 listed entity, increasing its market capitalisation by more than five times to over $43 billion and has delivered total security holder returns of 289%.

Meanwhile, it’s again partnered with global investment group CDPQ, this time on its A25 asset in Montreal, Canada. The group was also a co-investor in Sydney’s WestConnex. CDPQ will take on a 50% partnership in the asset for CAD$355 million (around $383.7 million).

What did management say?

Charlton commented on the earnings release likely to drive the Transurban share price today, saying:

Our roads have benefitted from freight volumes which achieved an all-time high, ongoing traffic growth in our core markets, and the continued investment in business capability to improve the experience for our more than 10 million customers.

We have seen record traffic in Brisbane, as well as in Sydney … This performance was underpinned by the urban nature of our roads, demonstrating that the diversity of everyday journeys across commuting, travel and leisure trips provides resilience throughout economic cycles

What’s next?

Charlton said around 68% of the company’s toll revenue is linked to CPI escalations, but the timing of the escalations can be delayed.

As such, the flow through from recent higher inflation figures hasn’t yet been recognised in some markets.

It also upped its previous full-year dividend guidance by 4% to 57 cents per share.

Transurban share price snapshot

The Transurban share price has been outperforming the ASX 200 as of late.

The stock has gained 9.5% year to date compared to the index’s 8.5% increase.

Transurban shares have also risen 9.2% over the last 12 months. Meanwhile, the ASX 200 has lifted 6%.

The post Transurban share price in focus following record first half appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
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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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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one of this edition, we’re joined by Adam Lund, analyst, head of trading & co-founder of Spheria Asset Management.

The Motley Fool: What sets the Spheria Australian Smaller Companies Fund and Spheria Australian Microcap Fund apart from the competition?

Adam Lund: The small and microcap sector is filled with hype and investor exuberance, which is usually concentrated around aspirational companies that tell a good story.

Our approach to investing in smaller companies is to invest in fundamentals, not narratives. This alone helps set us apart from the small and microcap crowd.

MF: So, how do you go about that?

AL: To summarise our core investment process, we have a strong focus on risk management and seek to purchase securities where the present value of future free cash flows can be reasonably ascertained and the stock is trading at discount to its intrinsic value.

Additionally, it’s worth mentioning the small and microcap space is under-researched and has little broker coverage. So, there are phenomenal opportunities for the few investors applying disciplined fundamental analysis to build exposure to great smaller companies well before the wider market catches on.

MF: What were some of your top-performing ASX shares in 2022?

AL: We added The a2 Milk Co Ltd (ASX: A2M) back into our portfolio in 2021. We hadn’t held it for a few years. However, we’d owned it as far back as 2014 when it was a relatively unknown company. So, our team knows the business well.

We thought it was being irrationally priced by the market, and the re-rate we anticipated came as new management returned the business to growth, cleaned up the inventory position and steadied the strategy of the business.

Additionally, a buy-back was activated, providing good share price support. And renewed interest came as FDA approval allowed A2 to import infant formula into the US, and China’s reopening saw further expectations of growth.

A2 is a high-quality growth business, and even after the recent rally, it still remains somewhat overlooked by the market. The turnaround driven by CEO David Bortolussi, who stepped into the business in 2021, is well underway.

The company has an enviable position in the imported infant formula market in China, with a high margin and highly differentiated product. It’s a strong cash-generative business, capex-light and has multiple potential longer-term growth drivers.

A2 has significant cash on its balance sheet, with over $780 million of net cash. And it trades at only around 2.5 times enterprise value (EV) to sales and some 18 times enterprise value to earnings before interest and taxes (EBIT).

MF: What other ASX shares have stood out for you?

AL: The second stock that’s been a good performer for us over the past year is Monadelphous Group Ltd (ASX: MND). This is a high-class engineering group that provides construction, maintenance and industrial services to resources, energy, and infrastructure industries.

With commodity spot prices firming up, the capex cycle finding a new gear, and labour markets loosening, investors have woken up to MND, and the company has delivered stellar returns to patient long-term shareholders.

The valuation is much fuller today than it was in early 2022 when this business was trading on an undemanding EV/EBIT multiple of 10 times, with a net cash balance sheet and a strong track record of returns.

MF: And what’s your outlook for Monadelphous shares for 2023?

AL: We think MND has great further upside potential as it continues to benefit from an extended CAPEX cycle and a strong and growing pipeline of work.

The business was under pressure with the WA border closures limiting the access of interstate and offshore workers, which drove labour cost inflation while restricting project commitments. But this will now hopefully be history.

MF: After a volatile 2022, what’s your outlook for the market in 2023?

AL: We are in a complex and extremely challenging economic environment, but the volatility in the market is creating opportunities aplenty for active long-term investors that have a focus on valuations, strong cash flows and balance sheet risk.

On the flipside, it is a particularly troublesome environment for passive investors, who allocate their capital to index funds, which indiscriminately invest with no consideration for fundamentals or risk management.

It is our view that we are closer to the top of the rate hike cycle than the bottom and given the market tends to overreact both ways, we expect the volatility to persist, which will continue to create opportunities to buy good quality businesses at reasonable prices.

***

Be sure to tune in tomorrow for part two of our fund manager interview series with Adam Lund.

(You can find out more about Spheria Asset Management’s fund offerings here.)

The post Why this ASX 200 share has ‘great further upside potential’ in 2023: fund manager appeared first on The Motley Fool Australia.

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More reading

• A2 Milk shares are up 30% in a year, is this price sweet or sour?
• 3 ASX shares to cash in on China’s reopening to the world: Jun Bei Liu
• 3 small-cap ASX shares to rocket from this year’s mega-trends: fund manager
• If I invest $1,000 in A2 Milk shares now, what could my return be this year?
• 5 ASX All Ords shares cracking new 52-week highs on Tuesday

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 recommended A2 Milk. 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 ASX share market went through plenty of pain last year. But, some of the hardest-hit names could be the ones that rebound the strongest.

I think it makes sense that ASX shares related to property and ASX tech shares would be impacted by higher interest rates, as it hurts the valuations of ASX growth shares and could impact demand for housing.

However, with confidence now improving about the situation, I think the long-term outlook for the below two ASX shares is very positive, so I’d use this period to jump on these names.

Brickworks Limited (ASX: BKW)

Brickworks is a market leader when it comes to building products in Australia. It sells bricks and paving, roofing, cement, masonry and stone, and specialised building systems. The business is also a brick market leader in the north east of the US.

Plus, excitingly, the business has signed an agreement with Brickability – a “market-leading building products distributor” in the UK. The ten-year supply agreement includes a minimum purchase quantity of 10 million bricks per year, and it expects to build on this over time.

Brickworks recently said that its net property trust assets are expected to exceed $2.2 billion at the end of the FY23 first half. The industrial joint venture trust recently completed an independent revaluation process, resulting in a profit of around $112 million to the ASX share. I think that its future plans for more industrial properties on the land are very promising.

It’s benefiting from strong customer rental demand, with “significant” rental growth across its new developments and lease renewals. The property rental growth is outstripping the effect of capitalisation rate expansion because of higher interest rates.

Brickworks is also benefiting from the long-term dividend and asset growth of the investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which Brickworks owns a large chunk of.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a business that describes itself as a growth capital fund that’s focused on the IT sector. It aims to provide exposure to a portfolio of IT companies with global addressable markets. Bailador invests in “private technology companies at the expansion stage.”

There are a few different characteristics that Bailador typically looks for when investing in technology companies which include: being run by the founders, having been operating for between two to six years, having a “proven business model with attractive unit economics”, international revenue generation, a huge market opportunity and the ability to generate repeat revenue.

The Bailador share price has fallen around 20% since the end of August 2022, despite the ASX share having a large amount of cash on the balance sheet as it searches for opportunities.

At the end of December, it had a pre-tax net tangible asset (NTA) value of $1.74. That suggests the Bailador share price is at a 26% discount to this value. It could also pay a grossed-up dividend yield of more than 7.5% at the current values.

I think small technology companies have a very promising future.

The post A bull market is coming: Here’s which ASX shares I’m buying to prepare appeared first on The Motley Fool Australia.

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More reading

• 20+ years of growing dividends. Why I plan to buy more of this ASX 200 stock in 2023
• 3 of the safest ASX 200 dividend stocks in Australia
• Can these next-gen dividend heroes provide a passive income for life?
• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• How I’d invest $200 a month in ASX shares to make a $20,000 passive income for life

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Bailador Technology Investments. 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 Macquarie Group Ltd (ASX: MQG) share price will be one to watch on Tuesday.

That’s because the investment bank has just released its third quarter update.

Macquarie share price on watch after ‘good quarter’

While no numbers have been provided, Macquarie revealed that it experienced “varied conditions” for its diverse businesses in the three months to 31 December, resulting in a “good quarter” for the company.

According to the release, this led to the bank’s net profit after tax for the nine months to 31 December being “slightly up” on the prior corresponding period. This is a decent showing given that the prior period included a record December quarter result.

The stars of the show for Macquarie were its markets-facing businesses, Commodities and Global Markets (CGM) and Macquarie Capital.

Their combined third quarter net profit contribution was “substantially up” on prior corresponding period primarily due to the CGM business. This was driven by commodities including gas and power contributions across all regions, partially offset by a lower level of realisations and lower fee and commission income in Macquarie Capital.

This strong performance offset a weaker performance from Macquarie’s annuity-style businesses, Macquarie Asset Management (MAM) and Banking and Financial Services (BFS).

Their combined quarterly net profit contribution was “substantially down” on the prior corresponding period. This was mainly due to larger green energy sector asset realisations in MAM in the prior corresponding period, which was partially offset by continued growth in BFS.

It is the same story for Macquarie’s performance year to date, with its markets-facing businesses delivering profit growth and its annuity-style businesses recording softer profits.

Nevertheless, a solid fourth quarter is likely to see Macquarie achieve a record result for FY 2023.

Outlook

The good news is that Macquarie’s CEO, Shemara Wikramanayake, appears positive on the company’s outlook. She said:

Macquarie remains well-positioned to deliver superior performance over the medium term. This is due to our deep expertise in major markets; strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions; an ongoing program to identify cost saving initiatives and efficiency; ongoing technology spend across the Group; a strong and conservative balance sheet; and a proven risk management framework and culture.

The post Macquarie share price on watch amid ‘good quarter’ appeared first on The Motley Fool Australia.

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More reading

• 3 ASX dividend shares for lazy investors
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• Two ‘top prospect’ ASX 200 dividend shares for 2023 revealed: fund manager
• Experts say these ASX dividend shares are top buys right now
• $20,000 invested in these ASX shares 10 years ago is worth how much now?

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 Macquarie 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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ASX shares have proven to be a very good wealth-building tool over prior decades. Is the current period another opportunity to accelerate wealth?

Higher interest rates and strong inflation are hitting businesses in many different ways.

While valuations of some ASX growth shares are still down significantly, the S&P/ASX 200 Index (ASX: XJO) as a whole isn’t down much at all.

In fact, the ASX 200 is close to its all-time high. It had fallen quite a way by June 2022 and at the end of September 2022. But it has significantly recovered since then.

So, with the ASX 200 as a whole doing well, thanks to strong commodity prices and higher projected bank profits, I think the short-term opportunity there has already passed.

However, remember that the ASX 200 has returned an average of around 10% per annum over the ultra-long term. I believe that investors can still do well over the longer term with an exchanged-traded fund (ETF) focused on larger ASX shares, such as the Vanguard Australian Shares Index ETF (ASX: VAS) (though this ETF tracks the S&P/ASX 300 Index (ASX: XKO) ).

Can ASX shares still make mega returns?

Of course, the index is made up of different constituent businesses – the great performers and the ones going through tough times as well.

Over the last decade, names like CSL Limited (ASX: CSL), Pro Medicus Ltd (ASX: PME), and Altium Limited (ASX: ALU) have flourished.

I think there are probably going to be a few names on the ASX now that are on their journey to achieve very good returns. Time will tell which names end up being those big winners.

The Motley Fool can hopefully help identify those upcoming winners, but I think there are a couple of factors that will help generate stronger returns.

First, I’d look for a business that is looking to expand overseas because that increases the total addressable market. This gives the ASX share a bigger growth runway, meaning possible stronger returns. But it’s also important to evaluate how effective the business could be at winning market share.

Second, I’d only want to go for businesses that seem like they have good gross profit margins with the potential to become very profitable in the future. I regularly write articles outlining some of the ASX shares that I think could perform very well.

I think smaller ASX shares have more room for growth because they are earlier on in their growth journey, with more compounding potential.

The post ASX shares: Is this my once-in-a-lifetime chance for mega returns? appeared first on The Motley Fool Australia.

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More reading

• Here’s why analysts rate these blue chip ASX 200 shares as buys
• Why top brokers say surge in CSL share price will continue
• How to create a million-dollar ASX share portfolio in two decades
• Buying ASX shares as a beginner? Here are 3 things I wish I’d known
• Brokers name 3 ASX shares to buy now

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, CSL, and Pro Medicus. The Motley Fool Australia has positions in and has recommended 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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