Tag: Motley Fool

Tesla Inc (NASDAQ: TSLA) is one of the most famous share investments in the world. This fame has almost certainly been fueled by the legendary run Tesla stock went on between 2019 and 2022. The rather prominent public profile of its CEO Elon Musk would also be a factor.

But Tesla has many other tailwinds behind it too. It is an undisputed leader in the electric vehicle and battery space, with its popular cars now topping electric vehicle sales around the world. Its innovative approach to vehicle design and technology has won the company legions of global fans.

And Tesla continues to expand into previously unexplored territory. It has begun rolling out its Tesla Semi freight truck and plans to launch its highly-anticipated ‘cybertruck’ later this year.

Tesla is also a leading provider of household and commercial-scale storage batteries and solar technology.

There’s little doubt that government policies encouraging emissions-free travel and power generation are also powerful driving forces behind this company’s success. Policies such as electric vehicle subsidies will probably remain in place for decades, which will undoubtedly help the company’s growth.

But let’s talk about Tesla stock. How lucrative have the company’s shares been over the past few years? And has the horror 2022 Tesla suffered dented investors’ longer-term returns?

How much has Tesla stock made investors over the past three years?

Let’s assume an investor bought US$5,000 worth of Tesla shares three years ago. That would have been in January of 2020. So back on Monday, 21 January 2020, Tesla stock closed at a split-adjusted US$36.48 per share.

If an investor dropped US$5,000 on Tesla shares back then at this price, they would have received 137 shares of the company, with a couple of dollars left over.

As of last night’s (our time) market close over in the United States, Tesla stock was fetching US$127.17 each. Thus, our 137 shares would, right now, have a value of US$17,422.30. That represents a return of close to 250% over just three years.

So Tesla has still been a real winner for longer-term investors, despite the woes of 2022. Saying that, the company has had its fair share of both ups and downs recently.

Back in late 2021, Tesla stock reached a high of US$414.50. At that point, our 137 shares would have been worth a whopping US$56,786.50.

Who knows, maybe Tesla will get back there one day. But we shall have to see what happens in 2023 first.

The post If I’d bought $5,000 of Tesla stock 3 years ago, what would my investment be worth now? appeared first on The Motley Fool Australia.

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More reading

• Aussie investors are buying Tesla shares in droves. Should you?
• Should I buy Tesla stock for 2023 or not?
• Tesla share price correction: A chance to get rich?
• What can ASX lithium share investors learn from Tesla discounting its cars?

Motley Fool contributor Sebastian Bowen has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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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A2 Milk Company Ltd (ASX: A2M) shares have been strong performers in recent months.

As you can see below, since this time in August, the embattled infant formula company’s shares have risen 38%.

Investors may now be wondering whether it is too late to invest after this impressive rally over the last five months.

So, let’s take a look to see what might happen if you were to invest $1,000 into A2 Milk shares today.

Is it too late to buy A2 Milk shares?

Unfortunately, if the broker community is to be believed, the company’s shares have now peaked for the time being.

While that doesn’t mean that they can’t climb from here, it just means that brokers won’t be instructing their clients to put money into A2 Milk.

For example, the most bullish broker is Bell Potter. In fact, as far as I’m aware, it is the only broker that still has a buy rating on the infant formula company’s shares.

However, its price target of $6.80 is now precisely in line with the current A2 Milk share price. This means your theoretical $1,000 investment would be worth exactly the same this time next year unless a maiden dividend is paid.

Elsewhere, Goldman Sachs has a sell rating and $5.60 price target and Morgans has a hold rating and $6.35 price target. Based on their price targets, a $1,000 investment would turn into $824 and $934, respectively.

Though, it is worth remembering that brokers don’t always make the right call. A stronger than expected first half result next month could lead to brokers having to upgrade their earnings estimates and ratings accordingly.

So, investors may want to stay tuned for that. A2 Milk is scheduled to release its results on 20 February.

The post If I invest $1,000 in A2 Milk shares now, what could my return be this year? appeared first on The Motley Fool Australia.

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More reading

• 5 ASX All Ords shares cracking new 52-week highs on Tuesday
• My 3 best ASX shares of 2022 – and why I think they’ll win again in 2023
• The A2 Milk share price rocketed 20% in 2022. Is it too late to buy for 2023?
• 2 ASX 300 shares soaring to new 52-week highs today
• Can these 2 ASX 200 shares crush the market again in 2023?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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 been a relatively rough 12 months for ASX shares and the share market. In 2022, the S&P/ASX 200 Index (ASX: XJO) went backwards by around 5.5%. As such, it was always going to be a tough year for ASX exchange-traded funds (ETFs), such as those run by provider Vanguard. 

So let’s look at the best-performing Vanguard ETFs over the past 12 months.

Of all Vanguard’s ETFs, only four managed a positive return in the 12 months to 31 December 2022. Let’s see which ones they were.  

Four Vanguard ETFs that delivered a positive return last year

Vanguard Infrastructure Index ETF (ASX: VBLD)

This infrastructure-based ETF managed to eke out a gain of 0.2% in 2022, including fees and dividend distributions. The Vanguard Infrastructure ETF holds companies such as power generators, railway companies, pipeline operators and telcos.

It’s heavily weighted towards the US markets, with almost 70% of its holdings hailing from America. These include NextEra Energy Inc, Union Pacific Corp and Canadian National Railway Co.

This ETF has returned an average of 8.16% per annum since its inception in 2018. It charges a management fee of 0.47% per annum:

Vanguard Global Value Equity Active ETF (ASX: VVLU)

This ETF is a bit of a different beast, being an active ETF rather than an index fund. It uses modelling to build a portfolio of undervalued shares from around the world.

Again, the US is the most dominant market in this fund, but shares are drawn from countries as diverse as Japan, Canada, Israel and Hong Kong. Some of its current holdings include AT&T Inc, Meta Platforms Inc and Exxon Mobil Corp.

The Vanguard Global Value ETF returned 1.34% over 2022, after charging the annual management fee of 0.28%. Since its inception in 2018, this ETF has delivered an average annual return of 7.1% per annum.

Vanguard MSCI Australian Large Companies Index ETF (ASX: VLC)

Back to an index fund now, and this ASX-based ETF tracks the largest 20 companies on the Australian share market.

Naturally, banks and miners like Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are dominant here, with financials and materials shares accounting for more than 63% of the total portfolio.

Even so, this ETF was able to give investors a decent return of 4.53% last year, thanks in most part to some hefty dividend distributions. This ETF charges 0.2% per annum and has returned an average of 8.01% per annum since its inception in 2011.

Vanguard Australian Shares High Yield ETF (ASX: VHY) 

Last but certainly not least in terms of performance in 2022, we have the Vanguard High Yield ETF.

This fund invests in a basket of dividend-paying shares from the ASX, with the ETF currently invested in 74 income shares. These come from most corners of the ASX, but banks and miners are still quite dominant.

The Vanguard High Yield ETF hit it out of the park last year, delivering investors a dividend-driven return of 8.6% in 2022. This makes it Vanguard’s most successful ASX ETF of last year.

This fund charges a fee of 0.25% per annum and has given investors an average return of 8.76% per annum since its inception in 2011. 

The post Which of the Vanguard ASX ETFs has performed best over the past year? appeared first on The Motley Fool Australia.

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More reading

• How I’d generate a $4,000 monthly passive income using only ASX ETFs
• Top ASX dividend shares to buy in January 2023
• Here are the ASX ETFs to buy for a passive income boost in 2023
• 2 excellent ETFs for ASX investors in January

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in AT&T and Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Meta Platforms, NextEra Energy, and Union Pacific. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Canadian National Railway. The Motley Fool Australia has recommended Meta Platforms and Vanguard Australian Shares High Yield ETF. 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 Pilbara Minerals Ltd (ASX: PLS) share price is having a stellar finish to the week,

In morning trade, the lithium giant’s shares are up 8% to $4.35.

Why is the Pilbara Minerals share price rocketing higher?

Investors have been scrambling to buy this lithium miner’s shares following the release of its quarterly update.

That update was filled with positives, with production, sales volumes, lithium prices, and unit costs all heading in the right direction quarter on quarter.

For example, for the three months ended 31 December, Pilbara Minerals delivered a 10% quarter on quarter increase in spodumene concentrate to 162,151 dry metric tonnes (dmt) with a unit operating cost of A$579 per dmt.

The latter was down 5% from the previous quarter and is lower than its full year guidance range of A$635 to A$700 dmt.

And with the company benefiting from a combination of stronger market pricing and improved pricing outcomes with offtake customers, it reported spodumene concentrate sales of A$1.135 billion for the period.

This lifted the company’s cash balance from $1.375 billion at the end of September to A$2.226 billion at the end of December.

Broker response

Brokers have responded positively to the update. Macquarie, for example, notes that Pilbara Minerals’ production and shipments came in ahead of its estimates.

This has led to Macquarie reiterating its outperform rating and $7.50 price target. This implies potential upside of 72% for the Pilbara Minerals share price even after today’s solid gain.

Elsewhere, the team at Citi was also pleased with the company’s performance.

It believes that Pilbara Minerals will easily achieve its full year production guidance following the strong quarter. The broker also highlights the company’s impressive cash generation, commenting that it is “in harvest mode, banking another circa A$850 million.”

In response, the broker has retained its buy rating and lifted its price target to $4.80.

The post ‘In harvest mode’: Why the Pilbara Minerals share price is rocketing 8% higher today appeared first on The Motley Fool Australia.

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More reading

• My top predictions for ASX 200 mining shares in 2023
• Pilbara Minerals share price on watch following Q2 update
• 5 things to watch on the ASX 200 on Friday
• How much profit will Pilbara Minerals shares make in 2023?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 ASX-listed company operating retail chains Rebel Sport, BCF and Super Cheap Auto is facing legal action brought on by the Fair Work Ombudsman.

The ombudsman on Friday revealed that the Federal Court would hear of “serious contraventions” under the Fair Work Act against Super Retail Group Ltd (ASX: SUL) relating to alleged underpayment of staff.

Four of Super Retail’s subsidiaries are also named in the legal action.

“The breaches alleged in this case – inadequate annual salaries for employees stretching across multiple years – have become a persistent issue for businesses,” said Fair Work ombudsman Sandra Parker.

“Every employer should be clear that if annual salaries do not cover all minimum lawful entitlements for all hours actually worked, the results can be substantial back-payment bills, plus the risk of significant court-ordered penalties.”

Some staff left $34,500 short

The court case will focus on a sample of 146 employees who were allegedly underpaid $1.14 million for work between January 2017 and March 2019.

Super Retail has actually undertaken a remediation program, but the ombudsman will state that the back payments fall short.

Some staff members have been underpaid as much as $34,500.

Super Retail chief executive Anthony Heraghty announced to the ASX that any incorrect payment of staff was “unacceptable and contrary to the company’s values”.

“We are sorry for the impact on our team members and today we restate our unreserved apology to each person affected,” he said.

“Since 2018, we have changed our processes to fix the issues and help to ensure team members are being paid correctly.”

Super Retail shares were down 0.64% in mid-morning trade Friday. The stock currently pays out a 5.6% dividend yield.

First-ever court action against holding company

Parker stated that this is the first time that court action has been taken against a holding company for the alleged sins of its subsidiaries.

“Holding companies who allegedly knew or reasonably should have known of underpayments within their group will be held to account,” she said.

“We expect that holding companies have thorough governance measures in place to promote compliance across their subsidiaries, and that they act immediately to rectify any problems found.”

The post ASX 200 company hauled to court for ‘serious contraventions’ appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Leading brokers name 3 ASX shares to buy today
• Should I buy Super Retail shares following Monday’s stellar update?
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tony Yoo 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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail 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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If I were looking to invest $40,000 into the Australian share market, I wouldn’t be aiming for a quick profit.

I would put my money to work over the long term with the aim of growing that investment into $1 million one day.

But how realistic is turning $40,000 into $1 million with ASX shares? The good news is that it is very realistic if you have time on your side, thanks to the power of compounding.

Turning $40k into $1 million with ASX shares

As of the end of 2021, the Australian share market had provided investors an average return of 9.58% per annum over a 30-year period.

Given that this is broadly in line with the historical returns generated on Wall Street, I believe it is fair to expect something similar over the next 30 years. Though, it is worth remembering that past performance is no guarantee of future returns.

If I were to make a single investment of $40,000 into the share market and earn that same level of return for 30 years, I would fall a little short of my aim at approximately $623,000.

However, it wouldn’t take too much longer to reach my target if the returns continued.

Although it has taken 30 years to grow my original investment by almost $600,000, the power of compounding means that it would take only another 5.2 years to take that number to the $1 million mark.

Getting there sooner

If I were able to make a few smaller investments along the way, I could potentially reach my goal even sooner.

Starting with $40,000 and then adding $500 a month, or $6,000 a year, would grow my portfolio to the $1 million mark after 25 years based on an average annual return of 9.58%.

Increase the annual contribution to $12,000 a year, and we’re there in approximately 20 years.

But which ASX shares should you buy?

If you want to invest for the long term, my advice is to focus on buying ASX shares with strong business models, competitive advantages, and favourable long-term outlooks.

I believe ASX shares Altium Limited (ASX: ALU), CSL Limited (ASX: CSL), and Xero Limited (ASX: XRO) tick these boxes, so they could all be worth a closer look.

Alternatively, investors could consider exchange-traded funds (ETFs) based on indices such as the Betashares Nasdaq 100 ETF (ASX: NDQ) and Vanguard Australian Shares Index ETF (ASX: VAS).

The post How I’d invest $40k in ASX shares and aim for $1 million appeared first on The Motley Fool Australia.

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More reading

• Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead
• These ASX growth shares have massive global opportunities: Goldman Sachs
• 5 reasons I’d consider buying the Vanguard Australian Shares Index ETF (VAS)
• My ASX shares fell 15% last year. Here’s what I’m doing now
• Xero earnings per share forecast to surge 180% in FY24: Morgans

Motley Fool contributor James Mickleboro has positions in Altium, BetaShares Nasdaq 100 ETF, CSL, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, BetaShares Nasdaq 100 ETF, CSL, and Xero. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF and 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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The Liontown Resources Ltd (ASX: LTR) share price is ending the week deep in the red.

At the time of writing, the lithium developer’s shares are down 10% to $1.35.

Why is the Liontown share price crashing?

Investors have been selling down the Liontown share price on Friday following the release of an update on the company’s Kathleen Valley Lithium Project in Western Australia.

That update reveals that that construction of the project is going to cost more than previous estimates, which appears to have sparked fears that a capital raising may be required.

This is the second time that the capital cost of the project has been revised higher in a little over six months.

According to the release, additional scope and cost escalation has resulted in Kathleen Valley’s estimated capital cost to first production from the process plant increasing to $895 million inclusive of $40 million in contingency.

As a comparison, in June, Liontown revised its pre-production capital cost estimate from $473 million to $545 million.

The issue here is that Liontown revealed that it has spent $73 million on the project to date, bringing down the remaining capital cost of to $822 million including its contingency funds. However, it only has ~$685 million of remaining funds, comprising ~$385 million in existing cash reserves and $300 million via a debt facility.

Liontown advised that it is progressing a range of potential further funding options. Though, additional funding is not currently expected to be required until the end of 2023.

It also notes that it sees opportunities to generate revenue through a Direct Shipping Ore (DSO) opportunity designed to monetise material not previously expected to be processed. This is what Core Lithium Ltd (ASX: CXO) did recently, raising somewhere in the region of US$14 million.

Production expansion

Despite what the Liontown share price might indicate, the announcement wasn’t all bad news for shareholders of the ASX 200 lithium share.

Management revealed that the company has optimised the plant capacity design to deliver a 20% increase in the initial plant throughput rate to 3Mtpa (up from 2.5Mtpa).

This is expected to drive increased SC6.0 production to take advantage of strong short- and medium-term forecast lithium pricing.

Finally, it also confirmed that the Kathleen Valley Project remains on-track for first production from the process plant in mid-2024, with prudent scope adjustments made early in the construction schedule to further de-risk and maintain this timing.

The post Why is ASX 200 lithium share Liontown tanking 10% today? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 lithium shares struggling on Monday?
• Here are the top 10 ASX 200 shares today
• Which ASX lithium shares are producing and which are not in 2023?
• Here are the top 10 ASX 200 shares today
• What’s the outlook for ASX 200 lithium shares in 2023?

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 Rio Tinto Limited (ASX: RIO) share price has outperformed the S&P/ASX 200 Index (ASX: XJO) over the last 12 months. And one broker tips it to continue to rise.

Right now, the Rio Tinto share price is $126.01, 11.1% higher than it was this time last year.

For comparison, the ASX 200 has gained 1.3% in that time.

Let’s take a look at whether Rio Tinto shares could represent a buying opportunity this year.

Rio Tinto shares tipped to gain 6.6%

The Rio Tinto share price has had a good start to this year. It’s gained 9% year to date amid strong quarterly results, which dropped on Tuesday. This week’s release also led one top broker to up its price target for the stock.

The iron ore production at the company’s Pilbara operations increased 6% year-on-year last quarter, reaching 89.5 million tonnes, while iron ore shipments lifted 4% year-on-year to 87.3 million tonnes, and its realised average iron ore price came in at US$97.60 per wet metric tonne.

Its iron ore guidance for 2023 remains flat at 320 million tonnes to 335 million tonnes.

Meanwhile, the company upgraded its mined copper production forecasts to between 650 thousand tonnes to 710 thousand tonnes after completing its US$3.1 billion acquisition of Turquoise Hill Resources in mid-December.

Goldman Sachs upped its price target on Rio Tinto shares from $130 to $134.40 on the back of the release. That represents a potential 6.6% upside.

It believes the stock is trading at a “compelling valuation” and expects it to restart production growth this year.

It also likes the company’s low carbon aluminium business, saying it’s one of the highest margin, lowest emitting of its type in the world.

I think Rio Tinto could be a 2023 buy

There are plenty of reasons to like the ASX 200 iron ore giant right now, in my opinion.

The stock currently offers a price-to-earnings (P/E) ratio of 10.29 and a 26.4% debt-to-equity ratio, according to CommSec data. Additionally, its current 7.6% dividend yield is particularly tempting.

All that, combined with Goldman Sachs’ positive growth forecast, leads me to believe Rio Tinto shares could be a worthwhile addition to my portfolio in 2023.

The post Should I buy Rio Tinto shares in 2023? appeared first on The Motley Fool Australia.

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More reading

• My top predictions for ASX 200 mining shares in 2023
• Here are the top 10 ASX 200 shares today
• Why Allkem, DGL, Nanosonics, and Rio Tinto shares are pushing higher today
• Here are 2 excellent high yield ASX dividend shares that experts rate as buys
• Top brokers name 3 ASX shares to buy today

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 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 S&P/ASX 200 Index (ASX:XJO) bank share sector has numerous examples of high-yielding names.

But, some are expected to produce more dividend income than others, in yield terms.

While dividend income isn’t the only thing we should pay attention to, it can be particularly rewarding from Australian companies because of the yield-boosting effect of franking credits.

With that in mind, the higher-yielding ones could be particularly enticing.

ANZ Group Holdings Ltd (ASX: ANZ)

ANZ is the biggest bank on this list with a market capitalisation of around $75 billion, according to the ASX.

One of the beneficial factors for banks is that they trade on low price/earnings (p/e) ratios, which boosts the dividend yield on offer.

Commsec numbers suggest that ANZ shares could pay an annual dividend per share of $1.54. At the current ANZ share price, this translates into a forward grossed-up dividend yield of 8.9%.

Not only is ANZ hoping to pay a good dividend to shareholders, but it also wants to grow profit by acquiring the banking division of Suncorp Group Ltd (ASX: SUN), which will add scale and allow the ASX 200 bank share to better compete in Queensland.

At the current ANZ share price, it’s valued at 10x FY23’s estimated earnings, according to Commsec.

Bank of Queensland Limited (ASX: BOQ)

BOQ has a market capitalisation of $4.6 billion, according to the ASX.

This regional bank may be a fraction of the size of ANZ, but its potential dividend yield is even bigger.

Commsec numbers suggest that BOQ could pay an annual dividend per share of 52 cents. This equates to a projected grossed-up dividend yield of 10.6%.

The banking sector is currently benefiting from the rising interest rate environment. Banks are passing on interest rates quicker to borrowers than to savers, which is helping push up lending profitability. This can enable bigger profits and larger dividends for the ASX 200 bank shares.

At the current BOQ share price, it is valued at 9x FY23’s estimated earnings according to Commsec.

Bendigo and Adelaide Bank Ltd (ASX: BEN)

Bendigo Bank is another of the smaller but still sizeable banks in Australia. According to the ASX, it has a market capitalisation of $5.7 billion.

The ASX 200 bank share is expected to generate more profit in FY23, thanks to a mix of lending growth and stronger profitability due to the higher interest rates.

However, there is a danger for all banks that some households could run into trouble if they can’t afford the much higher interest rates.

But, at the moment, the Bendigo Bank share price is valued at 11x FY23’s estimated earnings with a possible grossed-up dividend yield of 8.5%.

The post Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8% appeared first on The Motley Fool Australia.

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More reading

• What could we expect for ASX 200 bank shares this earnings season?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• The Suncorp share price is on fire today. Should you buy?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. 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 Whitehaven Coal Ltd (ASX: WHC) share price is on the move on Friday.

At the time of writing, the coal miner’s shares are up 5% to $9.38.

This follows the release of the company’s quarterly update, which revealed another three months of strong cash generation.

Whitehaven share price charges higher on record half

For the three months ended 31 December, Whitehaven Coal delivered managed run-of-mine (ROM) production of 4.8Mt, up 21% on the previous quarter and 50% on prior corresponding period.

This underpinned managed sales of produced coal of 4.3Mt, up 16% on the September quarter and 21% on the prior corresponding period.

And while prices softened a touch to an average of A$527 per tonne for the quarter, down from A$581 per tonne in the previous quarter, this was still more than double what it was commanding a year earlier. As a result, the company delivered a record average first half coal price of A$552 per tonne.

And with total managed sales coming in at 8Mt for the half, management revealed that the company expects to post record half year EBITDA of $2.6 billion. This will be more than quadruple the $0.6 billion reported in the prior corresponding period.

Combined with its strong cash generation, the company finished the half with a net cash position of $2.5 billion.

Management commentary

Whitehaven Coal’s CEO, Paul Flynn, was pleased with the company’s performance given the wet weather. He said:

During the December quarter, we maintained strong operational performance at our Narrabri underground mine which helped offset the impact of continued wet weather on volumes from our open cut mines.

Strong ongoing demand for high CV coal, coupled with supply constraints, underpinned high prices, a solid December quarter and an exceptional first half result. We generated $2.5 billion of cash from operations in the half year, including $1.0 billion in the December quarter. At the end of December, we held a net cash position of $2.5 billion.

The Company is performing well and delivering strong returns for our shareholders including buying back $593 million of shares in the first half of FY23. Energy security remains a key imperative for our customers throughout Asia, and we are continuing to supply high quality coal through the energy transition for the benefit of all stakeholders.

Outlook

No change has been made to the company’s full year guidance.

Management advised that it remains on track to deliver within the range of its overall production, sales, and cost guidance for FY 2023.

This includes managed ROM coal production of 19 to 20.4Mt, managed coal sales of 16.5Mt to 18Mt, and unit costs of $95 to $102 per tonne.

The post Whitehaven Coal share price charges higher on record half appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 companies brimming with cash right now
• Why is the Whitehaven share price flaming out today?
• Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24?
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24
• Burning hot: The outlook for ASX 200 energy shares in 2023

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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