Tag: Motley Fool

The Allkem Ltd (ASX: AKE) share price is on the move on Wednesday morning.

At the time of writing, the ASX 200 lithium miner’s shares are up 1% to $12.45.

Why is the Allkem share price rising?

Investors have been bidding the Allkem share price higher today following the release of the company’s second quarter update.

According to the release, Allkem’s group revenue for the quarter was US$265 million and its group gross operating cash margin was approximately US$218 million. This reflects record sales revenue of US$151 million from the Olaroz operation despite softer sales units and revenue of US$83 million from the Mt Cattlin operation.

An additional US$32 million in revenue was generated from shipments of 53,715 dmt of low grade spodumene concentrate.

What drove the strong revenue?

Pleasingly, Allkem is still commanding strong prices for its lithium, which helped drive the solid top line result.

Allkem recorded an average of US$46,706 per tonne for its lithium carbonate during the quarter, which was up 16% from the first quarter.

It was a similar story for its spodumene concentrate, which came in 5% higher quarter on quarter at US$5,284 per tonne.

Another positive was the record performance of the Olaroz Lithium Facility, which reported production of 4,253 tonnes of lithium carbonate. This was up 17% on the previous corresponding period and took its half year production to a record of 7,542 tonnes. This was 13% higher than the prior record in 2019.

Outlook

The good news is that management appears positive on the company’s outlook despite some analysts predicting that times could get tough for the industry. It said:

EV sales growth is expected to remain robust in 2023 given strong order books and potential pent-up demand. Supportive government targets and policies announced globally (including subsidies or tax incentives) continue to ensure strong fundamentals for future growth

It also revealed that it expects the weighted average price for third party sales of lithium carbonate products in the current quarter to be in line with what was received in the second quarter.

The post Guess which ASX 200 lithium share just capped off a record quarter appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 lithium shares struggling on Monday?
• 2 ASX 200 mining shares to buy as China reopens: analysts
• Own ASX lithium shares? Here’s the latest lithium price forecast
• Brokers name 3 ASX shares to buy today
• Broker says Allkem share price can rise 20% even if lithium prices fall

Motley Fool contributor James Mickleboro has positions in Allkem. 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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S&P/ASX 200 Index (ASX: XJO) coal shares were among the best performers last year. The dividend income is expected to flow this year. But, could shareholders keep getting big payments for years to come?

Coal prices jumped higher in 2022 after the Russian invasion of Ukraine as countries looked for alternative sources of energy.

Mining costs don’t typically change much month to month, so when the resource price climbs it adds a lot to revenue but it can make the net profit after tax (NPAT) jump much higher.

While it seems obvious that the next result will show large profits and dividends, how long can this continue? The world can’t just instantly conjure up another major energy source – it could take years.

Due to the current situation, ASX 200 coal shares could be cash machines until at least FY24.

New Hope Corporation Limited (ASX: NHC)

New Hope is expected to keep benefiting substantially from coal earnings in FY24 according to the profit estimate on Commsec.

It could generate earnings per share (EPS) of $1.83 in the 2024 financial year and then pay an annual dividend per share of $1.32. This could translate into a grossed-up dividend yield of around 30%.

In fact, the FY25 grossed-up dividend yield could be 14% based on the current estimates.

But, remember that these are just estimates and things could be quite different in the future. Coal prices may not be quite as strong as analysts are expecting and therefore the dividends could be smaller. But, if coal prices outperform then the dividend could turn out to be bigger.

Whitehaven Coal Ltd (ASX: WHC)

Whitehaven is another ASX 200 coal share that has done very well out of these conditions with higher coal prices.

It’s also expected to pay a very large dividend in FY23. But the good times could continue in FY24.

Commsec numbers suggest that Whitehaven may pay an annual dividend per share in FY24 of 91 cents. If that is paid, then Whitehaven’s projected grossed-up dividend yield could be around 15%.

After that, in FY25, the early estimation is that Whitehaven could pay a grossed-up dividend yield of 11.5%.

Coronado Global Resources Inc (ASX: CRN)

Coronado Global is another ASX 200 coal share that is expected to pay very large dividends.

In FY23 it could pay an annual dividend per share of 35.7 cents, which translates into a dividend yield of 17.3%.

Profitability could reduce in the coming years, with a possible dividend yield of 11.5% in FY24.

Foolish takeaway

Even if coal earnings do drop off, it could still be strong enough for them to pay dividend yields of more than 10% in FY24. However, investors need to consider how much the share prices may reduce if the earnings fall.

The post Can ASX 200 coal shares really deliver dividend yields of over 10% in FY24? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 to yield 4.4% in 2023. These 2 dividend shares pay more than twice that
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why I’ll be buying more ASX dividend shares for my portfolio in 2023

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 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 Macquarie Group Ltd (ASX: MQG) share price has had a ripper decade.

If an investor were to have bought $1,000 of the investment bank’s stock 10 years ago today, they likely would have walked away with 27 securities and $29 change, having paid $35.95 per share.

Today, those 27 shares would be worth a total of $4,840.56. The Macquarie share price last traded at $179.28.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen around 57% over the last 10 years.

But what kind of return have Macquarie shares provided when we factor in the company’s dividends as well? Let’s take a look.

How much have Macquarie shares paid in dividends in 10 years?

Here are all the dividends paid by those holding Macquarie shares over the last 10 years:

Macquarie dividends’ pay date	Type	Dividend amount
December 2022	Interim	$3
July 2022	Final	$3.50
December 2021	Interim	$2.72
July 2021	Final	$3.35
December 2020	Interim	$1.35
July 2020	Final	$1.80
December 2019	Interim	$2.50
July 2019	Final	$3.60
December 2018	Interim	$2.15
July 2018	Final	$3.20
December 2017	Interim	$2.05
July 2017	Final	$2.80
December 2016	Interim	$1.90
July 2016	Final	$2.40
December 2015	Interim	$1.60
July 2015	Final	$2
December 2014	Interim	$1.30
July 2014	Final	$1.60
December 2013	Interim	$1.25
July 2013	Final	75 cents
Total:		$44.82

As readers can see, each Macquarie share has paid out $44.82 in dividends since January 2013.

Meaning, our figurative parcel has likely produced $1,210.14 of passive income over its life. That’s more than the initial investment!

It also brings the return posted by Macquarie shares in that time – factoring in both dividends and share price gains – to a whopping 523% return on investment (ROI).

Just imagine the potential gains if one were to have reinvested their dividends in the company, thereby compounding their wins.

Not to mention, most of the dividends handed out by the company over the last 10 years have been at least partially franked.

Macquarie shares currently trade with a 3.6% dividend yield.

Sydney Airport divestment

Long-term shareholders also likely saw an additional return from their investment in 2014. That was the year the ASX 200 bank palmed off its 17% stake in the once-ASX-listed Sydney Airport.

The bank offered shareholders one Sydney Airport share for every Macquarie share they held.

Technically, the value of the airport was offloaded to shareholders in two accounting components – a $2.57 per share reduction of capital and a $1.16, 40% franked special dividend.

If our figurative investor were to have held their Sydney Airport stake over the coming years, they would have been paid $8.75 per share – a total of $236.25 – when the airport was taken over in 2022.

The post Did you buy $1,000 of Macquarie shares 10 years ago? If so, here’s how much dividend income you’ve earned appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Buy this ASX 200 bank share with 21% upside: Morgan Stanley
• Why Integrated Research, Macquarie, Pilbara Minerals, and South32 shares are pushing higher
• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• ASX financial shares lifted the ASX 200 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 no position in any of the stocks mentioned. The Motley Fool Australia 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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If you’re looking to boost your income portfolio, then you may want to look at the shares listed below.

Here’s why these ASX dividend shares could be worth considering right now:

Rural Funds Group (ASX: RFF)

The first ASX dividend share for income investors to look at is Rural Funds.

It is an agricultural focused real estate investment trust (REIT) that owns a high quality portfolio of assets across a range of agricultural industries. These include almond and macadamia orchards, premium vineyards, water entitlements, cropping and cattle farms.

These properties are leased to major players in the industry such as Australia’s largest meat processor, JBS Australia, and wine giant Treasury Wine Estates Ltd (ASX: TWE).

Bell Potter is a fan of the company and has a buy rating and $2.75 price target on its shares.

As for dividends, the broker is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.43, this represents yields of 4.8% and 5.2%, respectively.

South32 Ltd (ASX: S32)

Another ASX dividend share that experts are tipping as a buy is diversified mining and metals company South32.

Morgans is a fan of the mining giant due to its attractive valuation, the de-risking of its growth portfolio, and its earnings-linked dividend policy. The broker expects the latter to lead to some very big dividends being paid in the coming years.

For example, the broker is forecasting fully franked dividends per share of 23 cents in FY 2023 and 22 cents in FY 2024. Based on the current South32 share price of $4.56, this will mean yields of 5% and 4.8%, respectively.

Morgans has an add rating and $5.30 price target on the miner’s shares.

The post Buy South32 and this ASX dividend share: experts appeared first on The Motley Fool Australia.

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More reading

• My ASX shares fell 15% last year. Here’s what I’m doing now
• Why Baby Bunting, Origin, Rio Tinto, and South32 shares are dropping today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• 2 ASX 200 mining shares to buy as China reopens: analysts
• Here are the 3 most heavily traded ASX 200 shares on Friday

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 Rural Funds Group. The Motley Fool Australia has recommended Treasury Wine Estates. 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 a lot of pain last year. So did my portfolio which dropped around 15%, though that doesn’t account for the dividends I received.

Some of my biggest investments are growth-focused, with two of my biggest holdings being listed investment companies (LICs) that target businesses with good growth prospects.

Hopefully, the difficulty seen last year last won’t be repeated this year. But whatever happens this year, I’m not going to let it affect my investment strategy in 2023.

Firstly, not every one of my ASX shares had a bad year. Fortescue Metals Group Limited (ASX: FMG) shares performed well for my portfolio; the company also paid another big dividend.

How I’m planning to invest in 2023

When share prices drop, I get excited.

I plan to keep investing whether the market is a bit higher or a bit lower.

While share prices are moving, I believe there will always be an opportunity somewhere, whether it’s share X or share Y.

Some individual names can become attractively valued compared to other options over a relatively short amount of time.

For example, BHP Group Ltd (ASX: BHP) shares are sitting at around $50 after a solid run over the past few months. But there are a number of other names that have been heavily punished since the start of 2022 such as Xero Limited (ASX: XRO), Megaport Ltd (ASX: MP1), and Siteminder Ltd (ASX: SDR).

A few months ago, I was suggesting that both ASX mining shares and ASX retail shares were cheap. But, both of those areas have gone on strong runs recently.

Where I’d look for ASX share bargains now

I think there are still some sectors that were heavily hit by interest rate rises but haven’t seen a recovery in investor sentiment.

The ASX tech share sector is one area that I believe is a big opportunity. I think names like Xero and Megaport are compelling because of their revenue growth and increasing focus on profitability.

Other tech names I like the look of include Bailador Technology Investments Ltd (ASX: BTI), Frontier Digital Ventures Ltd (ASX: FDV), and REA Group Limited (ASX: REA).

I also think that some property-based ASX shares could be at a good discount to their actual underlying value. Names like Brickworks Limited (ASX: BKW) and perhaps real estate investment trusts (REITs) Centuria Industrial REIT (ASX: CIP) and Rural Funds Group (ASX: RFF) could also be opportunities.

While there is some pessimism around, I think that it won’t always be the case. While the share market has recovered some of its lost ground over the last few months, I believe there are still plenty of opportunities and that’s where I’ll be looking.

The post My ASX shares fell 15% last year. Here’s what I’m doing now appeared first on The Motley Fool Australia.

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More reading

• ASX 200 mining shares: To buy or not to buy?
• Xero earnings per share forecast to surge 180% in FY24: Morgans
• Goldman Sachs says these ASX 200 blue chip shares are buys
• Why I’ll be buying more ASX dividend shares for my portfolio in 2023
• Tech turnaround: Expert picks 2 ASX shares to buy for a 2023 revival

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments, Brickworks, Fortescue Metals Group, and Rural Funds Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments, Brickworks, Frontier Digital Ventures, Megaport, SiteMinder, and Xero. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, and Xero. The Motley Fool Australia has recommended Bailador Technology Investments, Frontier Digital Ventures, Megaport, and REA 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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Although — or maybe because — small-cap ASX shares were absolutely hammered in 2022, some experts are tipping a roaring comeback in 2023.

IML portfolio managers Simon Conn and Marc Whittaker are certainly in this camp and specifically like the look of small-cap industrials.

The fund managers told clients on an IML blog post that the greatly reduced valuations for these stocks now factor in “a lot of negative news” already.

“Small industrials are trading at their biggest discount for over a decade,” read the blog.

“Small industrials and large industrials have tracked each other quite closely for much of the past 10 years. However, over the past year a significant value gap has opened between the two indexes.”

If you’re wondering which ASX shares would be the best to buy right now to take advantage of this small-cap revival, the IML team thankfully named three:

‘Astutely led’ with a bank of assets

The IML fundies reckon Bega Cheese Ltd (ASX: BGA) did not have a chance to show its full potential in the 2022 financial year because of a string of one-off hurdles.

“Shanghai shutdowns negatively impacted its June 2022 result by over $40 million. Then as operations were returning to normal Bega witnessed a rapid increase in costs, particularly the price it pays farmers for milk,” read the memo.

“However, at its recent AGM, Bega confirmed that it had finished implementing these price increases and its profit for the 2nd half of FY2023 should be back to the level it anticipated when it bought Lion Dairy and Drinks [in January 2021].”

Looking ahead to financial year 2024, Conn and Whittaker love the outlook for Bega because of three factors: competitive advantage, balance sheet, and management quality.

“Bega has a significant asset base on its balance sheet, including land & buildings worth circa $400 million,” read the blog.

“Bega has been astutely led by the current chairman for a significant time, who has overseen the company grow from a small dairy company with one operating site on the South Coast of NSW to today being one of Australia’s leading food and dairy companies.”

The Bega share price has declined more than 21% over the past year, but has spiked up 27.5% since early November.

‘Well-recognised brands’ at a cheap valuation

GUD Holdings Limited (ASX: GUD) is primarily a vehicle parts and accessories provider.

According to Conn and Whittaker, its oldest business is the automotive aftermarket, distributing products like Ryco filters and DBA brakes.

“This division is relatively defensive given the wear and tear nature of demand for its products, and generates significant cash — however it has limited growth potential,” they said.

“GUD has made a series of acquisitions over recent years in order to diversify its earnings. This makes it more resilient, while providing a potential growth driver for earnings.”

Similar to Bega, GUD has had its share of troubles with supply disruptions and cost inflation.

But its growth potential, pricing power, and cheap valuation have the IML fund managers licking their lips.

“At current levels, GUD is very attractively priced at under 10 times FY2023 earnings with earnings that should grow into FY2024 as supply chains normalise and recently won contracts with major Australian car companies are fulfilled,” read the blog post.

“GUD has had good success in the past in raising prices to mitigate cost increases, given its portfolio of well-recognised brands in the aftermarket and focus on wear and tear parts for the trade, where range and service are valued.”

COVID cash well invested

Pathology services provider Australian Clinical Labs Ltd (ASX: ACL) saw earnings grow strongly during the COVID-19 pandemic.

The company used that cash, according to Conn and Whittaker, to pay off its debts, leaving it in a strong financial position for post-pandemic growth.

Like Bega Cheese, the IML team reckons ACL displays excellent competitive advantage.

“ACL has invested significantly in its national laboratory footprint, which allows it to flex its costs up and down as volumes fluctuate,” read the blog post.

“This unified national laboratory system enables it to process samples in any laboratory around the country, so maximising the efficiency of its fixed-cost, laboratory network.”

The pair also love ACL’s growing earnings and management team.

“The recent acquisition of Medlab is a significant development for the company as this provides ACL with a presence in the Queensland market for the first time, meaning it is now able to offer a national footprint to customers and tender for national contracts,” said the IML experts.

“It is [now] one of only three national pathology providers.”

There is no doubt ACL shares are now heavily discounted. It has dropped more than 43.5% over the past 12 months.

The post ‘Very attractive valuations’: Experts name 3 small-cap ASX shares to buy appeared first on The Motley Fool Australia.

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More reading

• 2 hammered ASX shares to buy before they rise again: Celeste
• Are healthy returns on the horizon for ASX 200 healthcare shares in 2023?
• 3 ASX 200 automotive shares worth buying despite headwinds: Citi
• 5 things to watch on the ASX 200 on Tuesday

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 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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Earlier this week, The Motley Fool readers heard IML portfolio manager Michael O’Neill declaring 2023 as the time to double down on dividend shares.

His theory was that a global economic slowdown this year will force investors to rely on the consistency and reliability of income-producing stocks.

Even longer term, with the era of near-zero interest rates behind us, capital growth will be anaemic, according to O’Neill.

This means that investors will have no choice but to turn to shares that pay dividends for decent returns.

“While markets may or may not perform well in 2023, what is very unlikely is that we’ll enter another long bull market with a similar amount of capital growth,” O’Neill said on the IML blog.

“For us, with capital growth likely to be lower in the medium-long term, it’s the right time to place greater focus on income.”

Helpfully, he named four specific ASX dividend shares that his team loves at the moment:

High dividends with pricing power and market dominance

In general, the IML team prefers industrials for “long-term, consistently high dividends”. 

“We are also looking at which sectors and stocks are likely to perform well, and so provide a steady or growing dividend in a high inflation environment.”

All four of his picks are “currently trading at reasonable valuations”:

Company	FY2024 price-to-earnings ratio	FY2024 dividend yield
Aurizon Holdings Ltd (ASX: AZJ)	12.3x	7.3%
Metcash Limited (ASX: MTS)	11.9x	5.9%
Orica Ltd (ASX: ORI)	16.1x	3.4%
Suncorp Group Ltd (ASX: SUN)	12.1x	6.8%

O’Neill’s stocks each have slightly different strengths, which demonstrate the range of qualities that his team seeks in income-producing shares.

Suncorp is a classic example of a business that has pricing power.

“Their strong market position gives them the ability to pass on rising costs to their customers.”

Explosives maker Orica is an example of a company operating in a “rational” industry.

“The main players are motivated by profit and act ‘rationally’ to maximise long-term profits – not spending large amounts of capital at the top of the cycle, or chasing market share at all costs through unprofitable discounting.”

Grocery wholesaler Metcash is in the great position of selling goods that are considered “essential”, which will not see waning demand due to a lagging economy or inflation.

Finally, O’Neill loves rail operator Aurizon due to the nature of its client agreements.

“Ideally, contracts are structured with adjustments for inflation and pass-through of essential input costs such as fuel,” he said.

“Aurizon benefits from such contractual protections.”

The post 4 best ASX dividend shares to buy right now: expert appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Are ASX 200 retail shares on sale in 2023?
• Why ASX dividend shares are so ‘critical’ right now: fundie
• When it comes to ASX 200 dividend shares, is boring better?
• How to minimise risk using ASX 300 dividend shares: fundie

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon and Metcash. 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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Imagine what $1 million could do for you and your future. If you’re anything like me, it’s a lot. However, for billionaire Warren Buffett, $1 million is likely pocket change.

The investing great currently boasts a net worth of more than US$110 billion, and he built the most of it by buying and holding shares.

In fact, Buffett’s company, Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B) reportedly returned 20% on average between 1965 and 2019.

Fortunately for us, Buffett has freely given his investing advice over the years. Here are three key lessons I’ll be taking into 2023 in my aim to build a $1 million portfolio of ASX shares.

3 pieces of Buffett advice I’ll be using in 2023

Buy ASX shares I understand and believe in

The first Buffett tip I’ll be following in 2023 is only invest in a business you appreciate and truly believe will succeed in the future. There are two quotes from the billionaire that speak to this idea:

#1: Investment must be rational; if you can’t understand it, don’t do it.

#2: Risk comes from not knowing what you’re doing.

There are hundreds of business models among the 2,000 companies listed on the ASX. It’s entirely unlikely that any single person could learn the intricacies of them all.

That’s why I plan to focus on what I truly know to build my portfolio. Personally, I’ll spend the most time looking at shares in retailers and real estate investment trusts (RIETs) this year. Though, I will work to diversify my investments as well.

Focus on valuations

Secondly, the billionaire famously said:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Once Buffett identifies a share he believes is a good buy, he doesn’t go out and snap it up straight away. The investing great first determines if it’s trading at a good price.

In doing so, he looks at whether the company offers a ‘moat’ – or competitive advantages over peers – to protect against hard times.  

Be consistent like Buffett

Finally, I believe consistency will be the key to growing my portfolio to $1 million, starting in 2023.

That means consistently setting aside funds to invest, consistently buying shares offering the above qualities, and consistently reinvesting any dividends I might receive, no matter what the market might do.

By reinvesting dividends, I can compound my investments, thereby growing my portfolio without forking out extra cash. And the first rule of compounding is, according to Berkshire vice chair Charlie Munger:

Never interrupt it unnecessarily.

After all, Buffett is well known for not making investment decisions based on what’s happening or might happen, with the broader market.   

The post I’m aiming for $1 million by following Warren Buffett’s advice in 2023 appeared first on The Motley Fool Australia.

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More reading

• 4 best ASX dividend shares to buy right now: expert
• ASX 200 mining shares: To buy or not to buy?
• 5 things to watch on the ASX 200 on Wednesday
• Top ASX value shares to buy in 2023
• 3 fantastic ETFs for ASX investors to buy this month

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway, short January 2023 $200 puts on Berkshire Hathaway, and short January 2023 $265 calls on Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Many ASX 200 mining shares have had a top run in the past year, but are they still a buy?

Analysts have just downgraded the outlook for multiple ASX miners. These include BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Metals Group Ltd (ASX: FMG), Core Lithium Ltd (ASX: CXO), and Newcrest Mining Ltd (ASX: NCM).

So what are brokers saying about some of these ASX 200 mining shares?

Multiple mining shares cut

Capital market company CLSA has cut the Fortescue share price outlook to a sell with a $19 price target, the Australian Financial Review reported. Meanwhile, BHP has been cut to reduce with a $48.50 price target. And Rio Tinto has also been downgraded to reduce at a $117.50 price target.

Rio Tinto, BHP, and Fortescue are all major producers of iron ore, along with other minerals.

Fortescue shares closed on Tuesday at $22.03 each, meaning CLSA is tipping a 13.8% downside. BHP shares closed at $49.14, while Rio Tinto shares finished the day at $120.67. At those prices, CLSA analysts are forecasting BHP shares to have downside of 1.3% and Rio Tinto shares to slide 2.6%.

Meanwhile, Macquarie has slashed gold miner Newcrest to a neutral rating with a $25 price target, the AFR reported. Newcrest shares finished at $22.75 on Tuesday. This means despite the rating downgrade, Macquarie still sees nearly 10% upside for the Newcrest share price.

Lithium miner Core Lithium has also been slapped with a new “underweight” rating by JPMorgan. Core Lithium shares closed at $1.02 apiece on Tuesday.

What else?

Despite the broker downgrades, not everyone is negative on commodities. Goldman Sachs global head of commodities research Jeff Currie is very optimistic on the outlook for 2023.

In a presentation in London, Currie stated commodities have “the strongest outlook of any asset class in 2023″, Bloomberg reported. Currie said:

You cannot come up with a more bullish concoction for commodities.

Lack of supply is apparent in every single market you look at, whether it is inventories at critical operating levels or production capacity exhausted.

Share price snapshot

Most of the ASX 200 mining shares hit by broker downgrades have soared ahead in the last year.

For example, BHP shares have leapt 19.59% in the past 52 weeks.

Rio Tinto shares have gained 9.67% in the past year.

Fortescue shares have climbed 6% in the past 52 weeks.

The Core Lithium share price has jumped 15.91% in the last year.

However, Newcrest shares have slid nearly 7% in the last year.

The post ASX 200 mining shares: To buy or not to buy? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• 3 catalysts for Core Lithium shares to rip higher in 2023
• Why Baby Bunting, Origin, Rio Tinto, and South32 shares are dropping today
• Rio Tinto share price falls on Q4 update

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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On Tuesday, the S&P/ASX 200 Index (ASX: XJO) ended its winning streak with a very small decline. The benchmark fell 1.9 points to 7,386.3 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to bounce back on Wednesday despite a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 15 points or 0.2% higher this morning. In late trade on Wall Street, the Dow Jones is down 1%, the S&P 500 is down 0.2%, and the Nasdaq is up 0.1%.

Oil prices mixed

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) will be on watch after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is down 0.15% to US$79.74 a barrel and the Brent crude oil price has risen 1.1% to US$85.40 a barrel. Oil prices hit two-week highs at one point on Chinese demand optimism.

Rio Tinto named as a buy

The Rio Tinto Ltd (ASX: RIO) share price is in the buy zone according to analysts at Goldman Sachs. In response to the miner’s quarterly update, the broker reiterated its buy rating and lifted its price target to $134.40. Goldman notes that the miner delivered “record 4Q Pilbara production, [and] group production to lift ~8% in 2023.”

Gold price falls

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could come under pressure today after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.7% to US$1,907.8 an ounce. Traders may have been taking profit after the precious metal hit a multi-month high.

JB Hi-Fi shares rated as a buy

The JB Hi-Fi Limited (ASX: JBH) share price may be good value after its trading update. That’s the view of analysts at Morgans, which have retained their add rating with an improved $53.00 price target. The broker commented: “Although trading conditions will be more difficult in 2H23, we believe JBH is well placed to ride out the turbulence and deliver shareholder value over the medium-term.”

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Top ASX value shares to buy in 2023
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why I’ll be buying more ASX dividend shares for my portfolio in 2023
• Here’s why the JB Hi-Fi share price is smashing the ASX 200 today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Jb Hi-Fi. 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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