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It’s a good day to be invested in Global Lithium Resources Ltd (ASX: GL1) as the company’s share price rockets 8% on what management describes as “game-changing” news.

The lithium developer has revealed an enormous increase to the resource base of its two wholly-owned Western Australian projects.

The Global Lithium share price opened 11.4% higher at $2.25 today before rocketing to a high of $2.28 – marking a 12.9% gain.

At the time of writing, the stock is swapping hands for $2.19. That’s 8.42% higher than it was before it entered a trading halt yesterday.

Let’s take a closer look at the news driving the ASX lithium share sky-high on Thursday.

Global Lithium reveals major resource increase

The Global Lithium share price is soaring on news of a 148.5% resource base increase.

The company’s Manna and Marble Bar lithium projects have been found to house 50.7 million tonnes at 1% lithium oxide – up from 20.4 million tonnes.

The Manna project saw its mineral resource jump a whopping 230% to 32.7 million tonnes at 1% lithium oxide. While the Marble Bar project’s mineral resource was lifted 71% to 18 million tonnes at 1% lithium oxide.

And that’s not all. The ASX lithium share could be in for a boost next year with the company expecting to announce the results of a 20,000-metre drilling project at Manna.

Further drilling programs are also in the works for the new year while the company continues commercial discussions.

Global Lithium managing director Ron Mitchell commented on the increases announced today:

These game-changing Mineral Resource upgrades… are a great outcome for [Global Lithium] following the nearly 85,000m exploration programs we have undertaken safely during 2022.

As we look forward, 2023 is shaping up as another step-change year for [Global Lithium].

Global Lithium share price snapshot

Today’s gains see the Global Lithium share price nearly double where it was at the start of 2022.

The stock has gained 94% since the start of the year. It has also lifted 245% since this time last year.

For comparison, the benchmark All Ordinaries Index (ASX: XAO) has fallen 6% year to date and 3% over the last 12 months.

The post Guess which ASX lithium share is surging 8% on ‘game-changing’ news appeared first on The Motley Fool Australia.

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More reading

• ‘Really exciting’: Experts name 2 ASX mining shares ready to take off
• Gold and lithium: Mining expert names 2 ASX shares that could explode
• This ASX lithium share is 10% owned by Mineral Resources. Is it a buy?
• Could this ASX share be the next lithium stock to explode?

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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S&P/ASX 200 Index (ASX: XJO) shares are facing some fresh headwinds on Thursday.

In early morning trade, the benchmark index is down 0.4% having earlier posted losses of 0.6%.

That also happens to be how much the S&P 500 Index fell overnight in US markets.

The reason for the slump in the ASX 200?

You guessed it.

The US Federal Reserve.

ASX 200 shares slump amid Fed 5% fears

Inflation in the world’s top economy has begun to show some signs of slowing down. (See here.) That news saw US stocks and the ASX 200 close well into the green yesterday.

But the US labour market remains tight. And services inflation was one of the areas that saw a significant uptick in November.

With the US central bank determined to get inflation back to its 2% target range, the Federal Open Market Committee (FOMC) unanimously voted to increase the benchmark interest rate by 0.50% points to a range of 4.25% to 4.50%.

The latest rate hike impacting US stocks and ASX 200 shares today comes on the heels of four consecutive 0.75% increases.

The half percentage point increase was widely expected. But markets look to be sliding based on some hawkish words from Fed chair Jerome Powell, who indicated rates are likely to go higher than the market has priced in for 2023.

The Fed forecast that the official interest rate would reach 5.1% next year, higher than prior consensus forecasts. Rates would then fall to 4.1% in 2024, also above previous indications.

What did the Fed say?

ASX 200 investors look to have taken aboard the reality that interest rates in the world’s biggest economy won’t be coming down anytime soon.

According to Powell (quoted by Bloomberg):

We still have some ways to go… I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way. Restoring price stability will likely require maintaining a restrictive policy stance for some time…

It is our judgment today that we are not at a sufficiently restrictive policy stance yet. We will stay the course until the job is done.

Commenting on the latest interest rate hike impacting ASX 200 shares and stock markets across the Asia-Pacific area today, Kerry Craig, global market strategist for JPMorgan Asset Management said:

The fabled Fed pivot may take longer than the market had been expecting. US equities didn’t react favourably to the outcome of the meeting and that sentiment is likely to flow into APAC markets.

For APAC, the China reopening story remains a tailwind but the degree that this will be able to offset the higher rates and still support USD remains to be seen.

The post ASX 200 shares slump amid Fed 5% fears appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Why Thursday could be huge for ASX 200 shares
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 investors so obsessed with Core Lithium shares right now?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Appen Ltd (ASX: APX) share price has avoided the tech selloff on Thursday and is edging higher.

In morning trade, the struggling artificial intelligence (AI) data services company’s shares are up 1% to $2.62.

Though, this is little consolation for its long-suffering shareholders, which have watched the Appen share price crash deep into the red this year, as you can see below.

Why is the Appen share price rising?

Investors have been buying the company’s shares after it announced a change in leadership.

Usually, a change of CEO will put pressure on a company’s share price. However, investors appear to believe this is an overdue change given its poor performance in recent times and are buying shares today.

According to the release, the company has appointed Armughan Ahmad as CEO and president of the company, effective from no later than 30 January 2023.

Appen’s current CEO and managing director, Mark Brayan, will remain with the business until 28 February 2023 to ensure a smooth transition.

The release notes that Ahmad brings over 25 years of global experience in the technology industry having led product, sales, and services organisations at KPMG, Dell Technologies, and Hewlett Packard.

In his most recent role as president and managing partner of Digital at KPMG in Canada, Ahmad oversaw the company’s innovative services to product shift by delivering exponential technology-based market offerings to accelerate industry sector focused digital transformation for customers.

‘An outstanding candidate’

Appen’s Chair, Richard Freudenstein, was pleased with the appointment. He said:

As we scale Appen to its next phase of growth, the board felt it was important to appoint a successor with deep technology expertise in international markets.

Armughan is an outstanding candidate and is ideally suited to be the next CEO of Appen. He is one of the technology industry’s most successful and respected executives having worked in both technology product companies in Dell Technologies, Hewlett Packard and also in the services industry transformation at KPMG. Armughan has an incredible track record of driving growth and operational excellence, he is passionate about customers and partners, strongly believes in company culture, and is focused on delivering best-in-class innovation.

Armughan Ahmad appears up the challenge of turning around this fallen tech star’s fortunes. He commented:

In my due diligence with industry partners and customers, I’ve found that Appen has the best technology in its category and delivers AI products and services to many of the world’s largest tech companies and Fortune 500 customers globally.

Above all, Appen has built an incredible team that is committed to driving innovation while putting customers first. I am looking forward to leading this talented organisation to deliver continued innovation for our customers, value for our shareholders, and enhanced experience for our crowd contributors and employees.

The post Appen share price lifts on CEO change appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Evolution Mining, Rio Tinto, and Xero shares are racing higher
• Why is the Appen share price surging 11% on Thursday?
• Why are ASX tech shares having such a cracking run on Thursday?
• Is the Appen share price on the way back up?
• It’s about time you buy this ASX tech share that’s beaten down 75% this year: expert

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 Appen. 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 Woolworths Group Ltd (ASX: WOW) share price is pushing higher on Thursday.

In morning trade, the retail giant’s shares are up 1% to $34.72.

Why is the Woolworths share price rising?

Investors have been bidding the Woolworths share price higher today in response to news that the company has made a major new acquisition.

According to the release, a day after selling down its stake in Endeavour Group Ltd (ASX: EDV), Woolworths has put the proceeds to work by acquiring a 55% stake in Petspiration Group.

Petspiration Group is a leading Australian and New Zealand speciality pet food, accessories, and services retailer and the name behind the PETstock and Pet.co.nz brands.

Woolworths has paid a total of $586 million in cash for the stake, which represents an 11x EBITDA acquisition multiple. Based on this acquisition price, management expects the transaction to deliver strong returns for shareholders with an internal rate of return in the mid-teens.

It has advised that the founders of Petspiration will continue in leadership roles and together with existing shareholders will retain a 45% interest.

‘Material value creation’ opportunities

Woolworths’ CEO, Brad Banducci, was delighted to have acquired a stake in Petspiration and sees material value creation opportunities. He commented:

Specialty pet is a large and growing retail segment in which we have limited presence. We are delighted to be investing alongside founders, Shane and David Young, in Petspiration, the number two player in the segment.

Specialty pet is a logical adjacency given the high penetration of pet ownership across Australia and New Zealand. The partnership will allow us to meet more of our customers’ pet family needs with a complementary range of specialty pet products and services, strengthen the Everyday Rewards loyalty program and unlock opportunities for material value creation across both businesses.

The post Woolworths share price pushes higher on ~$600m acquisition appeared first on The Motley Fool Australia.

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More reading

• Brokers say these ASX 200 shares are buys for income investors
• Bell Potter says these are some of the best ASX shares to buy for 2023
• Why is the Endeavour share price sinking today?
• Woolworths share price higher on Endeavour selldown: What’s going on?
• 5 things to watch on the ASX 200 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 BetaShares Nasdaq 100 ETF (ASX: NDQ) has had a shocking year in 2022, as has the index it mirrors.

The exchange traded fund (ETF) has dumped 26% year to date while the NASDAQ-100 Index (NASDAQ: NDX) has tumbled 29%.

But such poor performance didn’t appear to deter the market’s youngest investors.

New data from share trading and superannuation platform Superhero shows the BetaShares Nasdaq 100 ETF has been the most traded ASX share among both Gen Z and Millennial investors using the platform in 2022.

Gen Zs went one step further, however. The market’s youngest investors doubled down on ETFs in general.

So, what drove younger investors to flock to the BetaShares Nasdaq 100 ETF and its fellow ETFs this year? Let’s take a look.

Gen Z doubles down on BetaShares Nasdaq 100 ETF

Market volatility didn’t turn Superhero users away from investing on the ASX in 2022. In fact, confidence in ETFs appeared to rise amid a rollercoaster year on the bourse.

The platform reveals 83% of ETF trades it received this year were buys. That’s compared to around 70% of all trades. Superhero co-founder and CEO John Winters commented on the phenomenon:

Given the volatility in the market this year, it’s unsurprising to see our investors, particularly younger investors, look to ETFs as a way to build their portfolios.

Half of all Superhero users aged between 18 and 32 traded in ETFs in 2022.

Of course, BetaShares Nasdaq 100 ETF was Gen Z’s favourite stock, according to the platform.

The youngest group of investors were also found to flock to the Vanguard Australian Shares Index ETF (ASX: VAS) and the Vanguard Diversified Balanced Index ETF (ASX: VDBA) – the funds came in as the second and third most popular trades among those aged 18 to 25. Winters continued:

Overall, we’ve seen more buy trades over sell trades and for ETFs, four in five trades made by Gen Zs and Millennials were buys, indicating a long-term strategy to consistently build their portfolios.

Are ETFs like NDQ the future of ASX investing?

So, are ETFs like the Betashares Nasdaq 100 ETF the future of Aussie investing? Their popularity has certainly increased this year.

New research by fund manager BetaShares has revealed 1.9 million Australians are now invested in ETFs – a 6% year-on-year increase.

The industry leader expects that figure to rise by around 230,000 in 2023 following this year’s trend away from unlisted managed funds.

BetaShares CEO Alex Vynokur commented on the findings:

The key benefits of ETFs – namely convenience, liquidity, transparency, and cost-effectiveness – continue to resonate as more investors allocate greater amounts of their portfolios to ETFs than ever before.

Remarkably, 32% of Australians invested in ETFs use the investment vehicles as the core of their portfolio. That’s up from 4% in 2019, according to the fund manager. Vynokur continued:

This research is backed by our own experience where we have seen continued interest in core-oriented market exposures like our BetaShares Australia 200 ETF (ASX: A200) and Nasdaq-100 ETF.

The post New kids on the ASX block: Why did Gen Z flock to the BetaShares Nasdaq ETF (NDQ) in 2022? appeared first on The Motley Fool Australia.

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More reading

• Down 27% this year, is the Betashares Nasdaq 100 ETF (NDQ) a buy before 2023?
• Why is the BetaShares NASDAQ 100 ETF (NDQ) having such a stellar run today?
• 3 fantastic ETFs for ASX investors to buy in December
• 3 ASX shares to buy for the end-of-year tech comeback: expert
• 3 top ETFs for ASX investors to buy and hold for a decade

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 BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 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 tough time on Thursday.

In morning trade, the lithium miner’s shares are down over 6% to $4.25.

Why is the Pilbara Minerals share price falling?

There have been a few catalysts for the weakness in the Pilbara Minerals share price this morning.

The first is overall market weakness after the US Federal Reserve lifted interest rates by 0.5% overnight. In addition, the central bank’s closely followed “dot-plot” revealed that it expects rates to peak at 5.1%, which was higher than the market was expecting.

This appears to have put pressure on richly valued growth stocks today.

Another reason is a broker note out of Morgans, which has suggested that the Pilbara Minerals share price may have peaked. You can read about that here.

Finally, the release of the results from the company’s latest battery material exchange (BMX) lithium auction this morning could be putting a spot of pressure on its shares.

BMX results

Although Pilbara Minerals continues to command a strong price for its lithium, it is lower than what it recorded a month earlier.

According to the release, the company has sold two cargoes for a combined total of 10,000 dry metric tonnes (dmt) at an average price of US$7,552/dmt (SC5.5, FOB Port Hedland basis). This is down 3.2% from US$7,805/dmt last month.

And while this is only a modest softening, it may have sparked fears that Goldman Sachs could be on the money with its forecast for lithium prices to crash over the next 12-18 months.

In case you missed it, Goldman has suggested that spodumene 6% could fall to an average of US$800 a tonne in 2024. That’s a long way from the US$7,552 a tonne Pilbara Minerals is receiving for its 5.5% grade spodumene.

The post Why is the Pilbara Minerals share price sinking 6% today? appeared first on The Motley Fool Australia.

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More reading

• Has Core dethroned Pilbara as the most talked-about ASX lithium share of the moment?
• ‘Not enough upside’ for Pilbara Minerals share price: Morgans
• 5 things to watch on the ASX 200 on Thursday
• Lithium, miners, and tech shares, oh my! Here’s where Aussies put their ASX money in 2022
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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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Investors were busy last month, with S&P/ASX 200 Index (ASX: XJO) energy shares being a key focus in November.

Sharesies is an online broker platform, and each month it produces a report detailing the most popular picks.

Of course, this is just the data from one broker, so readers should keep that in mind.

From the report, we learned that there was twice as much buying volume as selling volume. For Sharesies, this has been consistent for the last six months.

It also noted that an increase in the strength of the Australian dollar, relative to the United States dollar, “may have been a driver behind and uptick in US investments buying relative to other markets”.

November’s most purchased by value

According to Sharesies, there were two ASX lithium shares and two ASX coal shares in the top five most bought, by value.

The most popular investment was Sayona Mining Ltd (ASX: SYA).

In second place was New Hope Corporation Limited (ASX: NHC).

The fourth most popular investment was Core Lithium Ltd (ASX: CXO).

In fifth place was Whitehaven Coal Ltd (ASX: WHC).

To complete the list, in third place was property business Charter Hall Group (ASX: CHC).

With energy being a key theme in 2022, perhaps it’s unsurprising that old and new ASX 200 energy shares are getting investor attention going into the end of the year.

What’s going on with these ASX energy shares?

Firstly we’ll look at what’s going on with the ASX coal shares.

After Russian invaded Ukraine, there were a number of knock-on effects. One was a rise in energy prices as some countries looked to find alternative sources of energy.

This sent the coal price soaring, and while it’s not at a 52-week high, it’s still very high. And this means both New Hope and Whitehaven are generating large profits.

With profits jumping higher, both companies are paying much larger dividends. They also launched share buybacks, aimed at boosting shareholder returns.

For the ASX lithium shares, they are making operational progress amid strong demand for lithium.

Sayona Mining said in its update that the restart of the company’s North American Lithium (NAL) operation is getting closer, as 98% of procurement activities are now complete and permitting activities are 96% finished. Operations are on track to be restarted in the first quarter of 2023.

For Core Lithium, it held its annual general meeting (AGM) last month. The business has started transporting ‘spodumene direct shopping ore’ (DSO) product from its Finniss lithium mine near Darwin in the Northern Territory. Crushing of the lithium ore commenced on 9 November 2022 and loading onto a ship at Darwin Port was expected to start at the end of November.

It will be interesting to see if December is another solid month of interest for ASX 200 energy shares.

The post Here are the old and new energy ASX 200 shares that investors were buying last month appeared first on The Motley Fool Australia.

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More reading

• Has Core dethroned Pilbara as the most talked-about ASX lithium share of the moment?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 investors so obsessed with Core Lithium shares right now?
• Lithium, miners, and tech shares, oh my! Here’s where Aussies put their ASX money in 2022
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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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Core Lithium Ltd (ASX: CXO) shares have been the talk of the town in 2022. Does that mean the lithium hopeful has unseated industry giant Pilbara Minerals Ltd (ASX: PLS) as the hottest stock

Core Lithium certainly out-traded Pilbara Minerals on investing platform Superhero this year.

New data reveals the former was Australia’s most traded ASX share between 1 January and 30 November, with the latter coming in second place.

The Core Lithium share price has also outperformed its S&P/ASX 200 Index (ASX: XJO) peer, gaining 84% year to date. It’s trading at $1.16 right now.

Meanwhile, the Pilbara Minerals share price has risen 29% in 2022 to reach $4.55 today.

But is it really that simple to usurp the market’s most popular lithium share? Let’s take a look.

Is Core Lithium ASX’s hottest lithium share right now?

Core Lithium shares have outperformed Pilbara Minerals shares in 2022. They’ve also been subject to more trading on Superhero.

Additionally, the last five sessions have seen an average of around 49 million Core Lithium shares swap hands across the entire market. That same period has seen an average of nearly 35 million Pilbara Minerals shares trade each day.

While that might initially appear to the point that Core Lithium’s the favourite, it’s worth noting the Pilbara Minerals share price is nearly four times higher than that of its smaller peer.

Thus, more cash has recently been traded for Pilbara Minerals shares than for Core Lithium stock.

Apples and oranges?

It’s also worth looking at the vast differences between the companies. Aside from being Aussie lithium companies, the pair have little in common.

It was recently announced that Pilbara Minerals, with its $13.6 billion market capitalisation, will be admitted to the S&P/ASX 50 Index (ASX: XFL) next week.

Core Lithium, meanwhile, boasts a $2.1 billion valuation and was added to the ASX 200 in June.

Pilbara Minerals has also reached profitability and has flagged its first dividend, while Core Lithium’s flagship Finniss Project’s maiden spodumene concentrate shipment is expected in the new year.

So, has the up-and-coming producer unseated Pilbara Minerals as the most talked about ASX 200 lithium share of the moment? The smaller company’s popularity has certainly taken off in 2022 but it’s arguable as to whether it can be crowned the market’s hottest lithium stock.

The post Has Core dethroned Pilbara as the most talked-about ASX lithium share of the moment? appeared first on The Motley Fool Australia.

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More reading

• Here are the old and new energy ASX 200 shares that investors were buying last month
• ‘Not enough upside’ for Pilbara Minerals share price: Morgans
• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why are ASX 200 investors so obsessed with Core Lithium shares right now?

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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It is a good day to be an Australia and New Zealand Banking Group Ltd (ASX: ANZ) shareholder.

That’s because today is the day that the banking giant will be rewarding them with its latest dividend payment.

The ANZ dividend

At the end of October, the big four bank released its results for the 12 months ended 30 September.

ANZ was on form in FY 2022 and reported a 16% increase in statutory profit after tax to $7,119 million and a 5% lift in cash profit from continuing operations to $6,515 million.

A key driver of its profit growth was an improvement in its net interest margin (NIM) thanks to rising rates.

In light of this profit growth, the ANZ board declared a fully franked final dividend of 74 cents per share, bringing its full year dividend to 146 cents per share. This was up from 142 cents per share in FY 2021.

Today is payday for that 74 cents per share final dividend, which equates to a very attractive 3.1% yield based on the current ANZ share price.

Should you buy shares?

The team at Citi is positive on the bank and currently has a buy rating and $29.25 price target on its shares. This implies potential upside of almost 22% for investors over the next 12 months.

In addition, the broker is expecting the ANZ board to lift its dividend by almost 14% to $1.66 per share in FY 2023. This equates to a mouth-watering 6.9% dividend yield at current prices.

Citi commented:

[FY 2022’s] exit NIM of 1.80% is likely to drive material consensus revenue upgrades, and we think the street upgrades core earnings. We retain our Buy call, with core earnings momentum and benign asset quality.

The post The ANZ dividend is being delivered today. Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• Why is the ANZ share price marching higher on Tuesday?
• Could this help ANZ close the gap on its ASX 200 competitors?
• Could the VAS ETF outperform the BHP share price in 2023?
• I’d buy 6 shares a week of this ASX stock for $1800 a year in passive income
• Here’s how I’d invest $20,000 in ASX 200 shares for a 7% dividend yield

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 fund manager Wilson Asset Management (WAM) has recently identified its preferred ASX iron ore pick: BHP Group Ltd (ASX: BHP) shares.

WAM operates several listed investment companies (LICs). Two of these LICs are WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).

There’s also one called WAM Leaders Ltd (ASX: WLE) that looks at the larger businesses on the ASX. These are often referred to as ASX blue-chip shares.

WAM says WAM Leaders actively invests in the highest quality Australian companies. But does WAM have a good reputation for picking stocks?

The WAM Leaders portfolio has delivered gross returns (before fees, expenses, and taxes) of 15% per annum since its inception in May 2016. This compares to the S&P/ASX 200 Accumulation Index (ASX: XAOA) average return of 8.1% over the same time.

WAM outlined why it likes BHP shares at the moment.

Rising iron ore price

A key factor influencing BHP is how the prices of commodities perform. The iron ore ASX share rose in November amid a 25% increase in the iron ore price over the month.

WAM attributed the higher valuation of the business to “positive news from China as well as the weakening US dollar”.

The fund manager noted that Chinese authorities had changed their tactic to implement quick lockdowns when cases surge and “relax restrictions rapidly when spread of the virus slows”.

It was also pointed out that China is accelerating the rollout of vaccinations for the elderly in the coming months, before “further reopening the economy early next year”.

Wilson Asset Management also noted that the Chinese government announced 1.88 trillion yuan of funding for property developers to be used by homebuilders to complete and deliver pre-sold housing units.

In positive comments about China, WAM said:

Overall, the Chinese economy appears to have turned a corner and is now stabilising which we expect will continue to support iron ore prices over the coming months.

Why BHP shares?

While other ASX iron ore shares have also risen in recent weeks, such as Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Ltd (ASX: RIO), WAM’s investment team said there were a few key reasons why BHP is the pick of the ASX iron ore shares.

Firstly, WAM likes the “cost” performance of the business. The scale of the company, and technology and systems it utilises, gives it a strong ability to achieve low operating costs.

Next, the fund manager pointed to its copper exposure. BHP is looking to grow its copper operations with the proposed proposed acquisition of OZ Minerals Limited (ASX: OZL).

The investment team believes that BHP has a “strong” balance sheet and also likes its growth outlook.

BHP shares are one of the biggest positions in the WAM Leaders portfolio.

The post Here’s why BHP shares are this fund manager’s favourite ASX iron ore pick appeared first on The Motley Fool Australia.

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More reading

• Lithium, miners, and tech shares, oh my! Here’s where Aussies put their ASX money in 2022
• BHP shares: 2 reasons to buy, and 2 to sell
• Why did the BHP share price get hammered on Tuesday?
• 2 ASX 200 dividend heavyweights to buy and hold until you retire
• Why is the Fortescue share price tanking on Tuesday?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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