Tag: Motley Fool

The Bitcoin (CRYPTO: BTC) price is kicking off December in positive territory.

BTC is up 4% overnight to US$17,170 (AU$25,289).

That will certainly come as good news to crypto investors who watched the token nosedive in November.

Here’s what happened in the month just gone.

How did the Bitcoin price move in November?

Depending on your time zone, the Bitcoin price was right around US$20,564 as we flipped our calendars over to November.

By the time we flipped that calendar over to December last night, the token was worth US$16,460, down 20% over the month.

And there was plenty of the crypto’s characteristic volatility on display.

Over the month, the Bitcoin price traded as low as US$15,599 and as high as US$21,447, according to data from CoinMarketCap.

Why did the world’s first crypto come under intense selling pressure?

After a strong October performance, which saw the Bitcoin price performance beat the performance of the tech-heavy Nasdaq Composite (NASDAQ: .IXIC). November went decidedly the other way.

The biggest drag on Bitcoin, and indeed most non-stable altcoins, was the initial liquidity crunch and subsequent collapse of crypto exchange FTX.com.

The Bahamian-based exchange, founded by Sam Bankman-Fried, was the fifth largest in the world before its undoing.

Problems arose as investors were made aware that FTX was backed, to a significant degree, by the exchange’s own utility token FTX Token (CRYPTO: FTT). That clearly didn’t sit well with veteran investors.

With Bankman-Fried now having declared bankruptcy, billions of dollars look to have gone up in virtual smoke.

On the day the news of FTX liquidity issues hit the wires, the Bitcoin price plummeted below US$15,680, marking an unwanted two-year low.

The FTX collapse and that of related Alameda Research saw analysts at JPMorgan take a bearish view on cryptos. They forecast the Bitcoin price could slide all the way to US$13,000 as investors digested the new uncertainties.

The post The Bitcoin price got hammered in November. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Top 10 signs you’ve been crypto-scammed
• The Bitcoin price has dumped 23% since the FTX collapse. Now what?
• How might volatile crypto prices impact your ASX shares?
• If cryptocurrency prices continue to plummet, what should you do?
• Why did the Bitcoin price just hit 2-year lows?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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November was another positive month for the S&P/ASX 200 Index (ASX: XJO). During the period, the benchmark index rose 6.1% to finish at 7,284.2 points.

Unfortunately, not all shares climbed with the market. Here’s why these were the worst performing ASX 200 shares in November:

Elders Ltd (ASX: ELD)

The Elders share price was the worst performer on the ASX 200 last month with a 20.6% decline. Investors were hitting the sell button following the release of the agribusiness company’s full year results. For the 12 months ended 30 September, Elders reported an impressive 35% increase in sales revenue to $3,445.3 million and a 42% jump in underlying profit before tax to $223.5 million. However, overshadowing this solid result was management’s 2023 outlook, which warned that “extreme rainfall events across the eastern states have created some uncertainty.”

Collins Foods Ltd (ASX: CKF)

The Collins Foods share price was out of form and sank 18.6% in November. The majority of this decline came in the final days of the month following the release of the quick service restaurant operator’s half year results. Although Collins Foods revealed solid top line growth, inflationary pressures weighed on its profits. Unfortunately, management now doesn’t expect these pressures to ease in the second half. In addition, concerns that the Taco Bell brand could be about to fail again in Australia also weighed on sentiment.

Novonix Ltd (ASX: NVX)

The Novonix share price had a tough time in November and tumbled 16.4%. This may have been driven by profit taking after some very strong gains during the previous month following major funding news in the United States. In addition, battery materials shares came under pressure last month due to concerns over demand in China amid soaring COVID cases.

Healius Ltd (ASX: HLS)

The Healius share price wasn’t far behind with a 15.2% decline last month. This was driven by the release of a trading update from the healthcare company late in the month. For the first four months of FY 2023, Healius revealed that revenue was down 32% and EBITDA was down 64.1%. This was due to a sharp decline in COVID testing demand.

The post These were the worst performing ASX 200 shares in November appeared first on The Motley Fool Australia.

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More reading

• Want healthy dividend growth? Why I’d buy this ASX 200 blue-chip stock
• Why did the NAB share price underperform the ASX 200 in November?
• Down 10% in November, why did the Pilbara Minerals share price power down?
• These were the best performing ASX 200 shares in November
• Buy these cheap ASX dividend shares now: analysts

Motley Fool contributor James Mickleboro has positions in Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Collins Foods. The Motley Fool Australia has recommended Collins Foods and Elders. 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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Sonic Healthcare Limited (ASX: SHL) shares could represent an attractive dividend idea. The S&P/ASX 200 Index (ASX: XJO) blue-chip stock is one of the largest ASX healthcare shares.

It’s not exactly a household name. But, it’s one of the largest pathology businesses in the world, and it’s the largest in Australia with a network of collection centres. It also has operations in the United States, Germany, the United Kingdom, Switzerland, Belgium and New Zealand.

Sonic Healthcare is also the second largest radiology provider in Australia with over 120 radiology centres. It also has clinical services in Australia, with over 150 medical centres and more than 2,000 general practitioners.

Let’s get into the dividend elements of the business.

Sonic Healthcare dividend

The Sonic Healthcare FY22 final dividend increased by 9% to 60 cents per share. This brought the full-year dividend to $1 per share, which was a rise of 10%.

It said that its “progressive dividend strategy” was maintained.

The fact that it has a goal of paying “progressive” dividends to investors is encouraging for future growth. It was one of a limited number of ASX 200 blue-chip stocks that grew the dividend during the COVID-hit era of 2020.

Sonic Healthcare shares have paid out a bigger dividend every year since 2013.

The FY22 grossed-up dividend yield is currently 4.4%.

Future growth projected

The ASX healthcare share is expected to pay an annual dividend of $1.03 per share in FY23 according to Macquarie. This would represent 3% growth in FY23. If Sonic ends up paying that amount it would be a grossed-up dividend yield of 4.6%.

It could then pay an annual dividend per share of $1.06 in FY24. Between FY22 and FY24 this would be overall growth of 6%. By FY24, Sonic Healthcare shares could be paying a grossed-up dividend yield of 4.7%.

Underlying earnings could keep rising

The business has benefitted enormously from the amount of global COVID testing it has been involved in around the world.

In FY22, it generated $2.4 billion of COVID revenue. FY23 is unlikely to feature as much testing revenue. In the four months to October 2022, the company generated $280 million of COVID-19 revenue. Though monthly COVID revenue had dropped to $57.7 million in October 2022.

But, excluding COVID revenue, Sonic Healthcare saw base business revenue rise 6.7% year over year. It’s this side of the company’s revenue growth that could help fund growth of the dividend.

Scale and acquisitions

The bigger the ASX 200 blue-chip stock becomes, the better profit margins it can achieve. Acquisitions, such as the Canberra Imaging Group, have helped lock in higher earnings for the business.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the four months to October 2022 was 32.7% higher than the four months to October 2019. This denotes a 200 basis point increase in the EBITDA margin.

It recently announced another deal – it is going to buy 19.99% of Microba Pty Ltd (ASX: MAP). Sonic Healthcare is seeking to acquire options for an additional 5% equity position.

Management sees gut microbiome testing becoming a “key part of pathology over coming years”.

The post Want healthy dividend growth? Why I’d buy this ASX 200 blue-chip stock appeared first on The Motley Fool Australia.

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More reading

• These were the worst performing ASX 200 shares in November
• Why did the NAB share price underperform the ASX 200 in November?
• Down 10% in November, why did the Pilbara Minerals share price power down?
• These were the best performing ASX 200 shares in November
• 5 things to watch on the ASX 200 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 recommended Sonic Healthcare. 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 Medibank Private Ltd (ASX: MPL) share price is in the green today despite the latest customer data dump.

Medibank shares are currently up 0.68% and are trading at $2.95. However, in earlier trade Medibank shares lifted 1.5%. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 1.13% today.

Let’s take a look at what is going on with Medibank.

What’s going on?

Medibank is not alone among financial shares in the green today. The S&P/ASX 200 Financials Index (ASX: XFJ) is climbing 0.92%. However, Nib Holdings Ltd (ASX: NHF) shares are 0.55% in the red at the time of writing.

In today’s news, Medibank has provided a “cybercrime update’ this morning. Stolen customer data was released to the dark web overnight, the company confirmed today.

Commenting on the news, Medibank said:

We are in the process of analysing the data, but the data released appears to be the data we believed the criminal stole.

Unfortunately, we expected the criminal to continue to release files on the dark web.

The data, at this stage, does not include any financial or banking data.

Medibank CEO David Koczkar unreservedly apologised to customers. He said:

We are remaining vigilant and are doing everything we can to ensure our customers are supported. It’s important everyone stays vigilant to any suspicious activity online or over the phone.

Medibank share price snapshot

The Medibank share price has lost nearly 13% in the last year, while it has fallen 11% year to date.

For perspective, the ASX 200 has returned nearly 2% in the last year.

Medibank has a market capitalisation of about $8.1 billion based on the current share price.

The post Medibank share price lifts despite latest data dump to ‘dark web’ appeared first on The Motley Fool Australia.

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More reading

• Guess how much NIB shares have gained since Medibank’s cyber attack?
• Leading brokers name 3 ASX shares to buy today
• Top 10 signs you’ve been crypto-scammed
• Here are the top 10 ASX 200 shares today
• NIB share price surges ahead as profits soar 31%

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 recommended Nib Holdings Limited. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is missing out on the good times on Thursday.

That’s because this morning, the pizza chain operator requested that its shares be placed in a trading halt until Monday.

Why is the Domino’s share price paused?

Domino’s requested a trading halt this morning so it could launch a capital raising that aims to raise up to $165 million. This comprises a fully underwritten $150 million institutional placement and a $15 million share purchase plan.

The company is raising the funds at a floor price of $65.05 per new share, which represents a modest discount of 2% to where the Domino’s share price last traded.

Why is it raising funds?

According to the release, the proceeds will be used to fund the acquisition of the remainder of the German joint venture and any surplus will be applied towards debt retirement.

This comes after the company received an option exercise notice last month requiring the purchase of Domino’s Pizza Group plc’s shares in the joint venture.

But the acquisitions don’t stop there. The company has also revealed it has now completed the acquisitions of Domino’s Malaysia and Domino’s Singapore. The proposed acquisition of Domino’s Cambodia remains subject to regulatory approvals but is expected to complete in the first quarter of 2023.

Trading update

Finally, Domino’s also provided the market with an update on its guidance for the full year.

It has reaffirmed the guidance for FY 2023 provided to the market at its annual general meeting at the start of November, with the business continuing to track to plan.

This is for the company “to deliver NPAT growth in FY23.”

Positively, the Malaysia, Singapore and Cambodia markets have also seen trading in line with expectations.

The post Domino’s share price halted amid $165 million cap raise appeared first on The Motley Fool Australia.

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More reading

• ‘Buy it for 5 years’: Jun Bei Liu’s 3 best ASX shares for 2023
• Here are the 10 most shorted ASX shares
• Skin in the game: The ASX share in my portfolio I’m most excited about
• Three comforting lessons for investors whose portfolio has been smashed versus the surprisingly good return of the ASX 200
• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. 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 Domino’s Pizza Enterprises. 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 big few months for S&P/ASX 200 Index (ASX: XJO) goliath BHP Group Ltd (ASX: BHP) and its $9 billion takeover target, copper miner Oz Minerals Limited (ASX: OZL).

The iron ore giant recently posted an improved acquisition bid that appeared too good for Oz Minerals to refuse. BHP now looks set to snap up the copper miner for $28.25 per share – nearly 50% higher than Oz Minerals’ last undisturbed share price.

But one expert believes the ASX 200 takeover target theoretically could have fielded bids as high as $40. So, has BHP scored a bargain? Let’s take a look.

Is BHP getting an ASX 200 copper bargain?

A takeover bid for Oz Minerals has been a long time coming, according to Shaw and Partners senior resource analyst Peter O’Connor. Speaking with Market Matters’ James Gerrish, O’Conner said the copper miner looked like a takeover target two years ago, continuing:

BHP are late-ish to the table in the short-term. In a long-term view, they’re probably still early. But I would have loved them to do this at some $20 per share.

Still, BHP could be getting an ASX 200 copper bargain. That’s when you compare the acquisition currently on the table to a similar takeover being conducted by Rio Tinto Limited (ASX: RIO).

Rio Tinto is in the throes of snapping up the entirety of Canadian-listed Turquoise Hill. It seems set to fork out $43 Canadian (around $47.17) per share for the company. O’Connor commented:

It’s like real estate James, when you’ve got your house in your street and you see a house sell down the road… you get a print on value… It’s the same with copper.

Copper [mergers and acquisitions] tells you what’s happening out there. So, the Turquoise Hill bid… implies a flow through value for Oz Minerals which is closer to $40 per share.

Fortunately for BHP, there is one factor keeping its takeover cheap. The expert said:

But what this particular deal lacks is contestability… they’ve leveraged up the best price they can get from one bidder.  

But that might not be the case for long. The transaction still has some notable hoops to jump through.

First, BHP will conduct due diligence on the ASX 200 copper miner. If its interest continues after it flips through the books, another party might wonder why. That could spur a competing bid from an interloper, O’Connor said.

Beyond the bid, the ASX 200 copper share was tipped to boast “the best management team in the copper market globally,” in O’Connor’s opinion. “I think what they’re buying is expertise,” the expert said.

The post BHP’s bargain? Expert thinks its ASX 200 takeover target could be worth 40% more appeared first on The Motley Fool Australia.

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More reading

• BHP beat you to Oz Minerals? Buy this ASX 200 copper share instead: fundie
• 5 things to watch on the ASX 200 on Thursday
• Why is the BHP share price smashing the market with a 22% gain in November?
• Is a stock market crash coming for us in 2023?
• The 10 ASX 200 shares responsible for 60% of all Aussie dividends last quarter

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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The Block Inc (ASX: SQ2) share price is rocketing in morning trade on Thursday.

The global buy now, pay later (BNPL) stock closed yesterday trading for $93.09 per share and is currently trading for $99 per share, up 6.4%.

Here’s what’s piquing ASX investor interest today.

Why is the ASX BNPL share soaring higher?

The Block share price is flying higher today following a 4.4% overnight surge on the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC).

Block, which acquired Afterpay in January this year, is dual-listed in Australia and the United States. And Block’s shares rocketed 9% on the NYSE yesterday.

The big move higher for tech stocks and the Block share price comes with due thanks to US Federal Reserve chair Jerome Powell.

Tech stocks have been amongst the hardest hit in the latter half of 2022 amid fast-rising interest rates, with the Fed leading the global charge higher.

As most Aussie were sleeping last night, Powell indicated the world’s most influential central bank is likely to slow the pace of interest rate increases as it gauges the impact on its battle against inflation.

According to Powell (courtesy of Bloomberg):

The time for moderating the pace of rate increases may come as soon as the December meeting. Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level.

On the heels of his speech, the Block share price on the NYSE galloped higher.

As for the medium-term outlook, investors should still be prepared for more rate hikes in 2023, just at a potentially slower pace.

“It will take substantially more evidence to give comfort that inflation is actually declining. The truth is that the path ahead for inflation remains highly uncertain,” Powell said.

Commenting on the broader market rally, Dan Eye, a money manager at Fort Pitt Capital Group said (quoted by Bloomberg):

As the market moves into the first quarter of next year, inflation won’t be the same problem as it has been in 2022. We’re likely much closer to the end of this hiking cycle and that should be a tailwind for stocks.

Block share price snapshot

While still down 44% since its first day of trade on 20 January, the Block share price is up 5% over the past month as investors eye the beginning of the end of a series of rapid rate hikes.

The post Why is the Block share price skyrocketing today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• 5 ASX 200 shares with founders steering the ship
• Here are the 10 most shorted ASX shares
• Guess which ASX All Ords share is leaping 22% on ‘significant progress towards profitability’
• Here are the 10 most shorted ASX shares

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

From not-so-transitory inflation to geopolitical strife and supply chain disruptions, anxious investors have had plenty of excuses to push the Nasdaq Composite (NASDAQINDEX: ^IXIC) lower in 2022. Indeed, as the tech-heavy index sags 30% year to date, financial traders may wonder whether this, too, shall pass.

While it’s never 100% safe to invest in anything, true contrarians should view the current tech wreck as a prime buying opportunity. A post-Thanksgiving attitude of gratitude, fortified with an understanding of what’s rattling the markets in the first place, could provide the emotional wherewithal to stock up when stocks are down.

COVID-19 concerns return

When Chinese President Xi Jinping secured an unprecedented third term, the Nasdaq buckled as traders collectively winced at the thought of restrictive policies that would linger longer. Those fears may have been vindicated recently as Beijing enacted a fresh wave of lockdowns amid reports of new COVID-19 cases.

This isn’t the place to debate whether Xi’s latest restrictions are justified, as China faces nearly 40,000 new cases in a single day. What’s known for certain, though, is that the populace is getting restless, with protests erupting in Beijing and surrounding cities.

There’s already been collateral damage in the form of disruptions at the production facility at Apple components supplier Foxconn in the Chinese city of Zhengzhou. The upshot is a potential current-quarter iPhone production shortfall of 5% to 10%. This development prompted a single-day sell-off in Apple stock, which led the Nasdaq lower. Yet, panic need not be your knee-jerk reaction as this certainly hasn’t been China’s first coronavirus lockdown and it won’t be the last — and every restriction in the past has been lifted sooner or later, leading to a relief rally in well-known technology names.

Bullard’s bully pulpit

The only thing that may be as reliable as China’s on-again, off-again zero-COVID policy is the hawkish stance of Federal Reserve Bank of St. Louis President James Bullard. He’s among the most vocal proponents of aggressive interest rate hikes, and he’s never loath to put a damper on dovish market sentiment with a handful of choice words.

That’s the power of a high central-bank position — yet, you as an investor have the power to choose your response. As you may recall, Bullard sent shock waves though the financial markets with the pronouncement that the Fed may need to hike its benchmark interest rate all the way up to 7% to keep inflation under control.

Now, Bullard’s turning up the heat again with statements like, “We’ve got a ways to go to get restrictive.” Before you pull out your “Don’t fight the Fed” banner, however, bear in mind that one hawk doesn’t represent the central bank as a whole.

The most recently released meeting notes from the Fed’s Federal Open Market Committee did, in fact, indicate that Fed officials collectively expect smaller interest rate increases to “soon be appropriate.” Moreover, while the Federal Reserve “is clearly not finished yet,” a 50-basis-point rate hike in December “sounds very reasonable” in the committee’s estimation.

Safety in numbers

Besides, if China’s zero-COVID policy and Bullard’s statements contributed to more reasonable valuations for Nasdaq components, contrarians should celebrate, not hesitate. Ask yourself: Could I have imagined in mid-2021 that tech-sector highfliers such as these would in 2022 gift me with price-to-earnings ratios at their current levels?

• Alphabet: 19.1
• Meta Platforms: 10.46
• Intel: 8.88
• Netflix: 25.26
• Cisco Systems: 17.36
• Micron Technology: 7.19
• Qualcomm: 10.48

If you’re obsessed with income as much as value, feel free to investigate Intel and Qualcomm for their generous dividend yields. While you’re doing your due diligence, remember that these relatively low tech-market valuations are brought to you courtesy of scary headlines and extrinsic shocks. Without them, after all, there can be no “buy low” piece of the “buy low, sell high” puzzle. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Down 30%, is it safe to invest in the Nasdaq right now? appeared first on The Motley Fool Australia.

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More reading

• Rio Tinto share price lifts despite lukewarm iron ore outlook
• Why did the NAB share price underperform the ASX 200 in November?
• BHP beat you to Oz Minerals? Buy this ASX 200 copper share instead: fundie
• 5 ASX 200 shares with juicy gross profit margins
• Down 10% in November, why did the Pilbara Minerals share price power down?

David Moadel has positions in Intel. 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. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Cisco Systems, Intel, Meta Platforms, Netflix, and Qualcomm. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short January 2025 $45 puts on Intel. The Motley Fool Australia has recommended Alphabet, Meta Platforms, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

One of the best ways to find success in the stock market is by investing within trends. Long-term megatrends in technology and other sectors have the ability to reshape the economy and create big market winners.

For example, trending sectors like e-commerce, cloud computing, and video streaming led to massive returns in several stocks over the last decade, even with the challenges in the tech sector in the last year. 

While 2023 is potentially shaping up to be a tough year for stocks as most economists expect a recession, that doesn’t mean that there won’t be any winners.

To find great investments, it’s a smart idea to see what’s trending right now. Here are two of the biggest megatrends for 2023 and beyond.

1. Platforms vs. point solutions

Behind the scenes, one of the biggest trends in technology is that enterprises are replacing multiple “point solutions” with a single cloud platform.

A point solution is an application that solves a single problem, like accepting payments, authenticating users, or monitoring outages. A platform, on the other hand, gives IT managers a single interface to manage multiple functions, including those provided by individual point solutions.

According to tech research firm Gartner, by 2024, 60% of organizations will have switched from using point solutions to platforms, up from 20% today. As a result, many of the fastest-growing software companies today have positioned themselves as platforms. 

Take GitLab (NASDAQ: GTLB), for example. The company provides a single software platform used to manage DevOps, or the systems through which companies develop and deploy software.

GitLab is growing rapidly, in part because it’s grabbing market share from point solutions. Its revenue jumped 74% in the second quarter to $101 million, and it has a large growth opportunity ahead of it from this megatrend, as 85% of its customers are still using two to 10 DevOps point solutions.

Another example is Okta (NASDAQ: OKTA), a leader in cloud identity software. Okta’s cloud identity platform integrates with more than 7,000 applications and provides a suite of identity tools including single sign-on and multifactor authentication, so businesses can ensure their customers and employees can log on seamlessly and securely. FedEx is one of many companies that have used Okta’s Identity Cloud to replace ad hoc legacy point solutions. In its second quarter, Okta’s revenue jumped 43% to $452 million.

Finally, Bill.com (NYSE: BILL) has established itself as an automated end-to-end payments platform for small and medium-sized businesses. It’s grown both organically and through acquisitions and helps businesses automate payables, credit card expenses, receivables, and more. Bill.com integrates with accounting software tools and in some cases replaces manual bookkeeping or data entry for its customers. Top-line growth has been strong, with revenue up 94% to $229.9 million.

2. Connected TV

In-home entertainment, the transition from traditional pay TV to video streaming defined the 2010s. This decade, the trend that’s shaping up to define it is connected TV, or ad-driven streaming.

With video streaming rapidly replacing linear TV, advertisers are starting to shift ad budgets, and some of the biggest streaming platforms, like Netflix and Disney+, are responding by launching their own ad-based streaming tiers.

Commenting on the decision to launch the ad tier and the audience shift to video streaming, Netflix co-CEO Reed Hastings said on the company’s recent earnings call:

What I underappreciated was just the impact on advertisers. They’re just being able to reach fewer people. And then the 18-to-49 demographic is even faster than the decline in pay TV. So, this is what is really fueling the cycle is that really collapsed linear TV as an advertising vehicle outside of a few properties like sports.

As eyeballs have shifted to streaming, advertisers naturally want to follow, and that will get easier for them with the Disney+ and Netflix ad tiers. Advertisers also love the connected TV model because it offers both the large-screen, engrossing medium of video with the targeting and tracking of digital channels like social. 

Connected TV is already a fast-growing business for a number of adtech companies, and it could explode next year as Netflix and Disney join the fray.

One such winner of this switch looks to be Roku (NASDAQ: ROKU), the leading streaming platform in the U.S. Though Roku may best be known for its branded dongles that enable streaming, the company makes most of its money through an ad revenue share arrangement with streaming services on its platform. Typically, Roku retains 30% of the ad inventory from its streaming partners and keeps all the revenue it makes from those ads.

Though Roku’s revenue growth slowed because of a cyclical decline in ad spending, the growth of the connected TV ecosystem bodes well for it over the long term.

Another company that looks poised to capitalize on the growth of CTV is Magnite (NASDAQ: MGNI), a supply-side adtech platform that rearranged its business to prioritize CTV. In its most recent quarter, CTV revenue rose 29% year over year and now makes up 44% of its revenue, excluding traffic acquisition costs.

The leading demand-side ad tech platform, The Trade Desk (NASDAQ: TTD), also seems well positioned to take advantage of the growth in CTV. Though it doesn’t break out CTV revenue, CEO Jeff Green said in the third-quarter results that the CTV market is rapidly growing and is one reason why the company delivered 31% year-over-year revenue growth to $395 million.

Megatrends are worth keeping an eye on

With the rise of these megatrends, there are plenty of ways to profit, and both the transition from point solutions to platforms and the evolution of connected TV look poised to transform their respective industries over the coming years. Companies riding these trends, such as the companies mentioned, are worth keeping an eye on, as they look well-positioned to outperform the market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 megatrends to get behind in 2023 appeared first on The Motley Fool Australia.

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Jeremy Bowman has positions in Bill.com Holdings, Inc., Magnite, Inc, Netflix, Okta, Roku, The Trade Desk, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bill.com, FedEx, Magnite, Netflix, Okta, Roku, Trade Desk, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Gartner and has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Netflix, Okta, Trade Desk, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Rio Tinto Ltd (ASX: RIO) share price is on the move on Thursday morning.

At the time of writing, the mining giant’s shares are up 2% to $111.73.

Why is the Rio Tinto share price rising?

Investors have been buying the miner’s shares this morning after responding positively to its strategy update.

This includes an update on the progress it is making against its long-term strategy to strengthen the business, grow in a decarbonising world, and continue to deliver attractive shareholder returns.

In respect to growing in a decarbonising world, Rio Tinto believes it is well-positioned to benefit from the megatrend. In fact, it estimates that the energy transition could add as much as 25% in new demand above traditional sources on a copper equivalent basis across the miner’s key products by 2035.

In order to meet this demand, the company is targeting an investment of up to US$3 billion per year in growth. This includes investments in the Oyu Tolgoi copper, Rincon lithium, and Simandou iron ore projects.

Rio Tinto will also be working hard to decarbonise its own operations. It has outlined projects that are underway to meet challenging decarbonisation targets to halve Scope 1 & 2 emissions by 2030, before reaching net zero by 2050.

Six large emissions abatement programmes are focused on renewable power, process heat, diesel and the Elysis zero carbon aluminium smelting technology to drive the transition to net zero.

Investments of around US$7.5 billion are expected between 2022 and 2030, including around $1.5 billion over the next three years which will be back-end dated. Management advised that these investments are being prioritised and phased in the most logical way, with consideration for near-term work around energy inputs and attractive economics.

‘A stronger Rio Tinto’

Rio Tinto’s chief executive, Jakob Stausholm, believes the company will be stronger in the coming years thanks to its strategy. He commented:

We are now creating real momentum, to build a stronger Rio Tinto that is a platform for delivering long-term value. From evolving our culture, to operational improvements, a different approach on cultural heritage, and technology breakthroughs to address climate change and a changing customer environment, we are seeing early results that give us conviction we have the right objectives, the right team, and the right strategy. This is all captured in our newly defined purpose: finding better ways to provide the materials the world needs.

Meeting the incremental demand of the energy transition and ensuring local supplies of critical minerals globally deepens our relevance in the world and provides new opportunities. We are working hard to decarbonise our assets and products, as we invest to grow in materials needed for the energy transition. “The quality of our assets, resilience of cashflows and strength of our balance sheet ensure we are well positioned to continue to invest with discipline for the long term and deliver attractive returns to our shareholders throughout the cycle.

Production guidance for FY 2023

Rio Tinto has also provided the market with its production guidance for FY 2023.

It revealed that it is targeting Pilbara iron ore shipments (100% basis) of 320Mt to 335Mt. This is in line with what the company guided to originally for FY 2022 before wet weather hampered its performance and led to a slight amendment. It now expects to achieve the low end of this guidance range in 2022.

Other highlights for FY 2023 include a small increase in alumina production to 7.7Mt to 8Mt (from 7.6Mt to 7.8Mt) and aluminium production of 3.1Mt to 3.3Mt (from 3Mt to 3.1Mt).

The post Rio Tinto share price lifts despite lukewarm iron ore outlook appeared first on The Motley Fool Australia.

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