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The AGL Energy Limited (ASX: AGL) share price has added 16% over the course of November so far. And it did so amid plenty of excitement.

After closing October at $6.81, the energy provider’s stock lifted to trade at $7.93 today – marking a 16.45% gain.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lifted just 5.27% over the last 30 days. That leaves the stock having outperformed the index by 11.18% in that time.

Let’s dive into all the drama that occurred at the 180-year-old energy company over the course of November.

What went right for the AGL share price in November?

Three major happenings likely drew investor attention to AGL this month. Perhaps the most notable was the company’s annual general meeting (AGM). There, billionaire shareholder Mike Cannon-Brookes secured a second win over the AGL board.

All four nominees for the company’s board put forward by the Atlassian Corp (NASDAQ: TEAM) co-founder and co-CEO were elected by shareholders despite only one being recommended by AGL.

The win could insinuate investors may be more aligned with Cannon-Brookes’ vision for the company’s future than that of its board. The billionaire previously urged shareholders to vote for the four nominees, saying:

John Pollaers, Kerry Schott, Mark Twidell, and Christine Holman have no alignment with [Cannon-Brookes’ investment vehicle] Grok other than broadly agreeing with our view – and that of AGL shareholders – that this transition needs to occur as quickly as possible and with an ambition for AGL to lead Australia’s energy transition.

The company also received a first strike on its remuneration report, with more than 25% of shareholders voting against it.

Another major happening likely putting AGL shares in the spotlight this month was a proposal offered to Origin Energy Ltd (ASX: ORG).

And who was behind the asking? A consortium including none other than former AGL suitor Brookfield Asset Management.

Finally, the AGL share price slipped 1% on news the company plans to close its Torrens Island ‘B’ Power Station in 2026 last week. The South Australian asset will be transformed into a low-carbon industrial energy hub.

Coming into the end of November, the AGL share price is 26% higher than it was at the start of 2022. It has also gained 47% since this time last year.

Comparatively, the ASX 200 has dumped 4% year to date and is trading flat year-on-year.

The post How did the AGL share price outperform the ASX 200 by 11% in November? appeared first on The Motley Fool Australia.

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More reading

• Are AGL shares a good investment right now?
• Here are the top 10 ASX 200 shares today
• Why is the AGL share price falling on Thursday?
• How much dividend income would $20,000 worth of AGL shares have netted you in 2022?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian. 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 Mayne Pharma Group Ltd (ASX: MYX) share price is having a day to forget.

At the time of writing, the pharmaceutical company’s shares have crashed 27% to a multi-year low of 20 cents.

Why is the Mayne Pharma share price crashing?

Investors have been selling down the Mayne Pharma share price on Wednesday following the release of a trading update at the company’s annual general meeting.

According to the release, the company’s revenue has fallen sharply during the first four months of FY 2023.

For the four months ended 31 October, Mayne Pharma’s revenue from continuing operations came to $59 million. This is down 29.5% over the prior corresponding period. This is despite the company generating $6.3 million in revenue from its new Nextstellis product, which wasn’t on sale a year ago.

The main drag on its performance has been dermatology sales in the Portfolio Products segment. This weakness has offset sales growth from retail generics and led to Portfolio Products revenue almost halving during the four months.

Management blamed this on higher than expected sales and channel inventory levels in June 2022, discontinued products, and higher gross to net charges. The latter includes patient savings (copay card costs).

Outlook

Management’s outlook for the remainder of the half also appears to have spooked investors and put pressure on the Mayne Pharma share price.

It advised that first half cash and earnings are expected to be impacted by a number of items. This includes normalised trading patterns with suppliers and customers, higher than expected copay card costs in dermatology, and a Nextstellis direct to consumer campaign in the US.

Though, one positive is that its focus on driving improved profitability and cash flow is expected to lead to a return to positive EBITDA in FY 2024.

Time will tell if that is the case. Nothing Mayne Pharma has done in recent years appears to have gone to plan. As a result, its shares are now down over 90% from 2016’s highs.

The post Why is this ASX All Ords share crashing 27% today? appeared first on The Motley Fool Australia.

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More reading

• The Woodside share price has dropped for 5 days in a row. What’s going on?
• How did the AGL share price outperform the ASX 200 by 11% in November?
• A recession could be inevitable. Don’t panic — do this instead
• Why is the Whitehaven share price surging 7% on Wednesday?
• Almost ready to retire? I’d buy ASX dividend shares now to capitalise on a stock market recovery

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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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.

Before the start of 2022, the prior 13 years had been nothing short of remarkable for investors. The broad-based S&P 500, which is typically viewed as the best indicator of health for both the U.S. economy and the stock market, surged 600% from its Great Recession low. That’s a compounded rate of return of 17.7% annually.

As the old saying goes, though, what goes up, must come down. Year to date, the broad market index has lost 16%, and all the signs are pointing to the economy sliding into an official recession early next year.

Although we recently endured two consecutive quarters of gross domestic product (GDP) contraction, the rule of thumb many use for a recession, the National Bureau of Economic Research says the definition is much less specific. It looks for “a significant decline in economic activity that is spread across the economy and lasts more than a few months.”

We may be getting that soon. Perhaps the surest sign of a recession is on the way was Amazon and FedEx both announcing they were preparing to lay off tens of thousands of workers before Christmas. Still, there is no reason for you to panic.

The gathering storm

The Dallas branch of the Federal Reserve just released its latest regional report showing that its new orders index tumbled to a reading of negative 20.9 in November, making this the sixth straight month in negative territory and the lowest point since May 2020 during the depths of the pandemic. New order growth rates, capacity utilization, and shipments have all deteriorated for multiple months.

Manufacturers in the Fed survey had a mix of dour comments. One food manufacturer, for example, noted that while demand was still present, “there is just no cash to buy food.” While a machinery manufacturer pointed to continued supply chain problems, a miscellaneous manufacturer said, “Our order backlog is growing because we cannot buy electronic components at any price.”

One metal manufacturer declared, “Recession is coming! We are just waiting for the backlog to evaporate. Then layoffs start.”

Indeed, JPMorgan Chase‘s Jamie Dimon said in October he expected the U.S. to fall into a recession within the next six to nine months because a “very, very serious” combination of problems would be buffeting businesses; inflation has risen to such a degree that the Federal Reserve is now overcorrecting to rein it in by drastically raising interest rates.

The silver lining amid the clouds

This is scary stuff, and investors do need to protect themselves, but not by burying their heads in the sand and hoping the storm blows over. Pulling all your money out of the stock market and stuffing it in a mattress is not a winning strategy.

As savvy investors know, market downturns are unique buying opportunities because former high-flying stocks are now available at far more reasonable valuations. But if a recession is coming, those high-flyers may still have further to fall.

Certainly, dollar-cost averaging is a worthwhile strategy to deploy, buying shares in good stocks with solid long-term potential that continue to fall. It means you acquire more shares when they’re cheap and fewer when they’re more expensive, all the while establishing a stake in a business that will rally when the storm passes.

Another option is to buy dividend stocks, which helps protect your portfolio as stock prices fall.     

Unparalleled opportunity

The asset managers at Hartford Financial Services looked at the performance of the S&P 500 going all the way back to 1930 and found that dividends contributed 40% to the total return of the index over that 91-year period.

They also found that from 1960 on, dividends represented an amazing 84% of the index’s total return. Moreover, reinvesting dividends in the benchmark index, coupled with the power of compounding, would have turned a $10,000 investment into more than $4.9 million compared to just $795,823 that grubstake would have become based just on the index’s price alone.      

Even more remarkable, there has not been a single decade in which dividend stocks in the index didn’t generate positive returns, even when the broader market was losing money for investors. That includes the so-called “lost decade” of the 2000s when the S&P 500 produced negative returns, but dividend-paying stocks in the index produced 1.8% positive returns.

Fortify your portfolio now with dividend stocks

Market corrections, bear markets, and recessions can all be painful times. It behooves investors to remain calm during such periods of turmoil and look at how to make lemonade from the lemons they’ve been handed.                                    

As Warren Buffett has said, be fearful when others are greedy, and greedy when others are fearful. That doesn’t mean buying stocks willy-nilly, but targeted investments like those that pay dividends will benefit you over the long haul. 

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

The post A recession could be inevitable. Don’t panic — do this instead appeared first on The Motley Fool Australia.

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More reading

• Why is the Whitehaven share price surging 7% on Wednesday?
• Almost ready to retire? I’d buy ASX dividend shares now to capitalise on a stock market recovery
• Why is the Rio Tinto share price marching higher again today?
• Why did the CBA share price jump to a 52-week high in November?
• 3 reasons to buy Amazon stock right now

Rich Duprey has no position in any of the stocks mentioned. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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 Amazon, FedEx, and JPMorgan Chase. The Motley Fool Australia has recommended Amazon. 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 Whitehaven Coal Ltd (ASX: WHC) share price is among the best performers on the ASX 200 index on Wednesday.

In morning trade, the coal miner’s shares are up 7.5% to $9.96.

This means the Whitehaven Coal share price is now up over 250% since the start of the year.

Why is the Whitehaven Coal share price charging higher again?

Investors have been buying the coal miner’s shares today after the company was the subject of a couple of bullish broker notes.

One of those notes came from the team at Morgans, which has retained its add rating with a slightly trimmed price target of $11.20.

Based on the current Whitehaven Coal share price, this implies potential upside of 12.5% over the next 12 months.

But Morgans doesn’t expect the returns to stop there. It has pencilled in a massive fully franked $1.15 per share dividend in FY 2023, which equates to an 11.5% yield for investors.

Morgans likes the company due to its significant cash flow generation thanks to strong coal prices. It commented:

For investors, we see strong potential for a prolonged energy market dislocation where supply security commands a higher premium for longer. WHC is trading on a +30% free cash flow yield, with clear upside earnings/valuation risk, supporting further outsized shareholder returns over time.

Who else is bullish?

Another broker that sees further upside for the Whitehaven Coal share price is Bell Potter.

This morning the broker upgraded the company’s shares to a buy rating and lifted its price target on them to $11.00. This suggests potential upside of 10.5% over the next 12 months.

And like Morgans, Bell Potter is expecting a big dividend. It is forecasting a 96 cents per share fully franked dividend in FY 2023, which equates to a 9.6% yield for investors.

Its analysts are positive on Whitehaven Coal due to their belief that coal prices will stay high in the near term and drive strong earnings and dividend payments. The broker commented:

Upside risk to pricing across the energy complex in the northern hemisphere winter, exacerbated by sanctions on Russian supply, are the key drivers of our strong coal price, near-term WHC earnings and dividend outlook and recommendation upgrade.

The post Why is the Whitehaven share price surging 7% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Broker says this ASX 200 coal share could offer a market-beating 29% return in 2023
• 5 things to watch on the ASX 200 on Wednesday
• Morgans tips these ASX 200 shares to jump 20%
• Up 240% in 2022, is it time to cash in the chips on Whitehaven shares?
• Here are the top 10 ASX 200 shares 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 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 would be forgiven for being disheartened at points in 2022 so far. Markets across the world have struggled over the course of the last 11 months amid roaring inflation, the war in Ukraine, and continued pandemic-related impacts. However, there is a silver lining.

Market downturns can provide ripper opportunities. Here’s how I would capitalise on the ASX’s recent suffering by investing in dividend shares for retirement now.

The S&P/ASX 200 Index (ASX: XJO) has fallen 4% so far this year. Meanwhile, the benchmark All Ordinaries Index (ASX: XAO) has dumped 6%.

Why I’d buy ASX dividends for retirement now

ASX dividend shares can generate passive income – that’s likely especially important for those gearing up for retirement. And what better time than during a market downturn to snap up dividend stocks?

That might sound counterintuitive, but downturns can allow an investor to buy into quality companies for less than they otherwise would. There are likely some major bargains buried in the market’s rubble right now.

Additionally, buying quality ASX dividend shares during a downturn could mean my portfolio comes along for the ride when the market recovers.

Of course, such a recovery is never guaranteed. Historically, however, the Aussie bourse has always returned to, and surpassed, previous highs following a tumble.

Another reason I would invest in ASX dividend shares during a market downturn is the opportunity to receive more shares than I otherwise might.

The cheaper the quality share, the further my hard-earned cash will go. And the more shares I hold, the more dividends I’ll likely receive. That could see me enjoying a greater passive income during my golden years.

Not to mention, dividend stocks are capable of acting as an inflation hedge ­– providing returns faster than the measure can eat away at cash savings. That’s another important factor to consider when retirement planning.

Here’s how I would go about identifying quality ASX dividend shares to buy for retirement now.

How I would find quality dividend stocks trading cheap

Each person will have a differing opinion on what makes an ASX dividend share good quality. Personally, I look for companies with a competitive edge, a strong balance sheet, and a history of pushing through tough times.

When seeking out dividend stocks to provide passive income in retirement, I would also consider companies’ dividend yield and payment history.

A high dividend yield might sound like great value for money but it could be hard to sustain over years to come. Meanwhile, a company that has historically prioritised dividends might offer greater surety of passive income.

That might mean I focus my efforts on blue chip shares, generally found on the ASX 200.

And, as always, I would be looking to build a diverse portfolio of ASX dividend shares so to de-risk my investments.  

The post Almost ready to retire? I’d buy ASX dividend shares now to capitalise on a stock market recovery appeared first on The Motley Fool Australia.

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More reading

• Why is the Rio Tinto share price marching higher again today?
• Why this ASX 200 dividend share could be an income gold mine hiding in plain sight
• 5 things to watch on the ASX 200 on Wednesday
• Guess which ‘boring’ ASX 200 share became one of the top dividend boosters of 2022
• Here are the top 10 ASX 200 shares 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Ltd (ASX: RIO) share price is treading higher again in morning trade on Wednesday.

After closing up 3.5% yesterday, shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner are up 0.2% at the time of writing to $108.05 per share.

Materials shares are broadly outperforming today, with the S&P/ASX 200 Materials Index (ASX: XMJ) up 0.68% while the ASX 200 is down 0.41%.

Here’s what’s moving the Rio Tinto share price today.

What are ASX 200 investors considering?

The Rio Tinto share price is in the green on the back of another leg up for iron ore prices.

The industrial metal broke back above the US$100 mark yesterday and gained another 2.4% overnight to US$101.25 per tonne. That’s the highest price in more than two months amid new Chinese government stimulus for the nation’s property markets.

The Rio Tinto share price also enjoyed a big gain in US markets, with the stock closing up 4.0% on the NYSE.

In other news likely to draw the interest of ESG-focused investors, the miner announced it will invest another $600 million in renewable energy assets in the Pilbara. The new investment is part of Rio’s ongoing effort to decarbonise its Western Australian iron ore operations.

Rio Tinto intends to construct two 100MW solar power facilities and 200MWh of on-grid battery storage by 2026.

Commenting on the new renewable energy investments, Rio Tinto Iron Ore CEO Simon Trott said:

The Pilbara is extremely well-positioned to take advantage of renewable power with land, access to people, and abundant wind and solar resources. Our Pilbara electricity grid is the largest privately-owned grid in Australia, ensuring that we have the initial infrastructure required to enable a transition to renewable energy.

We expect to invest around $3 billion to install renewable energy assets as well as transmission and storage upgrades in the Pilbara as part of our commitment to halve our emissions from the Pilbara by the end of this decade.

Rio Tinto share price snapshot

The Rio Tinto share price is up 16% over the past 12 months. That compares to a flat full-year performance of the ASX 200 Index.

The post Why is the Rio Tinto share price marching higher again today? appeared first on The Motley Fool Australia.

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• Why this ASX 200 dividend share could be an income gold mine hiding in plain sight
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• Guess which ‘boring’ ASX 200 share became one of the top dividend boosters of 2022
• Here are the top 10 ASX 200 shares today
• The 10 ASX 200 shares responsible for 60% of all Aussie dividends last quarter

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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In morning trade, the Commonwealth Bank of Australia (ASX: CBA) share price is down slightly at $107.53.

Despite this, the banking giant’s shares are on course for a positive monthly gain of approximately 3%.

In fact, things have been so positive this month, the CBA share price managed to hit a 52-week high of $109.20 at one point.

Why did the CBA share price hit a 52-week high in November?

Investors were bidding the CBA share price higher in November thanks largely to the release of a solid first quarter update in the middle of the month.

For the three months ended 30 September, Australia’s largest bank reported a 2% increase in cash earnings over the second half average of FY 2022 to $2.5 billion. This was driven by a 9% lift in operating income, which was offset partially by a 4.5% increase in expenses due largely to wage inflation.

The bank’s solid operating income growth was underpinned by higher margins and volume growth, which offset a reduction in non-interest income. The former reflects household deposit growth of 8.6%, home lending growth of 6.3%, and business lending growth of 12.6%.

And while the banking giant surprisingly decided not to reveal what its net interest margin (NIM) was during the period, Goldman Sachs estimates that it came in at between 2.05% to 2.10%.

This was a big positive given that the broker was forecasting a first half NIM around 10 basis points lower than this. Especially given how interest rate hikes are likely to support a further increase in its NIM during the second quarter.

Goldman commented:

CBA did not provide a NIM for the quarter; however, we note that net interest income was very strong at +16% vs 2H22 average and was run rating 5.5% above our 1H23E forecasts. Based on current GSe balance sheet forecasts, and the fact liquids seem to have grown stronger than loans in the quarter, we estimate a 1Q23 NIM of between 2.05% to 2.10% (which is >10bp higher than our current 1H23E), with its trajectory into 2Q likely still higher.

All in all, a positive month for the bank and its shareholders will no doubt be hoping for more of the same from the CBA share price in December.

The post Why did the CBA share price jump to a 52-week high in November? appeared first on The Motley Fool Australia.

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• The 10 ASX 200 shares responsible for 60% of all Aussie dividends last quarter
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• Could now be the time for income investors to buy CBA shares?
• 5 ASX 200 shares Macquarie just recommended its clients buy
• Sell the big four banks and buy this ASX lithium share: broker

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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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.

The post-COVID slowdown hasn’t been kind to Amazon (NASDAQ: AMZN), and the stock is down 45% so far this year. While the company’s e-commerce operations are experiencing weak growth and margins, Amazon is much more than just an online retailer. Let’s explore three potentially overlooked factors that could make the stock a buy for long-term investors. 

Cloud computing is Amazon’s new backbone 

Amazon’s third-quarter results were a mixed bag. Revenue grew by 15% year over year to $127.1 billion, but operating income almost halved to $2.5 billion because of challenges like inflation and overexpansion during the pandemic boom of 2020 and 2021. But while its North American and international e-commerce segments are both bleeding cash — with operating losses of $400 million and $2.5 billion, respectively — its cloud computing business, Amazon Web Services (AWS), is helping to pick up the slack. 

AWS segment revenue increased by 27% to $20.5 billion while its operating income jumped 11% to $5.4 billion. With both of Amazon’s e-commerce segments burning cash, AWS is now Amazon’s foundation. And investors may be overlooking its value. According to analysts at equity research firm Redburn, AWS alone could be on track for a $3 trillion valuation and could be spun off to unlock a better valuation. 

While Redburn’s predictions are admittedly optimistic and don’t come with a concrete timeframe, they do highlight the huge potential many industry watchers see in Amazon’s cloud offering because of its economic moat, which includes a strong brand and economies of scale. The company is using these advantages to attract new clients such as power company Duke Energy, which entered a three-year cloud deal with AWS in November to modernize its electric grid.

Film entertainment could help too

First an online bookstore, then an e-commerce giant, and now the global leader in cloud computing — Amazon is no stranger to reinventing itself. And while cloud computing looks likely to power most of the company’s valuation growth, other business segments could also contribute. 

In November, Amazon announced plans to spend $1 billion a year to produce 12 to 15 movies that it will release in theatres annually. This decision comes in the wake of its March acquisition of Hollywood studio MGM, and could help lay the groundwork for the company to become a fully-fledged entertainment giant that can compete with the likes of Walt Disney.

The new content will also help create a competitive advantage for Amazon Prime, which includes a video-streaming service. 

Management hasn’t provided guidance on how much revenue it expects Amazon’s film production efforts to generate. But if it’s successful, it could provide some much-needed diversification and growth to counteract the slowdown in the company’s retail operations. 

Amazon’s valuation is still reasonable

Amazon’s significant stock declines have made the company more interesting for value-hungry investors. And while the company is far from distressed territory, its price-to-sales ratio of 1.9 is lower than the S&P 500‘s average of 2.4. And while Amazon’s bottom line remains under pressure in the near term, continued growth in AWS and new business could help turn things around in the coming years.

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

The post 3 reasons to buy Amazon stock right now appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Will Ebiefung 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 Amazon and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Duke Energy 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 Amazon 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 Qantas Airways Limited (ASX: QAN) share price is on course to record a strong monthly gain.

In morning trade, the airline operator’s shares are down slightly to $6.19.

This means the Qantas share price is up 6% since the start of the month.

Why did the Qantas share price take off in November?

Interestingly, the Qantas share price was looking like it could have an underwhelming month as recently as two weeks ago.

At that point, the flying kangaroo’s shares were trading modestly lower month to date.

But that all changed just a few days later when the release of a trading update turned on the afterburners and sent Qantas’ shares hurtling higher.

What was in the trading update?

Readers may recall that in October, Qantas provided the market with its first half profit guidance and net debt guidance.

It advised that it expected to report an underlying profit before tax of between $1.2 billion and $1.3 billion for the six months ending 31 December. Management also revealed that it expected its net debt to be between $3.2 billion and $3.4 billion, well below of its target of $3.9 billion.

Well, fast forward a little over a month and Qantas is now expecting to be even more profitable. Such a refreshing change after a couple of years of COVID struggles!

According to the release, management expects the airline to post an underlying profit before tax of between $1.35 billion and $1.45 billion for the half. This represents a $150 million increase to the guidance range given in October.

Qantas advised that this is being driven by consumers continuing to put a high priority on travel ahead of other spending categories. In addition, it advised that there are signs that limits on international capacity are driving more domestic leisure demand, which is benefiting Australian tourism.

Impressively, this strong profit is being achieved despite Qantas’ fuel costs being on course to reach a record high of $5 billion for FY 2023.

In light of this strong performance and also due to some delayed capital expenditure, Qantas expects its net debt to be $2.3 billion to $2.5 billion at the end of December. This is around $900 million better than expected in its most recent update.

Anything else?

Also giving the Qantas share price a boost was the reaction from brokers.

A number of Australia’s leading brokers, such as Goldman Sachs, responded by reiterating their buy ratings and lifting their price targets.

In fact, Goldman is tipping the Qantas share price to reach a record high of $8.20. This bodes well for its shares in December and beyond.

The post Why did the Qantas share price take off in November? 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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A wide array of ASX tech shares suffered a sell-off during 2022 as inflation and rising interest rates pulled down asset values.

It’s true that a higher interest rate is meant to hurt share prices. As billionaire Ray Dalio once said about interest rates:

It all comes down to interest rates. As an investor, all you’re doing is putting up a lump sum payment for a future cash flow.

However, these businesses are the same companies that they were at the start of the year. The main thing that has changed is that investors can now buy them at cheaper prices. So I think that investors are spoiled for choice.

Here are three that could continue to do well, even if the global economy goes through a tough time in the short term.

Xero Limited (ASX: XRO)

Xero is a leading cloud accounting software business. According to the recent Xero FY23 half-year result, it has 3.5 million global subscribers (this was a 16% year-over-year increase).

Despite the growth that Xero continues to achieve, the Xero share price has fallen by around 50% in 2022 to date.

Not only are subscribers growing, but how much it’s making from those subscribers is rising too. HY23 average revenue per user (ARPU) increased by 13% to $35.30, which helped annualised monthly recurring revenue (AMRR) rise by 31%.

With a gross profit margin of 87%, the business is experiencing rapid gross profit growth. The business is directing a large part of this to marketing as well as product design and development expenses.

I think we may start to see the underlying profitability of Xero come through in the next couple of years as the percentage of revenue that the ASX tech share spends on growth reduces. Xero’s HY23 free cash flow jumped 145% to $15.5 million.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This is an exchange-traded fund (ETF) focused on video gaming and e-sports businesses around the world.

For people who know a bit about video gaming, some of its biggest holdings may be recognisable: Nvidia, Activision Blizzard, Nintendo, Advanced Micro Devices, Roblox, Tencent, Electronic Arts, Take-Two Interactive Software, and Bandai Namco.

The VanEck Video Gaming and Esports ETF has dropped by around 30% since the start of the year. But I’m not sure that the demand for video games will drop that much. I’d guess younger people will continue to want to spend some of their discretionary income on games and consoles.

E-sports is an exciting area of growth. VanEck-sourced stats suggest that e-sports revenue has grown by an average of 28% per annum since 2015. Global e-sports audiences are growing and this is helping unlock new revenue such as new potential revenue streams from game publisher fees, media rights, merchandise, ticket sales, and advertising.

Audinate Group Ltd (ASX: AD8)

This ASX tech share provides the Dante system — advanced audio and visual media equipment that helps simplify digital media setup and usage. The company has a strong presence in the professional audio sector and now it’s trying to offer a full package with video as well.

Audinate wants to grow in areas such as live venues, broadcasting, corporate board rooms, and university lecture spaces.

According to Audinate sources, the professional AV industry is expected to grow 11% in 2022 and hit a new high-water mark of $263 billion globally. It’s estimated the industry will grow by nearly 50% over six years to $351 billion in 2027.

The company has a focus on significant traction in the video field, including revenue of at least US$3 million in FY23.

The recovery from COVID, as live events resume, could be a boost for the Audinate share price in 2023. The Audinate share price is down around 20% since August 2022.

The post Could these be the best ASX tech shares to buy now for 2023? appeared first on The Motley Fool Australia.

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• Why I’m buying ASX shares in this once-in-a-lifetime market to try and retire early
• ‘Back a winner’: Expert names his 3 best ASX shares for 2023
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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 positions in and has recommended AUDINATEGL FPO, Activision Blizzard, Advanced Micro Devices, Nvidia, Roblox Corporation, Take-Two Interactive, Tencent Holdings, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Electronic Arts and Nintendo and has recommended the following options: long January 2023 $115 calls on Take-Two Interactive. The Motley Fool Australia has positions in and has recommended AUDINATEGL FPO and Xero. The Motley Fool Australia has recommended Activision Blizzard, Nvidia, and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports 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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