Tag: Motley Fool

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.

Given that the industry-tracking AdvisorShares Pure US Cannabis ETF (NYSEMKT: MSOS) is down by more than 60% in the last 12 months, dramatically underperforming the broader market’s slump of 14.5%, it’s safe to say that marijuana stock investors are likely feeling a bit down on their luck lately.

But the industry is approaching three major shifts that could create new opportunities for investors — not to mention a few new risks. Let’s explore how cannabis companies are likely to change over the next couple of years, starting with the elephant in the room: legalization.    

1. Marijuana legalization will proceed in the U.S. and the E.U., and potentially by a lot

The biggest change coming to cannabis stocks in the next couple of years is the possible advance of marijuana legalization in the U.S. and in the E.U. While the jury is still out on whether the federal government will legalize adult-use cannabis anytime soon, enterprising state legislatures are already forging ahead. Maryland and Missouri both voted in the latest election to legalize cannabis for adult use, which means that new markets will soon open in both places.

Plus, legalization is advancing in major E.U. markets, specifically in Germany, where an estimated 4 million people consumed cannabis in 2021. While there’s no timeline for when recreational sales will begin, Tilray Brands (NASDAQ: TLRY) is likely the best positioned to benefit since it’s currently serving the country’s medical cannabis market. But if other E.U. nations follow in Germany’s footsteps to adjust their own laws, there will likely be room for other operators to flourish, too.

2. The cannabis glut will (painfully) end in Canada

Since late 2020 in Canada, there’s been far more supply of marijuana than there has been demand at the average sales price. In the country’s adult-use market, companies like Tilray and Canopy Growth (NASDAQ: CGC) are king.  

One major impact of the glut is that the average selling price per gram of legal cannabis faces downward pressure, which results in lower sales and compressed margins. Another impact is that under Canada’s marijuana regulations, companies are only allowed to retain a certain amount of cannabis in their inventories, with any excess being marked for destruction.

And to make matters worse, any business that overbuilt its cultivation and manufacturing facilities will be burning money on overhead that isn’t translating into earnings.

In the next couple of years, the glut will subside. It might continue to cause growers to shut down their extraneous operations, and sales are likely to be under pressure. But when the levels of demand and supply are more in equilibrium, there will be an opportunity to buy shares of the players that are the best positioned for consistent growth.

It’s too early to say which Canadian company is going to fare the best in the coming shakeout, but betting on one of the market’s top dogs, like Tilray, isn’t an unreasonable approach. 

3. The seeds of a cannabis glut will begin to germinate in the U.S.

The conditions that made for a glut in Canada are already appearing in the U.S. recreational market, and it’ll likely humble some of the better-performing businesses of recent times. 

As more states legalize recreational marijuana in the aftermath of the 2022 election, and as the chances of a change in federal policies remain high, competitors will be scrambling to cash in on fresh demand. To do so, they’ll be cranking the dial on cannabis products to 11. It’s also reasonable to expect them to open up a galaxy of new retail locations to distribute their goods. And for as long as demand seems hot, they’ll probably keep scaling up their operations. 

Until there’s a glut of marijuana in the U.S., that is. Investors are likely to be blindsided by the symptoms of oversupply, which will be the same as they were in the Canadian market. Top-line growth will slow, stall, and then decline, leaving companies with far too many cultivation facilities and storefronts to sustain. In that situation, vertically integrated pure-play competitors like Green Thumb Industries and Curaleaf Holdings will probably be hit the hardest, though timely interventions by management could easily head off major problems. 

In contrast, diversified companies like Tilray and Canopy Growth might not have as many problems with revenue growth, assuming that the pair are competing in the U.S. at all by that point. Being able to lean on beverage sales for growth, like Tilray and Canopy both can, could help to mitigate some of the shareholder risks from a glut of cannabis. Likewise, cannabis real estate investment trusts (REITs) like Innovative Industrial Properties will be somewhat insulated from problems with oversupply since they don’t directly compete by selling cannabis. 

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

The post 3 big changes could be coming for cannabis stocks before 2024 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Could the stage now be set for Telstra shares to outperform?
• These are the ASX dividend shares income investors should buy now: brokers
• How I’d aim for $1,000 in monthly income by buying ASX 200 dividend shares
• 2 ASX ETFs I’d buy right now if I were in my 20s
• Experts name 2 ASX 200 dividend shares to buy

Alex Carchidi has positions in Innovative Industrial Properties. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Innovative Industrial Properties. 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.

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

from The Motley Fool Australia https://ift.tt/vH2a3kJ

If you’re an income investor, then you might want to read on. Because listed below are two ASX dividend shares that have just been rated as buys by brokers.

Here’s what they are saying about these top ASX dividend shares:

QBE Insurance Group Ltd (ASX: QBE)

This insurance giant could be an ASX dividend share to buy.

That’s the view of analysts at Morgans, which remain positive on the company following its trading update this week. The broker has an add rating and $14.89 price target on its shares.

While QBE’s catastrophe claims will be higher than allowances in FY 2022, the broker believes this is still “a reasonable effort in what has been a very volatile year for weather.”

In light of this, the broker remains positive and notes how “tailwinds such as rising bond yields, premium rate increases and cost out will drive an improved earnings profile for QBE over the next few years.”

Morgans expects this to lead to a 42.6 cents per share dividend in FY 2022 and then a 90.3 cents per share dividend in FY 2023. Based on the latest QBE share price of $12.85, this equates to yields of 3.3% and 7%, respectively.

Stockland Corporation Ltd (ASX: SGP)

Another ASX dividend share that has recently been rated as a buy is Stockland. It is a residential and land lease developer and retail, logistics, and office real estate property manager.

Goldman Sachs is a fan of the company. Earlier this month, the broker retained its buy rating with a $4.40 price target.

Its analysts like Stockland due to its exposure to industrial property. The broker continues to “hold a favourable view on the industrial sector more broadly with a number of trends underpinning long-term demand.”

It also highlights the recently refreshed corporate strategy and the sale of its low returning Retirement division as other positives.

In respect to dividends, Goldman is forecasting dividends per share of 27.6 cents in FY 2023 and 28.3 cents in FY 2024. Based on the current Stockland share price of $3.71, this will mean yields of 7.4% and 7.6%, respectively.

The post These are the ASX dividend shares income investors should buy now: brokers appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Don’t get spooked, this ASX 200 share is still a buy: expert
• Why is the QBE share price tumbling today?
• Time to buy? Which ASX 200 shares are trading on single-digit P/E ratios?
• Top brokers name 3 ASX shares to buy today
• Worried about your income in retirement? Take a look at these 3 ASX 200 dividend shares

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.

from The Motley Fool Australia https://ift.tt/VtYG6zk

Sitting back and enjoying life while a steady income hits my account without me having to lift a finger sounds picture perfect. Though, setting up a portfolio of S&P/ASX 200 Index (ASX: XJO) dividend shares capable of offering $1,000 of monthly passive income might sound daunting.

But these things are often simpler than they seem. Here’s how I’d go about setting myself up to receive consistent income from ASX 200 giants like BHP Group Ltd (ASX: BHP) or Commonwealth Bank of Australia (ASX: CBA).

How to receive $1,000 a month from ASX 200 dividend shares

Figuring out how much I need to invest in ASX 200 dividend shares to receive $1,000 of passive income is relatively simple. Though, it will depend on the yield on offer.

If I wanted to end up with $1,000 of passive income from dividend stocks each month, I would need to target $12,000 of dividends annually.

That means, if I were targeting shares with an average dividend yield of 10%, I’d probably need a portfolio worth $120,000 to receive $1,000 of dividends a month. Though, a 10% yield is particularly high and, often, difficult to sustain.

Right now, the SPDR S&P/ASX 200 (ASX: STW) – an exchange traded fund (ETF) tracking the ASX 200 – offers a 4.56% dividend yield.

Assuming an investor beats that slightly and achieves an average dividend yield of 5%, they would likely need to have a portfolio worth $240,000 to receive an average of $1,000 each month.

However, it’s worth remembering that dividends are never assured and past performance doesn’t guarantee future performance.

Building a portfolio

Of course, many readers might be questioning how one would go about building a $240,000 portfolio. It might sound like a daunting figure for an investor without bucketloads of spare cash lying around.

But one doesn’t need to invest all at once. A portfolio of that size can be built up over years or decades.

Slowly building a substantial portfolio could also allow an investor to harness the power of compounding and take advantage of dividend reinvestment plans (DRPs). Thus, an investor’s initial outlay could end up being less than the value of their portfolio.

How I’d find ASX 200 dividend shares to buy

Buying ASX 200 dividend shares really isn’t all that different to buying any other stock.

I would personally consider a company’s long-term outlook, competitive advantages, and balance sheet before investing in its shares.

I would also consider its dividend yield. And perhaps more importantly, whether its balance sheet can sustain its yield.

I would also look at its dividend history. It could be a good sign if a company has previously continually paid out dividends, even in tough times.

By considering these factors, and likely more, I would hopefully find myself with a diverse portfolio of dividend shares capable of providing both returns and growth in years to come.

That way, I could potentially reach my goal of receiving $1,000 of passive income from ASX 200 dividend shares each month faster. Though, no investment is guaranteed to provide returns or growth.

The post How I’d aim for $1,000 in monthly income by buying ASX 200 dividend shares appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Thursday
• Are CBA shares flying too close to the sun?
• Here are the top 10 ASX 200 shares today
• Why did the BrainChip share price leap 7% today?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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.

from The Motley Fool Australia https://ift.tt/MoYtRdT

Exchange-traded funds (ETFs) may be one of the easiest ways for investors to build long-term wealth. Indeed, ASX ETFs could be very effective options.

An ETF is a fund, a basket of shares, that can be bought on the ASX.

It hasn’t been long since I was in my 20s, but people in their early 20s have plenty of time to enable compounding to do a lot of the work to build a healthy financial nest egg.

There are many different ETFs to choose from. I’d want to choose ones that seem to have long-term growth potential. That’s why I’d want to look at the two below.

iShares S&P 500 ETF (ASX: IVV)

This is one of the most popular ETFs on the ASX, with a fund size of around $5 billion according to Blackrock.

The ETF is invested in 500 of the biggest businesses listed in the US which is where many of the world’s largest businesses are based. Of course, past performance is not a reliable indicator of future performance, but the 14.2% average return per annum over the prior five years has shown how well the underlying businesses have grown.

At the moment, the fund’s biggest holdings are Apple, Microsoft, Amazon.com, Alphabet, Tesla, and Berkshire Hathaway. Of course, there are almost 500 others.

One of the most attractive things about this ASX ETF is that its management fee of 0.04% is exceptionally low. Plenty of active fund managers charge at least 1.00%.

I think the holdings offer considerable diversification. While they’re all listed in the US, the underlying revenue comes from across the world, and the positions are from a variety of sectors like tech, retail, financials, healthcare, and so on.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This ETF is slightly different in a number of ways.

It has 200 businesses in its portfolio, but they are listed in countries across the world. While the US accounts for just over 70% of the portfolio, Japan, Switzerland, the Netherlands, Germany, and the UK each account for over 2%.

The biggest difference between the two portfolios is how they are constructed. The iShares S&P 500 ETF just copies the underlying index – I think it’s a great index.

However, this ASX ETF has an ethical slant. It combines “positive climate leadership screens” with a “broad set” of environmental, social, and governance (ESG) considerations.

It excludes a number of areas from its investing. These include fossil fuel producers, companies significantly engaged with gambling or alcohol, companies with human rights or supply chain issues, companies that lack gender diversity on their boards, and so on.

It starts with the global large-cap universe. What’s left after those exclusions are the 200 largest ‘ethical’ businesses.

On 22 November 2022, its largest positions were: Home Depot, Visa, Apple, Mastercard, Toyota, and Nvidia.

For investors who only want to own businesses that they feel good about, then this ASX ETF could be a good option.

The post 2 ASX ETFs I’d buy right now if I were in my 20s appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 high quality ETFs for ASX investors to buy now
• 3 ETFs for ASX investors to buy right now
• 2 excellent ETFs to buy for portfolio diversification
• Why I think every investment portfolio should include at least one ASX ETF

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Home Depot, Mastercard, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Mastercard, Nvidia, and iShares Trust – iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/mTuJC5y

Are you looking for dividend shares to buy? Listed below are two ASX 200 dividend shares that experts rate highly.

Here’s why they are bullish on these shares:

Charter Hall Long WALE REIT (ASX: CLW)

The first ASX dividend share for income investors to look at is the Charter Hall Long Wale REIT.

This property company is focused on high quality real estate assets that are leased to corporate and government tenants on long term leases.

The team at Citi believes the company is a top option thanks to its “low risk income stream with c. 12 year WALE and 99.9% occupancy.” Citi currently has a buy rating and $4.70 price target on its shares.

The broker is also expecting generous dividend yields from Charter Hall Long Wale REIT’s shares. It has pencilled in dividends per share of 28 cents in FY 2023 and 29 cents in FY 2024.

Based on the current Charter Hall Long Wale REIT share price of $4.31, this will mean yields of 6.5% and 6.7%, respectively.

South32 Ltd (ASX: S32)

Another ASX dividend share that has been named as a buy is South32. It is a diversified mining and metals company producing a range of commodities including aluminium, copper, manganese, and nickel.

Morgans is positive on South32 and has an add rating and $5.30 price target on the miner’s shares.

The broker likes South32 due to its portfolio transformation and favourable dividend policy. In respect to the former, the broker believes this is “substantially boosting group earnings quality, as well as S32’s risk and ESG profile”

As for dividends, Morgans is expecting fully franked dividends per share of 22.9 cents in FY 2023 and 21.5 cents in FY 2024. Based on the current South32 share price of $4.01, this will mean yields of 5.7% and 5.4%, respectively.

The post Experts name 2 ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Macquarie is cooling off on its outlook for BHP shares. Should you?
• Will ASX 200 shares bottom before the year is out? Here’s Macquarie’s ‘best guess’
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• What has this top broker got against South32 shares?
• Here are the 3 most heavily traded ASX 200 shares on Monday

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.

from The Motley Fool Australia https://ift.tt/aBRueAw

In turbulent times like 2022, the share market can get quite skittish.

An example of this is how it reacted to QBE Insurance Group Ltd (ASX: QBE)’s business update on Monday.

A perception that the numbers were slightly unflattering sent the share price immediately plummeting 4% that morning.

But if the business is still fundamentally sound for the long term, prudent investors may want to pick it for cheap after such knee-jerk reactions.

And that’s exactly what Morgans senior analyst Richard Coles thinks, as he urged investors to take a chill pill.

Everyone settle down, this isn’t that bad

It seems the market freaked out from QBE’s 2022 catastrophe claims tracking to come in higher than what QBE had previously allowed for.

But Coles said on the Morgans blog that the US$100 million figure is nothing to worry about.

“We would argue this is still a reasonable outcome in what has been a very volatile year for weather, noting the global insurance industry is likely to see total claims greater than US$100 billion.”

In fact, Coles insisted this is a better result than how the company might have performed a couple of years ago.

“We believe that in years gone by, the size of the claims blow-out for QBE in a similar scenario would have been much larger, reflecting the company’s efforts to improve underwriting quality in recent periods.”

2022 might be bumpy, but 2023 will be bumper

Admittedly, the Morgans team has downgraded the 2022 earnings per share forecast by 6% due to the higher claim costs.

But they have actually lifted the 2023 estimate by 5% on higher investment yield assumptions.

“The higher running yield QBE is achieving on fixed income securities — now 3.9% versus 2.5% in June — and the continuation of robust premium rate increases should position the company for a strong FY23 in our view.”

The QBE share price now trades 6.2% higher than where it started this year while paying out a 2.2% dividend yield.

The insurance giant is hot with professional investors at the moment.

According to CMC Markets, eight out of nine analysts are rating the stock as a strong buy.

The post Don’t get spooked, this ASX 200 share is still a buy: expert appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the QBE share price tumbling today?
• Top brokers name 3 ASX shares to buy today
• 3 ASX All Ordinaries shares that hit multi-year highs today
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now
• Analysts says income investors should buy these ASX dividend shares in November

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

from The Motley Fool Australia https://ift.tt/GbMOCWL

It’s a phenomenon regularly seen that the worst-performing ASX sectors in one year turn it around to have a belter the next year.

After all, if some ASX shares have been pummelled, the heavy discounting gives it more upside when the market inevitably rotates its love back to them.

With this pivot in mind, Shaw and Partners senior investment advisor Adam Dawes stuck his neck out this week to name two sectors that are set to boom in 2023.

And what’s more, he dared to name four stocks in those industries that he would buy now:

Watch healthcare and technology stocks over the next 12 months

While he still felt “slightly contrarian” making this claim, Dawes felt like now is the time to revisit some unloved industries.

“You’ve got to start to potentially start dipping your toe back into the consumer discretionary space and certainly the tech space,” he told Switzer TV Investing.

Technology completely fell out of favour in 2022 due to rising interest rates that are adverse to high-growth businesses.

And the central banks’ attempts to bring down inflation by slamming consumer wallets have put the fear of God into investors about retailers that are not selling staples.

Dawes feels like they’ve both been punished enough and those sectors could make a roaring comeback in 2023.

“In the new year, once interest rates potentially stabilise — we might even see some interest rates starting to fall — that will give that consumer discretionary space a bit of a boost.”

4 best ASX shares to buy in health and tech

Dawes named three ASX shares in discretionary retail and one technology stock to lead the comeback:

• Lovisa Holdings Ltd (ASX: LOV)
• Universal Store Holdings Ltd (ASX: UNI)
• Scentre Group (ASX: SCG)
• Xero Limited (ASX: XRO)

Shares for budget jewellery retailer Lovisa have already bucked the trend, gaining 80% since mid-June. Youth fashion merchant Universal Store has also seen its stock price rocket more than 62% upwards over the same period.

Operator of Westfield shopping malls, Scentre Group, is a good buy for those who are seeking a more generalist play.

“If you want to go broader, something like Scentre Group, because then you get all the stores at once putting in money.”

In the tech sector, Xero investors have watched in horror as their shares have lost more than 55% year to date.

The market reacted negatively to the latest update that showed overseas growth was not up to expected levels and that a new chief executive would be starting in the new year.

But for Dawes, this just presents a buying opportunity with a long-term horizon.

“Xero is a classic example of where we really want to be getting some positions in — probably early in the new year versus later on.”

The post 4 ASX shares to buy in the sectors set to explode in 2023: expert appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive
• 3 ASX 200 shares with enormous insider ownership
• Could these be the best ASX growth shares to buy now for 2023?
• Up 30% in 3 months, why Lovisa shares can keep sparkling: UBS
• 3 ASX shares to buy for the end-of-year tech comeback: expert

Motley Fool contributor Tony Yoo has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa Holdings Ltd and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/bEeNZJv

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was on form again and charged higher. The benchmark index rose 0.7% to 7,231.8 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to edge lower on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points lower this morning. In late trade in the United States, the Dow Jones is up 0.3%, the S&P 500 has risen 0.4%, and the NASDAQ has climbed 0.7%. Minutes from the US Federal Reserve boosted stocks.

Qantas shares rated as a buy

The Qantas Airways Limited (ASX: QAN) share price may have stormed to a 52-week high on Wednesday, but Goldman Sachs believes it could keep ascending. According to a note, the broker has reiterated its conviction buy rating with an improved price target of $8.20. It said: “We believe the stock is not appropriately pricing QAN’s improved earnings capacity.”

Oil prices sink

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a difficult day after oil prices sank on Wednesday night. According to Bloomberg, the WTI crude oil price is down 3.9% to US$77.82 a barrel and the Brent crude oil price is down 3.7% to US$85.14 a barrel. Russian price cap talks and a build up of US gasoline weighed on prices.

More annual general meetings

The annual general meetings continue on Thursday with another group of ASX 200 shares hosting their yearly events. This includes retail giant Harvey Norman Holdings Limited (ASX: HVN), coal miner New Hope Corporation Limited (ASX: NHC), and gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL).

Gold price rises

Gold shares Evolution and Regis Resources will also be on watch after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 0.7% to US$1,752.5 an ounce. Comments from the US Federal Reserve that smaller rate hikes could be coming soon boosted the gold price.

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

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Why did the BrainChip share price leap 7% today?
• 3 ASX 200 shares hitting new 52-week highs on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Calix, Chalice Mining, Qantas, and Whitehaven Coal shares are rising

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 Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/WiO5Ra3

Commonwealth Bank of Australia (ASX: CBA) shares were on form again on Wednesday.

Australia’s largest bank’s shares ended the day 0.5% higher at $108.07.

This leaves the CBA share price trading within a whisker of a 52-week high of $108.39.

Can CBA shares keep rising?

Unfortunately, analysts at Goldman Sachs appear to believe that investors should be taking profit and selling CBA’s shares right now.

According to a recent note, the broker has reiterated its sell rating with a $90.98 price target.

This implies potential downside of 16% for investors over the next 12 months.

Why isn’t the broker a fan?

While Goldman Sachs believes CBA is a high quality bank, the broker just can’t get its head around its valuation.

There are three key reasons why its analysts don’t believe that CBA’s shares deserve to trade at such a premium to the rest of the big four. These include intense competition, its exposure to macro headwinds, and softer volume trends. Goldman explained:

While the 1Q23 update highlighted the strength of the CBA franchise (particularly deposits), reflected in its very strong NIM performance, we reiterate our Sell given: i) it does remain more exposed to the intense competition we are currently observing in mortgages (albeit CBA appears to be favouring NIM over volumes), ii) we expect that potential further macro downside is likely to more adversely impact the household this cycle, which CBA is more exposed to, and iii) domestic volume trends have tracked towards system levels.

The broker highlights that despite the above, its shares still trade at a 51% premium to the average forward price-to-earnings ratio (PER) of peers. This is more than double the historic average. Goldman concludes:

We therefore do not believe its fundamentals justify the 51% 12-mo fwd PER premium it is currently trading on versus peers, compared to the 20% historic average. With c.14% [now 16%] downside to our revised 12-month TP of A$90.98, maintain Sell.

The post Are CBA shares flying too close to the sun? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive
• Will ASX 200 shares bottom before the year is out? Here’s Macquarie’s ‘best guess’
• Why did Macquarie just switch out ANZ for CBA shares?
• 4 quality, undervalued ASX 200 shares in an earnings upgrade cycle revealed: fund manager
• Are ASX 200 bank shares a buying opportunity hiding in plain sight?

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.

from The Motley Fool Australia https://ift.tt/gbqnNYu

The Cleanaway Waste Management Ltd (ASX: CWY) share price is under consideration by investors on news the business could expand into the recycling space. It comes after recycling coordinator REDcycle suspended its collection of soft plastics.

It has reportedly ceased activity because third parties can’t deal with the huge volume of used soft plastics being returned.

For readers that don’t know, Cleanaway is one of Australia’s largest businesses operating waste and recycling collection trucks, as well as waste centres. It recently held its annual general meeting (AGM).

Potential REDcycle competitor

The Australian Financial Review (AFR) has reported that Cleanaway and plastics maker Qenos are weighing up a “$500 million co-investment” to step into the space left by REDcycle. The REDcycle program allowed shoppers to return soft (scrunchable) plastics via Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) supermarkets.

Apparently, the two businesses have been “working for months” on a plan to collect around 100,000 tonnes annually of soft plastics through existing household garbage collections. Of course, Cleanaway trucks already do this for hundreds of locations.

Cleanaway boss Mark Schubert explained a final decision will be made by mid-2023 on whether it should proceed, the AFR reports. Though it will depend on the “price and availability” of gas for these potential new plants that may be built on existing Qenos sites in Sydney and Melbourne. This will be an important part of the business case for the ASX 200 share.

According to the plan, the Cleanaway project would aim to recycle about 10 times the quantity REDcycle was collecting.  

How would this work?

If this were to happen, it would be based on a “bag in a bin” concept at each household. Cleanaway would integrate the soft plastics pickup into the weekly truck collection schedule. Mr Schubert said:

It’s a very convenient solution at scale, you do a bag in a bin.

What the REDcycle program showed is there is huge community and customer support. What’s required though is scale.

Our plan would be to invest in the front-end sorting.

It would take about two years for the plants to be fully operational. Cleanaway would share about half of the $500 million cost.

Cleanaway has reportedly already done trials of soft plastic pick-ups for about 2,000 homes in inner Melbourne.

The AFR reports that the technology to do this already exists. In fact, it’s happening overseas on a commercial scale. In terms of the process, the newspaper said:

The companies would jointly invest in the advanced recycling technology to convert the soft plastics into feedstock, and make new plastic through a process known as pyrolysis. The end product is a polyethylene called Alkanew, which can be used to re-manufacture the very same packaging.

Is the Cleanaway share price an opportunity?

In 2022 to date, Cleanaway shares have fallen by more than 12%.

Macquarie currently has an outperform rating on the ASX 200 share, with a price target of $2.90. This implies a mid-single-digit rise for the Cleanaway share price. Though, potential cost pressures are giving the broker cause for caution.

The post Could this ASX 200 share cash in on the suspension of REDcycle? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 key things I look for when buying ASX dividend shares

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/iSha9Ax