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Fortescue Metals Group Limited (ASX: FMG) is the only S&P/ASX 200 Index (ASX: XJO) mining share that I have invested in.

It is one of the biggest miners in Australia. Though its size isn’t what attracted me to one of the country’s leading ASX iron ore shares.

I am impressed by the company’s commitment to trying to lower its mining costs and automate various parts of the business, such as bringing in automated trucks.

The timing of my investments has been to jump on the business when sentiment about iron ore is weak. This has enabled me to invest in the miner when the Fortescue share price looks cheap. But, it was because of the two key factors below that I chose this one over all the other ASX 200 mining shares.

Big dividends

Fortescue is one of the biggest dividend payers on the ASX.

The last few years has seen Fortescue generate big net profits thanks to an elevated iron ore price.

I’m not expecting the next two years of dividends to be as good as the last two years. However, I’m happy with the level of dividend income that I’m expecting to receive because I bought at a noticeably lower Fortescue share price, so my yield on cost is good.

Using the dividend estimates from CommSec and the current Fortescue share price, the business is expected to pay an annual dividend per share of $1.36 in FY23 and 98 cents per share in FY24. This equates to a grossed-up dividend yield of 9.7% and 7% respectively.

I like that Fortescue can (but won’t always) pay larger dividends than other ASX mining shares. It helps that Fortescue usually has a low price-to-earnings (p/e) ratio.

Green hydrogen plans

As mentioned, I’ve used iron price weakness to buy Fortescue shares and I’m receiving a large dividend every six months whilst I’m a shareholder.

But, the reason for my long-term choice of this business over other ASX 200 mining shares is the green energy plan.

I think the world is going to need to make big changes to energy usage to get to net zero.

Fortescue is working around the world to make green hydrogen around the world. I think it could see more consistent demand than iron ore. It wants to make 15mt of green hydrogen annually by 2030.

While it’s possible cars powered by green hydrogen could become mainstream, I’m excited by the potential of green hydrogen being adopted by planes, boats and heavy machinery. These are segments that are, currently, harder to decarbonise.

Fortescue has already signed major supply deals with E.ON as well as with United Kingdom businesses Ryze Hydrogen and major construction vehicle business JCB.

As green hydrogen and green ammonia production is ramped up, I think that this will have a larger (and positive) influence on the Fortescue share price.

Snapshot of Fortescue shares

Over the last month, Fortescue shares have gone up by 22%.

The post Of all the ASX 200 miners, here’s why I decided to buy Fortescue shares appeared first on The Motley Fool Australia.

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More reading

• 3 reasons why I think it’s time to snap up NAB shares
• 5 things to watch on the ASX 200 on Monday
• Time to buy? Which ASX 200 shares are trading on single-digit P/E ratios?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. 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 Link Administration Holdings Ltd (ASX: LNK) share price is on the move on Monday morning.

At the time of writing, the administration services company’s shares are up slightly to $3.46.

Why is the Link share price rising?

Investors have been bidding the Link share price higher today after the company released an update on its plans with its PEXA Group Ltd (ASX: PXA) stake.

According to the release, the company has sold 10% of its existing 42.77% shareholding in the property settlements platform company for a 4.8% discount of $13.50 per share.

This led to Link generating total net proceeds of $101.9 million, which will now be used to repay its borrowings.

But what about the rest of the holding?

The good news for shareholders is that Link has decided that it will distribute at least 80% of its remaining shares in PEXA to Link shareholders via an in-specie distribution.

Link intends to seek shareholder approval for the plan in December, with the distribution then to occur in January if given the thumbs up.

Link CEO and managing director, Vivek Bhatia, commented:

We are proud of the performance of PEXA since our initial investment in 2011 and Link Group is pleased to have been part of its success as Australia’s leading Electronic Lodgement Network Operator. The PEXA Selldown will provide Link Group with balance sheet flexibility as it executes on its strategic plan, and the proposed in-specie distribution of the remainder of Link Group’s PEXA shares will allow Link Group Shareholders to continue to gain exposure to a quality asset that is planned to generate attractive cash flows with multiple growth levers.

The post Link share price higher on PEXA update appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
• How are ASX 200 tech shares faring after the overnight NASDAQ plunge?
• 2 under-the-radar ASX shares Firetrail loves right now

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 Link Administration Holdings Ltd and PEXA Group Limited. 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 QBE Insurance Group Ltd (ASX: QBE) share price is having a poor start to the week.

In morning trade, the insurance giant’s shares are down 4% to $11.91.

Why is the QBE share price dropping?

The catalyst for the weakness in the QBE share price on Monday has been the release of an update on the company’s performance in FY 2022.

According to the release, while QBE’s performance during the third quarter was resilient, it was impacted by inclement weather. Management summarised:

QBE updates on recent trading performance through 3Q22 and updated full year outlook. While performance remains resilient across many facets of our business, higher than expected catastrophe costs have introduced some risk to our full year outlook.

Gross written premium growth

QBE revealed that its gross written premium growth remained strong in the third quarter and was up 6% (13% in constant currency) on the prior corresponding period.

Group-wide renewal rate increases averaged 8.4%, while growth ex-rate of 8% reduced compared to first half. This reduction followed planned North America Program terminations and a large first half bias for written premium across a number of growth focus areas.

Retention has remained at favourable levels. In the year to September, group gross written premium growth was 12% (16% in constant currency) on the prior period, with an ex-rate growth of 11%.

Excluding Crop, gross written premiums increased by 12% in constant currency, with ex-rate growth of 6%.

Underwriting performance

Unfortunately, QBE’s underwriting performance was impacted by elevated catastrophe activity.

As of the end of October, the net cost of catastrophe claims in the second half was tracking ~US$430 million, with the total net cost of catastrophe claims tracking at ~US$880 million in the year to October.

In light of this, management now expects FY 2022 net catastrophe costs of ~US$1,060 million, which is up from its catastrophe allowance of US$962 million.

Outlook

Commenting on its outlook, management revealed that it no longer expected its combined operating ratio to improve on FY 2021’s exit ratio of 94%. It concludes:

Challenging operating conditions have persisted into the second half, and while performance remains resilient across many facets of our business, higher than expected catastrophe costs have introduced some risk to our original full year outlook.

QBE continues to expect FY22 Group constant currency GWP growth of around 10%, and we expect the supportive premium rate environment should continue into 2023.

Based on our assessment of underwriting performance to date, we now expect a FY22 Group combined operating ratio of around 94%. As outlined at the 1H22 result, QBE’s FY22 combined ratio outlook excludes the impact of the Australian pricing promise review.

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

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More reading

• Top brokers name 3 ASX shares to buy today
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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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Those interested in snapping up Macquarie Group Ltd (ASX: MQG) shares have likely poured over the company’s recent half year earnings.

It posted a $2.3 billion profit for the six months ended 30 September. The investment banking giant also lifted its interim dividend 10% to $3 per share.

The market responded well to the earnings. It bid the Macquarie share price 1.8% higher on the release and it has gained another 5.8% since. The Macquarie share price closed Friday’s trade at $179.32.

However, that’s 15% lower than it was at the start of 2022 and 13% lower than it was this time last year. For comparison, the S&P/ASX 200 Index (ASX: XJO) has slipped 6% year to date and 3% over the last 12 months.

But one broker sees hope in the bank stock, tipping it as a buy and predicting its earnings to pick up in the coming years. Here’s why Baker Young managing portfolio analyst Toby Grimm is bullish on the ASX 200 giant.

What could the future bring for Macquarie shares?

Grimm believes now is a good time to buy shares in ASX 200 investment banking giant Macquarie.

The fundie said, as per The Bull, “the company’s diversified business model is appealing”. But there might be some short-term pain in store for the stock.

Grimm pointed out that, while Macquarie’s first half profit was a 13% increase on that of the prior corresponding period, it also marked a 13% drop on that of the second half of financial year 2022, which came in at around $2.66 billion.

As a result, the fundie thinks the ASX 200 giant’s “full year will be tough”, but the future is brighter. Grimm continues:

[B]ut we believe the investment bank is positioned for an earnings recovery in 2024.

Grimm isn’t alone in liking the investment bank. Morgans tips it as a buy, with a price target of $214.30. Meanwhile, Goldman Sachs is neutral on the stock, expecting it to rise to $188.35.

The post Looking to buy Macquarie shares? The bank is ‘positioned for an earnings recovery’: fundie appeared first on The Motley Fool Australia.

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More reading

• Over half of millennials own shares. Here are 3 ASX share ideas to start your own portfolio
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• Morgans names 2 of the best ASX 200 dividend shares to buy
• Are ASX share investors getting their mojo back?
• These ASX shares turned $20,000 into $100,000 in 10 years

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 Goldman Sachs. 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.

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ASX dividend shares can be a really good way for investors to grow wealth and also receive passive income.

Some businesses may be largely known for their dividends, such as Australia and New Zealand Banking Group Ltd (ASX: ANZ) and Rio Tinto Limited (ASX: RIO).

But, some of these large blue chip ASX shares may be about as large as they’re going to become. I think businesses that can deliver both income and earnings growth (which can help share price growth) could be the ticket for long-term financial success.

How much $100 a week can grow into

Investors should try to minimise their brokerage costs where possible, so it doesn’t make sense to make lots of small investments.

However, it’s possible to save the $100 each week in a savings account until the amount grows to a satisfactory level to invest.

In total, that would amount to $5,200 a year.

It’s hard to say what future returns will be – past performance is not a reliable indicator of future performance. Over the decades, the ASX share market has returned approximately 10% per annum, excluding franking credits.

Investing $5,200 a year, returning 10% per annum, could turn into $83,000 in 10 years, and $298,000 in 20 years. And in 30 years that $100 a week could turn into $855,000. Remember, those numbers assume the $100 per week number stays the same, with no increase. It would grow even more if the investment is $120 per week or $200 per week.

Which ASX dividend shares could deliver good returns?

I think that businesses that have already done well have a good chance of continuing that success.

Businesses that have diversification of earnings – through different product/service offerings or being geographically diversified – give themselves a better chance of performing well in the long term. That’s because they aren’t reliant on just one market for one product.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one business that ticks the box in my opinion. It has an array of impressive retail businesses like Bunnings, Officeworks and Kmart. But, the ASX dividend share also has a growing portfolio of other businesses. These include chemicals, energy and fertilisers (WesCEF), healthcare (Priceline and Clear Skincare Clinics) and lithium (Mt Holland project).

I think Wesfarmers will be around for decades to come, generating good profit. Its business portfolio may be quite different, but I like that it can alter its businesses to be more future-focused.

In FY24 the ASX dividend share is expected to pay a grossed-up dividend yield of 5.8% according to CommSec.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle Investment Group is a funds management investment business. It helps fund managers start and grow their own funds management businesses. It can help with seed capital and also do a lot of the back-office tasks like legal, compliance and so on.

The underlying fund managers are growing over time, and Pinnacle itself is expanding its number of portfolio managers. Some of its latest moves have been to invest in a private equity fund manager, as well as a Canadian fund manager.

While it may go through volatile periods, I think times of a depressed Pinnacle share price are a good time to pounce (such as right now).

Pinnacle is projected to pay a grossed-up dividend yield of 5.75% in FY24 according to CommSec.

Premier Investments Limited (ASX: PMV)

Premier Investments is a retail-focused ASX dividend share, but it’s expanding globally through some of its brands. It has brands like Just Jeans, Peter Alexander and Jay Jays that are focused on Australia.

But, Smiggle is a globally-growing business, which sells things like kids backpacks, water bottles, pencil cases and so on. These items can be branded with things like Minecraft, Harry Potter and Marvel art and imagery.

It also has investments in other ASX retail shares including global kitchen appliance business Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

In FY24, Premier Investments is expected to pay a grossed-up dividend yield of 5.8%.

Foolish takeaway on ASX dividend shares

At the end of the wealth accumulation phase, investors can sit back and enjoy the cash flow that ASX dividend shares dish out, depending on the investment picks and the yield.

The post I’d invest $100 a week in cheap ASX dividend shares for passive income in retirement appeared first on The Motley Fool Australia.

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More reading

• Brokers says these top ASX 200 dividend shares are buys this week
• If you’d bought $10,000 worth of Wesfarmers shares in January, this is how much you’d have earned in dividends
• Which stocks are in the Vanguard Australian Shares Index ETF (VAS) right now?
• How to have your ASX 200 dividend cake and eat it too
• 3 passive ASX income machines to help fund your retirement

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 PINNACLE FPO. The Motley Fool Australia has positions in and has recommended PINNACLE FPO and Wesfarmers Limited. The Motley Fool Australia has recommended Premier Investments 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 COVID-19 pandemic was as terrible for many businesses as it was for individual health and freedoms.

Industries that relied on movement of people came to an absolute standstill, and ASX-listed companies in those areas had to figure out how to survive on almost zero revenue.

But those who made it through the other side are now looking slim, fit and ready for supercharged earnings, unencumbered by high costs.

Morgans senior analyst Belinda Moore named one such ASX share that she’s currently bullish on:

‘Management hasn’t wasted a crisis’

Travel agent Webjet Limited (ASX: WEB) understandably was in deep trouble when the coronavirus struck the world and the travel industry pretty much shut down around the world.

The company was forced to cut costs dramatically just to stay afloat. But now, Moore said in a Morgans blog post, that’s paying off.

“With less reliance on international airline capacity and China, and the fact that management hasn’t wasted a crisis with a stronger business coming out of COVID, Webjet is leading the recovery of our travel stocks under coverage.”

The business is already starting to see the benefits of losing excess weight.

“Webjet reported a strong 1H23 result which exceeded expectations,” said Moore.

“Pleasingly, operating cash flow was materially stronger than expected and has further strengthened its already strong balance sheet.”

The Webjet share price gained more than 10% in 24 hours last week after those numbers were revealed to the market.

‘Webjet now deserves a PE rerating’

The company’s wholesale accommodation business WebBeds is leading the way, with earnings before interest, taxes, depreciation and amortisation (EBITDA) already back at 87% of pre-pandemic levels.

“Its EBITDA margin was impressive at 55.7%,” said Moore.

“In September, WebBeds was 35% more efficient on a booking per FTE basis compared to pre-COVID.”

The outlook for the coming year was “upbeat”, with WebBeds on track to top pre-pandemic earnings by 30%.

This has forced a rethink for Moore’s team on the business’ prospects.

“Given Webjet’s stronger than expected result and full year guidance, we have upgraded our FY23 EBITDA forecast by 18.7% to $120 million,” she said.

“With plenty of market share to win over coming years, which should underpin a strong earnings growth profile, whilst generating higher margins than pre-COVID and with a much stronger balance sheet, we would argue that Webjet now deserves a PE rerating.”

The post ASX 200 company to rake it in now after COVID cost cuts: expert appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Goldman Sachs tips Webjet share price to keep rising
• 5 of the craziest things making news on the ASX this week
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

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

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The ASX lithium share sector has had a great run this year. But it will be a hard act for ASX lithium shares to follow and do half as well in 2023 in my opinion. ASX lithium shares could even lose some of the ground they’ve gained.

But, we can’t know and predict for sure what share prices are going to do on any given day, month or even year.

Hence, If I had to choose two ASX lithium shares in the sector to invest in right now, I’d go with these two:

Pilbara Minerals Ltd (ASX: PLS)

I think that Pilbara Minerals is the leading ASX lithium share. Its share price has certainly risen to reflect that. The company has seen a gain of 35% so far in 2022 and is up 108% since 30 June.

The lithium price could drop back from here. But, it could stabilise, or even keep going higher. Pilbara Minerals achieving a price of US$5,000 per dry metric tonne (dmt) through a digital auction may have been unrealistic a year ago, yet its latest sale of 5,000 dmt was for US$7,805 per dmt.

The business is a cash machine right now. At 30 September 2022, it had built a pile of US$1.375 billion of cash and it’s planning to start paying dividends soon.

I’m a big fan of the company’s plans to be more involved with the lithium supply chain, not just extracting the raw materials from the ground. This should help the ASX lithium share achieve stronger profit margins.

If the lithium price remains elevated, I think that Pilbara Minerals could outperform the S&P/ASX 200 Index‘s (ASX: XJO) return in 2023.

Mineral Resources Limited (ASX: MIN)

Mineral Resources is involved in iron ore, lithium and mining services.

It could be useful for the business to have that diversification in this environment of uncertainty. With China seemingly looking to ease COVID restrictions a little, as well as providing support to the troubled real estate sector, things are looking up for iron ore.

The ASX lithium share is already profitable and it’s investing in increasing production, owning its lithium hydroxide conversion capabilities, decarbonising, automating road trains and so on.

I think that things are looking up in the short-term and the long-term for the business, particularly if it can capitalise on the strong lithium prices.

The promising look may turn into good dividends for shareholders. According to Macquarie, it could pay a grossed-up dividend yield of 15.9% in FY24. Dividends are not guaranteed, but this level of payment would certainly help future investment returns

According to Macquarie, Mineral Resources shares are valued at 4 times FY24’s estimated earnings.

The post Which are the best ASX lithium shares to buy now for 2023? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here is the Pilbara Minerals dividend forecast through to 2025
• Why are Mineral Resources shares hitting the headlines on Friday?
• 5 of the craziest things making news on the ASX this week
• Pilbara Minerals share price on watch as chair describes maiden dividend as ‘great source of pride’

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

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Plenty of ASX shares have dropped this year. I think that investors may be able to do well by thinking differently to the market and looking at beaten-up ASX shares.

While investing with a contrarian mindset isn’t always wise, it could work with unloved businesses that may be able to keep growing their revenue (and hopefully profit).

Now that many names are at much lower valuations, the entry price seems more compelling.

Some names may see their growth slow in FY23 as inflation and higher interest rates bite. But I don’t think economic conditions will keep worsening. At some point, hopefully sooner rather than later, the economy will look promising again.

With that in mind, I think the following two ASX shares are promising investments.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is Australia’s largest online beauty store, with more than 270 brands and over 12,000 products. However, it also says that its offering includes integrated content and marketing. For example, it has multiple podcasts going to connect with customers – the distribution costs for these podcasts are comparatively low.

I like that the business is seeing a growing number of returning customers, which reduces reliance on paid marketing channels. In the FY23 first quarter, its number of returning customers increased by 85% on a two-year basis, and was up 14% on the prior corresponding period.

Over the long term, the ASX share is planning to add new products, expand into new markets and geographies, and consider acquisitions. It’s planning to grow its gross profit margin by selling owned brands with higher margins, getting improved supplier terms, and expanding into attractive adjacencies.

In the long term, beyond FY27, the company is aiming for owned brands to contribute at least 15% of revenue and achieve an overall earnings before interest, tax, depreciation and amortisation (EBITDA) margin of at least 10%.

In 2022 to date, the Adore Beauty share price has fallen 56%, making the long-term value much better in my eyes.

Temple & Webster Group Ltd (ASX: TPW)

This is another e-commerce ASX share that is currently going through a bit of a setback with investor confidence.

When the company announced its FY22 result, it said that it “remains committed” to its profitable growth strategy and that it’s confident it can achieve its goal of becoming Australia’s largest retailer of furniture and homewares – offline or online.

While it will be tough to beat the locked-down revenue generation of the first half of FY22 when it reports its FY23 first-half result, the business is expecting “a return to double digit growth during FY23” once it finishes lapping COVID lockdowns from the year before.

The ASX share is working on improving its profitability. As such, it was able to increase its EBITDA margin guidance for FY23 from 2% to 4%, up to 3% to 5%.

I like the areas that the business is growing in. For example, it’s adding the following with its content and service: video, 3D, augmented reality and virtual reality, as well as design help for households.

Plus, the business is working on becoming a more effective option for trade and commercial customers. It’s also looking to grow in the home improvement category (including painting, plumbing and flooring products) via its The Build website.

The Temple & Webster share price has fallen 53% since the beginning of the year, making it more attractive in my opinion.

The post Why I think these beaten-up ASX shares are compelling contrarian buys appeared first on The Motley Fool Australia.

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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 Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Temple & Webster Group Ltd. 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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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Betmakers Technology Group Ltd (ASX: BET) remains the most shorted share on the Australian share market with short interest of 15.9%. Short sellers aren’t giving up on this betting technology company despite its shares crashing 65% in 2022.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest rise slightly to 14.6%. This travel agent giant’s shares were under pressure last week following the release of a disappointing trading update.
• Block Inc (ASX: SQ2) has seen its short interest ease to 12.2%. Interestingly, this is almost triple the short interest of the payments company’s NYSE listed shares.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) has seen its short interest fall to 11.4%. This pizza chain operator’s shares have taken a hit this year after inflationary pressures weighed on its performance.
• Megaport Ltd (ASX: MP1) has seen its short interest ease to 11.1%. A softer than expected first quarter update from the network as a service operator has put significant pressure on its shares.
• Perpetual Limited (ASX: PPT) has seen its short interest drop to 9.5%. Short sellers will have been pleased to see this fund manager’s shares tumble last week after the courts pressured the company into completing its acquisition of Pendal Group Ltd (ASX: PDL). This is likely to scupper its own proposed takeover by private equity.
• Nanosonics Ltd (ASX: NAN) has short interest of 9.1%, which is up week on week again. Unfortunately for short sellers, this infection prevention company released a trading update last week which revealed strong sales growth so far in FY 2023.
• Breville Group Ltd (ASX: BRG) has seen its short interest slide to 8.8%. Short sellers may have been closing positions after the appliance manufacturer’s shares jumped following a solid first quarter update.
• St Barbara Ltd (ASX: SBM) has entered the top ten with short interest of 8.6%. This struggling gold miner’s shares have fallen almost 60% this year. Short sellers appear to believe they can keep falling.
• Temple & Webster Group Ltd (ASX: TPW) has short interest of 8.5%, which is down week on week. This may be due to concerns over a potential ecommerce slowdown.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Dominos Pizza Enterprises Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group Ltd, Block, Inc., MEGAPORT FPO, Nanosonics Limited, and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Dominos Pizza Enterprises Limited, Flight Centre Travel Group Limited, MEGAPORT FPO, and Temple & Webster Group Ltd. 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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ASX shares that have a long-term growth outlook seem like attractive opportunities to me, particularly with how share prices share dropped this year.

I’m not sure whether every business has the potential to deliver strong growth over the long term. But, the ones that are able to deliver good compounding revenue growth over the years may be able to deliver good shareholder returns.

For that, I’m looking for ASX shares that have large addressable markets.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

This exchange-traded fund (ETF), if you haven’t already guessed, is about getting exposure to the global video gaming and e-sports sector.

While it does provide focused exposure to a specific sector, it is somewhat diversified because it has 25 holdings. It is invested in businesses that are involved in game development and other parts of the gaming infrastructure (such as semiconductors and semiconductor equipment).

Let’s look at some of the ASX share’s largest holdings: Nvidia, Activision Blizzard, Nintendo, Advanced Micro Devices, Roblox, Tencent, Take-Two Interactive Software and Bandai Namco.

According to VanEck sources, the competitive video gaming audience is expected to reach 646 million people globally in 2023 and e-sports revenue has grown by an average of 28% per annum since 2015. As noted by VanEck, e-sports has created new potential revenue streams including game publisher fees, media rights, merchandise, ticket sales and advertising.

I think the sector is seeing long-term revenue growth, and the industry is seeing positive signs in multiple regions, including the Middle East and Africa.

It looks much better value after the VanEck Video Gaming and Esports ETF’s 29% fall this year.

Bubs Australia Ltd (ASX: BUB)

Bubs manufactures and sells several products including goat milk formula, organic grass-fed (cow) formula, A2 beta-casein protein formula, organic baby food, and adult goat milk powder.

The business is growing at an impressive rate after its successful entry into the United States market as it tries to help alleviate the shortage there.

In the first quarter of FY23, group gross revenue increased 28% to $23.6 million, while infant formula more than doubled, contributing 92% of quarterly sales. However, adult goat dairy portfolio revenue was down 82% and business-to-business (B2B) revenue fell 91%, due to lockdowns in China and southeast Asia, according to Bubs.

Bubs produces Chinese-labelled products for China’s general trade. The ASX share said:

Over the next several years, these two pathways are likely to both significantly exceed the current largest revenue source of English label products into China via the cross-border e-commerce.

If Bubs can hang on to (and grow) its market share in the US, then its future looks very promising.

With the Bubs share price down around 40% in three months, I think this is a good time to pounce for a long-term investment as it looks to grow internationally.

The post Why I’d buy and hold these ASX shares until 2030 appeared first on The Motley Fool Australia.

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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 Activision Blizzard, Advanced Micro Devices, Nvidia, Roblox Corporation, Take-Two Interactive, and Tencent Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nintendo and has recommended the following options: long January 2023 $115 calls on Take-Two Interactive. The Motley Fool Australia has recommended Activision Blizzard, BUBS AUST FPO, 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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