Tag: Motley Fool

Those invested in Nufarm Ltd (ASX: NUF) shares are likely having a good morning after the S&P/ASX 200 Index (ASX: XJO) crop protection and seed technology company upped its final dividend by 50%.

That leaves its financial year 2022 (FY22) full-year dividends 150% higher year-on-year at 10 cents per share.

The stock opened with a 1.2% lift that saw it trading at $5.60 before soaring to a current high of $5.93.

Right now, the Nufarm share price has eased slightly to trade at $5.89, marking an 8.67% increase.

ASX 200 share soars alongside its dividends

Here are the key takeaways from the ASX 200 company’s full-year earnings:

• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 24% year-on-year to $447 million
• Revenue rose 17% to $3.8 billion
• Statutory net profit after tax (NPAT) soared 65% to $107.4 million
• Unfranked final dividend of 6 cents – up 50% on financial year 2021’s 4-cent final dividend

Nufarm’s final dividend, combined with the 4-cent interim dividend it announced in May – its first interim dividend since 2018 – saw it offering 10 cents per share over FY22.

The company’s underlying NPAT also more than doubled last fiscal year – reaching $133.2 million.

It ended FY22 with $346 million of net debt and $863 million of net working capital.

What else happened in FY22?

Let’s take a closer look at the results driving the ASX 200 share higher on Wednesday.

Nufarm’s APAC segment posted. a 21% increase in underlying EBITDA, coming in at $135 million despite battling supply chain challenges in FY22.

Its North America business did even better. Its underlying EBITDA rose 42% to $148 million amid higher sale prices and strong demand for crop protection products.

Looking to Nufarm’s European business, underlying EBITDA remained steady at $171 million as sales improved and regulatory headwinds took their toll.

Finally, the company’s Seed Technologies business saw its underlying EBITDA lift 26% to $59 million. That was driven by demand for Nuseed’s hybrid canola varieties, sorghum, and sunflower.

What did management say?

Nufarm managing director and CEO Greg Hunt commented on the company’s full-year earnings, saying:

This result reflects the hard work we have done over recent years to reset the business, our focus on core products and key geographies together with our increased investment in innovation and sustainability.

Favourable seasonal conditions and attractive soft commodity prices generated strong demand for our seeds and crop protection products. Our seeds business continued to increase earnings as a result of strategic investments in innovative technologies.

We made significant progress on all our strategic growth initiatives across omega-3, bioenergy, seeds and crop protection; and we have a promising pipeline of opportunities.

What’s next?

Nufarm didn’t provide any solid FY23 earnings guidance today. Though, Hunt did reveal that “assuming normal seasonal conditions”, the ASX 200 share expects to post modest underlying EBITDA growth this fiscal year. So far, conditions have remained favourable.

Looking further forward, however, the company is on track to grow its revenue to more than $4.6 billion in FY26. Hunt said:

Our revenue growth aspirations are supported by macro trends including the increasing demand for food from a rising global population, and the demand for sustainable agricultural practices to increase land productivity.

Nufarm share price outperforms ASX 200 in 2022

Today’s gain included, the Nufarm share price has lifted 20% year to date. It’s also trading for 17% more than it was this time last year.

For comparison, the index has fallen 6% in 2022 and 4% over the last 12 months.

The post Guess which ASX 200 share just upped its full-year dividend by 150% 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 Accent, Block, Nufarm, and Zip shares are racing higher
• 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.

from The Motley Fool Australia https://ift.tt/XC6q29x

The Pilbara Minerals Ltd (ASX: PLS) share price is recovering from a savage selloff on Tuesday.

In morning trade, the lithium miner’s shares are up 1% to $4.91.

Why is the Pilbara Minerals share price rising?

Investors have been bidding the Pilbara Minerals share price higher today after the company unveiled its capital management framework.

With Pilbara Minerals generating significant free cash flow from its operations, it is now in a position to start thinking about capital management.

Pleasingly for shareholders, this means that dividends are expected to be paid from FY 2023, with management aiming to pay out 20% to 30% of its free cash flow to shareholders.

It notes that this leaves it with enough free cash flow to maintain safe and reliable operations, as well as support growth and productivity initiatives.

Management commentary

Pilbara Minerals’ managing director and CEO, Dale Henderson, was pleased the company was in a position to pay a dividend so early in its operational life. He commented:

The strong dynamics we are experiencing for the lithium materials market and healthy production profile have quickly transformed the financial position of the business. With this comes the opportunity to bolster the growth path for the business and provide improved long-term value return for our shareholders – many of whom have stayed the course through both our ups and downs.

With strong cashflows being generated, it is pleasing to be in a position to seek to return value to our shareholders so early in our operational life via a maiden fully franked dividend for the 2023 Financial Year.

The established operating platform, expansion pathway and downstream participation opportunities place Pilbara Minerals in an enviable position to capitalise on the emerging demand for lithium materials. I am excited about what the future holds for the business, the opportunities this will bring to our stakeholders and all those who are connected with the business.

The post Pilbara Minerals share price higher on maiden dividend news 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 3 most traded ASX 200 shares on Tuesday
• Why are ASX 200 lithium shares hitting the dirt on Tuesday?
• Why is the Pilbara Minerals share price tumbling 10% on Tuesday?
• Why did ASX lithium shares have a dream run on Monday?
• Leading brokers name 3 ASX shares to buy 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.

from The Motley Fool Australia https://ift.tt/1hEGTno

The Aristocrat Leisure Limited (ASX: ALL) share price is down 7% in early trade.

Shares in the S&P/ASX 200 Index (ASX: XJO) gaming technology company closed yesterday trading for $37.88 and are currently changing hands for $35.24 apiece.

This comes following the release of Aristocrat’s financial results for the 12 months ending 30 September.

Here are the highlights.

Aristocrat share price slides as profits soar

• Revenue of $5.57 billion, up 17.7% year on year
• Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.85 billion, an increase of 20% from the prior year
• Normalised profit after tax and before amortisation of acquired intangibles (NPATA) of $1.10 billion, up 27% in reported terms and 20% in constant currency
• Total dividends of 52 cents per share, fully franked, an increase of 26.8% from the prior corresponding 12 months

What else happened over the 12 months?

The Aristocrat share price failed to receive a lift this morning from the company’s strong balance sheet. As at 30 September the company had a net cash position of $564 million and liquidity of $3.8 billion.

Aristocrat reported that its Gaming and Pixel United assets continued to grow and diversify over the 12 months, driven by “exceptional performance” in North American Gaming Operations and global Outright Sales.

Its Americas margin expanded by 2.7% to 56.1%. This was achieved despite headwinds from supply chain disruptions and mixed operating conditions across its core markets.

On the downside, and possibly pressuring the Aristocrat share price today, overall mobile bookings at its Pixel United segment “moderated” from their post-COVID levels in the prior reporting year.

The company’s Ukrainian operations were impacted by Russia’s invasion, with Aristocrat assisting most of its Ukrainian workforce to relocate to safer places.

What did management say?

Commenting on the results, CEO Trevor Croker said:

Aristocrat’s performance underlines the ongoing implementation of our growth strategy. Throughout the year, we continued to invest in competitive product portfolios to drive further share growth across key segments, greater operational diversification and deeper business capability…

As we look ahead, we believe that Aristocrat’s outstanding product portfolios, growing operational resilience and capability, along with a highly engaged team and strong culture, positions us well to maintain our momentum despite uncertain conditions.

It may be that these “uncertain conditions” are spooking ASX 200 investors this morning and pressuring the Aristocrat share price.

What’s next?

The company reported it expects to deliver NPATA growth over the full year to 30 September 2023.

Aristocrat said it will continue to seek opportunities for future growth, including markets in Poland, Spain and Canada, as well as bringing forward additional game development capabilities.

Looking ahead, the company expects continued “strong revenue and profit growth” from its Aristocrat Gaming segment.

Potentially dragging on the Aristocrat share price is the expectation of continuing lower growth in bookings and profit from Pixel United, compared to recent years.

Aristocrat share price snapshot

With today’s intraday fall factored in, the Aristocrat share price is down 22% year to date. That compares to a calendar year loss of 6% posted by the ASX 200.

The post Aristocrat share price dives despite 27% profit boost 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

• Aristocrat share price sinks 7% on FY22 results
• 5 things to watch on the ASX 200 on Wednesday
• Analysts say these ASX growth shares are buys
• Here are 2 of the best ASX growth shares to buy: Morgans
• Has this overlooked ASX 200 share really gained more than 1,200% in just 10 years?

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.

from The Motley Fool Australia https://ift.tt/0qg6UxX

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.

What happened

A cooler-than-expected Producer Price Index (PPI) report is sending stocks higher today, but that’s probably not the only reason Tesla (NASDAQ: TSLA) stock crossed the $200-per-share threshold this morning. As of 10:35 a.m. ET, Tesla shares were trading near the highs of the morning, up 4.7%.

So what

After hitting a nearly two-year low earlier this week, Tesla has bounced from about $177 to back above $200 per share today. The recent decline came as CEO Elon Musk has been busy focusing on running Twitter as a private company. It seems investors were correct in thinking Musk’s new role at Twitter could be affecting his other work. Yesterday, Musk addressed a business conference taking place along with the G20 summit in Indonesia, stating, “I have too much work on my plate that is for sure,” according to Reuters.

But that admission may have investors thinking Musk will not let his workload affect Tesla’s business. And an upcoming investor event marking the official launch of the Tesla Semi truck is further evidence Tesla’s remarkable growth continues unabated.

Now what

Martin Viecha, Tesla’s head of investor relations, confirmed the company would be holding a shareholder event on Dec. 1 when the first Tesla Semi electric truck is scheduled for delivery, according to EV industry site Electrek.

Musk previously announced the first Tesla Semi would be delivered to PepsiCo on the first day of December. But investors might be putting money back into the stock today after its recent decline partly due to the upcoming event.

By marking the occasion with a dedicated affair, it’s also possible that the widely followed company will provide a surprise announcement. That’s certainly no reason to buy a stock, but the fact that Tesla’s business continues to grow could be one reason for today’s bounce.   

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

The post Here’s what drove Tesla shares back above $200 today 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 Tesla stock falling today?
• Why Tesla shares jumped today
• Why Tesla stock is tumbling today
• Why did Elon Musk just sell $6 billion worth of Tesla shares?
• Why Tesla hit a new 52-week low today

Howard Smith has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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/davG29p

The share market can be a great place to find ASX dividend shares for sources of income. However, most people might only look to some of the most followed names.

Lots of investors go for big ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC), miners such as BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), and others like Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Woodside Energy Group Ltd (ASX: WDS).

But, I think that there are plenty of other names that could deliver a pleasing amount of dividend income in the coming years, and hopefully deliver better total returns than some of the bigger names I’ve mentioned.

With that in mind, I’m going to outline three ideas that could be good sources of dividends.

APA Group (ASX: APA)

APA Group is an energy infrastructure business that delivers half of the nation’s (natural) gas usage through 15,000km of pipelines that connect sources of supply and markets across mainland Australia. It also owns, or has interests in, gas storage, gas-fired power stations and renewable energy (wind and solar).

The last year has shown how important energy is. I believe the business has an attractive future for cash generation, particularly if it can start transporting some hydrogen in its pipelines.

The ASX dividend share has grown its distribution to investors every year for more than a decade and a half. I think it can keep growing as more pipelines and assets are added to the portfolio, such as the power cable called Basslink that connects Tasmania to the mainland.

Based on an estimated distribution of 55 cents per share in FY23 (growth of 3.8%), this translates into a forward distribution yield of 5%.

Best & Less Group Holdings Ltd (ASX: BST)

This is an ASX retail share that describes itself as a “leading value apparel specialty retailer with an omnichannel sales network comprising 244 physical stores and a fast-growing online platform”.

It wants to be the “number one choice for mums and families” that buy baby and kids’ value apparel in Australia and New Zealand through its brands Best & Less in Australia and Postie in New Zealand.

In FY22, the business had a dividend payout ratio of around 80%, meaning it still kept 20% of its profit to reinvest back into the business. It can use its profit to grow its store network. At the time of the FY22 result, it had agreements to open 11 new stores during the year, with three additional stores being relocated to larger sites.

The ASX dividend share is expecting the inflationary environment to accelerate the “migration to value”, which it provides.

At the end of FY22, it had net cash of $36.7 million, meaning it has plenty of cash on hand to invest for growth (and to keep paying dividends).

In the first eight weeks of FY23, total sales were up 38%. Largely because stores were closed in the first few weeks of FY22. But, it’s a boost for FY23 growth statistics nonetheless.

According to Macquarie, Best & Less could pay a grossed-up dividend yield of almost 13%.

VanEck Morningstar Australian Moat Income ETF (ASX: DVDY)

This is an exchange-traded fund (ETF) invested in high dividend yield, “quality” companies based on Morningstar’s economic moat rating. These businesses are also screened on Morningstar’s ‘distance to default’ measure.

If it’s hard for an investor to pick one particular ASX dividend share, this ETF could be a way to get a diversified investment with 25 holdings.

As of 15 November 2022, these were some of the biggest holdings: AUB Group Ltd (ASX: AUB), Ansell Limited (ASX: ANN), IPH Ltd (ASX: IPH), Wesfarmers Ltd (ASX: WES), Computershare Limited (ASX: CPU), Deterra Royalties Ltd (ASX: DRR), Jumbo Interactive Ltd (ASX: JIN), and Telstra Corporation Ltd (ASX: TLS).

Excluding franking credits, over the year to 30 September 2022, the VanEck Morningstar Australian Moat Income ETF paid an income return of around 5.4%. ETFs just pass through the dividend income that the underlying businesses pay.

The post 3 impressive ASX dividend shares you’ve probably never heard of 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

• Medibank share price sell-off ‘excessive’: expert
• ‘Use the volatility’: QVE reveals 3 ASX shares it just bought
• Dividends beasts: 3 ASX shares that kept the funds growing even during COVID
• Here are the top 10 ASX 200 shares today
• The bear market rally has seen the ASX 200 jump five percent higher in October. It could all be about to run out of steam

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 Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended IPH Ltd. The Motley Fool Australia has positions in and has recommended APA Group, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Ansell Ltd., Austbrokers Holdings Limited, IPH Ltd, Jumbo Interactive Limited, and Westpac Banking Corporation. 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/TzMYRjE

The GrainCorp Ltd (ASX: GNC) share price is having a difficult morning.

At the time of writing, the grain exporter’s shares are down 4% to $7.65.

Why is the GrainCorp share price falling?

Investors have been hitting the sell button today after the company released its full year results.

Here’s a summary of how it performed in FY 2022:

• EBITDA up 112% to $703 million
• Net profit after tax up 174% to $380 million
• Fully franked final dividend of 14 cents per share
• Special dividend of 16 cents per share
• Total dividends of 54 cents per share, up from 18 cents per share

What drove this strong growth?

GrainCorp’s earnings growth was driven by strong performances from across the business.

The Agribusiness segment reported a 127% increase in EBITDA to $624 million. This reflects an increase in total grain handled (41.1mmt vs 34.4mmt) and strong supply chain margins for grain exports. GrainCorp CEO Robert Spurway advised that the company operated its “ports at close to full capacity in FY22, exporting 9.2mmt of grain and oilseeds to international markets.”

This was supported by the Processing segment, which reported a 63% increase in EBITDA to $127 million. This was driven by strong oilseed crush margins and higher volumes driven by efficiency improvements at GrainCorp’s Numurkah crush plant.

Crush margins were supported by strong demand for vegetable oils, arising from global production challenges in canola and soybean, disruption of supply out of the Black Sea region, and growing markets in renewable fuel feedstocks.

Outlook

GrainCorp has warned that inclement weather has been impacting operations. Spurway commented:

Recent heavy rainfall across large parts of ECA has delayed the harvest by several weeks and continues to present challenges for growers, their communities and local businesses.

While flooding will impact both yield and quality in parts of ECA, we have a high level of grain inventory in our network, and we expect a large export program to continue throughout FY23.

Spurway also confirmed that, as expected, margins softened in the second half of FY 2022. He explained:

The exceptional margins achieved in the first half of FY22 moderated in the second half as expected, as supply from the northern hemisphere improved. Pleasingly, domestic and global demand for feed and milling grades remains strong. Oilseed crush margins are expected to remain favourable, and we are well positioned to continue operating our crushing facilities at high utilisation.

Nevertheless, Spurway remains positive about the company’s prospects in FY 2023. He concludes:

GrainCorp is well positioned for the new financial year, with our businesses performing well, a strong balance sheet and pipeline of growth opportunities.

The post GrainCorp share price falls despite soaring earnings and dividend 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 Graincorp, Nanosonics, NextDC, and Readytech shares are racing higher
• Here are the top 10 ASX 200 shares today
• Wheat woes: Why the Graincorp share price is charging 8% to the upside 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.

from The Motley Fool Australia https://ift.tt/XxAO4bj

The Aristocrat Leisure Limited (ASX: ALL) share price is sinking on Wednesday.

In morning trade, the gaming technology company’s shares are down 7% to $35.08 following the release of its full year results.

Aristocrat share price sinks on FY 2022 results

• Operating revenue up 17.7% to $5,573.7 million
• Normalised EBITDA up 20% to $1,850.9 million
• Normalised net profit after tax up 30.7% to $1,000.9 million
• NPATA up 27.1% to $1,099.3 million
• Final dividend of 52 cents per share

What happened during FY 2022?

For the 12 months ended 30 September, Aristocrat reported a 17.7% increase in operating revenue to $5,573.7 million.

This was driven by a 31.4% increase in Aristocrat Gaming revenue to $2,982.6 million, which offset a 0.6% decline in Pixel United revenue to US$1,834.7 million.

On the bottom line, Aristocrat reported normalised net profit after tax before amortisation (NPATA) of $1,099.3 million, which was up 27.1% year over year. On a reported basis, which includes certain significant items, NPATA was up 13.9% to $1,046.9 million.

Management advised that this strong revenue and profit growth reflects sustained investment in top-performing product portfolios, differentiating capabilities, increased operational diversification, and business resilience.

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting Aristocrat to deliver revenue of $5,654.2 million and EBITDA of $1,670.1 million.

While Aristocrat missed on the top line, its normalised EBITDA was stronger than Goldman was forecasting.

Management commentary

Aristocrat’s CEO, Trevor Croker, was pleased with the company’s performance in FY 2022. He said:

Aristocrat’s performance underlines the ongoing implementation of our growth strategy. Throughout the year, we continued to invest in competitive product portfolios to drive further share growth across key segments, greater operational diversification and deeper business capability.

Strong performance in Aristocrat Gaming more than offset headwinds in the Pixel United business, again highlighting the increasing diversification and resilience of our Group.

Coker also spoke about the company’s expansion into real money gaming (RMG), which is expected to be a key growth driver in the future.

We have made further progress in our ‘build and buy’ strategy to scale in online RMG, with the launch of our new business, Anaxi. While we are focusing first on the North American i-Gaming vertical, we ultimately aim to be the leading gaming platform within the global online RMG industry. We will continue to invest behind this key adjacent growth opportunity as we build Anaxi over the medium-term.

Outlook

It could be the company’s subdued outlook which is weighing on the Aristocrat share price today.

Management advised that it “expects to deliver NPATA growth over the full year to 30 September 2023, assuming no material change in economic and industry conditions.”

While it expects the Aristocrat Gaming business to continue performing strongly, it warned that the Pixel United business is expected to deliver lower growth in bookings and profit compared to previous years.

The company will also be making further investments in Anaxi, to support its online RMG ambitions.

The post Aristocrat share price sinks 7% on FY22 results 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 Wednesday
• Analysts say these ASX growth shares are buys
• Here are 2 of the best ASX growth shares to buy: Morgans
• Has this overlooked ASX 200 share really gained more than 1,200% in just 10 years?
• Leading fund manager names the 3 ASX stocks that drove its returns higher in October

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/NS8YndM

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 stock market is posting solid gains on Tuesday, with those portions of the market that got hit the hardest seeing some of the biggest gains in response. The Nasdaq Composite (NASDAQINDEX: ^IXIC) gained more than 2% near midday, while gains of closer to 1% for the Dow Jones Industrial Average (DJINDICES: ^DJI) and S&P 500 (SNPINDEX: ^GSPC) showed broad-based support.

The catalyst for Tuesday’s rise was a report that signaled that inflationary pressures just might be subsiding. Most of the time, investors don’t pay a lot of attention to the Producer Price Index (PPI) report, favoring its consumer-oriented counterpart instead. However, because the PPI offers a different look at pricing pressures, it’s particularly useful as market participants try to anticipate whether and when inflation might finally come under control.  

What is the Producer Price Index?

Most people are familiar with the Consumer Price Index because it matches their own experience as consumers. However, the Producer Price Index looks at the wholesale prices that companies pay for the inputs they need to provide the goods they make and the services they offer.

The PPI report actually includes several different measures of inflation. Final demand figures look at the prices that manufacturers charge retailers for finished goods that are ready for consumer purchase. Intermediate demand measures, however, look at input costs further down the supply chain, with four separate stages reflecting different points in the production process. Taken together, the PPI numbers offer a sense of where in the pipeline cost pressures might be strongest and where they might be easing.

October’s PPI figures showed prices for final demand goods and services rose 0.2% for the month. That brought the year-over-year gain in the index to 8%. Breaking down the numbers, goods saw a 0.6% rise, but services prices were actually down 0.1% from the previous month. Most of the rise in goods came from a 2.7% jump in energy prices. Declines in service prices came from lower trade, transportation, and warehousing costs. Removing food, energy, and trade costs, the final demand PPI was 5.4% higher than it was 12 months ago.

The biggest cooling, though, was in intermediate figures. Processed goods for intermediate demand saw prices drop 0.2% from the previous month, while unprocessed goods plunged 11.7%. Energy was the primary driver on the unprocessed goods side, but for both measures, year-over-year gains slowed to about 10% — down from growth rates of 25% to 50% or more at times in the past 12 months.

Working through the system

When companies price their goods, they tend to use the cost structure that was in place when they were purchasing required inputs to make those goods. As a result, it can take time for lower costs at an earlier stage of production to filter through and remove cost pressures on finished goods.

However, investors are increasingly optimistic that the conditions are ripe for future price increases to slow. Indeed, if outright price declines become more prevalent early in the manufacturing process, then it could lead to a relatively quick slowing of year-over-year price increases at the consumer level. That in turn could take away some of the urgency at the Federal Reserve to boost short-term interest rates at the breakneck pace they’ve followed over the past six months.

Many market participants have seen the pullback in stocks, particularly in high-growth companies with most of their profit potential far in the future, as driven in large part by the interest rate environment. If inflation does indeed prove fleeting after all, then it could lead to at least some recovery from the bear market over time. 

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

The post Why this obscure inflation gauge has US stock markets soaring 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

• Aristocrat share price sinks 7% on FY22 results
• If even the RBA gets the forecast wrong…
• This falling ASX 200 share could catch an inflationary tailwind: fundie
• ASX 200 shares may have just hit the bottom: AMP economist
• Down 20% in a month, can things get any worse for the Medibank share price?

Dan Caplinger 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.

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/0FlwIar

“But what else will we use?”

It was a genuine question, in response to my suggestion that ASX CEOs should stop giving ‘guidance’.

It’s even a reasonable question… assuming that guidance is both accurate and in shareholders’ best interests.

But it’s usually not.

Which makes using it… a little silly.

But let’s backtrack a bit.

Warren Buffett – the world’s greatest investor and greatest investment teacher – released his company’s third-quarter results recently.

In it, I noted this statement:

In varying degrees, the COVID-19 pandemic has affected our operating businesses. In addition, significant disruptions of supply chains and higher costs emerged in 2021 and have persisted in 2022. Further, geopolitical conflicts, including the Russia-Ukraine conflict, have developed in 2022. We cannot reliably predict future economic effects of these events on our businesses or when our operations will normalize. Nor can we reliably predict how these events will alter the future consumption patterns of consumers and businesses we serve.

In other words?

‘You don’t know what’s going to happen next, and neither do we.”

Which is… refreshing, huh?

It’s also uncommon.

Happily, it’s less rare than it used to be – those two ‘X Factor’ events reminding corporate bosses that the future is uncertain.

But many still persist. And many more will return to giving ‘guidance’, once they feel like the coast is clear.

When was that last the case?

Maybe January 2020?

How did that end up?

Ego is a funny thing.

We all want to believe we know things. Doubly so when someone asks us, because they think we might or should know.

Cue the old Telstra ad:

Kid in the back seat: “Dad, why did they build the Great Wall of China”

Father, driving: “… To keep the rabbits out…. Lot of rabbits in China”

The ASX version is more similar than we – or the CEOs who get asked the question – would like to admit, perhaps even to ourselves.

How so?

Let’s say it’s November 2022 (convenient, huh?).

And some analyst from a stockbroker or fund is on a company conference call, and wants to know what to expect for the rest of the financial year.

It’s a reasonable question.

Sort of.

Actually, it’s not that reasonable, on the same basis that trying to answer it is similarly unreasonable.

Why?

Well, let’s think about it.

There are seven months of the financial year remaining.

Seven months over which inflation could rise. Or not.

Competitors could thrive. Or die.

Consumers could spend up big. Or snap the wallets shut.

Central banks could raise rates. Or keep them on hold.

Currencies could rise. Or fall.

Unemployment could stay low. Or increase.

Regulations could change. Or stay the same.

And they’re just the things that came immediately to mind.

But you really expect a CEO to know what’ll be happening next June?

And the CEO herself also thinks she might know?

Ladies and gentlemen, let me climb to the top of the tallest building in town, as the parade slowly makes its way past and shout – and please, say it with me:

“The Emperor Has Got Not Clothes!”

Now, remember the bloke I mentioned at the top of this piece?

His statement was in response to my assertion that CEOs should stop giving ‘guidance’, because it’s useless.

“But what else will we use?” was his response.

Now just think about that a little further.

He was essentially saying “I know it’ll probably be wrong — or lucky — but at least I can put something in my spreadsheet”.

Hmm…

That analyst – who will remain nameless to protect the guilty and because I can’t actually remember his name! – was content to play the game.

Why?

Because he got to fill in a spreadsheet, give that information to his customers and his boss, and then – if and when he was wrong – use that other useless phrase:

“The company missed expectations”.

See – it’s not the analyst’s fault. The expectations weren’t wrong… the company was.

Perfect.

Off the hook.

I hope – if I’m doing my job well – you can grasp the entire absurdity of the whole dog-and-pony show.

1. Analyst asks silly question.
2. CEO gives silly answer.
3. Analyst reports silly answer.
4. Company does or doesn’t get lucky enough to get close to silly answer.
5. Analyst looks smart if he’s right, or blames company if he’s wrong.

Please tell me I’m not the only one who thinks this is barking mad?

But… I need you to pay attention for just a little longer… it gets worse.

See, the CEO doesn’t want the company to ‘miss expectations’

She wants the market to like and respect her. And to like the company’s shares.

And so?

And so, once that ‘guidance’ is given, she’ll often make sure it’s delivered – come hell or high water.

Which sounds good… until you consider what happens inside a company to deliver on that vanity exercise.

(And lest you think this is hypothetical… I’ve been there many times in the past, and seen it first-hand.)

The CEO, who otherwise considers herself a business builder and long-term value creator becomes… less so.

Costs are slashed, whatever the long-term price.

Sales are made, no matter the implication. Deals are done, orders are pulled forward, discounts are given.

And then?

Well, it’s harder to make the next sale when your customer expects the same discounts or is already overstocked from the last deal. So the desperation builds…

(I have it on good authority that at one company I worked for, years ago, orders were invoiced and trucks were sent out on the last day of the financial year, only to return to the warehouse the next day for the invoice to be reversed!)

As Charlie Munger says, “Show me the incentive, and I’ll show you the outcome”.

Indeed.

Look, not all analysts are trying to get an easy ride. Most work hard, and just want to believe. So they do.

Not all CEOs will deliberately screw with the long-term health of a company just to deliver on ‘guidance’.

But, well… enough of them do it, many either without thinking, or after justifying it to themselves, convincing themselves they’re acting on noble or honest grounds.

And so, back to Buffett.

Yes, COVID and the war in Ukraine are remarkable one-offs. But Buffett has never given guidance.

He just doesn’t.

Because, rare among CEOs, he is both honest and humble enough to know (and admit) what he doesn’t know.

If I were a director of a public company, I’d be strongly encouraging my fellow directors and CEO to abandon the practice of providing ‘guidance’.

Which… might be enough to ensure I’m never asked to serve on a public company board.

Because people prefer to be popular. And to be well-thought-of, for giving the market what it wants.

I don’t blame people for wanting to believe that the future is knowable. It’s much more comfortable than uncertainty.

And self-delusion is a powerful force.

Unfortunately, that’s rarely the best way to build long-term value.

Investors should be careful what we wish for.

Fool on!

The post If even the RBA gets the forecast wrong… 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

• This falling ASX 200 share could catch an inflationary tailwind: fundie
• ASX 200 shares may have just hit the bottom: AMP economist
• Down 20% in a month, can things get any worse for the Medibank share price?
• Priced for ‘worst-case scenario’: Fundie names ASX share that can’t get any cheaper
• 2 ASX dividend giants to buy now: brokers

Motley Fool contributor Scott Phillips has positions in Telstra Corporation 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 positions in and has recommended Telstra Corporation 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/Lu1Xypc

The Carsales.com Ltd (ASX: CAR) share price is one of the success stories of the S&P/ASX 200 Index (ASX: XJO). Over the past decade it has risen by around 190%.

Despite all of the volatility with ASX tech shares this year, Carsales shares are only down by around 14%. That compares to names like Xero Limited (ASX: XRO) which is down 52% since the start of the year. Another is the REA Group Limited (ASX: REA) share price which has fallen by around 30%.

Fund manager Alphinity has been thinking about the outlook for the Carsales share price. With that in mind, one of the investment team – Jacob Barnes – recently visited the United States. Barnes went to look at the company’s American acquisition, Trader Interactive, which it bought for $1 billion. This business owns RV Trader, which is the largest online advertiser of RVs in the US.

For people who don’t know, an RV is between the size of a van and a bus, with things potentially included like satellite TV, a bath and so on. Barnes visited Oklahoma, which he called the “RV capital of the world”.

How Carsales shares could benefit from price rises

Barnes thought it would be a good idea to hear what customers think about the service, its effectiveness and pricing.

It’s useful to know if customers think the service is “compelling or if it would be the first thing cut if tougher economic conditions arise”. As this could make or break a company’s investment case.

According to Alphinity, the broad consensus of the RV dealers it spoke to said that RV Trader generated the largest number of leads of any source, despite price increases.

Alphinity wrote:

This hints at some of the latent pricing power inherent in Trader Interactive, which is much earlier in its maturity than Carsales, where it is by far the Australian market leader and provides a crucial service for almost all car dealers.

RV Trader’s importance within the RV market is only likely to increase. Demand conditions are expected to cool somewhat from COVID-induced excesses meets an improved supply dynamic as supply chains to the RV manufacturers begin to free up.

The COVID period was “quite favourable” from an RV dealer’s perspective. It helped support dealer margins. But it also meant that “advertising for new leads was far less important given demand exceeded supply“. It also allowed some dealers to cut back on the number of premium ads they placed on RV Trader, boosting dealer margins further.

The fund manager said that in a normalised environment, the flow of leads becomes “even more crucial to dealers”.

Could economic challenges hurt the Carsales share price?

It’s possible, and the Carsales business is a globally diverse company, so it could be impacted in various ways. However, on the RV Trader side of things, the fund manager said:

While some might be tempted to cut costs, it seems unlikely they will use cutting advertising as a savings opportunity considering turnover is the lifeblood of RV dealerships, in fact, if anything it is more likely that dealers will need to increase the number of premium ads they buy to drive turnover in a more subdued demand environment.

The fund manager also referenced that “many” RV sales are being made to wind power companies and contractors because turbines are “often located a vast distance from the nearest town”. Inflation has also increased the cost of lodging, making RVs even more attractive.

Recent movements

Over the past month, the Carsales share price has risen by 12%.

The post This falling ASX 200 share could catch an inflationary tailwind: fundie 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

• Planes, rains and automobiles: Fund names 3 ASX shares to back right now
• 3 ASX 200 dividend shares you may have overlooked: Wilsons
• 22 high-yield ASX dividend shares Wilsons is targeting
• 3 ASX shares that are the top buys right now: expert

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended REA Group Limited and carsales.com 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/5eMVRD3