Tag: Motley Fool

The Core Lithium Ltd (ASX: CXO) share price is rocketing higher on Monday. Indeed, the stock surged to an all-time high earlier today.

That’s despite no price-sensitive news having been released by the S&P/ASX 200 Index (ASX: XJO) lithium favourite.

Right now, the Core Lithium share price is $1.82, 8.98% higher than its previous close.

However, earlier today it leapt nearly 9.6% to $1.83 – the highest it’s ever been.

For comparison, the ASX 200 has lifted 0.02% right now while the S&P/ASX 200 Materials Index (ASX: XMJ) leads the market with a 3.6% gain.

So, what might be going right for the Core Lithium share price today? Let’s take a look.

Core Lithium share price hits new all-time high

The Core Lithium share price is among the best performers on the ASX 200 materials sector today.

While there’s been no price-sensitive news from the lithium developer today, it did release an announcement to the market.

The company revealed its chief financial officer Simon Iacopetta is stepping down after nearly four years in the job. He has committed to supporting the company while it undergoes a global search for his replacement. Iacopetta said:

My tenure at Core Lithium has been the highlight of my career to date. It has been hugely rewarding to see the Company move from an exploration opportunity to a project and now an operating mine … I am pleased to be leaving the business in very sound financial shape.

Meanwhile, the mining sector appears to be surging amid reports China will ease some of its COVID-19 restrictions.

While it hasn’t gone so far as to abolish its COVID-zero policy, the nation will ease quarantine times for close contacts and stop recording secondary contacts, BBC News reports.

The Core Lithium share price’s surge makes it the second-best-performing ASX 200 materials stock at the time of writing. It’s underperforming the Champion Iron Ltd (ASX: CIA) share price, which has soared 10% today.

The post Why did Core Lithium shares just crack a new all-time high? appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 share has surged 15% in a month, and a director is still buying up big
• Why this broker sees ‘downside risks’ to the current Woolworths share price
• Are ASX share investors getting their mojo back?
• Could government intervention rain on the Core Lithium share price parade?
• 5 things to watch on the ASX 200 on Monday

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

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The BHP Group Ltd (ASX: BHP) share price is having a top run today.

BHP shares are up 4.75% and are currently trading at $44.09. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.25% today.

So what is going on with the BHP share price?

Iron ore prices surge

BHP is not the only ASX 200 mining share rising today. The Rio Tinto Limited (ASX: RIO) share price is up 4.75%, while the Fortescue Metals Group Limited (ASX: FMG) share price is soaring 7.66%.

The iron ore price lifted 4.47% to US $93.5 in global markets on Friday, trading economics data shows.

Iron ore lifted amid news out of China. China is the world’s biggest steel producer and iron ore is used to make steel.

China has outlined a plan to rescue the property sector, Bloomberg reported. The measures are designed to ensure “stable and healthy development” in the sector, according to the publication.

Further, China has also slightly eased COVID-19 restrictions, boosting sentiment in commodities including iron ore.

Australian Prime Minister Anthony Albanese also had a “constructive” chat with Chinese Premier Li Keqiang in Cambodia on Sunday, Reuters reported. He said in quotes cited by the publication:

I say it was constructive, it was positive. I have said repeatedly about the relationship with China that we should cooperate where we can.

Another factor that can weigh on the iron ore price is the US dollar. A weaker US dollar makes commodities less expensive in other currencies, increasing demand. The US dollar tumbled late last week amid better than expected inflation data. However, the greenback is climbing today after the US Federal Reserve warned interest rate hikes could continue.

BHP highlighted its strength in the iron ore sector in an Annual General Meeting presentation late last week. BHP said:

We achieved record shipments from our iron ore business here in Western Australia for the third year running.

We are also increasing our output at Western Australian Iron Ore to 300Mtpa+, with
studies underway for a 330Mtpa option.

BHP share price snapshot

The BHP share price has surged 31% in the past year, while it has jumped 19% year to date.

For perspective, the ASX 200 has shed nearly 4% in the past year.

BHP has a market capitalisation of more than $223 billion based on the current share price.

The post Why is the BHP share price having such a ripper day? appeared first on The Motley Fool Australia.

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More reading

• Are ASX share investors getting their mojo back?
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager
• Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch…
• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
• Own BHP shares? Here are key takeaways from the miner’s AGM

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Super Retail Group Ltd (ASX: SUL) share price has jumped more than 15% over the past month. But despite the higher trading price, a Super Retail director bought shares in the S&P/ASX 200 Index (ASX: XJO) retail stock just last week.

Zooming out, there has been a lot of volatility on the ASX this year, and the Super Retail share price is still down 17% for the year.

Super Retail is the parent business of well-known Australian brands, including BCF, Supercheap Auto, Rebel and Macpac.

What’s going on with Super Retail shares?

Companies are currently facing several economic challenges, such as inflation and higher interest rates. How does this play out in terms of demand for retailers?

So far, there don’t seem to be many negative effects for Super Retail. The company recently gave a trading update showing like-for-like sales growth in FY23 compared to FY22.

It advised that in the first 16 weeks of FY23, Supercheap sales were up 23%, Rebel sales were up 20%, BCF sales were up 4%, and Macpac sales were up 76%. In total, like-for-like sales had increased by 20%.

However, Super Retail cautioned investors against “extrapolating this growth”, given the group was cycling against lockdowns in the prior comparative period (pcp).

Online sales represented 10% of the total FY23 sales to date. While sales were up, the group gross profit margin in percentage terms for the first 16 weeks of FY23 was in line with the gross profit margin delivered in the pcp.

Director buying

In a recent ASX announcement, Super Retail advised that director Peter Dobie Everingham had increased his holding of Super Retail shares.

Directors buying shares can be a buy signal, suggesting that the leadership thinks the company’s valuation is attractive.

With an on-market investment, Everingham purchased another 20,000 shares for a total cost of $201,716. This means that the cost was at a Super Retail share price of close to $10.10.

After that investment, Everingham now holds 60,000 shares.

Is there a good outlook for the Super Retail share price?

With so much volatility over the past year, it’s hard to say what will happen next with the ASX 200 share. The share price can perform very differently from the revenue and profit numbers reported by the business.

Super Retail CEO and managing director Anthony Heraghty said:

While current trading remains strong, the group expects higher mortgage rates and increased cost of living expenses will begin to impact consumer spending. The value proposition of the Group’s brands, our large active club member base and the resilience of our key auto and sports categories mean the Group is well positioned for more challenging retail trading conditions ahead.

As always, the Group’s first half result will be highly dependent on trading in the peak Christmas holiday period.

The broker Credit Suisse is particularly optimistic about the business. It has an outperform rating, with a price target of $14. Based on the current Super Retail share price of $10.50, that implies a possible upside of more than 33% in the next year.

The post This ASX 200 share has surged 15% in a month, and a director is still buying up big appeared first on The Motley Fool Australia.

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More reading

• Why this broker sees ‘downside risks’ to the current Woolworths share price
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 lithium shares smashing all-time highs on Friday
• Here are the 3 most traded ASX 200 shares on Friday
• 4 ASX 200 shares trading ex-dividend next week

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 Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail 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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Commonwealth Bank of Australia (ASX: CBA) shares are out of form on Monday.

At the time of writing, the banking giant’s shares are down almost 2% to $104.00.

This appears to have been driven by weakness in the banking sector and nervous investors selling shares ahead of the bank’s first quarter update tomorrow.

What is the market expecting from CBA tomorrow?

According to a note out of Citi this morning, it has responded to recent bank updates by trimming its expectations for CBA in FY 2023 and through to FY 2025. It commented:

CBA is set to provide its 1Q23 update on Tuesday, 15 November, closing out the results season for the Major Banks. Post recent results, we have made minor earnings revisions to our CBA forecasts, downgrading FY23-25E by ~2-5% reflecting earlier NIM leverage to deposits, mitigated by stronger asset headwinds; lower non-housing growth through FY23/24E; and slightly higher costs.

Nevertheless, the broker is expecting a first quarter result in line with consensus estimates. It is predicting a 9 basis points improvement in the bank’s net interest margin to 1.96% and core earnings growth of 6% over the second half average. It explained:

Our 1Q23 cash earnings forecast is in-line with consensus, and we forecast a quarterly NIM of 1.96%, ~9bps ahead of 2H22. At the core earnings line, we expect ~6% core earnings growth in 1Q23 vs the 2H22 average. We expect asset quality to be benign, with a quarterly charge of ~$220m in-line with consensus and more reflective of portfolio growth with new impaired assets likely to remain low, similarly to peers.

Are CBA shares good value?

Citi remains bearish on CBA’s shares and believes they are trading at too large a premium.

As a result, it has retained its sell rating and $85.50 price target on the bank’s shares. It concludes:

We retain our Sell call, with the valuation premium remaining disconnected from similar trends across the sector as volume growth slows.

The post Looking to buy CBA shares? Here’s what to watch in Tuesday’s update appeared first on The Motley Fool Australia.

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More reading

• Are ASX share investors getting their mojo back?
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why are CBA shares so high right now?
• ASX 200 bank shares: Buy, hold, or fold?
• Top fund manager sounds alarm bells for bank 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.

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

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

The market outlook appears gloomy as inflation persists and a recession starts to feel seemingly inevitable. But investors should remember that the stock market is forward-looking, so even if the current macroeconomic situation looks bleak, stocks aren’t necessarily going to continue bleeding.

In fact, the U.S. Investor Sentiment bull–bear spread is nearly neutral at around -2%. Anything above 0% indicates bullish sentiment while anything negative is bearish.    

US Investor Sentiment, % Bull-Bear Spread data by YCharts

As you can see from the chart above, the market sentiment has plunged as low as -40% as recently as September.

While the chart above suggests a capitulation, there’s another telling indicator I’ve been watching closely: margin debt.

I believe the drop-off in leverage could suggest investors are nearing a bottom in the bear market.

What is margin debt?

Buying stocks with margin is essentially just investing with borrowed money. As greed increases in a bull market, investors start to use more and more margin until eventually the market crashes and brokerages begin asking investors to cover their debts.

This is known as a margin call, and when it happens on a large scale it typically signals the end of a bull market.

Each month the Financial Industry Regulatory Authority (FINRA) releases the total amount of margin used by investors. Tracking this data can give you an indication of where investors are in the market cycle (i.e., if margin skyrockets the market is euphoric, and if it crashes the market is fearful).

A key chart to watch

I’m particularly interested in the change in margin debt compared to the S&P 500. Historically, as margin rises faster than the market, investors can expect a crash in the relatively near future. Conversely, if it begins falling faster than the market, it could be a sign of capitulation.

FINRA Margin Debt data by YCharts

As you can see in the chart above, the margin debt levels have fallen sharply. Most notably, leverage has crashed harder than the overall market.

Let me be clear: This doesn’t mean this bear market has bottomed. There are plenty of examples throughout the market’s history where stocks have continued to decline despite a steeper decline in margin.

But recent history indicates this is a good sign for a market recovery, and investors should keep a watchful eye on the October margin numbers, which FINRA will release the third week of November.

This doesn’t change anything for long-term investors

Tracking and analyzing the macro situation is a prudent exercise for investors, but it shouldn’t change the way you invest. Even the smartest economists are more wrong than right in their predictions.

In trying to time the bottom you run the risk of having your money sit on the sidelines uninvested. The age-old market slogan “time in the market trumps timing the market” rings true today more than ever. Long-term investors are best off continuing to buy great companies on a regular basis than trying to predict exactly when the market will start its recovery.

That being said, a little macroeconomic analysis still a worthwhile endeavor so long as you don’t base your investing strategy solely upon your conclusions. 

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

The post This key indicator suggests the bear market is nearing the bottom appeared first on The Motley Fool Australia.

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More reading

• Can you make money from ASX penny stocks?
• Hoping to bag the next NAB dividend? You’d better get in quick
• Why this broker sees ‘downside risks’ to the current Woolworths share price
• These 3 US stocks were Warren Buffett’s biggest winners over the past 5 years
• Why is this ASX 200 share crashing 17% today?

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.

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The Woolworths Group Ltd (ASX: WOW) share price has struggled in recent months, falling 14% from its August peak.

The stock reached a near-four-month high of $39.61 shortly before the supermarket giant released its financial year 2022 earnings. Today, the Woolworths share price is trading at $33.92, having slipped 1.08% this morning.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.15% at the time of writing. Meanwhile, the company’s home sector – the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) – has slipped 1.25%.

Could the stock’s recent tumble present a buying opportunity? Ord Minnett senior client advisor Tony Paterno doesn’t think so.

Let’s take a closer look at why the expert is bearish on the ASX 200 supermarket favourite.

Could this weigh on the Woolworths share price?

The future looks cloudy for the Woolworths share price as one top broker tips the stock as a sell.

Paterno noted Ord Minnett continues to see “downside risks” to the supermarket operator’s future earnings and multiples, as per The Bull. The expert continued:

We have reduced our earnings per share forecasts between 3% and 4%, primarily due to challenges in the New Zealand business.

The company’s New Zealand food segment reported an 8.1% drop in sales over the first quarter of financial year 2023 compared to the same period of the prior year, bringing in just $1.8 billion.

Much of that was due to the cycling of a major COVID-19 lockdown in Auckland in the prior period. However, CEO Brad Banducci noted numerous other impacts, saying:

In New Zealand Food, we are seeing signs of stabilisation in the trading environment; however, given the combination of lower sales and materially higher wage inflation, we currently expect [first half earnings before interest and tax] of NZ$100 — $130 million.

For comparison, the segment brought in NZ$200 million in the first half of last financial year. The company expects the upcoming second half to be a better one.

Meanwhile, not all brokers are bearish.

Goldman Sachs believes Woolworths shares are a buy, slapping the stock with a $41.70 price target – representing a potential 23% upside. It recently said:

Despite a noisy and softer [first quarter], we remain confident that [Woolworths] is the superior operator within [Australian] supermarkets.

The post Why this broker sees ‘downside risks’ to the current Woolworths share price appeared first on The Motley Fool Australia.

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More reading

• Are ASX share investors getting their mojo back?
• 5 things to watch on the ASX 200 on Monday
• 3 ASX 200 lithium shares smashing all-time highs on Friday
• Here are the 3 most traded ASX 200 shares on Friday
• 4 ASX 200 shares trading ex-dividend next week

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

When Warren Buffett gets something right, he really gets it right. The legendary investor’s stock picks through the years have helped him become one of the wealthiest people on the planet.

But much of Buffett’s success has stemmed from decisions he made a long time ago. What are examples of his best picks more recently? Here are Buffett’s biggest winners over the past five years — and whether or not they can keep winning in the future.

1. Apple

In his 2021 letter to Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) shareholders, Buffett wrote that the conglomerate had “four giants.” Three of them were Berkshire subsidiaries: the company’s insurance businesses (including Geico and General Re), railroad operator BNSF, and energy provider Berkshire Hathaway Energy. But Berkshire doesn’t control one of those giants – Apple (NASDAQ: AAPL).

Currently, Berkshire owns only a 5.8% stake in Apple. However, the tech stock ranks as Berkshire’s top holding by far, representing 38.8% of the total portfolio. Buying such a huge position in Apple has proven to be one of Buffett’s smartest moves ever. The stock has skyrocketed around 240% over the past five years.

It’s no secret why Apple has delivered such a tremendous gain. The company’s iPhone remains highly popular, especially with the shift to high-speed 5G networks. Apple’s services business has also become a much bigger revenue driver in recent years.

2. Mastercard

Buffett has been a longtime fan of credit card stocks. Berkshire’s portfolio includes American Express and Visa. The former ranks as Berkshire’s No. 5 holding. But the biggest winner over the past five years has been Mastercard (NYSE: MA).

Mastercard’s gain of more than 125% is due in part to a broad-based shift away from cash. A sharp increase in e-commerce also provided a nice boost.

Despite Mastercard’s status as one of Buffett’s biggest winners in recent years, it’s still not one of his favorite stocks. Berkshire reduced its position in Mastercard in the fourth quarter of 2021. Mastercard now makes up only 0.4% of Berkshire’s total portfolio.

3. Moody’s

Buffett technically didn’t decide to invest in Moody’s (NYSE: MCO). Berkshire owned shares of Dun & Bradstreet in the past. It received shares of Moody’s when D&B spun off the credit rating business in 2000.

While Berkshire later sold its stake in D&B, it retained a position in Moody’s. That turned out to be a wise move. The stock more than doubled over the past five years and has delivered more than a 20x gain since the spin-off from D&B.

However, Buffett could have made even more money from his investment in Moody’s. He sold some of the stock in 2009. The Oracle of Omaha referred to this as a “billion-dollar mistake” less than two years later.

Can they win in the future?

None of these three stocks are performing very well so far in 2022. Only Mastercard is beating the S&P 500. But can these stocks win in the future? I think so.

Apple remains a great stock to buy for the same reasons it’s made Buffett so much money in the past. Demand should continue to be strong for iPhones for a long time to come. Apple has opportunities to extend its smartphone dominance by introducing augmented reality applications. 

Mastercard should benefit as digital payments replace cash in many cases. The company could especially profit as open banking (expanding interoperability between financial service providers) picks up momentum.

Moody’s has a strong moat with its credit rating business. It also has significant growth potential for its analytics unit.

My view is that Apple, Mastercard, and Moody’s should be big winners for Buffett over the next five years. And I think all three are good picks for investors who aren’t worth close to $100 billion, too. Warren Buffett doesn’t have to be the only person to really get it right.

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

The post These 3 US stocks were Warren Buffett’s biggest winners over the past 5 years appeared first on The Motley Fool Australia.

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More reading

• Why big US tech stocks ripped higher today
• Warren Buffett bought $9 billion in stocks and sold more than $5 billion last quarter
• Berkshire, Buffett feel the bear’s bite
• Why I think Warren Buffett is right to always think a market crash is coming
• Better big tech stock: Apple vs. Alphabet

y. Keith Speights has positions in Apple, Berkshire Hathaway (B shares), and Mastercard. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Mastercard, Moody’s, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Mastercard. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Elders Ltd (ASX: ELD) share price is having a day to forget.

In morning trade, the agribusiness company’s shares are down 17% to $11.02.

This makes the Elders share price the worst performer on the ASX 200 index by some distance.

Why is the Elders share price crashing?

Investors have been hitting the sell button today following the release of the company’s full year results.

Although Elders delivered strong top and bottom line growth in FY 2022, management’s outlook commentary and the announcement of the retirement of its CEO appear to have undone this and put significant pressure on its shares.

For the 12 months ended 30 September, Elders reported a 35% increase in sales revenue to $3,445.3 million and a 42% jump in underlying profit before tax to $223.5 million.

And while Elders’ operating cash flow was down 28.5% to $113.7 million, that didn’t stop the company growing its dividend. The Elders board declared total dividends of 56 cents per share for FY 2022, up 33% from 42 cents per share in FY 2021.

What drove Elders’ growth?

Elders revealed that the Rural Products business outperformed expectations, with gross profit growing 35% to $383.1 million. This was driven by the continued focus on the backward integration strategy, whilst capturing the benefits of strong seasonal conditions. Growth through strategic acquisitions continued in FY 2022, adding value and presence across the network.

The Agency services profit contribution grew due to strong livestock prices despite reduced volumes from limited domestic supply. It reported a gross profit of $147.0 million, up 4% on FY 2021.

Finally, Elders’ Real Estate Services gross profit was $61.6 million, up 21% on FY 2021. This reflects ongoing network expansion and very high demand for both residential and farmland assets despite a fourth quarter market easing.

Outlook

FY 2023 looks set to be a tough year for the company, which explains some of the weakness in the Elders share price on Monday. Management commented:

High demand for agricultural commodities is expected to create favourable trading conditions in the first half of FY23, however recent extreme rainfall events across the eastern states have created some uncertainty in affected cropping regions and concern about reaching full harvest potential for both summer and winter crops.

The Rural Products outlook remains positive, with high demand particularly for agricultural chemicals, fertiliser and seed. However, the agricultural industry will await assessment of the full impact of the extreme wet conditions and flood events to realign expectations for the FY23 season.

Cattle and sheep prices are expected to soften in the medium term, driven by falls in domestic re-stocker demand, with volumes also balancing out in the short term. The wool market is expected to remain strong, driven by increased demand in China and Europe, pending production conditions improving following recent wet conditions and flood events in Eastern Australia.

CEO retirement

Also putting pressure on the Elders share price is news that its CEO, Mark Allison, is retiring next year after 10 years with the company.

He will leave the company on or before 14 November 2023, following the completion of the third of three successful Eight Point Plans.

Mr Allison said: “The timing is right, and will allow for a smooth transition and leadership refresh for Elders’ next phase of growth.”

The post Why is this ASX 200 share crashing 17% today? appeared first on The Motley Fool Australia.

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More reading

• Why this broker sees ‘downside risks’ to the current Woolworths share price
• These 3 US stocks were Warren Buffett’s biggest winners over the past 5 years
• Are ASX share investors getting their mojo back?
• Fortescue share price surges 9% amid Asian green steel plans
• Why I’d buy dirt-cheap ASX shares now and aim to hold them for a decade

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 recommended Elders 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 ASX share market has been through a rollercoaster of a year in 2022. For plenty of ASX tech shares, it has been a year to forget.

Inflation and higher interest rates have punished the valuations of plenty of businesses that are expected to grow their operations over the coming years.

After all of the investor panic that we saw earlier in the year, there appear to be signs that investors are now returning to the market.

Is confidence returning?

According to the Sharesies Investing Insights report for October 2022, there was “steady buying by the majority of investors, with some choosing to buy and sell the market moves.”

For me, this was one of the most interesting takeaways from the report:

Twice as much buying as selling on the Sharesies platform this month. Buy orders outstripping sell orders is a consistent pattern on the platform over the last six months, regardless of market volatility.

Which ASX shares are people buying?

ASX mining shares were some of the most popular investments last month according to the report.

In terms of the total amount invested, in dollar terms, these were the top ten: Sayona Mining Ltd (ASX: SYA), New Hope Corporation Limited (ASX: NHC), Fortescue Metals Group Limited (ASX: FMG), Core Lithium Ltd (ASX: CXO), Pilbara Minerals Ltd (ASX: PLS), Qx Resources Ltd (ASX: QXR), Telstra Corporation Ltd (ASX: TLS), BHP Group Ltd (ASX: BHP), Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT).

However, the list was a little different when you look at which were the top 10 most bought ASX shares by the number of investors. Here is the list: BHP, Fortescue, Commonwealth Bank of Australia (ASX: CBA), Pilbara Minerals, Wesfarmers Ltd (ASX: WES), Core Lithium, Woolworths Group Ltd (ASX: WOW), Qantas, Coles Group Ltd (ASX: COL) and Macquarie Group Ltd (ASX: MQG).

Perhaps unsurprisingly, investors were drawn to a number of ASX’s blue chips.

Strong levels of ETF investing

According to the report, exchange-traded funds (ETFs) saw four times as much buying in dollar volume traded terms as selling in October.

Sharesies suggested that this was “likely driven by investors employing a dollar-cost averaging investment strategy”.

These were some of the ETFs getting investor attention last month:

Vanguard Australian Shares Index ETF (ASX: VAS)

VanEck Global Clean Energy ETF (ASX: CLNE)

BetaShares Climate Change Innovation ETF (ASX: ERTH)

iShares Core MSCI World Ex Aus ESG Leaders ETF (ASX: IWLD)

iShares Core MSCI Australia ESG Leaders ETF (ASX: IESG)

Foolish takeaway

While investors may be coming back to the market, it doesn’t mean that the market has reached a bottom yet. Only time will tell whether June was the month we saw the lowest prices for many ASX shares.

The post Are ASX share investors getting their mojo back? appeared first on The Motley Fool Australia.

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More reading

• Why this broker sees ‘downside risks’ to the current Woolworths share price
• Fortescue share price surges 9% amid Asian green steel plans
• Flight Centre share price tumbles on trading update
• Could government intervention rain on the Core Lithium share price parade?
• 4 ASX 200 shares to play the global decarbonisation theme: fund manager

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 positions in and has recommended COLESGROUP DEF SET, Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and 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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The Fortescue Metals Group Limited (ASX: FMG) share price is jumping 9% this morning, making it one of the top-performing S&P/ASX 200 Index (ASX: XJO) shares. It could be getting an extra boost from its plans to collaborate in Asia to make green steel.

Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is also currently the best-performing sector. It’s up more than 3% following news China is easing some of its COVID-related restrictions.

Amid the news, ASX 200 iron ore majors BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (AS: RIO) are also soaring in early trade today, up 4.61% and 4.78%, respectively.

Asian green steel collaboration

Fortescue Future Industries (FFI) is the division of Fortescue that plans to produce green hydrogen and green ammonia.

FFI has agreed to immediately work with Indonesia’s largest private steelmaker to see if green hydrogen and green ammonia can be used in GRP’s steelmaking operations in the future, according to reporting by the Australian Financial Review.

Gunung Raja Paksi Tbk (GRP) is a member of Gunung Steel Group. Established in 1970 in North Sumatra, GRP is located in Cikarang Barat, West Java Province and covers more than 200 hectares.

In its website, GRP says it produces 2,200,000 tons of “high-quality” steel annually certified by local and international certification organisations. Its goal is to develop a better future.

The agreement with FFI was announced at the B20 summit in Bali, a business forum that precedes G20 meetings later in the week.

Are bigger plans in store?

Fortescue leader Andrew Forrest said that FFI was in “green steel discussions” in Europe that could be on a larger scale than the GRP collaboration. Could this have an even larger impact on the Fortescue share price?

Forrest said that the GRP deal was the company’s biggest play in Asia.

He also noted that China would be watching the collaboration “closely”. Forrest said:

The Chinese steel industry is many times the scale of Indonesia and has significant pollution issues.

If there is a way they can produce all the steel the country needs without destroying the local environment, that’s what they’ll do.

It wasn’t reported how exactly green hydrogen or green ammonia would be used in the steelmaking process.

Green iron ore

But, Fortescue has already announced that it will make a US$6.2 billion capital investment by 2030 to decarbonise its iron ore operations by 2030 and achieve “real zero terrestrial emissions”, referring to scope 1 and scope 2.

The company will avoid 3 million tonnes of carbon dioxide equivalent emissions per annum when fully achieved. It will also save net operating cost savings of US$818 million per annum from 2030, at prevailing market prices of diesel, gas and Australian carbon credit units

It said that there would be cumulative cost savings of US$3 billion by 2030, and capital payback would be achieved by 2034 at prevailing market prices.

Fortescue added that this move would establish a “significant new green growth opportunity by producing a carbon-free iron ore product and through the commercialisation of decarbonisation technologies”.

Fortescue share price snapshot

The Fortescue share price is up 9.09% at $19.38 at the time of writing. Over the last month, Fortescue shares have lifted more than 13% and are up a hefty 31% since the start of November.

The post Fortescue share price surges 9% amid Asian green steel plans appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price launching 5% on Friday?
• 3 reasons I’m still bullish on Fortescue shares
• Amidst the ongoing tech stock wreck, value shares are everywhere. There’s just one catch…
• China’s property crash has decimated the iron ore price. So what’s the outlook for Rio Tinto shares?
• The Fortescue share price has leapt 17% in November. Here’s why it may not last

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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