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Writing in its October monthly update, the Chester High Conviction Fund said it is “less than convinced banks offer any real downside protection should economic conditions worsen over the next 12 months.”

The comment came after the fund noted the strength in the S&P/ASX 300 Index (ASX: XKO) in October was led by the banking sector, with Bank of Queensland Limited (ASX: BOQ) reporting results that highlighted an increasing net interest margin, a key driver of profitability for banks. 

For the month of October, the Bank of Queensland share price jumped 13% higher. The Commonwealth Bank of Australia (ASX: CBA) share price soared 15% for the month, a great return for shareholders, but solidifying itself as even more expensive than when reporting results in August. 

The Chester High Conviction Fund said “banks are capturing the benefit of higher interest rates, without yet feeling the impacts of those higher rates on impaired loans.”

Yet the fund views banks as “leveraged exposure to the Australian economic cycle,” effectively sounding the alarm bells for bank shares should the economy weaken. The sharp increase in interest rates will hit many mortgage-holders from next year onwards as they transition off low fixed rate mortgages. 

Chester notes the rising pressure on commercial property pricing. Writing on Livewire Markets, Christopher Joye recently said commercial property owners and residential developers “have been the single biggest bank killers over the last 150 years,” noting “ANZ and Westpac almost went bust because of their commercial property exposures in the 1991 recession.”

Most economists are forecasting Australia will dodge a recession, but clearly economic growth is set to slow next year. Recession or not, bank shares, for so long the darlings of the S&P/ASX 200 Index (ASX: XJO), could be in for rougher days ahead.

The post Top fund manager sounds alarm bells for bank shares appeared first on The Motley Fool Australia.

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More reading

• Looking to buy CBA shares? Here’s the latest on the bank’s class action
• Are Bank of Queensland shares worth buying in November?
• Are ASX 200 bank shares a no-brainer buy in an inflationary environment?
• Experts name 2 ASX 200 dividend shares to buy next week
• Why Morgans added CBA shares to its best ideas list

Motley Fool contributor Bruce Jackson 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 Westpac Banking Corporation. 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 drama surrounding and following Elon Musk just doesn’t seem to dissipate. Musk is, of course, the head of several companies. There’s the publically listed Tesla. But there are also his private companies like SpaceX, Neuralink and The Boring Company.

And Twitter.

Twitter was dramatically bought out by Musk, with the final deal going through last month. The company will now be taken private at US$54.20 a share. We’ve seen the news of massive staff layoffs and the departure of Twitter’s old CEO and chief financial officer since.

But we have also just seen some fresh news regarding Musk.

According to a Securities and Exchange Commission (SEC) filing, Musk has just offloaded 19.5 million shares of Tesla, worth close to US$4 billion.

Musk has been selling down his Tesla stake for a couple of years now. But 2022 has seen the selling accelerate, with this latest tranche taking total sales this year to almost US$20 billion.

Why is Elon Musk selling his Tesla shares?

So it’s unclear why Musk has stepped on the gas when it comes to selling his Tesla shares. Uncharacteristically, he hasn’t taken to Twitter to explain his motives. But we can probably conclude that the sales have at least something to do with his Twitter deal.

It cost Musk around US$44 billion to buy out Twitter. As we covered at the time, much of this funding came from loans and significant private investors like Twitter founder Jack Dorsey.

But Musk is still on the hook for a big chunk of change for the US$44 billion deal. So it’s very possible that Musk is battening down his own financial hatches and just making sure he has plenty of liquid capital on hand in case he needs it for his Twitter deal.

Or he could just be trying to diversify his wealth. Musk still has more than 445 million Tesla shares to his name, an amount worth approximately US$85.25 billion or around 14% of the company’s total share count. Perhaps he is branching out. It can be risky to have so many eggs in one basket.

But seeing as Musk is offloading so many Tesla shares at 2022 prices (which are a lot lower than those we saw in 2021), we’d have to conclude it’s probably the former.

The post Why did Elon Musk just sell $6 billion worth of Tesla shares? appeared first on The Motley Fool Australia.

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More reading

• Why Tesla hit a new 52-week low today
• Why Tesla shares dropped below $200 on Monday
• Forget Dogecoin, this crypto could be the even bigger winner from Elon Musk’s Twitter takeover
• Tesla sees a China slowdown, but this Nasdaq stock is faring much worse
• Why Tesla shares dropped Wednesday

Motley Fool contributor Sebastian Bowen 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.

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Telstra Corporation Ltd (ASX: TLS) shares could be great value at current levels.

That’s the view of analysts at Morgans, which have named the telco giant on the broker’s best ideas list for November.

Morgans’ best ideas are those that the broker believes offer the highest risk-adjusted returns over a 12-month period. They are also supported by a higher-than-average level of confidence and are its most preferred sector exposures.

What is the broker saying about Telstra shares?

According to the note, the broker is feeling positive on Telstra for a number of reasons. This includes Optus’ recent cybersecurity incident, strong earnings momentum following its turnaround, and the recent company restructure.

In respect to the latter, the broker feels that this restructure could unlock significant value for shareholders from assets sales etc. It explained:

After a major turnaround, TLS has emerged in good shape with strong earnings momentum and a strong balance sheet. In late CY22 shareholders vote[d] on Telstra’s legal restructure, which opens the door for value to be released. TLS currently trades on ~7x EV/EBITDA. However some of TLS’s high quality long life assets like InfraCo are worth substantially more, in our view. We don’t think this is in the price so see it as value generating for TLS shareholders. This, free option, combined with likely reputational damage to its closest peer, following a major cybersecurity incident, means TLS looks well placed for the year ahead.

Morgans has an add rating and $4.60 price target on Telstra’s shares.

Based on the current Telstra share price of $3.95, this implies potential upside of 16.5% for investors over the next 12 months.

Morgans also expects a 16.5 cents per share fully franked dividend in FY 2023. This represents a dividend yield of 4.1%, stretching the total potential return to almost 21%.

The post Why Telstra shares could be ‘worth substantially more’: Morgans appeared first on The Motley Fool Australia.

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More reading

• Why is the Telstra share price trailing the ASX 200 on Monday?
• What is the current dividend yield on Telstra shares?
• Morgans names 3 of the best ASX 200 shares to buy in November
• Here are the top 10 ASX 200 shares today
• How did the Telstra share price fare over 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 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.

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It’s looking like three for three days of gains so far this week for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 is again in the green this Wednesday, currently enjoying a rise of 0.65%, which puts the index back over 7,000 points for the first time in almost two months.

So time now to dig deeper into these share market moves and check out the shares that are topping the ASX 200’s share trading volume charts right now, according to investing.com.

The 3 most traded ASX 200 shares by volume this Wednesday

Lottery Corporation Ltd (ASX: TLC)

First up today is a newcomer to this list in Lottery Corporation. This Wednesday has had a significant 19.98 million Lottery Corp shares traded on the share market thus far. There’s been no news out of Lottery Corp today.

But the ASX 200 company did hold its annual general meeting yesterday. Perhaps investors liked what they heard because Lottery Corp shares are up a healthy 2.24% to $4.57 apiece today. Perhaps this is why we are seeing the high volumes that we are.

Whitehaven Coal Ltd (ASX: WHC)

Next up today is the ASX 200 coal miner Whitehaven Coal. Whitehaven has seen a chunky 23.38 million shares change hands as it currently stands. Whitehaven issued a guidance update today, probably the source of the elevated trading volumes we are witnessing.

The company has told investors to temper their expectations over FY2023, with flooding affecting several of the miner’s sites. Whitehaven shares are down close to 10% today at $8.52 a share.

Evolution Mining Ltd (ASX: EVN)

Our final share today is the ASX 200 gold miner Evolution Mining. This Wednesday has seen a whopping 25 million Evolution shares dug up and sold. All ASX gold miners are having a stellar day on the markets today, thanks in most part to higher gold prices.

Evolution has been one of the biggest beneficiaries, banking an 8.8% gain to $2.34 a share. Such a large rise is probably behind Evolution taking out the top spot on this list today.

The post Here are the 3 most traded ASX 200 shares on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why Magellan, News Corp, REA, and Whitehaven Coal shares are dropping today
• Coles share price slips as boss says ‘best is still to come’
• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing
• Whitehaven share price dives 9% as floods hit guidance
• Nervous about buying ASX shares right now? Here are some top tips from Scott Phillips

Motley Fool contributor Sebastian Bowen 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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I’ve been warning investors off BrainChip Holdings Ltd (ASX: BRN) shares for a while now.

If you stayed away, then you’ve managed to save yourself from watching your wealth go up in smoke as the semiconductor company’s shares dropped from a high of $2.34 to 62 cents today.

That’s a decline of approximately 73%, which would have turned a $10,000 investment into approximately $2,700.

Given BrainChip shares have fallen so heavily, some investors may now be considering picking up a parcel “on the cheap”. However, I believe this would be a mistake and would suggest investors avoid this meme stock.

Listed below are five key reasons I would stay away from BrainChip’s shares.

BrainChip share price valuation

The first reason I would avoid BrainChip shares is the company’s valuation. Although its shares have pulled back materially from their highs, that doesn’t necessarily make them good value. In fact, with a market capitalisation of $1.1 billion and next to no revenue, I would argue it remains vastly overvalued.

For example, Life360 Inc (ASX: 360) has a similar market capitalisation but with US$174 million of annualised recurring revenue. Furthermore, Life360 is bordering on being profitable and has a hefty cash balance. Whereas BrainChip is burning away at its cash and has six more quarters of funding before another capital raising will be required. Raising more capital, whether it be through LDA Capital or the market, will dilute shareholders further.

Competition

BrainChip focuses on edge artificial intelligence (AI). This is the deployment of AI applications in devices throughout the physical world. However, the computation is done near to the user at the edge of the network rather than centrally in a cloud computing facility or data centre.

Competition in edge AI is fierce, with major players such as Nvidia and Qualcomm all pursuing dominance in the market. US$360 billion tech behemoth Nvidia recently unveiled the Jetson Orin Nano series of system-on-modules (SOMs). Nvidia highlights that Jetson Nano has “set the new standard for entry-level edge AI and robotics applications”.

Whereas US$130 billion semiconductor giant Qualcomm’s Snapdragon has been winning plaudits. Dave Altavilla, a semiconductor expert writing for Forbes, recently commented:

Qualcomm’s previous-gen Snapdragon 8 Gen 1 platform led the field with respect to the various smartphone AI workloads, and its Snapdragon 8+ Gen 1 platform is currently unmatched across the board.

And with both Nvidia and Qualcomm pouring billions into their research and development (R&D) activities each year, I have serious doubts over BrainChip’s ability to compete. In my opinion, big users of these technologies are more likely to go with a brand they can trust than a small player with no track record of success.

No takeover?

This brings us neatly to the next reason I would avoid BrainChip shares. When a small company has a game-changing technology that is going to disrupt an industry, the incumbents will often acquire it.

However, BrainChip has received no takeover interest from its larger rivals. That’s despite them spending billions on R&D each year. Nvidia spent US$1.82b on R&D during the last quarter, which is enough to buy BrainChip twice. If the big boys really feared BrainChip’s technology, they would surely acquire it. Particularly while the Australian dollar is so weak versus the US dollar.

We’ve been here before

If you’ve followed the BrainChip story long enough, you’ll know that the company has been talking up its growth potential for many years. For example, back in 2016, the company projected the “neuromorphic chip market alone to be $4.8bn by 2022 [and] consist of abundant opportunities”.

Anyone reading that presentation six years ago would likely have imagined that BrainChip would now be commanding a decent share of this huge market. Particularly given the list of its partnerships, which were supposed to create “significant” license opportunities and related revenues. A quick look at its income statement is enough to see that these partnerships didn’t deliver the goods.

Fast forward and BrainChip has a number of new partnerships which open up “new global opportunities for the Akida technology”. Yet, there is little revenue to speak of.

Announcements going nowhere

This leads on nicely to the final reason I am staying away from BrainChip shares. The bulls will point to its NASA announcement as a testament to the supposed quality of its product. That announcement revealed that BrainChip was collaborating with VORAGO Technologies. The ASX tech company was to support a Phase I NASA program for a neuromorphic processor that meets spaceflight requirements.

However, since the announcement of an evaluation kit order several months later in December 2020, the company has said no more. And neither VORAGO nor NASA are mentioned in its latest annual report. Furthermore, as far as I can see, the work with NASA appears to have ended after just three weeks on 18 January 2021 based on NASA data without comment from BrainChip.

This is another case of déjà vu if you’ve followed the BrainChip story as long as I have. Remember the French National Police evaluation of its SNAPvision technology? The countless major casinos trialling its Game Outcome solution? The “large market opportunity” for BrainChip Studio?

I suspect in a few years we could be asking the same about Akida.

The post 5 reasons I would avoid BrainChip shares at all costs appeared first on The Motley Fool Australia.

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More reading

• Why did the BrainChip share price pop then drop today?
• 2 beaten-down Nasdaq stocks that could win from a $40 billion market
• Why A2 Milk, Argosy Minerals, Dicker Data, and Life360 shares are falling
• Why did the BrainChip share price lose a quarter of its value in October?
• These were the worst-performing ASX 200 shares in October

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. 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 S&P/ASX 200 Index (ASX: XJO) is on form again on Wednesday. In afternoon trade, the benchmark index is up 0.6% to 6,999.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are rising:

Allkem Ltd (ASX: AKE)

The Allkem share price is up 2% to $15.78. This may have been driven by a broker note out of Macquarie. According to the note, thanks to stronger than expected lithium prices, the broker has upgraded its earnings estimates. This has led to Macquarie retaining its outperform rating and lifting its price target to $21.00.

Newcrest Mining Ltd (ASX: NCM)

The Newcrest share price is up over 6% to $19.32. This follows a rise in the gold price overnight and the release of the gold miner’s annual general meeting update. At the meeting, management spoke positively about its response to inflationary pressures. Thanks to the implementation of measures such as long-term and fixed-price contracts for maintenance, fuel, and energy, and logistic costs, Newcrest expects to contain cost growth to a range of around 6% to 8% in FY 2023.

Orica Ltd (ASX: ORI)

The Orica share price is up over 7% to $15.13. Investors have been buying this commercial explosives company’s shares following the release of its full year results. For the 12 months, Orica reported underlying EBIT of $579 million. This was a 36% increase year over year. Management advised that this was driven by its refreshed strategy and improved market conditions.

SSR Mining Inc (ASX: SSR)

The SSR share price is up 9% to $21.64. This morning this gold miner released its third quarter update and reported production of 106,919 ounces and an AISC of $1,901 per ounce. However, SSR still posted a quarterly loss of US$25.8 million and downgraded its full year guidance. Investors appear to have been expecting an even worse update.

The post Why Allkem, Newcrest, Orica, and SSR shares are rising today appeared first on The Motley Fool Australia.

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More reading

• Why is the Newcrest share price surging 5% on Wednesday?
• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Wednesday
• Why did ASX lithium shares smash the market on Tuesday?
• Here are the top 10 ASX 200 shares today  

Motley Fool contributor James Mickleboro has positions in Allkem 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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Maybe you’re looking to make your first investment in an ASX-listed share. Or, perhaps you’re hoping to get a better entry on your next buy. The ideal time of day to add to your portfolio is an interesting question to think about.

Simplistically, the return made on any investment is determined by two variables — the buy price and the sell price. There are many factors that influence these values between buying and selling, but let’s focus on the buy.

As an investor, there are a few things that you can control as a small shareholder. One of those is the price paid for admission.

Unlike an electricity or internet bill, you can decline to enter if you’re unsatisfied with the price for an ASX share. Instead, the share market can be somewhat treated like a mall… one where you know what you want, but wait for a bargain price.

Having said that, is there anything to suggest there’s a prime time for buying at a specific point in the day?

What is the best time to load up?

Firstly, I want to emphasise that the longer you intend on holding an investment, the less important this information will be. Aside from companies at the small-cap end of the market capitalisation spectrum, the max variability for most ASX shares in a single trading session will typically be less than 5%.

Ultimately, a 2% or 3% difference in the price paid for an investment is negligible if the goal is 366% over 20 years (historical returns of 8% compounded annually). Put a different way… your returns are more closely correlated with how long you hold onto those ASX shares, rather than when you bought them — as shown below.

Time Frame	Positive return probability	Negative return probability
1 day	54%	46%
1 quarter	68%	32%
1 year	74%	26%
5 years	86%	14%
10 years	94%	6%
20 years	100%	0%

Nevertheless, the conventional wisdom of the past has suggested that midday presents an opportunity for those wanting to avoid the bulk of volatility. Markets tend to be more volatile in the mornings as investors and traders initially respond to any announcements. Commonly, share prices have stabilised by midday.

Furthermore, prices tend to pick up steam in either direction as the market approaches the close. One reason for this could be that day traders generally don’t hold positions overnight. As a result, there can be a final rush to close out any remaining trades before the final bell.

Secondly, managed index funds will rebalance their holdings at the end of the day. This can create an influx of volatility due to the enormous dollar value being moved.

Why is there so much intraday volatility among ASX 200 shares?

Volatility has always been part and parcel of share markets around the world. However, the proliferation of high-frequency trading (HFT) is believed to have amplified the ups and downs in recent history.

For those unaware, HFT uses computer algorithms to trade securities at extremely high speeds. It’s not uncommon for some of these trades to take place in intervals measured in milliseconds. Firms leveraging HFT seek out small imbalances in share prices and exploit them with large sums of money.

Initially, HFTs were thought to be a positive — improving market efficiency and accuracy. However, following the devasting ‘Flash Crash’ of the Dow Jones in 2010 — where rampant selling was magnified due to HFT algorithms — swarms of investors have spoken out against the trading method.

For ASX shares, the effects of HFT are characterised by abnormally high end-of-day trading volumes. Around 25% of all ASX share market volume is now in the match, according to The Australian Financial Review.

Fortunately, the ramifications are relatively minute for long-term investors.

The post What’s the best time of day to buy ASX shares? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most traded ASX 200 shares on Wednesday
• 5 reasons I would avoid BrainChip shares at all costs
• Why Allkem, Newcrest, Orica, and SSR shares are rising today
• Why Magellan, News Corp, REA, and Whitehaven Coal shares are dropping today
• The IAG share price has smashed the ASX 200 this year. Is it too late to buy?

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decent gain. At the time of writing, the benchmark index is up 0.55% to 6,997.1 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is down over 3% to $9.35. This may have been driven by news that the company’s co-founder, Hamish Douglass, has sold down his holding materially this week. Douglass offloaded $118 million worth of shares for $9.10 per share. This sale takes Douglass’ holding from 21.45 million shares to approximately 8.45 million shares. The sale isn’t exactly a vote of confidence for Magellan.

News Corporation (ASX: NWS)

The News Corp share price is down 9% to $23.55. This follows the release of the media company’s first quarter update this morning. News Corp reported a 1% decline in revenue to US$2.48 billion and a 14.5% reduction in EBITDA to US$350 million. Management blamed this on forex headwinds and a fundamental reset by Amazon of its book inventory levels and warehouse footprint.

REA Group Limited (ASX: REA)

The REA share price is down 4.5% to $113.78. Investors have been selling this property listings company’s shares following the release of its first quarter update. For the three months, REA delivered a 16% increase in revenue to $305 million and an 11% lift in operating EBITDA to $131 million. While this looks solid, management is targeting an earnings growth rate ahead of revenue growth in FY 2023. So, it has a bit of catching up to do.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price is down almost 10% to $8.50. Investors have been hitting the sell button today after the coal miner downgraded its production guidance due to flooding around the Gunnedah Basin. Management ROM production is now expected to be 19 to 20.4Mt. This is down from 20 to 22Mt previously. In addition, Whitehaven Coal’s unit cost guidance for the year has been revised higher.

The post Why Magellan, News Corp, REA, and Whitehaven Coal shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• The Magellan share price has crashed 50% in 2022. Is the company looking for a buyer?
• Whitehaven share price dives 9% as floods hit guidance
• REA share price tumbles despite 16% revenue boost
• Magellan share price flat after Douglass sells $118m of shares
• How I’d find ASX growth shares to buy today to double my money

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 REA 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 Insurance Australia Group Ltd (ASX: IAG) share price is in the green today, up 0.71% to $5 per share at the time of writing.

The insurance stock has trounced the benchmark index in 2022 so far.

The IAG share price is up 12% in the year to date while the S&P/ASX 200 Index (ASX: XJO) is down 8%. IAG shares are also outperforming the S&P/ASX 200 Financials Index (ASX: XFJ), which is down 3%.

The IAG share price hit a new 52-week high last week of $5.09, as my Fool colleague Matthew reported.

So, is it too late to buy?

Broker tips earnings upgrade

The latest tailwind for the IAG share price is an earnings upgrade from top broker Morgan Stanley.

According to reporting in The Australian, Morgan Stanley has upgraded its earnings expectations for IAG on the back of higher investment yields and continual price increases.

Morgan Stanley analyst Andrei Stadnik expects IAG to lift its cash net profit by 3% to 5%.

Insurance shares tend to ride out periods of rising inflation fairly well. This is because insurers can raise their prices to offset rising costs reasonably easily as consumers tend to still want their products, even when they are tightening their belts.

Experts say buy on the IAG share price

As my Fool colleague Zach reported recently, several brokers are positive about the IAG share price.

Wilsons’ analysts recently singled out IAG as a quality ASX share pick for income investors due to its strong dividend yield, earnings quality, and long-term outlook.

Wilsons said that on 26 October, when the IAG share price closed at $4.82.

Zach pointed out that IAG is offering a 5.35% projected dividend yield for the next 12 months.

Watermark Fund Management principal Justin Braitling says insurance shares are looking increasingly attractive due to rising interest rates and depressed company valuations.

Braitling said:

Insurance margins have been under pressure with low interest rates (now reversing) and the insurance cycle has turned following a period of elevated claims.

The shares are cheap, and we are moving into a hardening cycle for premiums-claims inflation on the other hand should start to ease.

The post The IAG share price has smashed the ASX 200 this year. Is it too late to buy? appeared first on The Motley Fool Australia.

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More reading

• Why did the IAG share price just hit a new 52-week high?
• 3 ASX 200 shares hitting new heights today
• Why IAG shares are a cheap buy right now: expert
• 22 high-yield ASX dividend shares Wilsons is targeting
• Why did the IAG share price get smashed today?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Insurance Australia 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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About a month ago, my colleague Zach posed the question: Is the Northern Star share price on the comeback trail?

It appears to have been a keen observation, with the Northern Star Resources Ltd (ASX: NST) share price soaring by more than 20% over the past four weeks.

The gold miner is currently trading at $10,00, up 6.38% for the day so far. It appears to be riding high alongside many other ASX 200 mining shares on the back of rising commodity prices.

The S&P/ASX 200 Materials (ASX: XMJ) is the best-performing sector so far today, up 2.28%.

Why is the Northern Star share price rising?

Gold — and, by extension, ASX gold shares — is typically considered a safe haven for investors in tough economies, and a decent inflation hedge.

But this hasn’t been the case in 2022, with Fidelity International’s Tom Stevenson saying that belief is a myth.

Indeed, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 16% in the year to date. And the price of the yellow metal itself is down 7.55% year over year, according to Trading Economics.

Aggressive interest rate hikes in the United States haven’t been good for the price of gold. This is because gold delivers no yield to an investor keeping bullion in their home safe. By comparison, cash looks more appealing now that interest on savings in the bank is rising for the first time in more than a decade.

But after four consecutive 0.75% rate hikes in the US, the market is doing its usual thing and looking forward.

The Fed will stop raising rates eventually, widely tipped to be at some point next year, and that’s going to be good for gold shares.

So, perhaps some investors have seen a buy-the-dip opportunity with the Northern Star share price in recent weeks.

Plus, the US dollar is weakening on lower consumer confidence data, and as my colleague Bernd points out, a weaker greenback supports the value of gold, which is priced in US dollars.

The gold price has gone up 4.5% over the past week to US$1,707 per ounce at the time of writing.

According to Trading Economics, gold is at its highest point in more than a month, up 2.4% over the period.

What about company news?

There is no news out of Northern Star today or in November so far, apart from daily share buyback notices.

For the record, as of yesterday, Northern Star has purchased 14.68 million shares since it announced its $300 million share buyback in August.

This is the first share buyback ever undertaken by Northern Star. The miner has spent $109.4 million so far.

The only significant piece of company news released to the ASX over the past four weeks was the miner’s September quarter activities report.

The market didn’t like that the results were ‘slightly below plan‘, and the Northern Star share price dropped on the day.

So, on the whole, it seems macroeconomic factors have done the heavy lifting on the Northern Share share price over the past month.

What do the experts think?

In his article on 13 October, Zach noted that 15 out of 15 analysts rated Northern Star shares a buy, with a consensus price target of $10.70, according to Refinitiv Eikon data.

Shaw and Partners portfolio manager James Gerrish is also optimistic. As Tony Yoo reported last month, Gerrish said the ‘rally could be hard and fast’ for the Northern Star share price.

Gerrish said:

Northern Star has held up better than most of its peers over recent weeks but it’s still been a tough year for the gold miner. We believe this stock offers good value at current levels and when the sentiment turns for the sector the rally could be hard and fast.

At the time, the Northern Star share price was trading about $8.50.

As for the gold price, BMO Capital Markets reckons it could stay around today’s level for a while.

The broker forecasts a modest uptick in bullion prices in 2023 with good support until 2026. The broker tips an average price of US$1,680 from April to June 2023.

The post Why has the Northern Star share price rocketed 20% in a month? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today 
• 5 things to watch on the ASX 200 on Monday
• Is there any good news in sight for the gold price and ASX 200 gold shares?
• Is the Northern Star share price cheap or expensive compared to its peers?

Motley Fool contributor Bronwyn Allen 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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