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The Coles Group Ltd (ASX: COL) share price is sliding lower despite the supermarket giant’s CEO and managing director Steven Cain heralding brighter days for the business.

Speaking to shareholders at the Coles annual general meeting (AGM), Cain said the pandemic ultimately helped strengthen the company, touting “the best is still to come”.

He also said ‘local shopping’ trends, driven by floods and COVID-19 restrictions, were unwinding to Coles’ benefit, with Aussies instead seeking out value amid the inflationary environment.

The Coles share price is down 0.42% this afternoon, trading at $16.52.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has lifted 0.62% at the time of writing. Meanwhile, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) has slumped 0.25%.

Let’s take a closer look at what went down at the company’s 2022 AGM.

Coles share price slides following AGM

The financial year 2022 was challenging for Coles, but the supermarket operator pushed through relatively unscathed, as its management pointed out at this year’s AGM. Speaking at the meeting, Cain said:

Coles is now a better business than before COVID, we are more resilient, more agile, and now classified as essential!

We are making significant progress on our strategy and our increased investment in the business. The good news is the best is still to come.

The company bore $240 million of COVID-specific costs last fiscal year. However, it managed to post comparable year-on-year earnings before interest and tax. And it wasn’t just the pandemic that posed a challenge.

Floods in New South Wales, Queensland, and South Australia earlier this year hampered supply chains nationwide. Additionally, inflation has taken its toll on many of the company’s suppliers. Coles chair James Graham commented today:

In somewhat challenging circumstances our suppliers worked collaboratively with us [last financial year] to overcome availability constraints and we have responded to many requests for cost price increases where there were clear signs that raw material and/or operating costs had also increased.

These challenges in both availability and cost pressures have continued into our new financial year where we have seen an increase in the effects of inflation.

Also potentially disappointing is that Coles’ long-term soft plastic recycling partner REDcycle has paused its soft plastics collection.

Cain said sustainability was important to Coles and it’s exploring options for a sustainable, long-term structural solution for soft plastic recycling.

Looking ahead

Looking to the future, the company is developing two distribution centre automation projects, with the commissioning of a Queensland facility expected in the first quarter of 2023 and a NSW facility in early 2024. It’s also developing customer fulfilment centres in Victoria and NSW.

Coles now expects to benefit from an increasing net new store opening profile and an expected increase in skilled migration as processing times for Australian visas decrease.

It’s also expecting to sell Coles Express to Viva Energy Group Ltd (ASX: VEA) next year, as announced in September.

Coles share price snapshot

The Coles share price hasn’t managed to dodge the 2022 downturn, falling 7.7% so far this year. It’s also dropped 6.6% since this time last year.

Meanwhile, the ASX 200 has also fallen 7.7% year to date and 5.7% over the last 12 months.

The post Coles share price slips as boss says ‘best is still to come’ appeared first on The Motley Fool Australia.

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More reading

• Top fund manager has ‘never seen’ ASX share price moves like we are witnessing
• Whitehaven share price dives 9% as floods hit guidance
• Could ASX 200 retail shares be ‘too cheap’ to ignore right now? Here’s Scott Phillips’ take
• Nervous about buying ASX shares right now? Here are some top tips from Scott Phillips
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended COLESGROUP DEF SET. 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 off to the races again this Wednesday. At the time of writing, the ASX 200 has gained a healthy 0.65%, putting the index back over the 7,000 point mark for the first time in almost two months. But the Newcrest Mining Ltd (ASX: NCM) share price is doing even better.

Newcrest shares are on fire today. The ASX 200 gold miner has gained an impressive 5.67% at the time of writing to $19.19 a share. That’s after the company closed at $18.6 a share just yesterday.

So what’s going on with Newcrest here that has gotten investors so very excited?

Why is the Newcrest Mining share price spiking 5% today?

Well, the first thing one normally does when examining the share price moves of a gold miner like Newcrest, is to look at the price of gold itself. A gold miner’s profitability is primarily influenced by what it can sell its gold for, after all.

As my Fool colleague James covered this morning, gold has indeed had a top time of it over the past 24 hours or so. The precious metal rose 2.1% overnight to US$1,716.30 an ounce. This was largely thanks to a decline in the value of the US dollar.

So with gold enjoying a surge in value as we’ve just seen, it’s perhaps no surprise that a gold miner like Newcrest is shining brightly on the ASX today.

We also see other ASX gold shares enjoying similar gains as well. The Northern Star Resources Ltd (ASX: NST) share price is presently up a healthy 6% at $9.96. While Gold Road Resources Ltd (ASX: GOR) shares are up an even more impressive 7.4% at $1.52.

At the current Newcrest Mining share price, this ASX 200 gold share has a market capitalisation of $17.2 billion, with a dividend yield of 2.06%.

The post Why is the Newcrest share price surging 5% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why Arafura Rare Earths, BHP, Capricorn Metals, and Newcrest shares are rising 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?
• 5 things to watch on the ASX 200 on Friday

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

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The Reliance Worldwide Corporation Ltd (ASX: RWC) share price has gone down the drain this year.

Like many other ASX 200 shares, Reliance Worldwide has been battling sharp cost inflation, supply chain bottlenecks, and logistics disruptions. 

But it’s also been suffering from a turn in investor sentiment. As a plumbing parts company, the demand for its products is linked to repair, maintenance, and remodelling activity.

As a result, Reliance is exposed to consumer confidence, which is being threatened by rising interest rates and soaring inflation. 

So, the Reliance Worldwide share price is reeling this year. With shares last changing hands at $2.99, the Reliance Worldwide share price has tumbled 52% in the year to date.

This downward slide has only been continuing recently, with Reliance Worldwide shares retreating 15% in the past month to languish at 52-week lows.

The market didn’t react kindly to the company’s recent quarterly trading update, which showed earnings margins heading south.

Reliance Worldwide directors go on a buying spree 

The Reliance Worldwide share price isn’t getting any love from investors. But the company’s directors have seen this as an opportunity to pick up shares.

It appears as though these directors have banded together, with six of Reliance’s eight directors purchasing shares on-market in recent weeks. The company’s CEO, Heath Sharp, hasn’t joined in.

As the great investor Peter Lynch once said, “insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise”.

Non-executive chair Stuart Crosby kicked off the buying at the end of October, picking up 31,250 Reliance Worldwide shares for around $100,000. 

Non-executive director Christine Bartlett came to the table on 31 October. She bought up 20,000 Reliance Worldwide shares, splashing $64,000 in the process.

In the past week, four more non-executive directors have joined the buying party. They’ve each purchased parcels of between 15,000 and 27,000 shares, forking out between $45,000 and $83,000.  

Overall, these purchases are on the smaller end of the scale. And the directors’ total holdings aren’t sizeable either, with four of these directors owning 50,000 Reliance Worldwide shares or fewer after the transactions.

Nonetheless, these efforts can be seen as a vote of confidence and a positive signal for investors. 

What’s next for Reliance Worldwide shares?

Reliance held its 2022 annual general meeting (AGM) at the end of last month.

Commenting on the outlook, CEO Heath Sharp noted that there continues to be a backlog of work in most of its markets. This is because demand has run ahead of the ability of contractors to satisfy it.

The company believes this backlog will underpin volumes in FY23.

What’s more, Reliance believes its position in the market should help it weather some of the economic storm:

We continue to believe that our market orientation helps cushion us from any marked economic downturn should it eventuate. We are principally focussed on repair, maintenance and remodel activity, with lower exposure to cyclical construction markets. 

At the same time, the company acknowledged the risks of continued inflationary pressure, rising interest rates, geopolitical tensions, higher energy costs, and supply chain disruptions.

As it stands, Reliance commands a market capitalisation of nearly $2.4 billion. 

The company generated net profit after tax (NPAT) of US$137 million in FY22, down 3% from the prior year.

This means that Reliance Worldwide shares are currently trading on a trailing price-to-earnings (P/E) ratio of around 11x.

The post 4 directors have been buying up this ASX 200 share in the past week appeared first on The Motley Fool Australia.

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More reading

• 5 ASX shares trading near 52-week lows that insiders have been buying
• 3 ASX 200 directors buying up their company shares in the past week
• Why Ampol, Cann, Reliance Worldwide, and South32 shares are dropping
• Why is ASX 200 share Reliance Worldwide crashing 16% today?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Cathryn Goh 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 Reliance Worldwide Corporation Limited. The Motley Fool Australia has recommended Reliance Worldwide 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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The Aussie Broadband Ltd (ASX: ABB) share price is having a strong day.

In afternoon trade, the broadband provider’s shares are up 4% to $2.57.

Why is the Aussie Broadband share price charging higher?

Investors have been buying Aussie Broadband shares on Wednesday following the release of its investor day update.

That update saw management spruik its “huge opportunity to be even bigger than today” and reaffirm its guidance for FY 2023.

In respect to the latter, management continues to expect Aussie Broadband to deliver revenue of $800 million to $840 million. This will be an increase of 46% to 54% from $546.9 million in FY 2022.

The company also reaffirmed its earnings before interest, tax, depreciation and amortisation (EBITDA) margin guidance of 10% to 10.5% for FY 2023. This will be an improvement from 7.2% during the last financial year.

Based on the middle of both its revenue and margin guidance ranges, this implies EBITDA of $84 million for the year. This will be more than double the EBITDA of $39.4 million it recorded in FY 2022.

What about its growth opportunities?

Aussie Broadband highlighted a number of growth opportunities in its investor day presentation.

As well as traditional broadband services (which it is targeting the almost doubling to 1 million services by FY 2025), the company notes that it has the ability to leverage its existing infrastructure to provide more products to its business customers at higher margins.

This includes cloud services, mobility services for Internet of Things, virtual office phones, and 4G and 5G failovers.

In respect to the cloud, the company notes that the Australian cloud infrastructure as a service market is expected to growth from $1.7 billion in FY 2021 to $3.04 billion in FY 2025.

And while major public cloud providers (Amazon, Microsoft, Google, etc.) currently dominate the market, management notes that they can be expensive and are not the best solution in every scenario. This creates an opportunity for Aussie Broadband to win market share.

All in all, management appears confident in its growth trajectory over the coming years. And judging by the Aussie Broadband share price performance today, investors seem to share this confidence.

The post Aussie Broadband share price lifts as company spruiks ‘huge opportunity’ appeared first on The Motley Fool Australia.

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More reading

• These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market
• The Aussie Broadband share price offers 40% upside: expert
• Buy this ASX share that all its directors have been snapping up: expert
• Which ASX 200 shares could benefit from the federal budget?
• Which ASX All Ords shares could perform well in a recession?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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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There are a number of names that people have created for different categories of ASX shares. For example, ASX dividend shares, defensive ASX shares, blue-chip ASX shares and so on. Another term, which is mostly used in the US, is ‘penny stocks’. Are there penny stocks on the ASX?

What are penny stocks?

It’s all about the share price.

Some businesses have very high share prices. For example, the CSL Limited (ASX: CSL) share price is currently around $280. That’s definitely not a penny stock.

But, the generally accepted definition of a penny stock these days is a business that has a share price under $5. It used to refer to businesses where the share price was just measured in pennies, but it seems there has been a bit of inflation in the definition here.

Typically, a business with a low share price is one with a small market capitalisation.

Blue chips are usually described as among the biggest on the share market, with very entrenched brands.

Small cap ASX shares may have a market cap of less than $2 billion. Microcap ASX shares typically have market caps under $300 million.

But, a share price doesn’t necessarily tell an investor how big a business is.

For example, Sayona Mining Ltd (ASX: SYA) has a share price of around 25 cents, yet its market cap is just over $2 billion according to the ASX.

The Telstra Corporation Ltd (ASX: TLS) share price is currently sitting at $3.96, under the $5 level. But it has a market cap of $45 billion.

But then there’s a name like Lycopodium Ltd (ASX: LYL) which has a share price of well over $6, yet its market cap currently sits at $259 million.

Why are things so different?

It depends on how many shares each business has. If a business worth $100 million had 10 shares, each share would be worth $10 million.

But, if that $100 million company had 100 million shares, then the share price would be just $1.

Are penny stocks good ASX investments?

It really depends on the business.

Some ‘penny stocks’ go on to become large businesses such as Pilbara Minerals Ltd (ASX: PLS), Northern Star Resources Ltd (ASX: NST) and Altium Limited (ASX: ALU).

But, plenty of others don’t go on to achieve anything. Perhaps that business is a mining explorer that burnt through all its cash and decided to close.

Others may take a slow and steady approach to growing. Simply going from $50 million to $100 million is a doubling of the company size, which I think is an impressive return.

That’s the kind of thing that investors are thinking about with ASX penny stocks – they’re small, so maybe they have plenty of growth potential.

Being small doesn’t automatically mean they will grow a lot though. But, if they are good enough, it’s worth pointing out that it’s easier to grow from $100 million to $200 million than it is to go from $10 billion to $20 billion.

But, I’d prefer to go for small ASX shares that already have a proven business model or service, and they’re simply quite early on with their growth journey. I think this approach could lower the risk of a total wipeout for an investor.

The post Are there penny stocks on the ASX? appeared first on The Motley Fool Australia.

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More reading

• Are CSL shares a good buy right now?
• 5 things to watch on the ASX 200 on Wednesday
• Why did ASX lithium shares smash the market on Tuesday?
• Why did the Pilbara Minerals share price have such a cracker day?
• Here are the top 10 ASX 200 shares today  

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and CSL Ltd. 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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Woe, thy name is the Magellan Financial Group Ltd (ASX: MFG) share price. Magellan shares have had an absolutely awful run over the past two years. Once venerated as the leading fund manager and investment company on the ASX, Magellan has seen its star fall dramatically over the past 24 months.

Back in February 2020. Magellan was a $65 share. Back in November 2020, the company was still commanding a price of around $55. Today, this company is a shell of what it once was, and is asking just $9.40 a share at the time of writing (down 2.79% for the day today).

Magellan shares have crashed 50% over 2022 year to date, and by 70% over the past 12 months. The company is down more than 85% from its all-time highs.

Magellan’s woes can be put down to a few factors: namely chronic underperformance of its funds leading to an exodus of investors, and the loss of its co-founder and former chief investment officer Hamish Douglass.

Douglass has caused some fresh concern with investors this week after it was revealed yesterday that he had sold off more than half of his ownership stake in Magellan. Douglass offloaded approximately 13 million shares for a price of $9.10 per share (worth around $118.3 million). This reduced his holding from 21.45 million shares to 8.45 million.

Was Hamish Douglass looking for a buyer for his Magellan shares?

However, it appears that there is a possibility Douglass was doing more than just offloading his Magellan shares.

According to reporting in The Australian this week, Douglass is also rumoured to have been asking around about a potential buyer for his Magellan stake. The report suggests Douglass has approached Phil King, of Regal Funds Management, about a possible buyout of Douglass’ Magellan holdings. That’s in addition to approaching Challenger Ltd (ASX: CGF) as well.

Buying out Douglass’ stake would give any potential suitor a hefty beachhead to launch more buy-ups of the company’s stock.

However, it is understood that both Regal and Challenger have rejected Douglass’ alleged advances.

If these rumours are true, it’s hardly a vote of confidence from Douglass over Magellan’s future. And it’s also the last thing investors probably want to hear right now. The Magellan share price will be an interesting one to watch going forward, that’s for sure.

The post The Magellan share price has crashed 50% in 2022. Is the company looking for a buyer? appeared first on The Motley Fool Australia.

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More reading

• Magellan share price flat after Douglass sells $118m of shares
• Why A2 Milk, Bravura, Magellan, and Pendal shares are dropping
• This ASX 200 dividend share has a 19% yield right now. Why it’s a trap: experts
• Magellan share price hits multi-year low following $2.4b horror month for outflows
• These were the best-performing ASX 200 shares in October

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 recommended Challenger 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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There’s been plenty of insider buying going on among ASX shares lately, and many of the targets are trading at, or around, 52-week lows.

That suggests those in the know believe their company is trading at attractive prices. So much so, that they’ll throw their hard-earned cash into the stocks.

Indeed, one S&P/ASX 200 Index (ASX: XJO) company has seen six directors buy its shares over the last fortnight.

Let’s take a look at the 52-week lows apparently tempting ASX directors to buy into ASX shares lately.

5 ASX insiders buying shares at near 52-week lows

We can’t talk about recent insider buying without mentioning Reliance Worldwide Corporation Ltd (ASX: RWC). The ASX 200 industrial share hit a new 52-week low of $2.96 on Tuesday.

Most of the company’s board has been bolstering their holding in the company lately, with six of its directors forking out an approximate total of $385,000 for 123,250 shares. That saw them paying an average of around $3.12 per share.

The largest parcel was snapped up by chair Stuart Crosby, who bought 31,250 shares for $99,389.65 on 28 October.

Directors Sharon McCrohan, Darlene Knight, Christine Bartlett, Brad Soller, and Russell Chenu have also made recent purchases.

Meanwhile, Bega Cheese Ltd (ASX: BGA) deputy chair Peter Margin has taken a slice of the ASX 200 dairy favourite’s shares. Margin bought 10,786 shares for $35,162.36 in late October, paying around $3.17 apiece.

The Bega share price hit a 52-week low of $3.12 on 21 October. It has since recovered 3.5% to trade at $3.23 today.

Shares in All Ordinaries Index (ASX: XAO) biotechnology company Starpharma Holdings Limited (ASX: SPL) are also both the subject of recent insider buying and trading near 52-week lows today. The stock hit its lowest point since 2015 earlier this week, falling to 49 cents.

Two of the company’s leaders, chair Rob Thomas and CEO and director Dr Jackie Fairley, snapped up 50,000 shares, worth a combined $52,000, in the company in late October.

Thomas got the better deal, buying each share for 52 cents while Fairley paid 52.8 cents apiece.

The share price of All Ords construction materials and services company Wagners Holding Company Ltd (ASX: WGN) also hit a multi-year low earlier this week when it slumped to 73 cents.

But the company’s chair and co-founder Denis Wagner seems to think the recent downturn has presented a buying opportunity. He bought 61,669 shares in the company in late October, paying nearly $50,000, or around 80 cents apiece.

The final ASX insider buying target trading at around 52-week lows is gold miner Red 5 Limited (ASX: RED). The stock hit a 52-week low of 15 cents in late October. It has since recovered to trade at 17.5 cents.

The company’s managing director Mark Williams and director Ian MacPherson both recently bolstered their stake in the company. They did so through a share purchase plan, which offered shares for 16 cents apiece.

The post 5 ASX shares trading near 52-week lows that insiders have been buying appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 directors buying up their company shares in the past week
• 3 ASX All Ordinaries shares leaping more than 10% on quarterly updates
• Why Australian Strategic Materials, Bega Cheese, Costa, and Elmo shares are racing higher
• Why Ampol, Cann, Reliance Worldwide, and South32 shares are dropping
• Why is ASX 200 share Reliance Worldwide crashing 16% 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 positions in and has recommended Reliance Worldwide Corporation Limited and Starpharma Holdings Limited. The Motley Fool Australia has recommended Reliance Worldwide Corporation Limited and Starpharma Holdings 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 may not be much of a big deal on the surface for the average Australian, but currency fluctuations do have a big impact when it comes to ASX investing, especially for Qantas Airways Limited (ASX: QAN) shares.

Over 2022 thus far, the Australian dollar has plunged in value. At the start of this year, one Aussie dollar was buying around 73 US cents. In early April, it was buying 76 cents.

But today, one local dollar only buys just under 65 US cents.

Such a dramatic fall of our currency against the greenback has many consequences, especially for some ASX shares.

When our dollar weakens against the US dollar, it means that, generally, imports become more expensive, while exports become cheaper. If an Australian tourist wishes to travel to America, a weaker dollar means more of our dollars need to be spent acquiring US dollars. Conversely, it is now cheaper for an American tourist to travel here as their dollars now buy more of ours.

So the most obvious beneficiaries of a lower Aussie dollar are the big miners. These companies can now sell their US-priced commodities at a higher currency-adjusted price than earlier this year, since buyers have to pay for iron ore, oil and gold, amongst others, in US dollars.

But what about Qantas shares?

How are Qantas shares impacted by a low Aussie dollar?

Well, the airline is a hard one to work out when it comes to currency. One might think that a lower Aussie dollar could boost incoming tourism to Australia, which would probably benefit Qantas.

But Qantas is likely to be a net loser from a low Aussie dollar, rather than a winner. For one, Australians might reconsider an international holiday, since our dollars don’t stretch as far. Suddenly, the Gold Coast or Byron Bay seems a lot more attractive than Los Angeles or New York than it did a year ago.

But Qantas’ primary concern with a low dollar is probably something more fundamental: oil.

Oil, in the form of jet fuel, is Qantas’ largest fixed cost. You need a lot of it to get a plane from one country to another. And fuel has to be paid for in US dollars. This means a weaker Australian dollar buys less fuel than it did at the start of the year.

According to reporting in the Australian Financial Review (AFR) this week, this is such a large consideration for Qantas that broker JPMorgan predicts that a US 5 cent rise in the value of the US dollar against the Aussie would boost Qantas’ earnings per share (EPS) by 7%. That’s more than any other ASX 200 share.

Luckily for Qantas, JPMorgan’s currency strategists are reportedly predicting that the Australian dollar will “claw back steep declines in 2022 over the September quarter, before climbing further to US70¢ ($1.11) by the June quarter of 2023”.

That would indeed be good news for Qantas shares.

The post How does a weak Aussie dollar impact Qantas shares? appeared first on The Motley Fool Australia.

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More reading

• Macquarie tips $800m buyback for Qantas shares
• Qantas boss says ‘we’re back’, but should you buy the ASX airline share?
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now
• How is the Qantas share price avoiding today’s carnage?
• Why did the Qantas share price fly 16% higher in October?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended JPMorgan Chase. 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 a sea of calm relative to some of the extreme volatility witnessed in the S&P/ASX Small Ordinaries Index (ASX: XSO), particularly among the smallest companies in that index.

Writing in its October 2022 monthly report, the 1851 Emerging Companies Fund says it has seen “some of the largest daily movements in our index for many years”.

“In over 15 years of investing in the Australian small-cap sector, we have never seen the fast-changing macroeconomic environment driving share price moves like we are witnessing as opposed to underlying company fundamentals.”

Managed by small-cap veteran Chris Stott, since inception in February 2020 the 1851 Emerging Companies Fund has returned 12.8% per annum, soundly outperforming its benchmark.

October saw the fund rise 4.4% after fees compared to its benchmark’s rise of 6.5%

Contributors to performance included the XRF Scientific Limited (ASX: XRF) share price jumping 24% higher for the month after the manufacturer of equipment and chemicals largely for the mining sector reported a “strong trading period across all divisions, driven by activity in the mining sector and buoyant demand for capital equipment products”.

On the flip side, the Eureka Group Holdings Ltd (ASX: EGH) share price fell 14% in October after the owner and manager of senior independent living communities announced a $28m capital raise at $0.47 to fund the purchase of two new villages. The company also announced they are in due diligence with over $20m worth of further potential acquisitions. 

In early November, 1851 Capital lodged a notice of initial substantial holder with the ASX, declaring it held 5.06% voting power in Eureka Group. 

The fund’s five largest positions are listed as Capitol Health Ltd (ASX: CAJ), PSC Insurance Group Ltd (ASX: PSI), PeopleIn Ltd (ASX: PPE), OFX Group Ltd (ASX: OFX) and Ridley Corporation Ltd (ASX: RIC).

The OFX Group share price continued its upward trajectory into November after the foreign exchange services company reported a strong performance for the first half of FY23, including upgrading its profit guidance for the full year. In what has been a tough year for many payment companies, OFX Group shares have been a standout, gaining 57% over the past 12 months.

1851 Capital expects inflation to peak this coming quarter, saying the impact of the recent east coast rain will likely drive food prices higher once again. Despite the recent hikes in interest rates, the fund says economic activity continues to remain robust with no major slowdown evident.

“We continue researching for companies to position for an inevitable economic recovery over the medium term,” concluded the fund.

The post Top fund manager has ‘never seen’ ASX share price moves like we are witnessing appeared first on The Motley Fool Australia.

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More reading

• Whitehaven share price dives 9% as floods hit guidance
• Nervous about buying ASX shares right now? Here are some top tips from Scott Phillips
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today  
• Here are the 3 most traded ASX 200 shares on Tuesday

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 positions in and has recommended OzForex Group Limited, PSC Insurance Group, and Peoplein. The Motley Fool Australia has recommended OzForex Group Limited, PSC Insurance Group, and Peoplein. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Allkem Ltd (ASX: AKE)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this lithium miner’s shares to $21.00. Macquarie has upgraded its earnings estimates for Allkem and other lithium shares to reflect its stronger lithium price forecasts. This is being driven by growing demand for the battery making ingredient. The Allkem share price is trading at $15.89 on Wednesday.

Block Inc (ASX: SQ2)

Another note out of Macquarie reveals that its analysts have upgraded this payments giant’s shares to an outperform rating with an improved price target to $145.00. Macquarie was pleased with Block’s quarterly update and particularly the performance of its Cash App business. In light of this and recent share price weakness, the broker has upgraded Block’s shares to an outperform rating. The Block share price is fetching $96.23 this afternoon.

Santos Ltd (ASX: STO)

Analysts at Morgans have retained their add rating but trimmed their price target on this energy producer’s shares to $9.00. This follows the release of the company’s investor day briefing on Tuesday. The broker was disappointed with the update and notes that Santos’ 2023 guidance for production and capex fell short of both Morgans and consensus estimates. Nevertheless, the broker remains positive and highlights that this does not materially impact investment views or have a lasting impact. The Santos share price is trading at $7.58 on Wednesday afternoon.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why did ASX lithium shares smash the market on Tuesday?
• Here are the top 10 ASX 200 shares today  
• Why did the Santos share price take a dive following the company’s investor briefing?
• Is the Allkem share price a buy ahead of next week’s AGM?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. The Motley Fool Australia has positions in and has recommended Block, Inc. 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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