Tag: Motley Fool

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.

Investors have watched the Federal Reserve closely for signs of just how aggressive it will be in tightening its monetary policy to fight inflation. After initially seeing at least a glimmer of hope that the Fed might not move at breakneck speed with ongoing interest rate increases, the news conference that Fed Chair Jerome Powell gave put to rest any ideas of a near-term tempering of the central bank’s resolve. The Nasdaq Composite (NASDAQINDEX: ^IXIC) fell sharply after the announcement, falling more than 1% Thursday morning when regular trading opened.

Electric vehicle (EV) pioneer Tesla (NASDAQ: TSLA) has been a big detractor from the market’s performance over the past couple of months, finally succumbing to investor fears about the impact of a global economic downturn on the auto manufacturer. Yet while Tesla’s declines Thursday morning were relatively mild, Roku (NASDAQ: ROKU) delivered a financial report that investors found more troubling, and that sent its stock sharply lower in premarket trading.

Tesla reports on China

Shares of Tesla moved lower between 1% and 2% in premarket trading on Thursday morning, adding to a nearly 6% decline on Wednesday. The EV company reported monthly sales figures in the key Chinese market, and even though the numbers were impressive, they failed to live up to the lofty expectations that many shareholders have for Tesla.

The latest figures from the China Passenger Car Association showed that Tesla delivered just over 71,700 electric vehicles manufactured at its Chinese Gigafactory facility in Shanghai during October. That was a healthy number, but it was down by 14% from the more than 83,100 EVs that Tesla delivered in September, which set a record for the company.

Tesla investors also have to take into account some other trends that could affect its competitive stance in the world’s most populous nation. Despite the encouraging adoption of Tesla vehicles by Chinese consumers, the U.S. automaker still ranks far behind the EV delivery volume of China’s BYD, which came in at more than 217,500 cars. Moreover, with factors like China’s zero-COVID policy and a general economic slowdown taking shape, Tesla has had to resort to cutting its prices for its mass-market Model 3 and Model Y vehicles. That flies in the face of increases in costs that threaten Tesla’s bottom-line growth.

China is an essential market for Tesla to tap, even though it comes with considerable obstacles. Any further pressure in China could make it hard for the stock to recover from its recent declines.

Roku runs into the ad downturn

Shares of Roku fell much more sharply, dropping 15% early Thursday. The streaming TV specialist said its business could take a double hit for the rest of the year, making investors more nervous about its longer-term prospects.

Roku’s third-quarter financial report included numbers that indicated ongoing growth in some areas. Revenue was up 12% year over year to $761 million, with streaming hours climbing 21% to 21.9 billion. Roku reported 65.4 million active accounts at the end of September, up by 9 million accounts in the past 12 months. Average revenue per user posted a 10% jump to $44.25.

However, Roku noted that advertising spending on its platform grew at a slower rate than it had expected at the beginning of 2022, citing weakness across the industry. Moreover, with strains on consumer budgets, Roku sees sales of its hardware also coming under pressure. Investors were surprised to see Roku predicting a possible year-over-year sales drop in the fourth quarter.

Investors weren’t prepared for that much bad news, explaining the big share-price drop. Yet such moves have been par for the course this earnings season, as shareholders demand near-term profit potential and resiliency against deteriorating macroeconomic conditions. 

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

The post Tesla sees a China slowdown, but this Nasdaq stock is faring much worse appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Tesla shares dropped Wednesday
• Could ‘no deal’ with Tesla actually be good news for Core Lithium shares?
• Why Tesla stock was up this morning
• Does the Vanguard International Shares ETF contain ‘good’ quality companies?
• The Core Lithium share price surged 25% in October. Here’s why

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

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

from The Motley Fool Australia https://ift.tt/XDfhYp7

Some companies are ramping up their cybersecurity spending to make sure they don’t run into the same sorts of problems that Optus and Medibank Private Ltd (ASX: MPL) are currently facing. One of these is Flybuys, which could have an impact on Coles Group Ltd (ASX: COL) shares.

For readers that haven’t heard of it, Flybuys is reportedly Australia’s largest loyalty scheme, with eight million members. Considering how many people’s details it holds, Flybuys is putting a lot of work into cybersecurity.

Flybuys is jointly owned by Coles and Wesfarmers Ltd (ASX: WES).

Boost to the cyber defence budget

According to reporting by The Australian, the Flybuys 2022 financial accounts show that directors noted the company had “significantly increased investment in cyber security to help protect the company’s and members’ data”.

In 2022 the business spent $32.62 million on technology, up from $23.15 million in 2021. Those expenses include cybersecurity.

The newspaper reported that approximately 20% of all retail expenditure in Australia is represented within the Flybuys system, and it represents “a huge pool of personal and financial data that could prove a tasty target for cybercriminals”.

Flybuys CEO Anna Lee confirmed that spending on protecting customer data against hackers was growing. She said:

As one of Australia’s most trusted loyalty programs, protecting our member data remains a top priority at Flybuys. We continually review and improve our data collection and security infrastructure, and this additional investment is reflective of that commitment to our members.

As cyber security threats continue to evolve, so too does out investment in this space. It’s incumbent on us to not only provide the best experience possible for our members, but ensure that experience is backed by the core systems that will help protect our members.

How is Flybuys going?

Flybuys reportedly saw revenue increase by 28.4% to $391.9 million. This included $341.9 million of revenue from points paid to Flybuys from its retail partners.

It was noted by The Australian that the end of lockdowns and travel restrictions saw a rebound in consumer spending and other activities that generated more points than were redeemed.

What this means in the context of Coles shares

Flybuys isn’t designed to make a profit, but the loyalty business seemingly adds value for Coles and Wesfarmers, otherwise they wouldn’t keep running it.

Bunnings and Officeworks recently joined the program.

In Coles’ latest quarterly update, the business announced that its total sales had increased by another 1.3%, with supermarket sales increasing by 1.6%.

The company said it’s on track to deliver cumulative ‘smarter selling’ benefits of $1 billion by the end of FY23 under its four-year program.

Sales growth has continued into the second quarter of FY23, though it’s seeing higher costs relating to inflation.

The post Why Flybuys could cost Coles shares amid greater cyber concerns appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Coles shares underperformed the market last month. What’s next?
• 2 ASX shares to cash in on ‘a very good Christmas’: expert
• Dividends beasts: 3 ASX shares that kept the funds growing even during COVID
• These are the ASX 200 dividend shares to buy: analysts
• Brokers name 2 ASX dividend shares to buy

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

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

The Woolworths Group Ltd (ASX: WOW) share price was out of form on Thursday.

The retail giant’s shares ended the day 4% lower at $32.05.

This followed the release of a mixed first quarter update from Woolworths.

Is the Woolworths share price pullback a buying opportunity?

According to a note out of Goldman Sachs, its analysts believe the pullback has created a buying opportunity for investors.

This morning the broker has reiterated its conviction buy rating with a slightly trimmed price target of $41.70.

Based on the current Woolworths share price, this implies potential upside of 30% for investors over the next 12 months.

Goldman is also expecting a fully franked 3.2% dividend yield in FY 2023, sweetening the deal further for investors.

What did the broker say?

While Goldman was a little underwhelmed with Woolworths’ first quarter update, it saw enough to remain positive. It said:

WOW reported 1Q23 sales largely in-line on Group basis though both AU Foods and NZ Foods came in slightly below expectations whilst AU B2B and Big W outperformed. The key underperformance vs GSe was AU Foods SSS being -1.1% (vs +3.0% GSe) largely coming from higher than expected volume decline YoY due to elevated prior year comps during lock-downs, which resulted in 1Q23 e-Comm sales -10.8% YoY.

After taking everything into account, including management’s briefing, Goldman Sachs has trimmed its sales and earnings estimates for the near term. It explained:

On the back of this, we trim our FY23-25e sales by -1.3%-1.4% and NPAT by -5.3%-3.0% respectively. This is largely on a lower sales and EBIT outlook for NZ Food as well as s~2-3% lower AU Foods sales and EBIT on lower volumes in 1H23.

Overall, the broker believes investors should look beyond this update and focus on the quality of the company and its positive long term outlook. It concludes:

Despite a noisy and softer 1Q23, we remain confident that WOW is the superior operator within AU supermarkets with a clear growth pathway to deliver ~3% sales and ~9% NPAT FY22-25e CAGR. WOW is trading at 22.1x FY24E P/E vs our TP implied 27.8x and historical average of 23.2x, providing a value entry point to a quality player in our view. Reiterate Buy (on CL).

The post Goldman says Woolworths share price pullback provides ‘a value entry point to a quality player’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Friday
• Why Bravura, Domino’s, Lendlease, and Woolworths shares are sinking
• Why is the Woolworths share price sinking 4% today?
• Woolworths share price on watch following soft Q1 update
• 2 ASX shares to cash in on ‘a very good Christmas’: expert

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

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

Thinking about buying S&P/ASX 200 Index (ASX: XJO) dividend shares next week? If you’ve got your eye on these four, you’d better be quick!

They’re about to trade ex-dividend, and once they do, new investors will have missed out on their upcoming payouts.

Stocks also often fall by the approximate value of their dividend as they pass their ex-dividend dates, as the upcoming payout can no longer be factored into its share price.

So, which ASX 200 shares will be trading ex-dividend next week? Keep reading to find out.

4 ASX 200 shares trading ex-dividend next week

Among the first shares off the ex-dividend rank is ASX 200 big four bank Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The bank will be handing out its fully franked 74-cent final dividend to those holding its shares before Monday on 15 December.

Macquarie Group Ltd (ASX: MQG) shares will also trade ex-dividend on Monday.

The financial services giant is offering those that hold its shares at today’s close its $3 per share, fully franked, interim dividend. It will begin to hit investors’ accounts on 13 December.

Iron ore favourite Champion Iron Ltd (ASX: CIA) will also be trading ex-dividend on – you guessed it – Monday. The company revealed its interim last Thursday.

It’s unfranked and comes in at 10 Canadian cents. The official Australian dollar equivalent will come to light on 22 November. But, for now, the current exchange rate means 10 Canadian cents is equivalent to 12 Aussie cents. The dividend will be paid on 29 November.

Finally, breaking the pattern is ASX 200 healthcare share ResMed Inc (ASX: RMD). It won’t be trading ex-dividend until Wednesday.

Unlike the previous three dividends, ResMed’s has been derived from the company’s September quarter earnings. It’s worth 4.4 US cents. The official Australian dollar amount will be revealed on 11 November, but until then, 4.4 US cents is worth around 7 Aussie cents. ResMed will start to pay out the offering on 15 December.

The post 4 ASX 200 shares trading ex-dividend next week appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Hoping to bank the latest ANZ dividend? Read this
• Planes, rains and automobiles: Fund names 3 ASX shares to back right now
• 5 things to watch on the ASX 200 on Friday
• Why did the South32 share price melt more than the market today?
• Here are the top 10 ASX 200 shares today

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

from The Motley Fool Australia https://ift.tt/q1e34JG

The Aussie Broadband Ltd (ASX: ABB) share price has a lot of upside, according to one expert.

This business primarily provides broadband, voice over internet protocol (VOIP), and mobile services to residential customers. Its target is to be Australia’s fourth-largest provider of communications and technology services.

Aussie Broadband has also acquired Over The Wire, which has a lot of capabilities across data, voice, cloud, and managed services. Over The Wire is focused on business, enterprise and government, and wholesale segments.

By combining these two businesses, it can be an integrated full-service provider across the “full suite” of solutions to residential, business, enterprise and government, and wholesale customers. It will also have full ownership of tier 1 voice and data networks in Australia, interconnection to all 121 NBN points of interconnection and a cloud infrastructure platform.

With all of the volatility that’s going on, I think it’s a good idea to look at how the company is actually performing, not just what the share price is doing.

FY23 first-quarter update

The ASX telco share announced that in the FY23 first quarter, it had reached 610,098 broadband services, up 4.3% from 30 June 2022.

In the quarter, it generated $184.4 million of revenue, which was an increase of 4.6% from the fourth quarter of FY22.

It said that Aussie Broadband’s residential and business segment delivered consistent net additions despite strong price-based competition without the need for heavy promotion use, reducing its customer acquisition costs and long-term churn risk.

The mobile division grew “strongly” thanks to a new marketing strategy and change to plans. There were 4,953 net mobile additions during the quarter.

Wholesale and white-label additions were lower because of white-label customer internal platform change., Management is expecting white-label additions to improve in the second quarter of FY23.

In terms of its NBN market share, it had reached 6.73% at September 2022, up 27 basis points from 30 June 2022. Since December, Aussie Broadband has reportedly taken more net additions than the rest of the industry combined.

Guidance for FY23

Aussie Broadband noted that based on current market conditions, the operating plan, and year-to-date trading, it’s expecting revenue of between $800 million and $840 million.

It’s planning growth in higher margin business, enterprise and government customers, and the full-year benefit of Over The Wire. This should deliver an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin, excluding integration costs, of between 10% and 10.5%, up from 7.2% in FY22.

Aussie Broadband share price target

One of the brokers that likes the ASX telco share is Ord Minnett, with a price target of $3.61. That implies a possible rise of more than 40% from Thursday’s closing price of $2.52.

The broker likes the expected increasing profitability of the business and thinks Over The Wire can help it become bigger.

Based on the estimated earnings for FY24, Ord Minnett thinks the business is priced at 13x FY24’s projected profit.

The post The Aussie Broadband share price offers 40% upside: expert appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 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?
• Aussie Broadband share price is ‘quite cheap for what it is’: expert

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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.

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

You can bet that any investor in Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares look forward to their dividend payments. After all, most investors who own shares of any ASX big four bank usually do so with the expectation of hefty dividend income.

Well, for ANZ investors, the next dividend payment is just around the corner. ANZ is scheduled to pay out its final dividend for FY2022 next month on 15 December. Just in time for Christmas.

ANZ shares to go ex-dividend next week

The bank will be doling out a payment of 74 cents per share, fully franked. That’s a slight increase over the interim dividend of 72 cents per share that investors enjoyed back in July. Last year’s final dividend was also a 72 cents per share payment.

But if investors who don’t already own ANZ shares want to get their hands on next month’s final dividend, they will have to be quick. That’s because ANZ shares are scheduled to trade ex-dividend for this payment on Monday next week.

When a share trades ex-dividend, any new investors who own the shares on or after that date are ineligible to receive the dividend in question. So today is effectively the last day one can buy ANZ shares and be eligible to receive this next payment.

Investors will have until 9 November to decide if they wish to receive the dividend in cash. Or else opt for the optional dividend reinvestment plan (DRP).

When a company goes ex-dividend, we often see a big fall in the company’s share price on that day. This reflects the value of the dividend leaving the company’s shares. After all, new shareholders won’t be able to enjoy the extra cash. So don’t be surprised if the ANZ share price seemingly has a bad day on Monday next week.   

As of yesterday’s closing ANZ share price, this ASX 200 bank has a dividend yield of 5.61%. If we factor in next month’s increased dividend, ANZ shares would have a forward yield of 5.69%.           

The post Hoping to bank the latest ANZ dividend? Read this appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Is Bendigo Bank the best bet for dividends out of all the ASX 200 bank shares?
• Up 14% in a month, why the ANZ share price can keep delivering: Citi
• Experts name 2 ASX 200 dividend shares to buy now
• Here’s how the NAB share price has fared in October
• The ANZ share price has had a strong run, rising 10% 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/w1Wn87b

If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Both dividend shares are rated as buys and expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Dexus Industria REIT (ASX: DXI)

This industrial property company could be a dividend share to buy according to analysts at Morgans.

The broker likes Dexus Industria due to its exposure to key industrial markets, which it notes remain robust and have a solid rental growth outlook thanks to strong tenant demand. In addition, Morgans points out that the company’s development pipeline provides near and medium term upside potential.

Another positive is that Morgans is expecting some big dividend yields in the coming years. Its analysts are forecasting dividends per share of 16.4 cents in FY 2023 and 16.9 cents in FY 2024. Based on the current Dexus Industria share price of $2.65, this will mean yields of 6.2% and 6.4%, respectively.

Morgans also sees plenty of upside for its shares with its add rating and $3.25 price target.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that has been named as a buy is this agricultural focused real estate investment trust (REIT).

Rural Funds is the owner of a quality portfolio of assets across a number of agricultural industries such as orchards, vineyards, water entitlements, cropping, and cattle farms. Many of these properties are leased to major industry players on long term agreements.

Bell Potter is positive on the company and is expecting some attractive dividend yields in the near term. It is forecasting an 11.7 cents per share dividend in FY 2023 and then a 12.7 cents per share dividend in FY 2024. Based on the current Rural Funds share price of $2.52, this represents yields of 4.6% and 5%, respectively.

The broker currently has a buy rating and $2.75 price target on Rural Funds shares.

The post Experts name 2 ASX dividend shares to buy with great yields appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Set for life: 5 ASX dividend shares I’d invest in if I ever had a million-dollar windfall
• Experts name 2 ASX dividend shares to buy with great yields
• Don’t miss out on these buy-rated ASX dividend shares: analysts
• When it comes to ASX 200 dividend shares, is there any such thing as truly passive income?
• 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended RURALFUNDS STAPLED. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

A common mistake that many novice investors make is to just buy up ASX shares indiscriminately without a clear game plan.

They then end up with a whole pile of stocks that are based on other people’s recommendations, without any real strategy of how the overall portfolio would work and when the positions might be exited.

As a counter-example, the Alphinity Australian portfolio managers Andrew Martin and Stuart Welch explained how they have a laser-like focus on earnings and earnings growth.

For them, earnings is ultimately what drives return on equity.

“The thing that drives markets, and what we can get some insight into,… is the earnings,” said Martin in a video to clients.

He showed how a portfolio that bought up the top 20% of companies with the best three-month earnings revisions would have returned a stunning 15.1% per annum since 2004.

Over the same period, a portfolio with all S&P/ASX 200 Index (ASX: XJO) companies all equally weighted would have returned 8.1% each year.

So with this strategy in mind, the team nominated three ASX stocks that they most favour at the moment:

Three ASX shares set to grow earnings for years to come 

Martin named two ASX shares that are related to the transport sector — Qantas Airways Limited (ASX: QAN) and Carsales.Com Ltd (ASX: CAR) — plus insurer QBE Insurance Group Ltd (ASX: QBE).

He pointed out how all three have outperformed in the past three months, with all of them, not so coincidentally, showing strong earnings growth:

Stock	6-month relative performance	6-month earnings per share change
Qantas	+7.5%	+2.1%
QBE	+11.2%	+5%
Carsales.com	+16.6%	+11.2%

Welch admitted that historically it’s been difficult to invest in airline shares, as the businesses are so cyclical and capital-intensive.

“But there are points in time when everything comes together and you can make money in them,” he said.

“We’ve seen very strong demand for both domestic and international travel, at this point running 120%+ relative to pre-COVID levels.” 

Qantas shares are up a stunning 42% since their mid-July trough.

Welch said that Carsales.com is “a very well-managed business” that’s enjoying yield improvements in both dealer and private advertising, plus the scale to increase fees.

“But also through new product development, which are high yielding and high margin for the business.”

To add to the dominant market position in Australia, the company has growth potential yet to be realised in other countries such as South Korea.

The Carsales.com share price is down 16% year to date, while handing out a dividend yield of 2.36%.

According to Martin, after a tough time through the pandemic and heavy rains, the outlook for QBE is “improving quite substantially”.

“But it is the first time in a long time that a number of things are going QBE’s way.”

There are two tailwinds for this ASX share: premium rate increases and interest rate hikes.

“QBE is actually growing its top line [revenue] for the first time in a decade, which is quite a material change,” said Martin.

“When rates go up, they can invest in higher rates and therefore get a better running yield. QBE has US$25 to US$26 of those types of investments.”

The QBE share price has risen more than 25% since its March trough, while paying out a 2.23% yield.

The post Planes, rains and automobiles: Fund names 3 ASX shares to back right now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Friday
• Why did the South32 share price melt more than the market today?
• Here are the top 10 ASX 200 shares today
• Why is the Rio Tinto share price faring worse than the ASX 200 today?
• How is the Qantas share price avoiding today’s carnage?

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

from The Motley Fool Australia https://ift.tt/75Q36fc

In the chaos of 2022, investors of ASX shares can fall prey to a massive psychological trap.

That’s focusing too much on macroeconomic factors such as inflation, interest rates and recessions.

Yes, they matter — but so does the internal performance of the business.

Because there has been so much upheaval in the world making the news feeds this year, this seems to have been forgotten in many people’s minds.

That’s why it’s worth listening to the portfolio managers at Elvest Fund, who recently pointed out two businesses it holds that have shown triple-digit percentage growth.

Regardless of the external factors, such fast-growing enterprises have a great chance of delivering value back to investors.

Tripling its earnings this financial year

RPMGlobal Holdings Ltd (ASX: RUL) provides technology and consulting to the mining industry.

For an ASX technology share, its price has remained relatively resilient. There’s been a 24% resurgence since early October, leaving it just 12% lower than where it started the year.

The Elvest analysts told clients that the company is at a crossroads.

“At its AGM, RPMGlobal provided a solid trading update and reiterated FY23 guidance,” read the memo.

“RPMGlobal is at an earnings inflection point, reflecting business maturation and growing demand for its mining operations software.”

It was one of Elvest Fund’s best performers last month, but with a sensational financial year under way, the team will keep riding it all the way home.

“The company is on track to deliver EBITDA of $14.2 million this financial year, up 215%.”

While coverage remains sparse for RPMGlobal, CMC Markets reports analysts at both Moelis Australia and Veritas rate the stock as a strong buy.

Forager Funds Management portfolio manager Alex Shevelev last week, without hesitation, named RMPGlobal as the stock he would hold for the next four years.

“Great management team, plenty of skin in the game and it may well be, given all the corporate activity in the space, that the business wouldn’t be around in four years in any case.”

‘Significant lift in free cash flow’ next two years

Smartpay Holdings Ltd (ASX: SMP) is a New Zealand company that provides point-of-sale payment terminals.

While the majority of its revenue comes out of its home country, the Australian operations are seeing explosive growth.

“Smartpay provided another strong quarterly trading update, with consolidated revenue up 91% year-on-year, driven by 145% growth within the Australian division,” read the Elvest memo.

The Smartpay share price is up almost 8% year to date, after enjoying a 24% rally since mid-October.

The future is looking bright with the ASX share’s zero-cost product ‘Smartcharge’ striking a chord with merchants, according to Elvest analysts.

“The business has healthy momentum heading into the seasonally stronger December quarter,” the memo read.

“Continued execution should drive a significant lift in free cash flow over the next two years.”

The $200 million business, much like RPMGlobal, is not yet attracting much analyst attention.

But according to CMC Markets, both Blue Ocean Equities and Shaw & Partners are recommending this ASX share as a strong buy.

The post Triple-digit growth: 2 ASX shares Elvest is investing in for the long haul appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The ASX share I’d hold onto for dear life: fund manager
• Fundie reveals 3 ‘top notch’ ASX shares to buy right now
• This embattled ASX All Ords mining share is gearing up to be a FY23 winner: fundie

Motley Fool contributor Tony Yoo has positions in RPMGlobal Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/FA5XTwK

The Rio Tinto Limited (ASX: RIO) share price suffered in October. It went backwards by 5.6%. But that was in stark contrast to the S&P/ASX 200 Index (ASX: XJO) which climbed by 6%.

Why was there such a difference in the performance?

Well, first let’s consider the ASX 200.

The index’s movements are decided by the underlying constituents. A key reason for the gain of the ASX 200 was the movements of the big banks.

In October 2022, the Commonwealth Bank of Australia (ASX: CBA) share price climbed by 15.4%, the National Australia Bank Ltd (ASX: NAB) share price grew by 12.5%, the Westpac Banking Corp (ASX: WBC) share price rose by 16.8% and the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price climbed 12.1%.

That may explain why the ASX 200 did well, but what about Rio Tinto?

Rio Tinto’s eventful month

During the month, Rio Tinto announced that it had agreed to modernise its joint venture with Wright Prospecting, which covers the Rhodes Ridge project in Western Australia. This project is reportedly home to one of the world’s largest and highest-quality undeveloped iron ore deposits. This updated an existing agreement dating back to 1972.

The initial plant capacity could have up to 40 million tonnes annually, subject to the receipt of relevant approvals.

Rio Tinto also issued a letter to Turquoise Hill shareholders – this is a business that partly owns the large copper mining project in Mongolia. The ASX mining share confirmed that its offer of C$43 in cash was its “best and final offer”. That offer represented a premium of 67% compared to the share price immediately before its proposal.

The mining blue chip also announced its quarterly production for the three months to September 2022 (which was Rio Tinto’s 2022 third quarter).

It said that it produced 84.3 million tonnes (mt) of iron ore over the quarter, which was 7% more than the second quarter of 2022.

Aluminium production was 759kt, an increase of 4% over the 2022 second quarter.

Mined copper production was 138kt, this was a rise of 9% compared to the second quarter of 2022.

Rio Tinto also noted that it has approved growth capital for underground mining at Kennecott, early works funding for the Rincon lithium project and that it continues to progress Oyu Tolgoi.

So, what went wrong?

Perhaps unsurprisingly, what’s usually the biggest influence on the Rio Tinto share price is movements in resource prices, particularly the iron ore price.

According to Commsec, the iron ore price had dropped to around US$92.43 at the end of the month. It was down from around US$98 at the start of the month. In other words, the drop in the Rio Tinto share price was fairly similar to the decline in the iron ore price.

As China is the biggest customer of Australian iron ore, changes in demand – and expectations of future demand – may have the biggest impact on Rio Tinto’s earnings.

The post Why did the Rio Tinto share price underperform by over 10% in October? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Rio Tinto share price faring worse than the ASX 200 today?
• What’s the forecast for the iron ore price right now?
• I think right now is the time to buy these 2 ASX dividend shares
• Why Atlantic Lithium, Coronado Global, Lake Resources, and Rio Tinto are charging higher
• Why is the Rio Tinto share price pushing higher today?

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

from The Motley Fool Australia https://ift.tt/MOmGLW4