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The Treasury Wine Estates Ltd (ASX: TWE) share price could be great value at current levels.

That’s the view of analysts at Goldman Sachs, which have just upgraded the wine giant’s shares.

What is Goldman Sachs saying about the Treasury Wine share price?

According to the note, the broker has upgraded the company’s shares from neutral to a buy rating with an improved price target of $14.70.

Based on the current Treasury Wine share price of $12.64, this implies potential upside of 16% for investors over the next 12 months.

The broker is also expecting a 3% dividend yield in FY 2023, bringing the total potential return on offer to approximately 19%.

Why is Goldman bullish on this ASX 200 share?

Goldman has been looking at just how sustainable the growth of Penfolds is in Asia-ex-Mainland China.

The good news is that the broker believes its growth is sustainable with a high earnings margin. It explained:

Whilst our analysis are directional estimates only, we expect sufficient premium market demand to support a revenue range of A$380mn-A$450mn (TWE FY22 A$385mn) with a relatively high quality distribution model focused on modern trade and on-premise key accounts. This revenue range implies ~21% market share of the premium import market and ~6% total wine market across these 7 Asia Focus Markets. As a result, we now have higher confidence of sustainable revenue growth at ~42.5% EBITS margin (vs prior ~40%) for Penfolds.

The broker has also been looking at the recently acquired Frank’s Family Vineyards (FFV) business and highlights that the latest US data supports a more sizeable distribution opportunity at accretive margins. As a result, it now expects “FFV to contribute >20% of Americas sales and >40% of EBITS by 2030.”

All in all, this has led to the broker bumping its earnings forecasts higher for the coming years. Which it believes makes the Treasury Wine share price great value based on current multiples. It concludes:

With proven redirection of Penfolds China volumes as well as refocusing Treasury Americas on premium/luxury, TWE is now re-entering a growth phase with a more diverse and defensive business. We have increased our FY23-25e sales and NPAT by 1%-5% and 5%-13% and now expect the company to deliver ~16% NPAT 2022-25e CAGR. The company is trading at a 12m forward P/E of 22.6x, vs our TP implied P/E of 26.3x. Upgrade to Buy (from Neutral), A$14.7/sh TP (previous A$12.0) implying 19% TSR.

The post Why Goldman Sachs just upgraded this ASX 200 share to a buy rating appeared first on The Motley Fool Australia.

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More reading

• Up 200% since June, it’s not too late to buy these 2 ASX shares: experts
• 5 things to watch on the ASX 200 on Tuesday
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• Treasury Wine share price climbs on strong Q1 performance
• 5 things to watch on the ASX 200 on Tuesday

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 Treasury Wine Estates 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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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:

National Storage REIT (ASX: NSR)

The first ASX dividend share to look at is National Storage. It is a leading self-storage operator with a portfolio of over 225 centres. From these centres, the company provides tailored storage solutions to over 90,000 residential and commercial customers.

The good news is that management still sees plenty of room to expand its network in the future. It notes that the self storage industry remains highly fragmented, giving it plenty of high-quality acquisition opportunities. This bodes well for National Storage’s income and distribution growth over the long term.

Ord Minnett is positive on the company and has a buy rating and $2.70 price target on its shares.

In respect to dividends, it is forecasting dividends per share of 11 cents in both FY 2023 and FY 2024. Based on the current National Storage share price of $2.39, this equates to yields of ~4.6%.

Rural Funds Group (ASX: RFF)

Another ASX dividend share for income investors to look at is this agricultural focused real estate investment trust (REIT).

Rural Funds has a high quality portfolio of assets across a range of agricultural industries. These include almond and macadamia orchards, premium vineyards, water entitlements, cropping and cattle farms.

These properties are leased to major players in the industry such as Australia’s largest meat processor, JBS Australia, wine giant Treasury Wine Estates Ltd (ASX: TWE), and leading almond producer Select Harvests Limited (ASX: SHV) on long term agreements.

Bell Potter is a fan of the company and recently upgraded its shares to a buy rating with a $2.75 price target.

As for dividends, the broker 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 $2.441, this represents yields of 4.8% and 5.2%, respectively.

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

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More reading

• Don’t miss out on these buy-rated ASX dividend shares: analysts
• Analysts name 2 ASX dividend shares to buy with great yields
• 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?
• Want to collect BIG dividends every month? Buy these 3 ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

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Ask a Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In part one of this edition, we’re joined by Kristiaan Rehder, portfolio manager of the Bennelong Kardinia Absolute Return Fund.

The Motley Fool: Unlike many funds, you invest in both ASX shares that you think will gain in value as well as ASX stocks you believe will see their share prices fall. What are the advantages to that strategy?

Kristiaan Rehder: We’re a long short fund. This means we have twice the investment opportunities as a long only manager. If a long only manager comes across a company that they identify has red flags, they tend to put their pens down at that point.

For Kardinia, we can extend the research and potentially profit from that trade by going short. And that can be very powerful.

To illustrate, the short book for the month of September contributed around 350 basis points to our performance.

We’re what’s referred to as a variable beta fund, which means we can adjust our net exposure depending on how bullish or bearish we are.

MF: Has the fund every been 100% long or entirely short?

KR: We’re capped at 75% net long and we cannot exceed 25% net short. The ability to vary the net exposure is no different from how I think an investor would manage their own money. They can get more exposure to the market if they’re bullish. If they are bearish, they can go to cash. In our case we can go to cash and also short.

So, we’re not bound to be fully invested at all times, which is a characteristic that most fund managers in Australia have to abide by.

We’ve got a long track record of 16 years. One of the longest running absolute return funds in the Australian marketplace. And the strategy has been tested over that time in all market conditions.

MF: How does that strategy impact the volatility of your returns?

KR: We’ve beaten the market return over the 16 years and we’ve done that with about half the volatility of the underlying markets. The standard deviation of the fund, a common measure of volatility, is around 7%, versus the underlying market which is about 14%.

This comes to the fore during bear markets, where the strategy has a history of protecting the capital.

Back in 2020, with COVID, at the worst point the market was down 36% and we were down 4%. And during the GFC in 2008, the market was down over 40%, and we generated a positive return.

MF: Do dividends from ASX shares play a role in determining your investment decisions?

KR: They certainly do. Kardinia is very focused on dividends. Particularly fully franked dividends, because they’re obviously so valuable to underlying shareholders.

The Australian marketplace is a very high yielding market compared to other markets around the world.

To illustrate the importance of dividends to the Australian market, if you look at the S&P/ASX 300 Index (ASX: XKO), that’s returned about 2.8% per annum over the last five years. If you compare that to the ASX 300 accumulation index, which includes dividends, it’s around 6.8%. So that 4% difference per annum is all to do with dividends.

MF: Do you have any advice to readers hunting for ASX dividend shares on their own?

KR: It’s simply not enough to invest in high dividend paying companies. It’s also important to ensure that those dividends are sustainable.

Some of the things we look at to ensure the dividend is sustainable are a strong balance sheet; good cash conversion on the profit loss and cash flow statements; and sensible management.

We’re also very interested in companies we think are likely to experience a dividend cut, as these companies can often provide interesting opportunities on the short side of the business.

MF: Atop trying to ensure that the dividend yields from the ASX shares you’re investing in are sustainable, what else do you look for from an income stock?

KR: We’ve extended beyond just dividends. We’re also looking at capital management, such as buybacks and capital returns.

BHP Group Ltd (ASX: BHP) is a stock in our portfolio which we bought ahead of capital management.

BHP paid an enormous dividend in its most recent reporting season. It declared a final, fully franked dividend of about US$9 billion. And that’s done very well for us.

We still hold BHP now, and we are favourably disposed to resources generally. We think there is likely to be ongoing demand for the commodities that BHP produces.

We also think it’s likely that at some point over the next six months the Chinese economy will be stimulated. Due to the COVID restrictions that are currently in place and the slowing economy that’s being experienced, there’s a reasonable chance that stimulus will be used to support the economy. And we think BHP will be well positioned for that.

There’s another company which is of particular interest to us. It’s been out of favour for some time, and that’s AMP Ltd (ASX: AMP). Our analysis shows that there’s considerable excess capital. And we think it can surprise the market in regards to the extent of its capital returns in the near term.

**

Tune in tomorrow for part two of our interview, where Kristiaan Rehder explains the ins and outs of how to successfully short ASX shares.

(You can find out more about the Bennelong Kardinia Absolute Return Fund here.)

The post Why these 2 ASX 200 dividend shares are ‘of particular interest’: fund manager appeared first on The Motley Fool Australia.

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More reading

• Why is the Fortescue share price surging today?
• Why is the BHP share price leaping 4% on Monday?
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• ASX dividend shares or distribution shares? Is there even a difference?
• Brokers name 3 ASX shares to buy today

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

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It might be hard to believe amid the turbulence, but there are some ASX shares that have risen in recent times.

One cognitive mistake many investors make is avoiding buying shares that have climbed up, thinking “It’s had its run”.

But that makes no logical sense because stocks don’t have any memory. What’s happened in the past has absolutely no bearing on where it will go in the future.

It’s classic anchoring. 

So keeping this false logic in mind, here is a pair of rising ASX shares that experts are rating as a buy:

Expansion and pricing power

Can you believe there is a software stock that has tripled in the past four months?

You better, because that’s exactly what US company Life360 Inc (ASX: 360) has achieved.

The Life360 share price was languishing at $2.41 at the close of trade on 23 June. The stock closed Monday at $7.08.

But it’s not too late to buy, according to Bell Potter investment advisor Christopher Watt.

“The company has more than 30 million active users a month and is becoming a dominant brand in the US and internationally,” Watt told The Bull.

“We believe there’s potential for Life360 to increase monthly prices for existing customers.”

The app started off as a way for families to track the whereabouts of adolescents but has now expanded functionality to features like driving safety.

Watt is not the only fan. According to CMC Markets, all five of the surveyed analysts currently rate Life360 shares as a strong buy.

Time for a nice glass of wine

While not as dramatic as Life360, Treasury Wine Estates Ltd (ASX: TWE) shares have also surged up while the rest of the market has floundered.

The stock has risen more than 18% since mid-June, all while paying out a dividend yield in excess of 2.4%.

Morgans investment advisor Jabin Hallihan reckons there’s still time to catch the upwards curve.

“This global wine company has more than 70 brands in its portfolio, including the iconic Penfolds brand,” he said.

“We believe the company is trading at a discount. Our 12-month price target is $15.71.”

Treasury Wine shares closed Monday at $12.64.

Hallihan’s team expects a boost in dividend income too.

“According to our forecasts, we expect a dividend yield of about 3% in fiscal year 2023. We have an add rating.”

The wider professional community is warm to Treasury Wines, although not unanimously.

Out of 20 analysts surveyed on CMC Markets, 11 consider the stock a buy while eight recommend holding.

The post Up 200% since June, it’s not too late to buy these 2 ASX shares: experts appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• Leading brokers name 3 ASX shares to buy today
• Why we just bought 2 ASX 200 shares that everyone abandoned: expert
• Brokers say these exciting ASX growth shares are buys

Motley Fool contributor Tony Yoo 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 recommended Treasury Wine Estates 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week in a very positive fashion. The benchmark index rose 1.5% to 6,779.4 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to rise strongly today after a great start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 40 points or 0.6% higher. In late trade in the United States, the Dow Jones is up 1.5%, the S&P 500 is up 1.4%, and the NASDAQ is 1.1% higher.

Oil prices edge lower

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch today after a soft night for oil prices. According to Bloomberg, the WTI crude oil price is down 0.3% to US$84.76 a barrel and the Brent crude oil price has edged 0.1% lower to US$93.47 a barrel. Weak Chinese demand data weighed on prices.

Pilbara Minerals update

The Pilbara Minerals Ltd (ASX: PLS) share price will be one to watch today when the lithium giant releases its quarterly update. Sky high lithium prices are expected to have led to another very strong quarter for the company. Though, the market will be looking to see if its margins are being impacted by cost inflation.

Treasury Wine upgraded to buy

The Treasury Wine Estates Ltd (ASX: TWE) share price could be great value according to analysts at Goldman Sachs. This morning the broker has upgraded the wine giant’s shares to a buy rating with a $14.70 price target. Goldman notes that its analysts “now expect the company to deliver ~16% NPAT 2022-25e CAGR.”

Gold price flat

Gold miners such as Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a subdued day after the gold price traded flat overnight. According to CNBC, the spot gold price is fetching US$1,656.2 an ounce. A strong US dollar and rising treasury yields have lessened its appeal.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 directors bought $4m worth of their company shares last week
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 gold shares have such a top run today?
• ASX 200 bank shares have had a stellar month. Here’s why this expert is now worried
• 3 ASX mining shares going nuts on new discoveries

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 Treasury Wine Estates 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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When you’re young, you might look for high risk, high reward growth shares. You can do this because if things don’t go to plan, you have plenty of time to recover from your losses.

However, when you’re in retirement or approaching it, you may be better focusing on income and capital preservation.

With that in mind, listed below are two ASX 200 shares that could be good options for a retirement portfolio. Here’s what you need to know about them:

Woolworths Limited (ASX: WOW)

Another ASX 200 share to consider for your retirement portfolio is retail conglomerate Woolworths.

Woolworths could be a top option because of its strong brands, entrenched customer base, and defensive qualities. The latter was on display during the pandemic and could prove invaluable if the Australian economy falls into a recession in the next 12 months.

Goldman Sachs is a big fan of the company. This is due to its digital and omni-channel advantage, which the broker believes will drive further market share and margin gains in the coming years.

Goldman currently has a conviction buy rating and $42.70 price target on the company’s shares. In addition, it is forecasting fully franked dividend yields of ~3% in the coming years.

The post Brokers name 2 ASX 200 shares to buy for a retirement portfolio appeared first on The Motley Fool Australia.

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More reading

• 5 ways to be carefree during the next ASX share market downturn
• Brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Thursday
• Could buying Woolworths shares help ‘recession-proof’ your ASX portfolio?
• Better buy: Woolworths or Coles shares?

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

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Are you wanting to add some new ASX 200 growth shares to your portfolio this week? If you are, read on.

Three ASX 200 shares that have been tipped as buys are listed below. Here’s what you need to know about them:

Breville Group Ltd (ASX: BRG)

The first ASX 200 growth share that has been tipped as a buy is leading appliance manufacturer, Breville. Goldman Sachs is a fan of the company and believes it is well-placed to continue its solid growth in the coming years. In fact, it is forecasting an EBITDA compound annual growth rate of 7% between FY 2023 and FY 2025. This is being driven by the “strong premium coffee in-home consumption trend and competitive advantage in premium brand and product.”

The broker currently has a buy rating and $24.70 price target on its shares.

NextDC Ltd (ASX: NXT)

Another ASX 200 growth share that could be in the buy zone is data centre operator NextDC. Morgans is very positive on the company and expects another strong result in FY 2023. This is partly due to its belief that “[s]tructural demand for cloud and colocation remains incredibly strong.” It also expects “significant new customer wins” thanks to the opening of the new M3 and S3 data centres.

Morgans has an add rating and $13.30 price target on the company’s shares.

TechnologyOne Ltd (ASX: TNE)

A final ASX 200 growth share that has been named as a buy is enterprise software provider TechnologyOne. Analysts at Bell Potter are very positive on the company thanks to its shift to a SaaS business model. The broker expects this to result in higher margin revenue and drive strong earnings growth over the coming years. It has also suggested that in FY 2022 “[b]oth SaaS and total ARR could positively surprise (guidance is SaaS ARR growth of >40%, we forecast 43%.”

Bell Potter has a buy rating and $14.25 price target on its shares.

The post Analysts say investors should buy these ASX 200 growth shares appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Friday
• Analysts say these ASX 200 shares are buys in October
• These are the 10 most shorted ASX shares
• Morgans names 2 ASX 200 shares to buy with 50%+ upside

Motley Fool contributor James Mickleboro has positions in NEXTDC 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 recommended TechnologyOne 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 Zip Co Ltd (ASX: ZIP) share price has been one to watch over the past year. But for all the wrong reasons. ASX growth shares have had a tough 2022 and a tough 12 months. But Zip has been among the highest-profile casualties of the market’s newfound scepticism of unprofitable shares.

Not even ZIp’s new status as ASX’s largest listed buy now, pay later (BNPL) share has saved it from investors’ wroth.

As it stands today, the Zip share price has lost close to 5% so far over the month of October. But that pales against the horror year Zip investors have endured. The company is down a calamitous 85% over 2022 thus far. It’s down an even more depressing 91% over the past 12 months.

As my Fool colleague Monica pointed out earlier this month, if an investor has invested $1,000 into Zip back at its February 2021 all-time high of $12.35, they would only have $51.60 left to their name.

But a few bad chapters don’t make an unreadable book. So could the worst be behind the Zip share price this October?

What’s next for the Zip share price?

The company has indeed enjoyed some more positive news of late. Last week, Zip released a well-received quarterly trading update. For the company’s first quarter, Zip announced that transaction volumes rose 15% to $2.2 billion.

Transaction numbers were up an even better 33% to 19.6 million, while revenues increased by 19% to $163.2 million. Pleasingly, customer numbers surged 50% to 12 million, with active customers up 17% to 7.4 million. The number of merchants was also on the rise, clocking a 70% increase to 94,100.

The company now expects its $140.7 million in cash and liquidity to see it through to profitability.

At the time of this update, the Zip share price spiked 13% – although it has since cooled off.

Unfortunately, brokers still haven’t been showering the company with love. As my Fool colleague Bernd reported earlier this month, brokers at Macquarie are still rating the Zip share price as underperform. Macquarie has a 12-month share price target of 60 cents on Zip. That’s below the last share price of 63 cents.

Saying that, this rating did come before Zip’s well-received quarterly update. So perhaps that will change a few minds. But we shall have to wait and see.

At the last Zip share price, this ASX BNPL share has a market capitalisation of $444.58 million.

The post How has the Zip share price been tracking in October? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
• Zip share price charges 13% higher on Q1 update
• Has ‘growth at all costs’ been the undoing of Zip shares and what now?
• If I’d bought $1,000 of Zip shares at their all-time high, here’s how much I’d have left
• After a horror year, what’s next for ASX BNPL shares in the new quarter?

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 ZIPCOLTD FPO. 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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It’s very interesting when directors of an S&P/ASX 200 Index (ASX: XJO) share decide to buy shares of their own company. Can investors take this as an investing prompt?

There are a number of stated reasons why directors may decide to sell their shares, whether the announced reason is the real reason or not. Paying tax and buying a property are two often-used reasons.

But, there may only be one reason for buying – they think it’s good value.

Which directors have bought ASX 200 shares?

The Millner family have been involved with the investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and they have increased their financial investment to the tune of millions of dollars.

Rob Millner is the current chair of Soul Pattinson. Between 17 October to 19 October 2022, it was announced that entities he’s involved with had bought 80,000 shares, spending almost $2.19 million.

But another announcement today showed that entities involved with Millner had bought another 70,000 Soul Pattinson shares at the end of last week and spent around $1.9 million on them.

Tom Millner, the son of Rob Millner, also made the same investment announcements as he’s involved with the same entities.

Wealth tied up in Soul Pattinson shares

For most people, spending around $4 million on shares would be a major move.

But the Millners have large amounts of their wealth tied up in shares.

Rob Millner’s disclosure showed that he now has a total interest in 22.83 million shares. That’s close to around $630 million at the current Soul Pattinson share price.

Tom Millner’s disclosure revealed that his total interest is now 21.98 million shares. That’s worth around $605 million.

So, despite having an enormous amount of their wealth already tied up in the investment conglomerate, both thought that the company’s current situation was worth investing in.

Investment follows outperformance in FY22 result

These investments by the Millner family come after last month’s Soul Patt’s report for the 12 months ending 31 July 2022.

The company’s net asset value (NAV), pre-tax, outperformed the All Ordinaries Index (ASX: XAO) by 20.2% in FY22. As well, its net cash flow from investments on a per-share basis increased 28% compared to FY21. It also grew the total ordinary dividend by 16.1% to 72 cents per share.

Soul Pattinson also declared a special dividend of 15 cents per share on the back of the bigger dividends it was receiving from New Hope Corporation Limited (ASX: NHC).

In terms of “managing risk”, Soul Patts said that it’s using active portfolio management to enhance returns and manage risk. It has increased diversification while increasing liquidity to take advantage of new opportunities, the company said.

The post Guess which ASX 200 directors bought $4m worth of their company shares last week appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company 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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S&P/ASX 200 Index (ASX: XJO) bank shares have driven the S&P/ASX 200 Financials Index (ASX: XFL) higher over the last 30 days.

The financials sector has lifted close to 7% since this time last month compared to the 4.7% jump in the broader ASX 200 index. And ASX 20 bank shares have been among its biggest gainers.

Indeed, the Bank of Queensland Ltd (ASX: BOQ) share price has soared 14.7% in that time while that of Westpac Banking Corp (ASX: WBC) has lifted 13%.

Other top performers include Australia and New Zealand Banking Corp Ltd (ASX: ANZ), up 11.5%, Bendigo and Adelaide Bank Ltd (ASX: BEN), up 10.6%, and National Australia Bank Ltd (ASX: NAB), up 8.1%.

Finally, the share price of Commonwealth Bank of Australia (ASX: CBA) is lagging its peers, having risen 7.5% over the last 30 days.

But the party might be coming to an end for ASX 200 bank shares, Barrenjoey analyst Jon Mott reportedly warns. Let’s take a look at why the expert is bearish on the Aussie financials giants.

Why is this expert bearish on ASX 200 bank shares?

The Bank of Queensland share price has outperformed its ASX 200 peers over the last month amid the release of the bank’s full-year earnings, detailing a strong final quarter for its net interest margin (NIM).

The measure – which, simply put, reflects the profit a bank takes from interest offered and charged to its customers – reached 1.81% in the final quarter of financial year 2022 on the back of consecutive rate hikes.

That could bode well for other ASX 200 banks, many of which are due to report in the coming weeks.

On the other hand, Mott believes a near-term increase in NIMs is increasingly priced into bank shares. He continued, courtesy of The Australian:

However, the impact of higher rates on over-leveraged consumers is not being reflected in prices.

The analyst also reportedly thinks NIMs will likely spike in the near future before easing sooner than expected. He tipped them to peak before the start of financial year 2024. In the meantime, the market could shift its focus to the risks rate hikes might pose to banks.

Notably, higher rates could see more homeowners defaulting on their mortgages while other Australians may choose not to enter the housing market.

Beyond that, Mott reportedly said the big four could struggle to justify record NIMs while many Australians are in financial stress. Additionally, he is said to have warned an Optus-style cyberattack would pose a greater threat to a financial institution, according to The Australian.

Perhaps unsurprisingly, Barrenjoey is underweight on the banking sector.

The post ASX 200 bank shares have had a stellar month. Here’s why this expert is now worried appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares going nuts on new discoveries
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Could chasing high yields mean missing out on potentially top-notch ASX dividend shares?
• Has CBA just become a new competitor to Telstra?
• Own CBA shares? This expert says you ‘may want to consider cashing in some gains’

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 Bendigo and Adelaide Bank Limited. 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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