Tag: Motley Fool

The Telstra Corporation Ltd (ASX: TLS) share price is in the green today, and decisively so. Telstra shares are presently up by a pleasing 1.32% at $3.84 a share.

That’s only just behind the S&P/ASX 200 Index (ASX: XJO), which is currently up by an even more robust 1.43%.

But here’s a fact that will probably make Telstra investors a little more envious. Telstra is, at these levels, not even close to its all-time high. In fact, it’s less than halfway there. Back in late 1999, the telco was commanding a share price close to $9 a share.

Of course, that doesn’t mean too much today. Back at the turn of the millennium, the markets were in full-froth mode, with the dot-com bust about to swing its axe. And those were pre-broadband, pre-mobile phone and landline-heavy times. That near-$9-a-share Telstra was a very different beast to the company we see today.

But still, Telstra shares have had a rough time of it lately. The telco remains down 9% in 2022 thus far, and down by 0.8% over the past 12 months.

Does this mean Telstra shares are a buy today?

So, could this be the time to pounce on his famous ASX dividend share? The company is sitting on a trailing and fully franked dividend yield of 4.3% at these prices, after all.

Well, one ASX broker who thinks it is worth a look is Morgans. As my Fool colleague James covered just yesterday, Morgans has just rated the telco as an add.

It also gave Telstra a 12-month share price target of $4.60 This implies a potential upside of close to 20% over the coming year if accurate.

Morgans stated that it believes some of Telstra’s assets, such as InfraCo, are worth “substantially more” than the pricing the whole company is currently commanding. Together with the woes that its rival Optus is currently facing, the broker is predicting that Telstra “looks well placed for the year ahead”.

No doubt that will be music to investors’ ears today.

At the current Telstra share price, this ASX 200 blue chip share has a market capitalisation of $43.8 billion.

The post The Telstra share price is still trading at less than half its record highs. Time to pounce? appeared first on The Motley Fool Australia.

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More reading

• Is ASX 200 lithium player Lake Resources profitable?
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• This is what will get ASX shares rising again early 2023: economist
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended 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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The leading investors from Wilson Asset Management (WAM) have shared two compelling S&P/ASX 200 Index (ASX: XJO) investment prospects on their radar.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

Meanwhile, WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 14.7% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 7.9% per annum over the same timeframe.

With that in mind, here are the two ASX 200 shares WAM Capital has outlined in its recent monthly update.

Premier Investments Limited (ASX: PMV)

WAM describes Premier Investments as a business that owns and operates a group of retail, consumer products, and wholesale businesses.

Last month, the business announced its FY22 result, achieving a 4.9% year-over-year increase in statutory net profit after tax (NPAT) to $285.2 million.

The business also declared a fully franked final dividend of 54 cents per share as well as a fully franked special dividend of 25 cents per share.

The ASX 200 share managed to generate $1.5 billion of retail sales and record retail earnings before interest and tax (EBIT) of $352.5 million. This is despite suffering from “significant” operational challenges including lockdowns, global supply chain complexities, and disruptions caused by the Omicron COVID variant.

WAM was also pleased by the company’s decision to announce a 12-month on-market share buyback of up to $50 million. This will allow the company to deliver a boost to earnings per share (EPS) and increase total shareholder returns.

However, the fund manager noted that the retail sector could see some volatility due to rising interest rates and a declining wealth effect in the short term.

So, why is WAM positive on the ASX 200 share? The fund manager said:

We believe Premier Investments is well-positioned given the opportunity for ongoing global expansion of Smiggle and potentially Peter Alexander – market-leading domestic brands with leverage to the re-opening theme along with a very strong balance sheet and management team that is positioned to capitalise on any opportunities that may present.

Event Hospitality and Entertainment Ltd (ASX: EVT)

This cinema, hotels, leisure assets, and property ASX 200 share is WAM’s other pick.

The Event Hospitality and Entertainment share price fell during September, like the rest of the ASX share market.

However, the fund manager believes the business is “well-positioned to benefit from the shift in consumer spend from goods to experiences in the near-term, underpinned by an improving theatrical content slate for cinemas, progressive recovery in international tourism for the hotels business and a solid winter 2022 result at Thredbo.”

On top of that, the investment team believes that its assets are being undervalued as well. It said:

We believe Event Hospitality and Entertainment assets remain undervalued and we estimate that the operating businesses are trading on approximately 4x enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) at current share price levels, a significant discount to our intrinsic valuation.

The post These 2 ASX 200 shares are ‘compelling growth opportunities’: fund manager appeared first on The Motley Fool Australia.

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More reading

• Why is the WAM Capital share price having such a lousy start to the week?
• Want to snare the next WAM Capital dividend? Here’s how
• How can investors prepare their share portfolio for retirement?
• The ASX 200 share experts are urging to buy right now
• Have ASX 200 retail shares been worth buying so far in FY23?

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 recommended Premier Investments 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’ve been closely following the big swings in the US stock market recently, you’ll be forgiven for feeling a little motion sick.

Volatility has been the name of the game over the past three trading days, in moves mirrored here by the S&P/ASX 200 Index (ASX: XJO).

Last Thursday, the S&P 500 Index (SP: .INX) ended the day up 2.6%, after initially tumbling 2% on open following higher-than-expected inflation figures. Those moves were reversed on Friday when the S&P 500 finished down 2.3%.

But investors in the US stock markets shook off that malaise yesterday (overnight Aussie time) to again send the S&P 500 up 2.7%. Tech stocks fared even better, with the Nasdaq Composite (NASDAQ: .IXIC) closing up 3.4%.

Reaching for your Dramamine yet?

What’s happening with the US stock market?

Investors and traders alike appear to be on a knife edge over whether markets are signalling a bottom or whether there’s more downside to come.

Last week’s volatility was driven by the higher-than-forecast September inflation data. The rally on that higher data looks to have been caused by a wave of short-sellers needing to cover their positions when they were caught on the wrong side of the trend.

The next day’s steep losses came as more of a direct response to those inflation numbers.

Which brings us to Monday.

The big lift in US stock markets yesterday was partly fuelled by expectation-beating earnings results from Bank of America Corp (NYSE: BAC).

A 13% year-on-year lift in credit card spending at the bank, coupled with falling delinquencies, showed US consumers remained resilient in the face of rising rates and high inflation.

Bank of America, with a market cap of some US$270 billion (AU$428 billion), closed up 6% on the results, helping drive the US stock market to another big day of gains.

The US stock market also got a boost from the United Kingdom. Investors were clearly pleased that many of the dramatic economic policies proposed by prime minister Liz Truss have been rolled back.

Topping it off, the recent big price swings also have analysts pondering whether markets are signalling that a bottom is forming.

Here’s what the experts are saying

Commenting on the big moves in the US stock market, Phil Blancato, CEO of Ladenburg Thalmann Asset Management, said (courtesy of Reuters):

The information coming out of the banks are much better than anticipated. Even though there was a drop in earnings they’re making significant income on their cash. So this recession is not a consumer-based recession. It’s not a bank-based recession if you can even call it one. It’s simply a cyclical slowdown.

Those are the best because they generally take around 10 months to recover which is right where we are. Inflation is not slowing the economy down. If we get any kind of recession it’s mild. For that reason, when you look at stocks trading now below their P/E [price to earnings] averages, stocks are fairly valued again and offer a good opportunity.

Siddharth Singhai, chief investment officer at Ironhold Capital, didn’t share that bullish sentiment on the US stock market.

“This seems to be a faux rally fuelled by lower inflation expectations, I don’t think the rally makes sense. Interest rate hikes are not getting discounted by the market,” he said.

Peter Tuz, president of Chase Investment Counsel, added (quoted by Reuters):

I was thinking that the bank earnings, especially Bank of America, was really pretty optimistic, and that coupled with the abandonment of restrictive policies in England just seemed to be the fuel that got the market going this morning.

There were some pretty rough days last week… The choppiness and volatility that we are seeing is part of the bottoming process. The fourth quarter generally is pretty good for markets historically.

If the US stock market, and by extension the ASX 200, is indeed in the process of forming a bottom, investors can expect more volatility during the rebound.

As with combatting motion sickness on a boat, the best bet is to keep your eyes fixed on the horizon and not fret about the daily ups and downs.

The post Bank or bust: What on earth is going on with the US stock market? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 shares going gangbusters on Tuesday?
• Why buying PayPal is a genius move right now

Bank of America is an advertising partner of The Ascent, a Motley Fool company. 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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If you’re an owner of Vanguard Australian Shares Index ETF (ASX: VAS) units, then today is a good day for you for a couple of reasons.

The first is that thanks to a strong night of trade on Wall Street, the Australian share market is rebounding strongly today.

This has seen the Vanguard Australian Shares Index ETF unit price rise almost 1.5%.

The other reason to smile is that today is payday for unitholders, with the latest Vanguard Australian Shares Index ETF dividend being paid to shareholders.

Vanguard Australian Shares Index ETF dividend

Earlier this month, the operator of the ETF, Vanguard, announced that the Vanguard Australian Shares Index ETF would be paying unitholders a quarterly dividend of 145.0577 cents per unit.

This is an increase of almost 4.5 cents per unit over the prior corresponding period and equates to a yield of 1.7% at today’s prices.

It also brings the total dividends paid over the last 12 months to approximately $6.30 per unit, which is the equivalent of a 7.5% yield.

Where next for the Vanguard Australian Shares Index ETF?

Given that the Vanguard Australian Shares Index ETF seeks to track the return of the S&P/ASX 300 Index before fees, expenses and tax, its future performance will depend entirely on how Australian shares perform over the next 12 months.

Unfortunately, this is incredibly difficult to predict in the current uncertain economic environment.

However, it is worth remembering that the Australian share market has provided strong returns for investors over the last few decades. And once it finds its legs again, the same is likely for the next few decades.

So, it could pay to be patient through the volatility.

The post The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

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More reading

• If I’d invested $5,000 in Vanguard’s VAS ETF at the start of 2022, here’s what I’d have now
• Why dividends matter
• Why is the Vanguard Australian Shares Index ETF lagging the market on Monday?
• This ASX ETF was my first investment, and I’ll be holding it for the long term
• Is the Vanguard Australian Shares Index ETF (VAS) dividend growing?

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

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

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

What happened

Shares of Netflix (NASDAQ: NFLX) rose sharply on Monday. The media streaming leader’s stock closed the day 6.6% higher, driven by two very different factors.

So what

The stock market as a whole was up on Monday. First, many investors wanted to take advantage of low stock prices after a brutal sell-off on Friday. This bullish effect was amplified by news from Great Britain, as the British government cancelled most of the tax cuts it had introduced in a recent mini-budget.

Together, these activities drove the S&P 500 2.7% higher, while the more volatile Nasdaq Composite index gained 3.4%. As a Nasdaq-listed growth stock, Netflix shares benefited strongly from these positive market moves.

And Netflix is scheduled to report third-quarter results after the closing bell tomorrow. The second quarter provided a bullish response to the sell-offs that follow the reports in January and April, and Netflix investors are hanging on the edge of their seats to see how the business developed in the July to September period.

Now what

Most of all, Netflix investors hope that the subscriber losses of the first half will remain in the rearview mirror from now on. Furthermore, everyone wants to know more about the ad-supported subscription tier that will launch on Nov. 3 — and how this new option might affect Netflix’s business trends.

We are about to get the answers to these questions tomorrow. In the meantime, Netflix’s stock may have recovered nicely in recent months, but the price still stands 60% lower year to date. In other words, Netflix has a lot to prove this week.

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

The post Why Netflix stock was soaring today appeared first on The Motley Fool Australia.

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More reading

• Tesla and Netflix will make or break the Nasdaq this week
• Netflix stock could be on the verge of a massive turnaround
• 97 reasons to double down on Netflix stock
• Why Netflix was a US stock market star on Thursday 
• 3 of the top-growing stocks on Earth

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

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

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It’s no secret that lithium shares have had a good run over recent years, with many making their way onto the iconic S&P/ASX 200 Index (ASX: XJO).

Many investors who put cash into three lithium favourites many moons ago – and held it there – will likely be thankful they did.

Of course, it’s tempting to take profits when things are going well. Those who invested in the Pilbara Minerals Ltd (ASX: PLS) initial public offering (IPO) could have walked away when their investment’s value had increased four-fold in 2018.

However, if they held onto their shares, they would have seen the company reach profitability in financial year 2022 and their stock rocket to more than 20 times what they paid.

So without further ado, here are three ASX 200 lithium shares that, together, have turned a $10,000 investment into half a million dollars over their listed life.

3 ASX 200 lithium shares that turned $10,000 into $500,000

If an investor split $10,000 between these three ASX 200 lithium shares at their respective IPOs, investing $3,333 in each, here’s how their money would have worked for them.

ASX 200 lithium company	Year floated	Total return since	Recent value of $3,333 invested
Pilbara Minerals Ltd (ASX: PLS)	2010	2,295%	$79,825
Allkem Ltd (ASX: AKE)	2007	5,660%	$191,981
Mineral Resources Limited (ASX: MIN)	2006	7,558%	$255,234

The most recently listed lithium winner is Pilbara Minerals.

It offered new shares for 20 cents apiece as part of a prospectus back in 2010. That saw it re-listing under its current name. At its most recent close, Pilbara Minerals shares were trading at $4.79.

Allkem has posted the second-best return of the trio after handing out shares for 25 cents each as part of its IPO.

Of course, the company went by the name of Orocobre back then. It was renamed Allkem in 2021 following its merger with formerly ASX-listed Galaxy Resources.

Allkem shares closed Monday’s trade at $14.40.

Finally, the Mineral Resources share price has posted the biggest gain since its listing in 2006. Though, the company hadn’t established its lithium leg at that time.

Instead, it listed as a mining services provider, offering its shares for 90 cents apiece under its prospectus. Nowadays, they’re swapping hands for a whopping $68.92 at last close.

Does the future still look bright for lithium stocks?

The performance of ASX 200 lithium shares is highly dependent on the materials’ value. Fortunately, that’s expected to climb in the near future.

The federal government believes financial year 2023 will be a record-breaking year for Australia’s lithium exports – driven by record-high lithium prices.

Lithium hydroxide is expected to trade at $51,510 a tonne in 2023. The material’s price will likely be driven by demand for electric vehicles.

However, the value of both lithium and Australia’s lithium exports are tipped to ease in financial year 2024.

The post 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000 appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price jumps on strong lithium auction results
• This is what will get ASX shares rising again early 2023: economist
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why are these ASX 200 lithium shares smashing it on Monday?

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

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The Westpac Banking Corp (ASX: WBC) share price is having a strong day.

In morning trade, the banking giant’s shares are up 2% to $23.92.

This means the Westpac share price is up 16% since the start of the month.

Why is the Westpac share price rising today?

There have been a couple of catalysts for the rise in the Westpac share price on Tuesday.

The first is a strong showing in the banking sector following a very positive session on Wall Street overnight. This has seen all of the big four banks climb today.

The second catalyst, which has seen the Westpac share price outperform its peers, is investors responding positively to the release of an announcement this morning.

What was announced?

Earlier today, Westpac confirmed that it is looking at the potential acquisition of payments processor Tyro Payments Ltd (ASX: TYR). The bank commented:

Westpac confirms it is in preliminary discussions with Tyro Payments Limited to acquire 100% of the company’s issued share capital. There is no certainty that any transaction will result.

Australia’s oldest bank believes that acquiring Tyro would strengthen its small business offering. It briefly explained:

An acquisition would strengthen Westpac’s small business proposition, enabling it to better support customers and grow merchant acquiring, particularly in the hospitality and healthcare sectors.

What’s happening with Tyro’s shares?

Interestingly, the Tyro share price has barely moved today despite this news. It is currently up only 0.5%, which could be an indication that investors aren’t overly convinced that a deal will be struck based on what management said this morning.

Tyro commented:

The Company confirms it has received approaches from several parties expressing interest in a potential change of control transaction, including Westpac Banking Corporation. None of these approaches are sufficiently definite or advanced to warrant further disclosure at this time.

The Company notes that these approaches are non-binding and highly conditional in nature, and there is no certainty that a binding offer or a transaction of any kind will eventuate.

The post Westpac share price climbs on Tyro news appeared first on The Motley Fool Australia.

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More reading

• Tyro share price on watch as Westpac takeover approach confirmed
• This ASX 300 company just upped its earnings guidance. Could it be in for a takeover bid?
• Here’s how ASX tech shares fared in September

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 Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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) shares are off to a roaring start today.

In early morning trade, the benchmark index is up 1.4%.

ASX 200 shares have been unusually volatile over the past few days, closing 1.4% lower yesterday after finishing 1.8% higher on Friday.

So, what’s going on?

Why are ASX 200 shares rocketing today?

ASX 200 shares are again closely following the action taking place in US markets.

Yesterday, overnight Aussie time, saw the S&P 500 Index (SP: .INX) finish up 2.7%.

Investor enthusiasm looks to have been sparked on a number of fronts.

First, Bank of America Corp (NYSE: BAC) reported its results and earnings at the bank, with a market cap north of US$270 billion, came in ahead of consensus expectations. Bank of America closed up 6% on the results and helped drive the broader bullish sentiment.

It also appears that the big swings we’ve seen on the S&P 500, mirrored here by ASX 200 shares, have some traders speculating that markets may be signalling the bottom is in.

And then there are the goings on in the United Kingdom, where a number of market-shaking policies put forward by newly minted prime minister Liz Truss have been axed.

What the experts are saying

Commenting on the surge in US markets, and by extension ASX 200 shares, Jason Paltrowitz, director of corporate services, OTC Markets Group, said (courtesy of Reuters):

It’s a combination of factors. Obviously, the positive BofA earnings as well as others have caused positive movement – while EPS [earnings per share] growth is lower than previous quarters, it’s better than expected. Additionally, Friday’s sell off was about uncertainty and not wanting to hold positions over the weekend. The start of the week has that money back in the market.

Peter Tuz, president of Chase Investment Counsel, added:

I was thinking that the bank earnings, especially Bank of America, was really pretty optimistic, and that coupled with the abandonment of restrictive policies in England just seemed to be the fuel that got the market going this morning.

There were some pretty rough days last week… The choppiness and volatility that we are seeing is part of the bottoming process. The fourth quarter generally is pretty good for markets historically.

Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, sounded a note of caution (quoted by Reuters).

“I think this is more a sign of more volatility to come,” he said. “I don’t think this is a sign of a bottom because we are not seeing real sustained long-term buyers come in… Most of the flow that we are seeing just today is people re-engaging hedges and shorts.”

Time will tell whether the lift in US stocks and ASX 200 shares today is a bear market rally or a more sustainable leg up based on a bottom forming.

There are plenty more earnings results due from major US stocks over the coming two weeks. Whether share markets trend higher or lower over those weeks, I expect we’re not through with the volatile swings quite yet.

The post Why are ASX 200 shares going gangbusters on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Why buying PayPal is a genius move right now

Bank of America is an advertising partner of The Ascent, a Motley Fool company. 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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The Pilbara Minerals Ltd (ASX: PLS) share price is charging higher on Tuesday.

In morning trade, the lithium miner’s shares are up a decent 4% to $4.99.

This means the Pilbara Minerals share price is now up over 40% since the start of the year.

Why is the Pilbara Minerals share price charging higher today?

The catalyst for the rise in the Pilbara Minerals share price on Tuesday has been the release of an update on the company’s upcoming spodumene concentrate auction.

According to the release, the company has accepted a bid for the spodumene concentrate before the auction has even begun for a shipment that is expected from mid-November.

And the good news is that the lithium price that Pilbara Minerals has accepted is higher than it received at last month’s auction via the digital Battery Material Exchange (BMX) platform.

What is the latest lithium price?

The release reveals that the company received and accepted a pre-auction offer of US$7,100/dmt (SC5.5, FOB Port Hedland basis) for a shipment of 5,000dmt on a 5.5% lithia basis. This represents a total consideration of US$35.5 million for the shipment.

Management also highlights that the offer of US$7,100/dmt equates to an approximate price of US$7,830/dmt on a SC6.0 CIF China equivalent basis after adjusting for lithia content on a pro rata basis and freight costs.

This compares favourably to last month’s winning auction bid of US$7,708/dmt on a SC6.0 CIF China equivalent basis.

Overall, this appears to demonstrate that demand for lithium remains strong, which could bode well for prices in the coming quarters.

The post Pilbara Minerals share price jumps on strong lithium auction results appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why are these ASX 200 lithium shares smashing it on Monday?
• What’s the outlook for ASX battery metals shares in Q2?
• If I’d invested $5,000 in these 5 ASX shares five years ago, here’s what I’d have now
• Why BrainChip, Emeco, Harvey Norman, and Pilbara Minerals shares are dropping

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/oVmlrDp

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.

Stocks jumped out to a strong start to the new week as investors took some solace from measures taken internationally to calm bond markets in Europe and elsewhere. As of 10 am ET Monday, the Nasdaq Composite (NASDAQINDEX: ^IXIC) was leading the way higher, climbing by more than 3%.

Adding to the already considerable volatility that investors have become accustomed to lately, third-quarter earnings season is ramping up, and some much-watched companies are on tap to reveal their latest financial results this week.

Reports from Tesla (NASDAQ: TSLA) always draw attention not just from stock market aficionados but also from the general car-buying public, while tens of millions of Americans watch streaming video on Netflix (NASDAQ: NFLX) daily. What these two companies say in their reports could help determine whether the Nasdaq hangs onto its early gains or moves downward to new lows for the year.

Netflix starts things off

Netflix will be the first of these two stocks to report, with the streaming video pioneer scheduled to release its Q3 numbers after the end of regular trading on Tuesday. The stock is up more than 5% Monday morning, but shareholders are watching Netflix try to navigate a particularly challenging time in its history.

After a period of spectacular growth that only accelerated during the early years of the COVID-19 pandemic, Netflix has more or less plateaued. The company anticipates that its sequential revenue will actually decrease from where it was three months ago, with year-over-year gains falling to less than 5%. After two straight quarters during which its global paid membership numbers fell, Netflix is hopeful that it will be able to return to growth, but management’s forecast for the addition of one million new memberships in Q3 is hardly the pace of expansion that Netflix shareholders have come to expect.

One big question will be how the introduction of a new ad-supported tier will affect viewer numbers. That won’t show up in the third-quarter results, as the company isn’t rolling out the offering to prospective subscribers until early November. Bullish investors are optimistic that the “basic with ads” service at less than half the price of its standard subscription will be appealing, but it could also remove one of the key features that distinguishes Netflix from many of its chief rivals.

Netflix stock is down by two-thirds from its peak, but it has also bounced back by more than 50% from its lowest level of the year. That makes now a critical time for shareholders, and the company will have to build up more confidence among its investor base to keep the stock in recovery mode.

Tesla looks to move forward

Tesla is scheduled to report its third-quarter financial results on Wednesday afternoon. The stock was up nearly 6% early Monday amid a broader Nasdaq rally, and shareholders hope that the EV pioneer can keep rebounding from its pullback of more than 30% in the past four weeks.

Investors already know some of the automaker’s key Q3 figures because it releases each quarter’s production and delivery numbers in the opening days of the next one. Tesla’s report on those figures in early October spooked many of its shareholders, as there was a roughly 22,000 gap between the number of electric vehicles it produced and the smaller number it delivered to customers. The automaker put the blame for that big disparity on logistical challenges and assured investors that those deliveries would get completed early in the fourth quarter. But that wasn’t enough to assuage the market’s broader concerns.

Tesla hasn’t been immune to supply chain disruptions and cost pressures, but the one thing that investors have counted on is strong demand for its EVs. If Tesla’s Q3 financials and explanations make it clear that people are still as interested in buying those vehicles as they have been in the past, then the stock could rise further after the report. However, if the report suggests that macroeconomic pressures are leading some prospective Tesla customers to reconsider their planned purchases, that would pose a new problem for the company to overcome.

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

The post Tesla and Netflix will make or break the Nasdaq this week appeared first on The Motley Fool Australia.

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More reading

• Why Tesla shares started trading this week up 8%
• How does Tesla make money?
• Netflix stock could be on the verge of a massive turnaround
• 97 reasons to double down on Netflix stock
• Why Netflix was a US stock market star on Thursday 

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 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.

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