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  • Nervous about investing? Here’s what history tells us about bear markets

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

    A worried woman looks at her phone and laptop, seeking ways to tighten her belt against inflation

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

    This year has been a roller coaster for the stock market, and if you’re starting to feel whiplash from all the ups and downs, you’re not alone.

    The S&P 500 is officially in a bear market after falling more than 20% from its peak in early January. The Nasdaq is also firmly in bear territory, and the Dow Jones Industrial Average has been skirting around it for weeks.

    It’s normal to feel nervous about the stock market in times like these. However, history tells us one important thing about bear markets: They’re not as dangerous as they may seem.

    The good news about bear markets

    One of the toughest parts of investing during a market downturn is that nobody — even the experts — knows how long it will last. That can be unnerving, especially if you have your life savings tied up in the stock market.

    The good news, though, is that historically, every single bear market has eventually given way to a bull market.

    Since 1928, the S&P 500 has fallen by 20% or more on 21 separate occasions (not including the current downturn). On average, that’s a bear market every 4.5 years. Yet, it’s not only recovered from every single one of those slumps, but it’s gone on to see positive average returns over time.

    ^SPX data by YCharts

    In other words, the stock market has seen some pretty serious bear markets and recessions over the years, but that hasn’t stopped it from growing. It’s extremely likely, then, that it will recover from this downturn, too.

    How to make money in the stock market despite volatility

    The best way to make money in the stock market is to invest consistently and hold your investments for the long term.

    It’s intimidating to invest during a bear market, but it can actually be a profitable strategy. When you invest during the market’s low points, you’re setting yourself up for significant gains when stock prices inevitably recover.

    Right now is also a fantastic opportunity to scoop up quality stocks for a fraction of the price. By continuing to invest now, you’ll not only reap the rewards when the market recovers, but you can also save a lot of money by investing at a steep discount.

    To be clear, nobody knows exactly how long it will take for the market to recover. For that reason, it’s best to avoid investing any money you might need in the foreseeable future. But if you can afford to invest right now, it could be a profitable move.

    The key to keeping your money safe

    One of the most important aspects of investing during a downturn is choosing the right stocks. Even the strongest companies may see their stock prices fall during a market slump, but as long as they have solid underlying business fundamentals, they’re more likely to bounce back when the market recovers.

    Weaker companies, though, may have a harder time rebounding. By doing your research and only investing in solid long-term stocks, your portfolio will have a much better chance of surviving even the worst downturns.

    When in doubt, you may opt to invest in an S&P 500 tracking fund, such as the Vanguard S&P 500 ETF (NYSEMKT: VOO). An S&P 500 ETF includes the same stocks as the index itself, and because the S&P 500 is almost guaranteed to recover from downturns, this type of investment will, too.

    Market downturns aren’t easy to stomach, and it’s normal to feel nervous about investing during periods of volatility.

    However, right now can be a fantastic opportunity to generate wealth. By investing in the right places and holding those investments for the long term, you can protect your savings while maximizing your earnings at the same time.    

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

    The post Nervous about investing? Here’s what history tells us about bear markets appeared first on The Motley Fool Australia.

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    Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Vanguard S&P 500 ETF. 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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  • Could this spell trouble for the BHP share price?

    A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.

    The BHP Group Ltd (ASX: BHP) share price is in the green this month, but what is ahead?

    BHP shares have jumped 5% since the market close on 9 September and are currently trading at $40.03. For perspective, the S&P/ASX 200 Index (ASX: XJO) has fallen more than 3% in the same time frame.

    Let’s take a look at the outlook for BHP.

    What’s ahead for the iron ore price?

    BHP is a diversified Australian mining giant, and iron ore contributed to more than 50% of the company’s earnings in FY22.

    The company also mines copper, coal, potash, uranium, gold, silver, nickel and other commodities.

    However, ANZ strategists are bearish on the outlook for the iron ore price heading into 2023.

    In a recent research report, ANZ commodity strategists Daniel Hynes and Soni Kumari said,

    We see prices at the end of 2023 sitting under USD100/t as the market tightness eases.

    Explaining this outlook, the strategists highlighted “bleak economic growth” and the Chinese property market. They said:

    Europe’s energy crisis and winter curbs in China leave little room for any recovery in steel production in Q4 2022.

    Global steel production is estimated to contract by nearly 5% y/y this year.

    Narrowing profit margins would also keep production subdued. Therefore, we expect prices to trend lower in Q4 and into 2023 as the impact of China’s stimulus measures peter out and iron ore demand weakens.

    Iron ore is currently fetching US$98 a tonne, trading economics data shows.

    BHP’s total earnings for FY22 were US$40.6 billion. Of this, more than half was derived from iron ore at 21.7 billion.

    Share price snapshot

    The BHP share price has gained 19% in the past year, while it has climbed 8% year to date.

    In comparison, the ASX 200 has lost nearly 9% in the past year.

    BHP has a market capitalisation of around $203 billion based on the current share price.

    The post Could this spell trouble for the BHP share price? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Monica O’Shea 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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  • Why is this ASX gold share exploding 100% on Monday?

    A man clenches his fists in excitement as gold coins fall from the sky.

    A man clenches his fists in excitement as gold coins fall from the sky.

    The Besra Gold Inc (ASX: BEZ) share price is having a sensational start to the week.

    In morning trade, the Malaysia-based gold explorer’s shares were up as much as 103% to 6.5 cents.

    At the time of writing, the Besra Gold share price has eased back a touch but remains up 72% to 5.5 cents.

    Why is the Besra Gold share price rocketing higher?

    Investors have been scrambling to buy shares today after the company announced that it was raising funds.

    While raising funds more often than not sends a share price lower, this wasn’t the case with Besra Gold’s capital raising. That’s because it is raising funds at a material premium to its last close price.

    According to the release, Besra Gold has signed a subscription agreement with Quantum Metal Recovery for the issue of ~11.1 million new shares at 9 cents per share to raise $1 million. This is almost three times greater than its last close price of 3.2 cents.

    Management advised that the proceeds from the placement will be used to fund activities at the Bau Gold Project and for general working capital.

    But it may not stop there. The company is also in advanced discussions with Quantum concerning broader funding support of Besra’s activities. Though, it warned that there is no assurance that such discussions will result in binding agreements.

    Besra Gold’s CEO, Dr Ray Shaw, commented:

    Quantum has with this Placement shown a clear commitment to support our exploration and development strategies at Bau and we welcome their increased investment in Besra. The Bau Gold Project has a Resource estimate of 72.6Mt @ 1.4 g/t for 3.3Moz1 (JORC 2012) of gold, involving a number of discrete deposits as well as an Exploration Target ranging between 4.9Moz and 9.32Moz2 (on a 100% basis). I am very excited with the enthusiasm Quantum has shown for Bau and I look forward to further developing our relationship.

    The post Why is this ASX gold share exploding 100% on Monday? appeared first on The Motley Fool Australia.

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    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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  • Waiting for AVZ shares to resume trading this week? Don’t hold your breath

    A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.

    A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.

    Were you expecting the AVZ Minerals Ltd (ASX: AVZ) share price to return to trade at long last today?

    Unfortunately, that won’t be the case after the embattled lithium developer extended its suspension this morning.

    AVZ shares remain suspended

    According to the release, AVZ shares will now be suspended until the earlier of the start of November or the release of an announcement relating to its ownership of the Manono Lithium Project.

    Though, as we have seen time and time again, the proposed date could be pushed further back once it arrives.

    AVZ commented:

    The Company advises that the subject of the initial trading halt request remains incomplete and requests a further extension to the voluntary suspension until the commencement of trade on 1 November 2022 or an earlier announcement to the market regarding its mining and exploration rights for the Manono Project.

    AVZ’s management will no doubt be hoping that this matter is resolved before it faces the wrath of shareholders and investors next month. It advised:

    The Company will provide an update to the market on the status of its activities in the DRC ahead of its planned roadshows and AGM which are scheduled to be held next month.

    What’s going on?

    AVZ is facing arbitration proceedings from China’s Jin Cheng Mining in relation to an ownership dispute.

    Jin Cheng claims it owns a portion of the project, whereas AVZ denies this. What ultimately happens, time will tell, but an unfavourable outcome could have a major impact on the company’s valuation. So, these are undoubtedly uneasy times for investors.

    Management remains optimistic, though. It recently stated that it is “confident of a positive outcome.” We’ll hopefully find out if that is the case in the near future.

    The post Waiting for AVZ shares to resume trading this week? Don’t hold your breath appeared first on The Motley Fool Australia.

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    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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  • In a sea of red, these ASX All Ords shares are leaping higher on Monday

    three people wearing athletic numbers and outfits jump over hurdles on a running track.three people wearing athletic numbers and outfits jump over hurdles on a running track.

    The benchmark All Ordinaries Index (ASX: XAO) is struggling on Monday, but not all shares housed on the index are in the red.

    The Aussie bourse’s suffering follows a rough Friday on Wall Street. The US market was weighed down by strong employment data, likely heralding further rate hikes.

    The Dow Jones Industrial Average Index (DJX: .DJI) plunged 2.1% on Friday, while the S&P 500 Index (SP: .INX) dumped 2.8%, and the Nasdaq Composite Index (NASDAQ: .IXIC) plummeted 3.8%.

    Seemingly in response, the All Ords is down 1.39% right now, but some shares are floating above the sea of red. Indeed, some are posting gains of as much as 6%.

    Keep reading to find out which stocks are outperforming and what’s driving them higher.

    3 ASX All Ords shares posting gains on Monday

    Plenty of ASX All Ords shares are outperforming the market on Monday.

    One such gainer is Archer Materials Ltd (ASX: AXE). Stock in the tech company is currently up 6.49%, trading at 82 cents apiece.

    Its surge follows news of a major advance in the company’s development of its 12CQ chip. It has used complementary metal-oxide-semiconductor chip technology to detect quantum information in its 12CQ qubit material at room temperature for the first time.

    Archer CEO Dr Mohammad Choucair said the achievement “cannot be understated”.

    At the same time, the share price of ASX All Ords airline and Qantas Airways Limited (ASX: QAN) takeover target, Alliance Aviation Services Ltd (ASX: AQZ), is also outperforming.

    It has gained 1.25% at the time of writing to trade at $3.24. The latest news of the takeover came in August when the competition watchdog expressed concerns over the proposition.

    Finally, All Ords healthcare share 4DMedical Ltd (ASX: 4DX) is also in the green today, with its share price gaining 6.25% to trade at 68 cents at the time of writing.

    It’s been nearly six weeks since the market heard price-sensitive news from the medical technology developer. However, the stock has now lifted 17% since the end of September.

    The post In a sea of red, these ASX All Ords shares are leaping higher on Monday appeared first on The Motley Fool Australia.

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    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 recommended Alliance Aviation Services Ltd. 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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  • ASX 200 tech shares are deep in the red on Monday. Here’s why

    A man yells as his virtual reality headset and earphones tumble to the floor.

    A man yells as his virtual reality headset and earphones tumble to the floor.

    S&P/ASX 200 Index (ASX: XJO) tech shares are taking a beating today.

    Following a strong run for much of last week, here’s how some of the leading large-cap tech companies are performing on Monday:

    After a few big up days last week, the S&P/ASX All Technology Index (ASX: XTX) – which also contains some smaller tech shares outside of the ASX 200 – is down 2.8% today.

    The ASX 200 is also falling, though not as steeply, down 1.4% at this same time.

    So, what’s spooking investors today?

    Why are ASX 200 tech shares selling off on Monday?

    The big tech selloff today follows similar action in US markets on Friday, which saw the NASDAQ close down 3.8%. Dual-listed ASX 200 tech share Block fell 7.3% on NYSE on the day.

    The reason for the selloff is the polar opposite of the reason for last week’s rally. Namely, market expectations of future interest rate hikes from the US Federal Reserve, the world’s most watched central bank.

    Last week, investors were hopeful that the Fed might scale back its hawkish tightening stance.

    Those hopes were dashed on Friday following the release of September’s jobs data. That showed the US economy added more jobs than consensus expectations. The US unemployment rate dipped lower to 3.5%, the lowest in more than 50 years. Wages also continued to climb in September and are now up 5% over the full year.

    ASX 200 tech shares are feeling the pressure, as the US Fed is now expected to continue with several outsized rate hikes. Tech shares, often priced with future earnings growth in mind, are particularly vulnerable to higher rates, which raise the present cost of investing in those distant earnings.

    What are the experts saying?

    Investors hoping ASX 200 tech shares may get a boost from a more dovish Fed will be disappointed by the medium-term outlook of two of its influential members.

    “We look to be, according to our reports, headed for 4.5% to 4.75% by sometime next year,” Chicago Federal Reserve Bank President Charles Evans said (quoted by Bloomberg).

    Fed Governor Christopher Waller added, “Until we see any signs of inflation beginning to moderate, I don’t know how we pause.”

    Oxford Economics US economist Nancy Vanden Houten believes investors should prepare for the Fed to hike rates by another 1.25% in 2022.

    According to Vanden Houten (courtesy of The Australian Financial Review):

    There is evidence of a slight easing in tight labour market conditions. However, it’s not enough to knock the Fed off a track to raise the target range for the federal funds rate by another 125 basis points this year.

    We assume that job growth, job openings, and importantly the inflation rate will continue to moderate through year-end, allowing the Fed to reduce the amount of rate increase to 50 basis points in December.

    Looking a few quarters ahead, there is light at the end of the tunnel for ASX 200 tech shares, hammered by fast-rising rates.

    “Everything hinges on inflation at this point. We do think it’s going to moderate over the next few quarters,” Peter Essele, head of portfolio management for Commonwealth Financial Network, said.

    If last week was any indication, when inflation does moderate, the tech sector could enjoy a sizeable rebound.

    The post ASX 200 tech shares are deep in the red on Monday. Here’s why appeared first on The Motley Fool Australia.

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    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 positions in and has recommended Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. 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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  • Is it smart to invest in the stock market right now? Take advice from Warren Buffett and Peter Lynch

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

    A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

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

    The stock market has been rocked by high inflation and rising interest rates this year. The broad-based S&P 500 and the tech-heavy Nasdaq Composite have fallen for three consecutive quarters, marking their longest losing streak since the tail end of the Great Recession in 2009. Both indexes have dropped into a bear market with the S&P 500 currently 22% off its high and the Nasdaq Composite down 31%.

    Losses of that magnitude can leave investors feeling uncertain or even fearful. Those emotions often lead to poor judgment, and that can result in lasting damage to your portfolio. Fortunately, Warren Buffett and Peter Lynch have imparted some relevant wisdom over the years, and investors would do well to consider their advice.

    Advice from Warren Buffett

    Warren Buffett is often called the “Oracle of Omaha,” a reference to his uncanny stock-picking abilities and his residence in Nebraska. Buffett built that reputation over several decades, using Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) to fund his investing activities. Berkshire stock is up more than 3,600,000% since he took the helm in 1964, and the company has grown into a $600 billion behemoth. Not surprisingly, Buffett has become a sort of North Star for many investors.

    During the Great Recession, Buffett wrote an opinion piece for The New York Times, and one quote, in particular, has become part of investing lore. He first mentioned the abysmal state of the stock market, then went on to say, “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” Those words have been repeated countless times since then, but they are especially relevant in the current bear market.

    Fear is everywhere right now. Inflation hit a 40-year high earlier this summer, interest rates are rising at a pace not seen since the 1980s, and several other scary things — geopolitical conflict, supply chain disruptions, and pandemic lockdowns — have left the financial world in a state of alarm. But historical data suggests bear markets are the best time to buy stocks, and Buffett’s words echo that sentiment.

    To be clear, the stock market downturn may drag on for months or even years, but Buffett has consistently advocated for a long-term mentality. In his op-ed piece, he noted investors were right to be worried about businesses in weak competitive positions, but “fears regarding the long-term prosperity of the nation’s many sound companies make no sense.” And there are plenty of sound companies around today.

    Advice from Peter Lynch

    Peter Lynch became an investing legend while managing the Magellan Fund at Fidelity. Under his stewardship, the fund earned an annualized return of 29.2%, growing more than twice as fast as the S&P 500. That took place between 1977 and 1990, a period in history defined by global oil shocks, rampant inflation, and high interest rates. Sound familiar?

    Lynch led the Magellan Fund for just 13 years, but he battled two bear markets and six market corrections during that time. That makes his outperformance even more impressive, and it makes his opinions all the more credible. With that in mind, Lynch once said, “The real key to making money in stocks is not to get scared out of them.”

    The stock market is currently in a state of disarray, and many investors may be tempted to cut their losses by cashing out. But I think Lynch would recommend the opposite. He once said, “A correction is a wonderful opportunity to buy your favorite companies at a bargain price.” 

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

    The post Is it smart to invest in the stock market right now? Take advice from Warren Buffett and Peter Lynch appeared first on The Motley Fool Australia.

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    Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). 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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  • What’s the outlook for the Lake Resources share price in the second quarter?

    two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.

    The Lake Resources NL (ASX: LKE) share price is currently down more than 2% in Monday morning trading at 99 cents.

    As the market deals with a number of macroeconomic headwinds, Lake shares have largely traded sideways for the past three months.

    After a bumpy ride since trading resumed in January, the Lake share price is relatively flat this year to date, as seen below.

    Notice the close alignment with movement in the benchmark S&P/ASX 200 Index (ASX: XJO), particularly since March.

    TradingView Chart

    What’s in store for Lake?

    Coming into the second quarter of 2023, the outlook for the ASX lithium share hinges on a number of factors.

    Perhaps the most important is the price of lithium and its outlook into the future.

    After retreating in the April-May period, the battery metal has reclaimed its growth pattern with lithium carbonate recently nudging past all-time highs in September. It has held this level since.

    Lake also announced it had secured a strategic investment and offtake agreement with WMC Energy at its Kachi Project in Argentina.

    The deal sees WMC agree to take 50% of the battery-grade lithium produced at the project, up to 250,000 metric tonnes per annum over a 10-year term.

    What do the experts say?

    Meanwhile, brokers are bullish on Lake Resources shares. According to Refinitiv Eikon data, 100% of analysts covering the share rate it a buy right now.

    The consensus share price target is $2.42. That implies significant upside potential of around 144% at the time of writing should it be accurate.

    Noteworthy is that Lake Resources had $175.4 million in cash and equivalents on its balance sheet in FY22, up from $25 million the year prior.

    Shareholder equity also increased to $218 million, however, the company is yet to commence full operations with turnover or operating profit.

    It is also reinvesting heavily back into its business with its available cash. Cash flow after capital expenditures (CapEx) was a negative $32 million, up from the $7 million loss in FY21.

    Lake Resources share price snapshot

    Certainly, the outlook for Lake Resources looks to be centred around movements on its Kachi Project, the price trajectory of lithium, and the market’s reaction to ongoing systematic risks.

    Despite its recent stagnation, the company’s share price has gained 82% in the past 12 months.

    The post What’s the outlook for the Lake Resources share price in the second quarter? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Zach Bristow 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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  • Morgans names the ASX 200 mining shares to buy and sell

    Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie

    Mining workers in high vis vests and hard hats discuss plans for the mining site they are at as heavy equipment moves earth behind them, representing opportunities among ASX 200 shares as nominated by top broker Macquarie

    If you’re wanting to invest in the mining sector, then the team at Morgans has got you covered.

    This morning the broker released a note that reveals which ASX 200 mining shares it believes investors should buy and which they should sell.

    Which ASX 200 mining shares are buys?

    According to the note, the broker believes investors should be focused on cash flow right now.

    With that in mind, Morgans believes BHP Group Ltd (ASX: BHP) and South32 Ltd (ASX: S32) are the best mining shares to buy.

    It currently has an add rating and $47.40 price target on BHP’s shares. Morgans said:

    Attractive on its FCF & risk profile. Strong numbers and less ‘can go wrong’ relative to its div miner peers, mainly driven by its opex performance and capex profile.

    As for South32, its top pick, its analysts have an add rating and $5.40 price target on its shares. The broker explained:

    Lower margin than its Aussie iron ore peers but the strongest FCF yield on offer, with free cash flow on sale in a business that continues to make smart asset decisions as it shifts its portfolio.

    The broker also rates Rio Tinto Limited (ASX: RIO) shares as a buy. It has an add rating and $108.00 price target on them.

    Which are the shares to sell?

    This morning, Morgans has become the latest broker to slap a sell rating on Fortescue Metals Group Limited (ASX: FMG) shares.

    The note reveals that the broker has put a reduce rating on its shares and cut its price target down to $14.50. Morgans has warned that Fortescue’s free cash flow could be heading to zero in the future. The broker said:

    FMG looks in the most difficult position from an FCF perspective. While investing in decarbonising and green/renewable projects has real positives attached, there is no disputing the capital-intensive nature of such spending and decade+ payback profile (we estimate c2034 in FMG’s case). While FMG is doing meaningful things that do add to its ESG profile, that helps our investment view, it also puts it at a distinct FCF disadvantage on our estimates to its local peer group for the next decade.

    Consensus is bearish but still has not factored in all the capex coming from decarb (now guided) and mine/hub replacement. FCF could be heading to zero for 7-8 years.

    The post Morgans names the ASX 200 mining shares to buy and sell appeared first on The Motley Fool Australia.

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    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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  • Guess which ASX All Ords director just bought $1.6m of their company’s shares

    A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.

    Insider buying is often heralded as a signal that those at a company’s helm are confident of its potential growth. And this All Ordinaries Index (ASX: XAO) share has been subject to yet more insider buying.

    Humm Group Ltd (ASX: HUM)’s largest shareholder Andrew Abercrombie – who also happens to be its founder and chair – has upped his stake in the diversified financial provider once more.

    He now holds approximately 23.6% of the ASX All Ords company’s outstanding shares, according to ASX data. The Humm share price is currently trading at 47 cents, leaving his parcel valued at around $55 million.

    Let’s take a closer look at the latest round of insider buying of the company’s shares.

    ASX All Ords share sees more insider buying

    Abercrombie has been at it again, indirectly forking out $1.6 million on Humm shares.

    His buying comes just months after he was reinstated as the company’s chair after the entirety of its board, aside from Abercrombie, walked out.

    Their exit came in the wake of an Abercrombie-led campaign against a $335 million acquisition offer for the company’s consumer finance leg – containing its BNPL business.

    The part-cash, part-scrip bid came from Latitude Group Holdings Ltd (ASX: LFS). Both an independent expert and the majority of the company’s board concluded the offer was in shareholders’ best interests in May.

    Abercrombie was the only director to disagree. He soon upped his stake in a vocal effort to halt the transition.

    A release to the ASX following the acquisition’s failure, authorised by the majority of the company’s directors, read:

    The events leading to the termination of the proposed sale … have caused the majority directors of [Humm] to conclude that they cannot remain on the board … with Andrew Abercrombie.

    The now-chair snapped up around 3.3 million additional shares in the ASX All Ords company last week.

    Of those, around 2.1 million of the All Ords company’s shares were snapped up by Abercrombie’s trust. Another parcel of approximately 1.2 million shares was bought by the Abercrombie Superannuation Fund.

    That leaves the director holding 118 million Humm shares. The company currently has 500 million shares outstanding, according to the ASX.

    The post Guess which ASX All Ords director just bought $1.6m of their company’s shares appeared first on The Motley Fool Australia.

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    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 recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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