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Why Apple stock plunged today
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 Apple (NASDAQ: AAPL) were plummeting on Thursday morning, down 4.4% as of 10:30 a.m. ET. That was even greater than the broader tech-heavy Nasdaq Composite, which was down a little over 3% at that time.

With the broader markets down a lot, it’s no surprise Apple is down as well, but it is surprising to see this stock, which has held up better than most tech stocks, underperform to such a degree.

Apple actually received both an upgrade and a rare downgrade from Wall Street analysts today. Given that Apple still trades at a premium multiple amid an overall bear market, it’s no surprise to see the stock falling back to Earth.

So what

On Thursday, Bank of America analyst Wamsi Mohan downgraded Apple from “buy” to “neutral,” while lowering his price target from $185 to $160.

The downgrade wasn’t particularly difficult to figure out, as global inflation, geopolitical conflict, and higher interest rates makes Mohan believe consumer spending will be low in the near term. Additionally, the very strong dollar against foreign currencies means Apple’s revenue could be pressured as well next quarter, while the post-pandemic hangover in PC sales could bring Mac and iPad sales back down to 2019 levels. When you combine that with Apple’s relatively high valuation at 24 times earnings and the fact it hasn’t fallen as much as other big tech stocks this year, it’s pretty easy for an analyst to become bearish, even on this blue chip name.

The downgrade follows yesterday’s Bloomberg story that Apple has asked some suppliers to pull back on production of the iPhone 14. Citing unnamed people “familiar with the matter,” Bloomberg‘s sources concluded that Apple had reversed a request from earlier this summer to increase iPhone 14 production amid weakening global demand.

Investors should keep in mind that Apple rumors always tend to circulate but don’t always come to pass. Moreover, not every analyst is bearish. In addition to the BofA downgrade, Apple actually received an upgrade from Rosenblatt Securities today. Rosenblatt nearly perfectly reversed Mohan’s call, upgrading the stock to “buy” from “neutral,” and raising its price target from $160 to $189.

Encouragingly, the analyst based his upgrade on a recent 1,100-person U.S. survey, which showed “substantial interest” in the iPhone Pro Max and new Apple Watch Ultra.

So who to believe? There could be room for both positive and negative analyst opinions to be somewhat correct here, based on the relative strength of the U.S. consumer versus other countries, as well as wealthy customers versus those at the lower end of the spectrum.

“We see reason to believe that consumers in other countries share this enthusiasm, prompting us to embrace more constructive near-term and long-term estimates,” Rosenblatt posited. Rosenbaltt also noted a clear preference for the premium models of the iPhone and Watch.

And therein lies the rub: Sure, consumers are excited about Apple’s premium devices, but do high inflation and potential recession, especially overseas, limit these enthusiastic customers’ ability to purchase a new phone or watch this fall?

Interestingly, the markets are falling today after this week’s initial jobless claims fell to 193,000, the lowest reading since April. In normal times, falling jobless claims and record-low unemployment would be a great thing for consumers and Apple; however, the Federal Reserve is trying desperately to bring down inflation, which was also revised upwards in the second quarter today. So, a “good” jobs number actually makes the Fed’s job harder. Hence, this is why tech stocks are falling broadly.

Now what

Many in the investing community may be wary of Apple stock now, as its relative outperformance versus other technology could spur more selling. Bear markets often end when even the “generals,” or the most-loved names, fall back to earth. This means Bank of America’s call could be right in the near term.

However, it’s hard to bet against a company and brand that generates the enthusiasm seen in the Rosenblatt survey. Therefore, while Apple stock may be a dubious buy in the near term, the stock likely won’t stay down for long. It’s a blue chip name investors can own for the long term, just as Warren Buffett is doing.

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

The post Why Apple stock plunged today appeared first on The Motley Fool Australia.

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Billy Duberstein has positions in Apple and Bank of America and has the following options: short January 2023 $210 calls on Apple. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. 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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30 September 2022
Are you at risk of missing the ‘recovery moment’ in ASX shares?
The ASX share market has seen plenty of volatility since the start of 2022. The S&P/ASX 200 Index (ASX: XJO) is down, but not by a lot – it’s in the red by around 14% this year.

But, there are some individual names that are down a lot more. For example, the Xero Limited (ASX: XRO) share price is down around 50%, the Wesfarmers Ltd (ASX: WES) share price is down more than 25%, the Magellan Financial Group Ltd (ASX: MFG) share price is down around 40% and so on.

So, what’s an investor supposed to do? Does it make more sense to buy ASX growth shares after their steep fall, or should ASX value shares be the way to go?

Funds management business Pengana Capital Group Ltd (ASX: PCG) has outlined some thoughts about the situation.

What is a value share?

According to Pengana, ‘value stocks’ are ones that have share prices trading at a lower multiple to the balance sheet or profit than the wider market. The fund manager named some sectors that have businesses that are regularly called value shares, such as banks, supermarkets and utilities that deliver “more dependable, immediate profits”.

The types of businesses that can generate consistent and reliable profit in this inflation environment may be attractive to some investors. The fund manager said inflation increases business uncertainty. Businesses with more predictable earnings streams become “relatively more attractive”, which supports value shares.

Pengana noted that after a decade of underperformance, (ASX) value shares saw a strong recovery in performance.

Should investors go for ASX value shares or growth shares?

Pengana said:

Investment textbooks tell us that value stocks generally outperform growth stocks in periods of rising interest rates and economic slowdowns. However, history tells us that investors who wait for certainty that the market has pivoted from favouring value back to growth are likely to miss the mark.

The tricky thing is that market lows and interest rate peaks can only be confirmed in hindsight. The fund manager notes that recent share market history offers little support for the strategy of ‘waiting until the maximum market drawdown has passed’ before investing in growth companies.

As I’ve already mentioned, many ASX growth shares have already been smashed in 2022 as multiple factors punish their valuations.

Pengana pointed to a couple of reasons why growth shares are hurting so much.

First, higher variable debt costs are reducing company profits, especially hurting those with already-thin profit margins.

Second, “higher bond yields increase a company’s equity discount rate which reduces the present value of future earnings and thus its market value. This particularly impacts growth companies whose profits lie further out into the future”.

Pengana has noted that some analysts are tipping that value shares can continue to outperform growth shares as higher interest rates slow the economy. Those value-focused analysts think that investors would do well to favour a value strategy until the market starts to show signs of recovery, and only then should a portfolio be rebalanced towards growth stocks.

But that’s not Pengana’s view.

How the fund manager sees the picture for growth shares

Pengana said:

This ‘recovery moment’ may arrive some time before the interest rate cycle peaks, because share markets are forward indicators of future economic health. Markets look ahead towards the economic recovery which follows the eventual downward turn in the interest rate cycle.

Moreover, the suggestion that growth stocks only begin outperforming value sometime after the maximum drawdown is not supported by historic data.

Investing in high quality growth companies, with moderate debt levels, has served as a good investment strategy for investors willing to ignore shorter-term market fluctuations. Such a strategy requires investing for the long term and recognising that well managed companies that grow earnings over time can sometimes be poor short-term performers.

It will be interesting how things play out for ASX growth shares from here and whether Pengana is right.

The post Are you at risk of missing the ‘recovery moment’ in ASX shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited 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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30 September 2022
This was the only ASX 200 share I bought in September. Here’s why
The S&P/ASX 200 Index (ASX: XJO) has seen plenty of ups and downs in recent weeks. I’ve been using that as a useful way to buy Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares.

Soul Pattinson is an investment conglomerate that’s invested across a number of industries, including telecommunications, building products, financial services, resources, agriculture, property, and so on.

There are a few key reasons why I decided to buy more shares of the business.

Better value

I like being able to buy businesses at good value, hopefully at a price that’s cheaper than they’re actually worth.

Since the start of 2022, the Soul Pattinson share price has dropped by more than 10%. That’s not a big fall, it represents a similar fall to the ASX 200. A lower price means this company is better value, in my view.

The ASX 200 share also reported in its FY22 result that during the financial year its pre-tax net asset value (NAV) increased by 13.8%, outperforming the All Ordinaries (ASX: XAO) by 20.2% and outperforming the Soul Pattinson share price by 35.1%. In other words, the underlying value of the portfolio compared to the share price improved during the year.

The Soul Pattinson share price was at a 6.9% discount to the pre-tax NAV per share at 31 July 2022.

Excellent dividend record

The investment company continues to generate impressive numbers, in my opinion. The FY22 group regular net profit after tax (NPAT) rose 154% to $834.6 million, and net cash flow from investments went up 93% to $347.9 million. On a per share basis, net cash flow from investments went up 28%.

Soul Pattinson uses that growing cash flow to pay a bigger dividend to investors. This allowed the business to grow the ordinary dividend by 16.1% to 72 cents per share. At the current Soul Pattinson share price, that translates into a grossed-up dividend yield of 3.8%.

The ASX 200 share has grown its dividend every year in a row for more than two decades. The business has also paid a dividend every year since it listed in 1903.

With the FY22 result, it also declared a special dividend of 15 cents per share, thanks to the strong performance and dividends from New Hope Corporation Limited (ASX: NHC).

Defensive portfolio

In this period of uncertainty, it’s hard to know what’s going to happen next.

But, I believe the way Soul Pattinson’s investment portfolio is set up means that the company can “manage risk”, as management put it.

The ASX 200 share’s investment style is “well-suited to the current environment”. It’s focused on businesses that are profitable with low-cost operations, that have robust and defensible business models, as well as market power to pass on inflationary costs.

I also like that the business can hunt for opportunities in the current environment, so it wouldn’t surprise me to see that it has found some opportunities, particularly in the private business space, as it is looking for new opportunities in this area.

The post This was the only ASX 200 share I bought in September. Here’s why 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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30 September 2022
I think these 2 ASX ETFs are buys for growth and diversification in October
In this tricky investment environment, it might be difficult to know what investment is good value and what could be a value trap. A diversified ASX exchange-traded fund (ETF) could be a way to take a measured approach and invest in many shares while still targeting growth.

That’s one of the best things about ETFs — we can buy dozens or even hundreds of businesses in a single investment.

In an ETF’s portfolio, there are going to be some losers. But, over time, hopefully there will be more (big) winners in the portfolio than losers.

Betashares Global Quality Leaders ETF (ASX: QLTY)

What I like about this ASX ETF is given away in the name — it’s global (which is good for diversification) and the portfolio is full of names that have been judged as high quality.

It has 150 businesses in the portfolio from across the world. Around 60% of the portfolio is from the US, which is lower than some other globally focused ETFs. There are a number of other countries that have a weighting of at least 1.5%, including Japan, Switzerland, the Netherlands, France, Hong Kong, Denmark, the UK, and Sweden.

For a company to be potentially included in this ASX ETF’s holdings, it needs to do well on four measures: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

The positions are fairly evenly weighted, but the biggest positions are: Automatic Data Processing, Novo Nordisk, Texas Instruments, UnitedHealth, AIA, Accenture, ASML, Cisco Systems and Alphabet.

Despite the Betashares Global Quality Leaders ETF falling around 25% since the start of 2022, it still registers a return of 10.6% per annum since inception in November 2018.

I like that this ETF has a management fee of just 0.35%.

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

This ETF is really diversified, in my opinion. It’s a fund of funds, meaning that it’s invested in a range of different shares of assets.

While it does have a small allocation of global and Australian bonds (around 10% of the portfolio in total), the other 90% is invested in shares.

The ASX ETF invested in Australian shares (36% of the portfolio), larger international shares (42.5% of the portfolio), smaller international shares (6.5%), and emerging market shares (5%).

So, within many of those funds are hundreds of businesses. Each individual fund within the Vanguard Diversified High Growth Index ETF would offer a good level of diversification, in my opinion, so multiple funds translate into ample diversification.

While the bonds help lower volatility, I don’t think this ETF will perform as well as an all-share ETF such as Vanguard MSCI Index International Shares ETF (ASX: VGS) over the long term because I think shares will outperform bonds.

I think the management fee of the Vanguard Diversified High Growth Index ETF is reasonable for all of this diversification, at just 0.27% per annum.

The post I think these 2 ASX ETFs are buys for growth and diversification in October appeared first on The Motley Fool Australia.

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- This ASX ETF was my first investment, and I’ll be holding it for the long term
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Cisco Systems, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Vanguard MSCI Index International Shares ETF. 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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30 September 2022
Goldman Sachs says these ASX 200 shares could rise over 40%
If you’re looking for some new investments, it could be worth hearing what Goldman Sachs is saying about the ASX 200 shares listed below.

Its analysts rate these shares highly and see major upside potential for investors over the next 12 months. Here’s what it is saying:

NextDC Ltd (ASX: NXT)

The first ASX 200 share that has been named as a buy is data centre operator NextDC.

NextDC continued its strong growth in FY 2022 thanks to the ever-increasing demand for space in its data centres thanks to the structural shift to the cloud.

The good news is that Goldman Sachs believes this strong demand is here to stay for some time to come. The broker has previously highlighted NextDC’s “compelling” growth profile, its proven and profitable business model, and digital infrastructure characteristics.

Goldman currently has a buy rating and $14.30 price target on its shares. Based on the current NextDC share price of $9.06, this suggests potential upside of 49%.

Xero Limited (ASX: XRO)

Another ASX 200 share that could be a top option for investors according to Goldman Sachs is Xero.

It is a cloud accounting platform provider with ~3.3 million subscribers globally. From these subscribers, the company is currently generating annualised monthly recurring revenue (AMRR) of NZ$1.2 billion and EBITDA of NZ$212.7 million.

Pleasingly, although 3.3 million sounds like a lot of subscribers, it is barely scratching the surface of its addressable market, which management estimates to be 45 million subscribers globally. This gives the company a major runway for growth over the next decade.

Goldman also highlights that Xero is “well-placed to navigate this [economic] uncertainty given the stickiness & importance of its software.”

The broker has a buy rating and $111.00 price target on Xero’s shares. Based on the current Xero share price of $77.00, this suggests potential upside of 44% for investors.

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Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended 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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30 September 2022
The mistake this billionaire investor is warning others not to make amid recession fears
There has been a lot of volatility on the ASX share market. But how low are valuations going to go with S&P/ASX 200 Index (ASX: XJO) shares? Have some businesses already seen a bottom in terms of their declines?

Some investors may be thinking that share prices and asset prices may fall further because interest rates are still going up.

Would it be better to wait for a lower price, or should investors jump on what’s available today?

Billionaire investor and co-founder of private equity business The Carlyle Group, David Rubenstein, thinks investors should jump in now.

Time to be greedy?

Talking at CNBC’s Delivering Alpha Investor Summit in New York, Rubenstein said:

People shouldn’t be afraid of going in and buying things now. The great fortunes in the investment world are often made by buying things at discounts.

Aside from the COVID-19 crash in 2020, the US share market has been on a bull run since the Global Financial Crisis, so there haven’t been many times when investors can buy shares at a discount.

Rubenstein said that a number of names are now trading at a relative discount, according to CNBC reporting.

He thinks it would be better to start investing now than trying to guess when the market bottom will be. Rubenstein believes the share market is “much closer to the bottom” than the top. He doesn’t think shares will fall another 50% or even 25% from here. The US share market could also influence ASX shares. He also said:

It’s a fool’s errand to find the bottom in the market or the top in the market. Trying to wait to the absolute bottom is probably a mistake, in my view.

What’s going to happen next with ASX shares?

Let me just consult my crystal ball here…

It seems likely that central banks are going to keep increasing interest rates because inflation hasn’t been brought under control yet.

However, assets aren’t necessarily going to drop in valuation in sync as higher interest rates rise.

The tricky thing for investors is that interest rates can have a big effect on share prices, bond values, and savings account interest rates. We just don’t know how high interest rates will need to go.

After that, we don’t know what the ‘normal’ interest rate will be for Australia or the US. There is a big difference, in my opinion, in an interest rate between 2% and 3%.

For me, I continue to invest each month into ASX shares that I think are good value at the time. This could be described as dollar-cost averaging.

I’m enjoying the lower prices that we’re seeing and will take advantage of them as long as possible. I believe that buying at this level will help my long-term wealth-building.

The post The mistake this billionaire investor is warning others not to make amid recession fears appeared first on The Motley Fool Australia.

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

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30 September 2022
Loser or bargain? Fundie’s verdict on 3 popular ASX shares that have nosedived
Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Auscap Asset Management portfolio manager Tim Carleton gives his thoughts on three ASX shares that are deeply in the red this year.

Cut or keep?

The Motley Fool: Now let’s take a look at three ASX shares that have fallen off the cliff recently, to see what you would do with them.

First is 4WD accessories maker ARB Corporation Limited (ASX: ARB), which has seen its share price halve so far this year.

Tim Carleton: This is one stock that we are looking to add to. We own it in the portfolio that we’d certainly be interested in adding to the exposure. A very, very high quality business.

You’re right, they manufacture and distribute 4WD accessories. They’ve had a few transitory issues lately, but they still have a significant runway for growth overseas. So we’re mindful of elevated demand through COVID, but there are lots of opportunities for them to grow revenue and earnings through organic expansion. And at the moment you’ve seen the multiple pull right back. So we would be looking to add to that exposure at the right point.

MF: How about Charter Hall Group (ASX: CHC), which has almost halved in 2022?

TC: If you own it, it’s probably worth continuing to hold.

I mean, its issue is that it’s facing macroeconomic pressure in the form of higher interest rates. So higher interest rates are negative for capitalisation rates.

[Charter Hall]’s a fund manager primarily in the real estate space and real estate fund managers have had this wonderful tailwind for a long time now of declining interest rates. And as interest rates fell, the relative attraction of the yields offered by REITs increased, which led to people bidding up those asset prices. As a result, capitalisation rates, which [are] the rates used to value property trusts, were declining.

That was pushing up valuations. That was a very, very powerful tailwind for fund managers such as Charter Hall.

We’re now probably in the opposite environment. So what was a tailwind is probably a headwind. But I think that has been reflected in the multiple. It’s currently trading on about 12 times, or a little over 12 times, earnings. A lot of their assets under management, I think, [are] reasonably sticky. So that’s not a particularly large multiple for the quality of the business.

If you didn’t have a position, it’s probably a little bit more difficult because, like I said, you are most likely facing some headwinds over the coming years as capitalisation rates head north and therefore valuations come down, which makes it harder to generate performance fees — harder to accumulate further assets in that sort of environment than the one we just experienced for the last decade.

MF: Breville Group Ltd (ASX: BRG) shares have plunged 43% so far this year. What are your thoughts?

TC: Breville is, again, one that we would look to add to at the right time.

The market is concerned about pullback in appliance expenditure, and we think rightly so, and that’s across the globe. And obviously, these guys operate in many, many different markets or have a presence in many markets around the world. But once this washes through, this business should still have plenty of organic growth as they can expand into new geographies.

They’re creating products all the time. They spend a considerable amount of money on research and development each year. That means that they’re always at the forefront of products in their space that are very, very highly regarded by consumers.

And that is their competitive advantage, right? Their competitive advantage is having products that consumers want. And it lets them earn a well above-average return on their capital, in selling those products.

So to the extent that we get an opportunity at an attractive price, and we’re probably not too far off that at the moment, we will certainly be looking to add to our Breville exposure.

The post Loser or bargain? Fundie’s verdict on 3 popular ASX shares that have nosedived appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB 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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30 September 2022
Analysts name 2 ASX 200 dividend shares to buy now
The ASX 200 index is home to a large number of companies that reward their shareholders with dividends each year.

Two that offer investors particularly generous yields right now are listed below. Here’s why these ASX 200 dividend shares have been tipped as buys:

Bank of Queensland Limited (ASX: BOQ)

Bank of Queensland could be an ASX 200 dividend share to buy.

It is a challenger to the big four banks and the owner of the Bank of Queensland, ME Bank, and Virgin Money Australia brands.

The team at Citi is positive on the company. Although it suspects that mortgage loan growth could slow as rates rise, it expects cost synergies from the ME Bank acquisition to be supportive of earnings growth.

In light of this, Citi has put a buy rating and $8.75 price target on the bank’s shares. This compares very favourably to the current Bank of Queensland share price of $6.63.

But it gets better. Citi is forecasting fully franked dividends per share of 46 cents in FY 2022 and then 50 cents per share in FY 2023. This will mean very big yields of 6.9% and 7.5%, respectively.

Wesfarmers Ltd (ASX: WES)

Another ASX 200 dividend share that could be in the buy zone is Wesfarmers.

It is the conglomerate behind a collection of high quality businesses such as Bunnings, Coregas, Covalent Lithium, Kmart, and Officeworks.

Analysts at Morgans are big fans of the company and believe its “highly regarded management team” and “quality retail portfolio” have positioned it well for growth in the coming years.

As a result, the broker currently has an add rating and $55.60 price target on its shares.

As for dividends, Morgans is forecasting fully franked dividends per share of $1.82 in FY 2023 and $1.89 in FY 2024. Based on the current Wesfarmers share price of $44.02, this will mean yields of 4.1% and 4.3%, respectively.

The post Analysts name 2 ASX 200 dividend shares to buy now appeared first on The Motley Fool Australia.

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30 September 2022
Could this be a looming risk for IAG shares?
The Insurance Australia Group Ltd (ASX: IAG) share price has lifted this week, but what is the future outlook?

IAG shares have jumped almost 4% since market close on Friday — including a 1.1% gain on Thursday — and are currently worth $4.58 a piece.

So what could be ahead for IAG shares?

What’s ahead for IAG?

IAG is an insurance giant operating in Australia, New Zealand and Asia.

Macquarie analysts are concerned market churn may place pressure on IAG shares and the Suncorp Group Ltd (ASX: SUN) share price.

The analysts raised concerns churn will rise across the insurance sector amid a potential affordability crunch, The Australian reported.

But analysts reportedly believe Suncorp may outperform IAG due to better underlying insurance trading ratio margin.

However, Wilson Asset Management (WAM)’s Anna Milne is more positive on the IAG share price. As my Foolish colleague Mitch reported recently, she believes it is one of multiple ASX shares that are among “the highest-quality names in their respective sector”.

Milne also sees the company’s national expansion as a positive for IAG.

Commenting on the outlook for IAG, she said:

IAG is the owner of the brand NRMA, which is one of Australia’s most trusted brands. The psychology of investing in these [IAG and others] quality names is that when share prices decline, it’s seen as an opportunity to get these high-quality names on sale.

IAG reported a $347 million profit in the 2022 financial year, compared to a $427 million loss in FY21.

The company paid a partially franked final dividend of 5 cents per share in September, taking total dividends for the financial year to 11 cents.

Share price snapshot

IAG shares have shed nearly 7% in the past year, while they have risen nearly 8% year to date.

For perspective, the ASX 200 has lost nearly 9% in the past year.

IAG has a market capitalisation of more than $11 billion based on the current share price.

The post Could this be a looming risk for IAG shares? 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 positions in and has recommended Insurance Australia Group Limited. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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30 September 2022
5 things to watch on the ASX 200 on Friday
On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a very strong day and stormed notably higher. The benchmark index rose 1.45% to 6,555 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to sink

The Australian share market looks set to give back some of yesterday’s gains after a very poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 24 points or 0.4% lower this morning. In the United States, the Dow Jones was down 1.55%, the S&P 500 dropped 2.1%, and the Nasdaq tumbled 2.85%. This meant the S&P 500 hit a new low for 2022.

Oil prices fall

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued finish to the week after oil prices pulled back overnight. According to Bloomberg, the WTI crude oil price is down 0.7% to US$81.55 a barrel and the Brent crude oil price is down 0.85% to US$88.57 a barrel. This was despite news that OPEC+ is considering an output cut.

Dividends being paid

Today is payday for a number of dividend-paying ASX 200 shares. Energy producer Beach, battery materials miner IGO Ltd (ASX: IGO), energy company Origin Energy Ltd (ASX: ORG), and wine giant Treasury Wine Estates Ltd (ASX: TWE) are among those rewarding their shareholders with dividend payments today.

Gold price edges lower

Gold miners including Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) will be on watch after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.1% to US$1,668.80 an ounce. Rate hike fears are weighing on the gold price.

Premier Investments rated neutral

The Premier Investments Limited (ASX: PMV) share price is fully valued according to analysts at Goldman Sachs. This morning the broker has responded to the retail conglomerate’s full year results by retaining its neutral rating with an improved price target of $21.40. Goldman was impressed with Premier’s strong beat but has concerns over its softening outlook.

The post 5 things to watch on the ASX 200 on Friday 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 recommended Premier Investments Limited and 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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30 September 2022