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  • Top fund manager sees potential for this ‘cheap gold stock’ to turn into ‘multi-billion-dollar’ company

    a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.

    The five year St Barbara Ltd (ASX: SBM) share price chart makes for some very ugly viewing.

    Source: The Motley Fool

    This year alone, St Barbara shares have fallen almost 50%, hit by a falling gold price and poor results, with production for FY22 down 14%, profits down 70% and no dividend announced.

    Writing in its August monthly update, leading fund manager Firetrail Australian Small Companies Fund noted the recent fall in the St Barbara share price came in sympathy with falling gold prices and the company’s softer than expected guidance for FY23.

    Rather than be deterred by these challenges, Firetrail disclosed it added St Barbara to its portfolio, saying it “is one of the cheapest gold stocks globally.”

    “Given the company’s significant resource base in WA, we expect it to play a leading role in much needed consolidation of the Australian small cap gold sector. We see potential for a multi-billion-dollar gold company to emerge in the next 12 months.”

    In Thursday trading, the St Barbara share price is up 4.82% cents to 70.8 cents, giving the company a market capitalisation of $577.35 million. If Firetrail are correct in their assessment that this could be a multi-billion-dollar gold company, the upside potential could be enormous.

    The post Top fund manager sees potential for this ‘cheap gold stock’ to turn into ‘multi-billion-dollar’ company appeared first on The Motley Fool Australia.

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    Motley Fool contributor Bruce Jackson 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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  • Could rising rates send the Westpac share price soaring 27%?

    surprised asx investor appearing incredulous at hearing asx share price

    surprised asx investor appearing incredulous at hearing asx share price

    The Westpac Banking Corp (ASX: WBC) share price could be dirt cheap at current levels.

    That’s the view of analysts at Goldman Sachs, which this week reiterated their bullish view on Australia’s oldest bank.

    What did Goldman say about the Westpac share price?

    According to the note, Goldman Sachs has retained its conviction buy rating and lifted its price target on the bank’s shares to $27.08.

    Based on the current Westpac share price of $21.30, this implies potential upside of 27% for investors over the next 12 months.

    Why is Goldman bullish?

    Goldman has been bullish on the Westpac in recent months due to its cost cutting plans and belief that the bank provides strong leverage to rising rates.

    This week, the broker became even more bullish because it feels that the market is being too conservative with sector net interest margins (NIMs) forecasts.

    In fact, Goldman expects sector NIMs to reach their highest levels in a decade in FY 2024. This has led to the broker increasing its earnings estimates for Westpac and the rest of the big four banks.

    Its analysts explained:

    Our product profitability analysis gives us greater conviction around where NIMs should settle as cash rates revert towards 3%, and we now forecast FY24 NIMs to rise to c. 1.9% (+3-5 bp vs. previous forecast), which is in line with where they were in FY13, adjusted for shifts that have occurred to the major banks’ product mix since then. We now sit 3-9 bp ahead of consensus of FY24E NIM, which drives FY24E ROTEs of 12%-13% (top-end at 11% CET1 ratio). Therefore, with the sector trading on 1.6x spot P/NTA, we think value exists.

    We continue to prefer WBC (Buy on CL) reflecting its: 1) strong leverage to rising rates, 2) cost management, 3) recent market update highlighting that the business is still investing effectively in its franchise, and 4) supportive valuations.

    The post Could rising rates send the Westpac share price soaring 27%? appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Has the Vanguard MSCI Index ETF (VGS) been growing its dividends?

    A woman looks quizzical while looking at a dollar sign in the air.A woman looks quizzical while looking at a dollar sign in the air.

    All investors like to see their investments, and their returns, grow year-on-year. And it’s no different for those invested in exchange-traded funds (ETFs) like the Vanguard MSCI Index International Shares ETF (ASX: VGS), which pays out quarterly dividends.

    The ETF tracks the MSCI World ex-Australia Index with net dividends reinvested. That sees it granting investors exposure to many of the world’s largest companies outside of Australia.

    The ETF is currently trading on a trailing dividend yield of around 1.9%, having brought in approximately $1.73 per unit in financial year 2022.

    But is the ETF growing its distributions? Let’s break the data down to find out.

    Disappointing few years for income investors

    As global markets struggle through 2022, so has the Vanguard MSCI Index ETF. It has tumbled 16.6% year to date. Though, that’s a better performance than many of its major holdings.

    The fund’s biggest holding is Apple Inc (NASDAQ: AAPL). The tech giant’s stock has dumped 17.7% so far this year.

    Its second biggest investment, Microsoft Corporation (NASDAQ: MSFT), has plunged 28% year to date, while its third largest holding, Amazon.com Inc (NASDAQ: AMZN), has slumped 30.8%.

    Combined, the struggling stocks make up around 10% of the ETF’s $4.7 billion of managed assets.

    It may come as no surprise then, that the Vanguard MSCI Index ETF’s dividends have also fallen recently.

    The ETF declared a total of $1.73 of dividends in financial year 2022. That was down 8% on financial year 2021’s $1.88 of declared distributions.

    Let’s look at how the fund’s payouts have evolved over its eight-year history:

    Data source: Vanguard.com.au

    As can be seen, the fund’s first full financial year following its inception in November 2014 saw it post record distributions of approximately $2.29 per unit.

    And while it’s been a wild ride since, it’s not fair to say the ETF’s dividends have grown.

    What has grown over the years, though, is its value. Vanguard MSCI Index ETF’s price has rocketed 77.5% over its lifetime, including its 2022 slump – certainly nothing to scoff at.

    What’s next for the Vanguard MSCI Index ETF?

    Only time will tell where the Vanguard MSCI Index ETF, and its dividends, go from here.

    The fund simply tracks a portfolio of 1,470 stocks, 71% of which are listed in the US, which all determine their own dividend offerings.

    However, we do know Vanguard expects the fund to pay a dividend worth around 34.3 cents per unit next month.

    The post Has the Vanguard MSCI Index ETF (VGS) been growing its dividends? appeared first on The Motley Fool Australia.

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    John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Microsoft, and Vanguard MSCI Index International Shares ETF. 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 Amazon, Apple, 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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  • Why is the Lynas share price powering up 5% today?

    A miner reacts to a positive company report mobile phone representing rising iron ore priceA miner reacts to a positive company report mobile phone representing rising iron ore price

    The Lynas Rare Earths Ltd (ASX: LYC) share price is charging higher today despite no new announcements from the company.

    At the time of writing, the rare earths producer’s shares are up 4.71% to $7.68.

    For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is one of the best performers on the ASX today. The sector is up 2.74%.

    What’s giving rise to Lynas shares?

    After the Lynas share price hit a year-to-date low of $7.28 yesterday, investors are taking advantage of the recent weaknesses.

    This comes amid the ASX staging a comeback despite macro-environmental headwinds still in the midst.

    Notably, the recent lift in neodymium-praseodymium (NdPr) prices is likely also supporting investor confidence in the company’s shares.

    In the past two weeks, the price of NdPr has been trending upwards to post a gain of around 10%.

    Lynas is considered the world’s second-largest producer of NdPr, behind China, which accounts for 60% of global production of rare earths.

    These deposits comprise a group of 17 metals that are critical to the manufacturing of many electronic products. This includes mobile smartphones, electric vehicles, aircraft engines, and wind turbines, as well as military hardware.

    What do the brokers think?

    A couple of brokers weighed in after the company announced water supply disruption issues affecting production at its Malaysia plant.

    According to ANZ Share Investing, analysts at Macquarie cut their price target by 2% to $9.30 per share. Based on the current Lynas share price, this implies an upside of around 20%.

    Clearly, the broker believes there is still significant value in the miner despite the short-term problems.

    On the other hand, Ord Minnett had a more bearish tone, slashing its 12-month rating by 1% to $4.80. This represents a downside of almost 40% from where Lynas trades today.

    Lynas share price snapshot

    Over the past 12 months, the Lynas share price has gained 15%.

    Year-to-date, however, the share is down 25% on the back of market volatility.

    Lynas has a price-to-earnings (P/E) ratio of 12.67 and commands a market capitalisation of approximately $6.63 billion.

    The post Why is the Lynas share price powering up 5% today? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Aaron Teboneras 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 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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  • Why did the AFIC share price just hit a new 52-week low?

    A woman sits with her hands covering her eyes while lifting her spectacles sitting at a computer on a desk in an office setting.

    A woman sits with her hands covering her eyes while lifting her spectacles sitting at a computer on a desk in an office setting.

    The Australian Foundation Investment Co Ltd (ASX: AFI) (AFIC) share price is in the red right now, hitting a 52-week low, even though the S&P/ASX 200 Index (ASX: XJO) is actually up by around 1.8%.

    That may seem strange considering the ASX 200 index and the AFIC holdings list look pretty similar with names like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Limited (ASX: CSL) among the top holdings.

    As a listed investment company (LIC), the job of AFIC is to invest in other ASX shares and generate returns for shareholders.

    Why is it down so much in 2022?

    It has been a rough year for plenty of ASX shares this year as investors get to grips with a tricky economic environment. Inflation is elevated, which isn’t good for economic stability. A stable economy is one of the main areas of focus for a central bank.

    The Reserve Bank of Australia (RBA), and other central banks, are putting a lot of effort and policy decisions into bringing down inflation back to a more normal level.

    Time will tell how long it takes to be successful and how this affects the AFIC share price.

    However, in the meantime, interest rates are jumping higher. This is unsettling for markets, such as the ASX share market. Assets are heavily influenced by interest rates, which act kind of like gravity. The higher the interest rate, the stronger it pulls down on asset values, in theory. Warren Buffett once explained:

    The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

    Back to the AFIC share price

    AFIC, the LIC, has a portfolio of assets that has a value worth many billions. The basket of shares that it owns can go down in value as well as up. However, how much investors decide to pay for that basket of shares can change too. They could pay 10% more than the value of that basket, 10% less than the basket value or any other premium or discount.

    For the last two years, AFIC shares have traded at a premium to the underlying net tangible assets (NTA).

    Investors may have been attracted to the blue chip investment style and the stable stream of fully franked dividends. However, ‘safe’ places to put cash (like savings accounts and term deposits) are now offering a much better return. Perhaps the AFIC share price has been falling today partly because investors can find income from other sources? The longer-term decline can be explained by the reduction of the asset value of the portfolio in 2022.

    The post Why did the AFIC share price just hit a new 52-week low? 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 CSL Ltd. 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 this little known ASX gold share is rocketing 10% on Thursday

    miner giving 'ok' sign in front of mine

    miner giving 'ok' sign in front of mine

    It’s a good day overall on the markets today, with the All Ordinaries Index (ASX: XAO) up 1.85% in afternoon trading.

    But this little known ASX gold share is leaving those gains in the dust.

    We’re talking about Great Boulder Resources Ltd (ASX: GBR), which is up 9.89% at the time of writing after earlier posting gains of more than 15%.

    Here’s what’s piquing ASX investor interest.

    What’s sending this ASX gold share higher?

    The Great Boulder Resources share price is leaping higher after the company reported it has identified a new high-grade gold lode at its Side Well Gold Project, located in Western Australia.

    The results come from an area close by the Mulga Bill High-Grade Vein, where Great Boulder has struck significant gold intersections in recent drilling.

    The results of the new drill hole, the first drilling in that location, returned 6 metres at 25.83 grams/tonne of gold from 268 metres.

    Commenting on the Mulga Bill drill results sending the ASX gold share higher today, Great Boulder Resources managing director, Andrew Paterson said:

    There are two results of particular interest in this batch of results. Firstly, the identification of a new high-grade lode where we drilled a deep intersection of 6m @ 25.83g/t Au is a great result with exciting implications for new mineralisation.

    Secondly the 3m @ 7.03g/t Au in hole 22MBRC048 sits in the gap between the HGV and Main zones at Mulga Bill, so we are hoping to define a new zone in that area to improve continuity of mineralisation between the two high-grade areas

    Reverse circulation (RC) drilling is ongoing at the site, and Great Boulder expects more results in the coming weeks.

    Great Boulder Resources share price snapshot

    Despite today’s big push higher, ASX gold share Great Boulder Resources remains down 27% in 2022. That compares to a year-to-date loss of 13% posted by the All Ordinaries.

    The post Why this little known ASX gold share is rocketing 10% on Thursday 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 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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  • How big will the ANZ dividend be in 2023?

    A man thinks very carefully about his money and investments.

    A man thinks very carefully about his money and investments.

    The Australia and New Zealand Banking Group Ltd (ASX: ANZ) dividend is one of the most popular options on the Australian share market for income investors.

    For decades, the banking giant has been sharing a portion of its profits with its shareholders each year.

    In light of this, investors may be keen to know where the ANZ dividend is heading from here.

    Let’s take a look at what one leading broker is expecting for the bank’s returns in 2023.

    How big will the ANZ dividend be in 2023?

    First things first, let’s start with the most recent full year dividend that the bank has paid.

    Due to its financial year running 1 October to 30 September, FY 2021’s fully franked dividend of $1.42 per share is the most recent full year dividend.

    Looking ahead, according to a note out of Citi, it is expecting the bank to declare a fully franked final dividend of 72 cents per share later this year.

    This will bring the ANZ dividend for FY 2022 to a fully franked $1.44 per share, up modestly year over year. And based on the current ANZ share price of $23.43, this will mean a 6.15% dividend yield for investors.

    But the good news is that Citi is expecting a much larger increase in the ANZ dividend in FY 2023.

    Its analysts are currently forecasting a fully franked $1.56 per share dividend for that financial year, which represents a 12 cents or 8.3% increase on its FY 2022 estimate.

    If Citi’s forecast proves accurate, it will mean a generous dividend yield of almost 6.7% for income investors.

    But it gets better. Citi also sees plenty of upside for the ANZ share price. It currently has a buy rating and $29.00 price target on the company’s shares. This implies potential upside of almost 24% for investors, as well as those generous dividend payments. Not bad!

    The post How big will the ANZ dividend be in 2023? 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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  • New Hope share price up 6%: Why things keep getting better for ASX coal shares

    A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises todayA female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today

    The New Hope Corporation Limited (ASX: NHC) share price is up 6.1% to $6.26 as ASX energy shares lead the market again today.

    The S&P/ASX 200 Energy Index (ASX: XEJ) is up 2.71% at the time of writing. More specifically, it’s ASX coal shares that are having a party.

    In addition to New Hope being up, Whitehaven Coal Ltd (ASX: WHC) shares are also rising 4.4% to $9.17. The Yancoal Australia Ltd (ASX: YAL) share price is up 3.6% to $5.78.

    What tailwinds are pushing the New Hope share price up?

    Well, there’s no news out of the company today, and the coal price actually dipped a little overnight.

    What’s likely happening today is that investors are just feeling really positive about coal and energy stocks in general. The energy index is up 25% in 2022 so far, and New Hope is up a staggering 169%.

    On top of that, a note out of Macquarie yesterday predicted stronger thermal coal prices to come.

    That’s great for New Hope shares because the company is a pure-play thermal coal miner. 

    The broker says developed economies are showing a “willingness to pay a premium to secure energy supply” given current global challenges.

    The broker upped its outlook for the thermal coal price by 38% to 114% over CY23 to CY27.

    The coal price hit a record of US$460 earlier this month, according to Trading Economics data. The value of the commodity has more than doubled over the past 12 months.

    In turn, Macquarie also increased its forecast earnings per share (EPS) for New Hope. Its expectations are up 34% for FY23, 163% for FY24, and more than 400% in FY25.

    The post New Hope share price up 6%: Why things keep getting better for ASX coal shares appeared first on The Motley Fool Australia.

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    Motley Fool contributor Bronwyn Allen has positions in Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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  • The Block share price is smashing the market with a 6% gain today

    a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.

    a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.

    The Block Inc (ASX: SQ2) share price has been among the best performers on the ASX 200 index on Thursday.

    In afternoon trade, the payments company’s shares are up a sizeable 6% to $89.66.

    Why is the Block share price storming higher?

    Investors have been fighting to get hold of the company’s shares today after Block’s US-listed shares stormed higher on Wednesday night.

    As one ASX-listed Block share is equal to one NYSE-listed Block share, the locally listed shares tend to follow the lead of their American counterparts each day.

    The good news for local investors is that Block’s shares rose 7% to US$59.07 overnight after a major rebound in the tech sector, which led to the tech-focused NASDAQ index rising 2.1%.

    Based on current exchange rates, this equates to a price of A$91.17, which is a touch higher than where the locally listed Block share price trades today.

    What drove the strong gain?

    Improving investor sentiment appears to have been the driver of this strong gain. Particularly for beaten down tech and fintech stocks.

    It wasn’t just Block that was rising on Wall Street on Wednesday. Rivals Affirm and PayPal also recorded 5%+ gains.

    It appears as though investors may feel that US stocks have bottomed after hitting a 2022 low earlier this week. Though, we’ve seen a number of false bottoms in recent months. So, time will tell if things are different this time.

    The post The Block share price is smashing the market with a 6% gain today appeared first on The Motley Fool Australia.

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  • Nuix share price slides amid ASIC lawsuit

    A Chinese investor sits in front of his laptop looking pensive and concerned about pandemic lockdowns which may impact ASX 200 iron ore share pricesA Chinese investor sits in front of his laptop looking pensive and concerned about pandemic lockdowns which may impact ASX 200 iron ore share prices

    The Nuix Ltd (ASX: NXL) share price is trudging lower in afternoon trade on Thursday.

    At the time of writing, Nuix shares are swapping hands at 59.75 cents a piece after drifting more than 2% lower.

    In broad sector moves, the S&P/ASX All Technology index (ASX: XTX) has stretched up nearly 2% after a gain early in the session.

    What’s up with the Nuix share price?

    The share caught the attention of sellers today following a company announcement.

    Nuix advised that the Australian Securities and Investment Commission (ASIC) has commenced civil proceedings in the Federal Court of Australia against the company and its directors.

    This was for a period from 18 January 2021 to 21 April 2021, the release says, and stems from Nuix’s disclosure of certain figures in its annual numbers.

    Specifically, ASIC is concerned with allegedly deficient reporting of the company’s “Annualised Contract Vale (ACV)” figure in its annual report.

    The release mentioned:

    ASIC alleges that aspects of the company’s market disclosure in that period contravened provisions of the Corporations Act and ASIC Act and that the relevant directors breached their duties in respect of that disclosure.

    ASIC isn’t taking any decisions lightly, either.

    It is seeking a ‘please explain’ from Nuix, penalties against the company, and disqualification orders against the directors involved.

    To push back, Nuix has denied all allegations made against it and its directors, noting it intends to defend against all of the proceedings.

    It was not able to provide commentary due to the ongoing nature of the case.

    Meanwhile, the Nuix share price is down more than 75% in the past 12 months and is down 73% this year to date.

    The post Nuix share price slides amid ASIC lawsuit 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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