Tag: Motley Fool

Fund management guru Geoff Wilson, the chair of Wilson Asset Management, has responded angrily to proposed legislation that will stop companies paying franked special dividends funded via capital raisings.

As my Fool colleague Brendan reported, the new rules will also require investors and super funds to pay back franking tax credits attached to special dividends received all the way back to December 2016.

Wilson says it’s a cash grab and the first step in dismantling the franking system, according to an article in The Australian today.

Changed ASX dividend rules to disadvantage growth shares

Wilson said:

If you stop every growth company that raises capital from paying a fully franked (special) dividend, that’s a big segment of the Australian corporate sector and puts growth companies at a big disadvantage.

It should have been off the table for a generation, for 30 years … this is the start of the dismantling of the Paul Keating-introduced franking system.

The retail investor will certainly be impacted by the retrospective nature of this. They’ll get a letter from a company saying ‘the dividend you got wasn’t franked so you‘ve actually got to pay tax on that’.

The government says the measure will save $10 million a year. But Wilson reckons it will be billions.

Wilson said:

Treasury thinks this will bring in $10m (a year) … but because of the broad wording of the (proposed legislation), and it really comes down to the tax office’s interpretation and its ability to put pressure on large corporate companies, we think the figure could run into the billions by making it retrospective to 2016.

Wilson said he’d fight the proposed legislation with “the same amount of resources as we did in 2019”.

He’s referring to the previous federal election when Labor promised to abolish franking credit cash refunds. The Liberals dubbed it a “retiree tax” because it would have affected retirees the most.

What is the government’s point of view?

The Federal Treasurer, Jim Chalmers, described the legislation as “a very minor measure”, according to the article.

Labor says it merely closes a loophole that companies use to pay out excess franking credits on their books.

The draft proposal says: “The object of the frankable distribution rules is to ensure that only distributions equivalent to realised profits can be franked”.

The current loophole allows companies to use capital raisings to fund franked special dividends. This allows them to release excess credits above their earnings in a given period.

Chalmers points out that the Coalition Government initially proposed the measure in 2016.

The legislation is now open for public comment until 5 October.

The proposed changes will not impact ordinary dividends. ASX dividend shares will still be able to pay special dividends without franking.

The S&P/ASX 200 Index (ASX: XJO) is down 0.22% at the time of writing.

The post Labor’s proposed changes to franked ASX dividends ‘could run into the billions’: Wilsons appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The Fortescue share price is handily beating the ASX 200 today
• Down 7% in a month, is the Telstra share price in the buy zone?
• Talga share price surges 14% on Mercedes battery anode deal
• Why has this ASX mining share exploded 200% in 2 days?
• 2 reasons why you shouldn’t worry about rising interest rates, and 2 reasons why you should

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

from The Motley Fool Australia https://ift.tt/XGjou1z

The Fortescue Metals Group Limited (ASX: FMG) share price is currently up by more than 4% at the time of writing. That compares to the S&P/ASX 200 Index (ASX: XJO) which is only up by 0.25%, which includes the impact of ASX resource shares rising.

Fortescue isn’t the only one that’s doing well. For example, the BHP Group Ltd (ASX: BHP) share price is up 2% and the Rio Tinto Limited (ASX: RIO) share price is up by 2.75%.

ASX coal shares are also doing well today, with the Whitehaven Coal Ltd (ASX: WHC) share price up by more than 4% and the New Hope Corporation Limited (ASX: NHC) share price up by 5%.

What’s going on with the Fortescue share price?

One of the main things that normally influence sentiment about Fortescue is a change in the iron ore price. A higher iron ore price can largely translate into higher profit for Fortescue because the costs to extract 1mt of iron ore don’t change as the iron ore price rises (aside from paying more to the government).

According to Commsec, the iron ore price only rose by 0.1% overnight.

But, aside from a bit of market positivity returning about miners today, there could be some positive thoughts surrounding the Fortescue dividend after some comments from Fortescue leader Andrew Forrest.

Dividends to keep flowing?

According to reporting by the Australian Financial Review, he has rubbished the idea that spending money on decarbonising Fortescue will mean lower dividend payments.

He said that Fortescue has enough cash right now to fully pay for the decarbonisation plan.

The AFR quoted him from London:

We could write out a cheque for this. We’ve got over $US6 billion in cash right now. So, why would we get rid of the dividend policy? This has no cash challenge implications at all.

One point that Forrest referred to was that the Iron Bridge project construction is finishing. In FY23, Fortescue is expecting 1mt of production from Iron Bridge. This project’s funding has been funded out of cash flow, which hasn’t hurt the dividend policy (of paying up to 80% of net profit out as a dividend).

Forrest said:

That’s nearly $4 billion. That comes to an end, that starts production. They just haven’t thought this through.

Investments to help with costs

Fortescue isn’t investing in renewables just for the sake of going green, it will also help lower costs because the green energy generated will save money straight away, leading to a “double-digit rate of return”, according to reporting by the AFR. This could help the Fortescue share price, as lower costs help profit.

Forrest said:

This is not like those huge construction programs you’ve always seen me do: scoping, feasibility study, definitive feasibility study, front-end engineering design, construction; then commissioning, might work, might not, all the repairs when it doesn’t, then ramp up. Then you might get a cheque.

That’s not how renewable works. You roll it out like a carpet. And every time you do that, you plug it in. It’s simple, it’s proven, and you start saving money immediately.

The Fortescue boss explained that renewable energy will come with lower costs of maintenance, operations and fuel inputs, compared to fossil fuel power stations.

As Forrest points out “the wind doesn’t send you a bill. The sun doesn’t send you a bill. Pump hydro doesn’t send you a bill. It’s free.”

Fortescue share price snapshot

Despite today’s rise, the Fortescue share price is still down more than 10% over the past month.

The post The Fortescue share price is handily beating the ASX 200 today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Fortescue shares: Buy, hold, or fold?
• Broker gives its verdict on the Fortescue share price
• The Fortescue share price has outpaced the ASX 200 today. Could green dreams be why?
• Is the Fortescue dividend at risk from the miner’s $9b decarbonisation strategy?
• Why has the Fortescue share price been having such a rough trot lately?

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/8RhELBo

The Telstra Corporation Ltd (ASX: TLS) share price is out of form again on Tuesday.

In afternoon trade, the telco giant’s shares are down 0.5% to $3.74.

This means the Telstra share price has now dropped almost 7% since this time last month.

Not even news that a major data leak from arch-rival Optus has been able to keep its shares from slipping during recent market volatility.

Is the Telstra share price in the buy zone?

While the recent weakness in the Telstra share price has been disappointing, it could be a buying opportunity based on a recent note out of Morgans.

According to the note, the broker has an add rating and $4.60 price target on the company’s shares.

This implies a potential return of 23% for investors over the next 12 months excluding dividends and 27.5% including them.

What did the broker say?

Morgans was impressed with Telstra’s performance in FY 2022 and notes that Andrew Penn has left the top job on a high. It said:

Delivering his last result, CEO Andrew Penn exits TLS on a high note. The FY22 result came in at the upper end of guidance (underlying EBITDA +8% YoY), FCF was a beat and TLS raised its dividend (+0.5 cents) for the first time in years.

The good news is that the broker believes Penn has left the company positioned for growth in the coming years. Particularly given how the industry is experiencing some of the biggest tailwinds in years. It explained:

Telco has the strongest tailwinds in a decade with an increasingly rational market, pricing rises and the criticality of telco increasingly recognised. This combines with an incoming CEO who currently seems unlikely to drastically change the business and the potential for value uplift (potential bids) following the legal restructure.

Overall, Morgans appears to believe this could make the Telstra share price great value after recent weakness.

The post Down 7% in a month, is the Telstra share price in the buy zone? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Some investors think Telstra shares are boring. I beg to differ
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here’s how ASX telco shares are faring following Optus hack
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares paying out ‘special’ dividends in 2022

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

from The Motley Fool Australia https://ift.tt/Wv1tbMq

The Talga Group Ltd (ASX: TLG) share price is accelerating today following a positive update from the technology minerals company.

At the time of writing, Talga shares are up 13.92% to $1.35 apiece.

Let’s take a look at what the company announced to the market.

Talga secures a deal for its Swedish lithium-ion battery anode

In today’s statement, Talga advised it has entered into a non-binding offtake term sheet with Automotive Cells Company SE (ACC).

ACC is co-owned by major automotive brands Mercedes-Benz, Stellantis and battery company Saft.

The deal will see Talga supply ACC with 60,000 tonnes of its flagship anode product Talnode-C over a five-year term.

Both parties will have until 30 November to complete due diligence and finalise a binding definitive agreement.

If successful, the deal is expected to include the supply of ramp-up volumes over 2023-25, prior to the 60,000-tonne offtake supply commencing in 2026.

The offtake term includes a floating price mechanism which will be signed off by both parties in the binding definitive agreement.

Talga is building an ultra-low emission battery anode production facility and integrated graphite mining operation in northern Sweden. It aims to use 100% renewable electricity to supply greener anode for lithium-ion batteries.

Talga share price summary

The Talga share price has struggled to reach its 2021 highs, falling 18% this year.

When looking at the past 12 months, its shares are down 14% for the period.

Based on today’s price, Talga commands a market capitalisation of approximately $419.34 million and has over 304 million shares outstanding.

The post Talga share price surges 14% on Mercedes battery anode deal appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Down 7% in a month, is the Telstra share price in the buy zone?
• Why has this ASX mining share exploded 200% in 2 days?
• 2 reasons why you shouldn’t worry about rising interest rates, and 2 reasons why you should
• Sayona Mining share price leaps 7% on lithium project news
• Why the Megaport share price is up 5% and could keep climbing

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/urvAmzq

There is one ASX mining share that is skyrocketing ahead this week amid a new discovery.

Dundas Minerals Ltd (ASX: DUN) shares have soared 200% since market close on Friday and are currently trading at 63 cents. Today alone, Dundas shares have risen by 48%.

Let’s take a look at what is impacting this ASX mining share.

Why is the Dundas share price rising?

Dundas is exploring nickel, copper, gold, and cobalt at the Albany-Fraser Orogen belt in Western Australia.

Investors are buying up Dundas shares on the back of drilling results at the company’s exploration target.

Dundas discovered massive sulphides and ultramafic rocks at two holes drilled to a depth of 37 metres.

Analysis using pXFR showed multiple samples were anomalous in cobalt, nickel, copper, and silver.

Commenting on the results, managing director Shane Volk said:

The cobalt, copper, nickel and silver pXRF readings are very encouraging. We are moving as quickly as possible to test both Central AMT anomalies with diamond drill holes to depths of up to 500m.

As far as Dundas Minerals can determine, there has been no prior exploration ever conducted in this area of the Albany-Fraser Orogen, we are working in an absolute greenfield exploration environment.

Dundas listed on the ASX in November 2021.

Share price snapshot

Dundas Minerals shares have surged 220% in the year to date. In the past month, Dundas shares have exploded 330%.

This ASX mining share has a market capitalisation of more than $25 million based on the current share price.

The post Why has this ASX mining share exploded 200% in 2 days? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 2 reasons why you shouldn’t worry about rising interest rates, and 2 reasons why you should
• Sayona Mining share price leaps 7% on lithium project news
• Why the Megaport share price is up 5% and could keep climbing
• Why are ASX 200 coal shares smashing it out of the park on Tuesday?
• Bell Potter names the ASX tech shares to buy now

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.

from The Motley Fool Australia https://ift.tt/SrVZfcP

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.

With the Federal Reserve announcing on Sept. 21 that it would increase the target for the federal funds rate once again in keeping with its recent campaign to crush inflation, investors everywhere are trying to figure out what rising interest rates mean for their portfolios. As it turns out, that’s a pretty complicated question, but the most straightforward answer is that it’ll put downward pressure on the market.

Still, higher rates aren’t going to affect every stock in the same way, so let’s take a look at two reasons why you might not need to overly worry about it, and two reasons why you should probably be at least a bit concerned.

1. Not all companies need to borrow money

The first reason you shouldn’t worry about the rising federal funds rate is that it isn’t the be-all and end-all for growth in all businesses. Profitable companies can often generate enough free cash flow (FCF) to keep penetrating their markets and making new products without the help of any outside capital. That means there will still be good investments to find as rates rise, even if the market’s general trend continues to be downward.

Take a company like Intuitive Surgical, Inc. (NASDAQ: ISRG), for example. It develops robotic surgical units for hospitals and also sells robotic toolheads, imaging hardware, and packages of maintenance services for its technologies. It’s strongly profitable, it’s growing its top line steadily, and it’s entirely debt-free. Furthermore, it has more than $4.4 billion in cash, which is more than enough to cover its cost of goods sold (COGS) of around $1.7 billion and its total operating expenses of roughly $2.1 billion in 2021.

Intuitive has no reason to take out new debt right now, so it probably won’t, and it’ll likely keep growing anyway. Rising interest rates are unlikely to hurt it directly, so it doesn’t need to be a major worry for shareholders.

2. Not all corporate customers need to borrow money

Another closely related reason you shouldn’t worry about rising interest rates is that there are many businesses with customers that don’t need to borrow money to continue buying products or services. 

In Intuitive Surgical’s case, its customers are hospitals. Most hospitals wouldn’t be solvent for very long if they had to take out new debt just to purchase the consumables, accessories, and maintenance contracts needed to operate their surgical robots, assuming they have robots at all. And assuming those hospitals want to keep using Intuitive’s robots to do surgeries, stopping their purchasing isn’t an option. 

The story is much the same for many other businesses. If there’s no need for a company to borrow money to buy a product that it can’t do its core activities without, there’s one less constraint for things to continue as normal. 

Of course, that’s not the entire story, and there are in fact at least a couple of reasons why investors may want to worry about rising interest rates.

1. Rate hikes could go on, hurting even resilient businesses

As the cost of borrowing increases, liquidity drains from the economy, and eventually it’ll start to crimp demand all over. That’s actually the entire point of hiking interest rates; having less money chasing the same quantity of goods tamps down on inflation. The trouble is, even the most resilient businesses can see their base of revenue come under pressure if the financial conditions get tight enough for long enough.

In Intuitive Surgical’s case, that’s likely to take the form of fewer customers buying its flagship da Vinci surgical robots. As of 2020, each da Vinci cost around $2 million, so buying one is a significant capital expenditure for customers. While the accessories, services, and surgical tool heads necessary to operate emplaced da Vinci systems aren’t likely to see falling demand, higher interest rates mean that prospective buyers may have trouble getting the money they need to actually buy one. 

Therefore, it’s possible that Intuitive will see orders for new systems start to contract as its customers have a harder time borrowing cheaply, which is a medium-term threat to its share price. 

2. Pessimistic sentiment can drive stocks down

The final reason why investors may want to be concerned about monetary tightening is that it tends to spoil the market’s mood, especially for growth stocks. Even companies that don’t need to borrow money can get dragged down as the market falls. And with talk of an interest rate-hike-driven recession in full swing at the moment, it’s safe to say that the market is a bit skeptical when it comes to riskier stocks.

Unfortunately, there’s not much that you can do to defend your portfolio from poor marketwide sentiment, aside from holding onto your shares. So, in that sense, there really isn’t much of a reason to worry about it, assuming you’re not going to add to your position. For now, it’s probably best to avoid Intuitive Surgical and other growth stocks unless you can stomach a lot of risk and you plan to hold onto your shares for at least three to five years. Even if it isn’t under immediate threat from rate hikes, the market’s acting as though it is, and that could last for quite a while.

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

The post 2 reasons why you shouldn’t worry about rising interest rates, and 2 reasons why you should appeared first on The Motley Fool Australia.

(function() { function setButtonColorDefaults(param, property, defaultValue) { if( !param || !param.includes(‘#’)) { var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0]; button.style[property] = defaultValue; } } setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’); setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’); setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’); })()

More reading

• Sayona Mining share price leaps 7% on lithium project news
• Why the Megaport share price is up 5% and could keep climbing
• Why are ASX 200 coal shares smashing it out of the park on Tuesday?
• Bell Potter names the ASX tech shares to buy now
• Pilbara Minerals share price up 5%: Can this lithium share keep rising?

Alex Carchidi 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 Intuitive Surgical. 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.

from The Motley Fool Australia https://ift.tt/M8FjlNr

The Sayona Mining Ltd (ASX: SYA) share price is powering ahead today.

This comes after the company provided an update on its North American Lithium (NAL) operation.

At the time of writing, shares in the emerging lithium producer are up 6.82% to 23.5 cents.

In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.23% to 6,484.4 points.

What’s lifting the Sayona Mining share price?

Investors are bidding up Sayona Mining shares following the company’s announcement that it is moving closer to restarting production at its NAL operation.

According to its release, Sayona Mining advised it has awarded Quebec mining operator, L. Fournier & Fils a four-year contract.

Valued at C$200 million (A$226 million), this will see Fournier & Fils supervise mining operations and services. This includes stripping and drilling, blasting, loading and transportation of ore and waste rock, and the maintenance of mining roads.

The drilling and blasting work will be undertaken by another local Quebec company, Dynamitage Castonguay.

Works will commence from next month, with the restart of production at NAL targeted within the first quarter of 2023.

Sayona Mining managing director Brett Lynch commented on the company’s progress, saying:

We are delighted to further advance NAL towards the recommencement of production in the first quarter of 2023, with the selection of a skilled and experienced mining operator being a crucial step in this process.

With both demand and pricing for lithium currently at all‐time highs, we are well placed at NAL to become the first supplier of spodumene in North America, paving the way to becoming the region’s leading supplier of lithium carbonate/hydroxide.

Sayona share price summary

The Sayona Mining share price has gained more than 30% over the past 12 months and is up almost 80% in 2022.

Based on today’s price, Sayona presides a market capitalisation of approximately $1.83 billion.

The post Sayona Mining share price leaps 7% on lithium project news appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s which ASX lithium shares investors have been loading up on this month
• Why is the Sayona Mining share price in the doldrums this week?
• Which ASX lithium shares are performing best in 2022?
• These 8 companies joined the ASX 200 on Monday. Here’s how they’re performing
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/hvYfsno

The Megaport Ltd (ASX: MP1) share price is having a strong day on Tuesday.

In afternoon trade, the elasticity connectivity and network services interconnection provider’s shares are up 5% to $7.81.

Why is the Megaport share price shooting higher?

Today’s strong gain by the Megaport share price is a bit of a mystery as there has been no news out of the company.

But with its shares down 60% since the start of the year, it’s possible that bargain hunters are snapping them up today.

Particularly given how several bullish brokers are predicting major share price gains over the next 12 months.

One of those brokers is Citi, which has a buy rating and $13.90 price target on the company’s shares. Based on the current Megaport share price, this implies potential upside of 78% for investors.

Citi commented:

Looking ahead, we see an increase in partner/indirect channel contribution and MVE sales as key to support our medium-term forecasts. While we are cautious on the macro outlook, with ~35% revenue growth expected in FY23e and existing customers underpinning growth (with positive net dollar retention) we maintain our Buy rating.

Who else is bullish?

Goldman Sachs is another broker that is bullish on the Megaport share price. It currently has a buy rating and $10.30 price target on the company’s shares.

The broker recently commented:

We remain positive on the product leadership of the company, and the rapidly growing NaaS/SD-WAN addressable markets. […] Overall, we revise FY22-25E EBITDA +16% to +1% given a more disciplined cost base into FY23.

All in all, these brokers appear to believe that this could make Megaport one to consider if you’re looking for options in the tech sector and have a higher than average tolerance for risk.

The post Why the Megaport share price is up 5% and could keep climbing appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Goldman Sachs names 2 ASX tech shares to buy now
• 3 hot small-cap ASX growth shares Firetrail’s backing right now
• Here are the 10 most shorted ASX shares

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

from The Motley Fool Australia https://ift.tt/FEXesPd

S&P/ASX 200 Index (ASX: XJO) coal shares are out ahead of the pack on Tuesday, gaining as much as 6%.

That puts them in the leading spot on the S&P/ASX 200 Energy Index (ASX: XEJ), which is, in turn, among the ASX 200’s best-performing sectors.

Here are how some of the biggest ASX 200 coal stocks are performing right now:

• New Hope Corporation Limited (ASX: NHC) shares are surging 6.02% to $5.725
• The share price of Whitehaven Coal Ltd (ASX: WHC) is up 6.01% at $8.385
• That of Coronado Global Resources Inc (ASX: CRN) is gaining 3.36% to $1.54

Meanwhile, the share price of market favourite Yancoal Australia Ltd (ASX: YAL) – which isn’t included in the ASX 200 – has lifted 1.3% to $5.47.

For comparison, both the ASX 200 and the All Ordinaries Index (ASX: XAO) are rising 0.37% right now.

So, what’s going so right for ASX coal favourites on Tuesday? Let’s take a look.

What’s boosting ASX 200 coal shares?

ASX 200 coal shares – and non-ASX 200 coal favourites – are outperforming on Tuesday.

Their strong performance comes as the energy sector lifts 1.55%, coming in second only to the S&P/ASX 200 Materials Index (ASX: XMJ)’s 2.25% gain.

That’s despite oil prices falling around 2.5% overnight. The Brent crude oil price slipped 2.4% to US$84.06 a barrel while most of Australia slept. At the same time, the US Nymex crude oil price fell 2.6% to US$76.71 a barrel.

It’s worth noting, however, that shares in New Hope, Whitehaven, Coronado, and Yancoal fell 15%, 14%, 12%, and 12% on Monday.

Their recent gains and falls come as demand for the commodity is seemingly supported by concerns of a European energy crisis.

The continent is facing a shortage of gas and coal after Russian energy commodities were withdrawn from the market following the nation’s invasion of Ukraine earlier this year, Reuters reports.

That has reportedly led many European nations to double down on coal to keep the lights on as the Northern Hemisphere’s winter approaches.

Such demand has likely driven prices higher – and that’s good news for ASX 200 coal shares.

New Hope, for example, recently posted a whopping 1,138.8% year-on-year increase in after-tax profits for financial year 2022.

The company also noted its realised average price came to $493.52 a tonne in the final quarter. For comparison, it posted a realised average price of $281.84 for financial year 2021.

The post Why are ASX 200 coal shares smashing it out of the park on Tuesday? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• New Hope share price rebounds 10%: Time to buy?
• ‘Largest exposure’: Why this expert is still bullish on red-hot ASX coal shares
• Why is the Whitehaven share price wilting 10% on Monday?
• Goldman Sachs warns that the New Hope share price could crash 40%
• Whitehaven Coal shares are on fire, but could there be a looming risk?

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

from The Motley Fool Australia https://ift.tt/YiDnv3U

If you’re looking for options in the beaten down tech sector, then you may want to consider the two shares that Bell Potter is recommending.

Here’s what the broker is saying about these ASX tech shares:

Life360 Inc (ASX: 360)

Bell Potter sees a lot of value in this rapidly growing location technology company’s shares.

And while the broker acknowledges that Life360 isn’t yet profitable, it highlights that the company has a strong cash balance which it expects to see it through to breakeven.

In light of this, the significant weakness in the Life360 share price this year could be a buying opportunity for investors.

Bell Potter has a buy rating and $8.23 price target on Life360’s shares. It commented:

Life360 develops and delivers a mobile app for families – called Life360 – that provides communications, driving safety and location sharing. The company adopts a freemium model to attract customers but has been successfully converting a portion of these customers to paying subscribers over the last several years by providing valuable features. The company has also recently made two acquisitions – Jiobit and Tile – so that now it not only connects and protects people but also pets and things. Yes Life360 is currently not profitable but is expected to be operating cash flow positive from 4Q2023 and has more than sufficient cash to fund its operations till then.

TechnologyOne Ltd (ASX: TNE)

Another ASX tech share that the broker is bullish on is TechnologyOne. It is a leading enterprise software company serving government, local government, and private sector customers.

It has been growing at a solid rate for years and appears well-placed to continue this trend in the future. This is thanks to its shift to a software as a service (SaaS) business model.

Bell Potter expects this shift to underpin higher margins and strong earnings growth for many years.

It is for this reason that the broker has slapped a buy rating and $14.25 price target on TechnologyOne’s shares. It explained:

Technology One is a provider of ERP (enterprise resource planning) software to large corporates and government agencies in Australia, New Zealand, Asia Pacific and the UK. The key competitive advantage of the company is it has developed a fully integrated SaaS solution of its software and is now switching customers to this solution. The migration is now around threequarters complete and Technology One is starting to reap the benefits of greater recurring revenue and a higher margin. This combination will in our view drive double digit earnings growth for years to come and, as the migration of customers approaches 100%, we expect the multiple to rerate to that of a pure SaaS company.

The post Bell Potter names the ASX tech shares to buy now appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• 8 ASX 200 shares got kicked out of the index on Monday. How are they tracking?
• Guess how many companies in the ASX 300 actually make no money
• 3 beaten-up ASX tech shares that pay dividends
• Here are 3 ASX growth shares analysts rate as buys

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. The Motley Fool Australia has recommended TechnologyOne Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/aXnDd2I