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The Wall of Worry is a higher barrier for investors to scale this year but there are still plenty of S&P/ASX 100 shares to keep your eye on, according to a top broker.

The figurative wall refers to the market pushing higher despite the growing list of problems. And there are problems aplenty.

Aggressive global interest rate hikes, the sharp slowdown in China’s economy and a looming energy crisis in Europe are only some of the obstacles ASX investors have to climb.

Volatility ahead

The experts at Macquarie are also warning investors to brace for more volatility over the next six months. The broker said:

“We think it is hard to make a bull case for stocks when Industrial (non-resource) PEs are already high, we are in the middle of an earnings downgrade cycle and central banks continue to tighten to slow inflation. Our indicators also suggest the US will be in recession by early 2023.”

But with volatility comes opportunity. Macquarie polled its analysts for their best ASX 100 shares to buy now.

Defensive ASX 100 shares to buy

One standout is the CSL Limited (ASX: CSL) share price. Macquarie likes the global biotech for its multiple growth drivers.

These include recovery in plasma collections, benefits from the Rika platform, earnings from Vifor and contributions from pipeline products.

Another on the buy list is diversified property giant GPT Group (ASX: GPT). Macquarie believes its defensive earnings and gearing puts it in a good position to outperform in this environment.

Speaking of defensive shares, Lottery Corporation Ltd (ASX: TLC) is also on the broker’s most favoured list. Macquarie calls it one of the most defensive discretionary shares due to its long and exclusive lotteries and Keno licenses in Australia.

Best placed industrial shares

Meanwhile, Idp Education Ltd (ASX: IEL) is another top ASX 100 share pick due to its structural growth story. The long-term growth rate of international students stands at 7% to 10% a year and the group enjoys good operating leverage.

The James Hardie Industries plc (ASX: JHX) share price is also a top buy, in Macquarie’s book. While the building materials supplier is under pressure from a slowing property market, the company is more exposed to renovations and remodelling – an area that has greater resilience to economic cycles.

Energy shock puts these ASX 100 shares on the buy list

Finally, there are two ASX 100 shares in the energy sector that made the cut. These are the Origin Energy Ltd (ASX: ORG) share price and Santos Ltd (ASX: STO) share price.

The energy shortage caused by the Russian-Ukraine war will drive up global gas prices and the two are well placed to benefit.

The post These are the top ASX 100 buy ideas from Macquarie appeared first on The Motley Fool Australia.

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More reading

• Why is the Origin share price sliding on Monday?
• 5 things to watch on the ASX 200 on Monday
• Why experts say these ASX growth shares are buys
• 2 blue chip ASX 200 shares to boost your portfolio: experts
• 3 blue-chip ASX 200 shares touting the highest dividend yield in September

Motley Fool contributor Brendon Lau has positions in CSL Ltd. and Santos Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Idp Education Pty 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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The Origin Energy Ltd (ASX: ORG) share price is in the red this morning. Its slip comes after the company announced it is exiting the Beetaloo Basin.

IOrigint also intends to exit all its upstream exploration permits as it leans into the clean energy transition.

The divestment of its Beetaloo Basin interests will bring in $60 million upfront and future royalties. Origin expects to recognise a non-cash post-tax loss of between $70 million and $90 million in relation to the transaction.

The Origin share price is trading at $5.80 at the time of writing, 0.26% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is lifting 0.14% right now. Meanwhile, the S&P/ASX 200 Utilities Index (ASX: XUJ) is down 0.31%.

Let’s take a closer look at the major news from the ASX 200 energy producer and retailer.

Origin announces Beetaloo Basin exit

The Origin share price is lower on news the company’s backing out of its 77.5% interest in three permits in the Northern Territory’s Beetaloo Basin.

The energy giant has entered an agreement with Tamboran Resources Ltd (ASX: TBN) and Tamboran’s major shareholder Bryan Sheffield to divest its interests for $60 million upfront.

It will also receive a 5.5% royalty based on wellhead revenues produced from the permits.

The company has also committed to undertake a strategic revenue of all its remaining exploration permits, excluding its Australia Pacific LNG interest, with a view to exiting all permits over time.

Management commentary

Origin CEO Frank Calabria commented on the company’s latest move, saying:

The decision[s] … will enable greater flexibility to allocate capital towards our strategic priorities to grow cleaner energy and customer solutions and deliver reliable energy through the transition.

Calabria said progressing projects like Beetaloo could be expensive and uncertain, adding:

Ultimately, we believe Origin is better placed prioritising capital towards other opportunities that are aligned to our refreshed strategy.

The suite of agreements executed with Tamboran allow Origin to realise value created by our investment and exploration activities to date and ensures another operator present in the area and committed to developing its resources can continue to take the venture forward.

Origin has also entered a gas sale agreement for up to 36.5 petajoules each year over 10 years, conditional on terms including Tamboran’s final investment decision to develop the project.

Perhaps unsurprisingly then, the company clarified it was not planning to exit the gas business. Calabria said:

Gas will continue to have an important role in our business … and in the broader energy mix as we look to underpin reliable energy supply to customers and accelerate our investment into the energy transition.

Origin share price snapshot

The Origin share price has been outperforming lately.

It has gained 8% since the start of this year. It’s also currently 35% higher than it was this time last year.

For comparison, the ASX 200 has dumped 11% year to date and 10% over the last 12 months.

The post Why is the Origin share price sliding on Monday? appeared first on The Motley Fool Australia.

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More reading

• Are these ASX blue-chip shares losing their defensive benefits?
• Are AGL shares offering a bigger final dividend than Origin this year?
• Could you be holding onto ‘zombie’ ASX shares hoping for new life?
• ‘We would like to see faster progress’: ASX 200 energy shares on notice
• 5 ASX 200 shares turning ex-dividend tomorrow

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

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The Lake Resources N.L. (ASX: LKE) share price has been a strong performer on Monday morning.

At the time of writing, the lithium developer’s shares are up a massive 19% to $1.11.

Why is the Lake Resources share price racing higher?

Investors have been bidding the Lake Resources share price higher today after the company released another update on its Kachi Lithium Project in Argentina.

This follows an update last week which revealed that its partner, Lilac Solutions, was disputing the date that it is due to achieve key milestones relating to the Kachi Pilot Plant. Lilac believes it has until the end of November, whereas Lake Resources says it is until then end of September.

This is important because Lilac will earn a 25% stake if it achieves these milestones by the agreed date.

Today’s update

This morning Lake Resources attempted to allay concerns that the previous update alluded to problems at the project.

According to the release, Lake has advised that ongoing work is being done by Lilac at the Kachi Project and all parties are confident that on-site operations will be successful.

Construction of the facility to house the Lilac demonstration plant is now complete and dry commissioning of the demonstration plant commenced last Wednesday.

Furthermore, Lilac has advised that, subject to completion of dry commissioning, it expects to begin wet commissioning of the plant on Thursday September 22. Once wet commissioning is complete, Lilac then expects to begin onsite processing of Kachi brines in the first week of October.

Management also notes that while the test program is based on operating the demonstration plant for 1000 hours, it is anticipated that the first 2000 litres of lithium concentrate produced from the demonstration plant will be sent for conversion into lithium carbonate once delivered. Lake proposes that this final lithium product will then be qualified by a tier one battery maker to validate product specifications.

Finally, Lake revealed that offtake discussions continue to advance and new appointments to the Lake board are in final stages of consideration.

The post Why is the Lake Resources share price rocketing 19%? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Here are the 3 most heavily traded ASX 200 shares on Friday
• ASX lithium shares take a beating on Friday
• Why is the Lake Resources share price tumbling again?
• Why Lake, Pushpay, South32, and Tyro shares are dropping

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

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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) is still the most share on the ASX after its short interest rebounded to 15%. Short sellers appear to believe the market is too optimistic on the travel market recovery.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest ease to 13.5%. This betting technology company’s shares have fallen 58% this year but short sellers appear to believe they can keep falling.
• Block Inc (ASX: SQ2) has seen its short interest rise to 10.4%. This could be due to weakness in the tech sector, concerns over the prospects of a US recession, and regulatory pressure in the BNPL industry.
• Lake Resources N.L. (ASX: LKE) has short interest of 9.9%, which is down slightly week on week. Short sellers will have been pleased to see this lithium share tumble last week after it revealed an ownership dispute with its DLE partner Lilac Solutions.
• Zip Co Ltd (ASX: ZIP) has seen its short interest ease slightly to 9.5%. This morning this buy now pay later provider’s shares were kicked out of the ASX 200 index following the quarterly rebalance.
• Megaport Ltd (ASX: MP1) has returned to the top ten after its short interest jumped to 9.1%. This could be due to valuation concerns. Megaport’s shares trade on huge multiples.
• City Chic Collective Ltd (ASX: CCX) has short interest of 8.6%, which is down slightly since last week. This plus sized fashion retailer’s shares have come under significant pressure since the release of a very disappointing full year result which revealed a huge jump in inventory.
• Nanosonics Ltd (ASX: NAN) has short interest of 8.4%, which is down slightly week on week. This infection prevention company’s shares have been targeted due to concerns over sales disruption and margin pressures from a business model change in the key US market.
• De Grey Mining Limited (ASX: DEG) has short interest of 8.2%, which is down slightly week on week. Short sellers continue to hold the gold developer’s shares despite a recent positive update on its Mallina Gold Project.
• Pointsbet Holdings Ltd (ASX: PBH) has short interest of 7.7%, which is down slightly week on week. This appears to have been driven by concerns over this sport betting company’s cash burn.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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More reading

• Why is the Lake Resources share price rocketing 19%?
• Here’s why the Flight Centre share price isn’t all that it seems
• 5 things to watch on the ASX 200 on Monday
• 2 ASX shares now at a buying opportunity after a shocking 2022: fundie
• Here are the 3 most heavily traded ASX 200 shares on Friday

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 Betmakers Technology Group Ltd, Block, Inc., MEGAPORT FPO, Nanosonics Limited, Pointsbet Holdings Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, MEGAPORT FPO, and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The BHP Group Ltd (ASX: BHP) share price is in the green in morning trade, up 0.29%.

BHP shares closed on Friday trading for $38.04 and are currently trading for $38.16 apiece.

This comes amid media speculations that the S&P/ASX 200 Index (ASX: XJO) mining giant may be set to increase its takeover offer for Oz Minerals Ltd (ASX: OZL).

What’s this about a sweetened takeover offer?

Citing people familiar with the matter who wish to remain anonymous, Bloomberg reports that BHP is mulling upping its $25 per share bid for copper, nickel and gold miner Oz Minerals.

On 8 August, BHP lobbed an unsolicited, conditional and non-binding indicative proposal to acquire all shares in Oz Minerals in cash via a scheme of arrangement, valuing the company at $8.4 billion.

As you likely recall, the Oz Minerals board unanimously rejected that offer, saying it undervalued the company’s assets.

OZ Minerals CEO, Andrew Cole said at the time:

We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations.

We are mining minerals that are in strong demand particularly for the global electrification and decarbonisation thematic and we have a long-life Resource and Reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.

The BHP share price closed 1% higher on 8 August, while Oz Minerals shares rocketed an incredible 35% by the closing bell.

Now, the cited sources said, BHP was still looking to increase its exposure to metals like copper, which are likely to see long-term demand growth amid the world’s push towards electrification.

Those sources said BHP may sweeten its takeover proposal for Oz Minerals as early as this month, saying Oz Minerals is seeking an offer of some $10 billion, or around $30 per share.

Both Oz Minerals and BHP have so far declined to comment on any new potential takeover offer. And the sources stated that there were no guarantees BHP would indeed come back with an improved offer, nor any certainty that Oz Minerals would accept a higher bid.

The Oz Minerals share price is up 4% in early trade today.

BHP share price snapshot

The BHP share price peaked in mid-April amid sky-high iron ore prices. BHP shares have retraced since then amid falling prices for the industrial metal. Still, the BHP share price remains up 2% over the past 12 months, compared to a 7% full-year loss posted by the ASX 200.

The post BHP share price gains amid improved Oz Minerals takeover rumours appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Analysts name 2 ASX 200 mining shares to buy
• Could the latest news out of China bode well for ASX 200 iron ore shares?
• BHP shares: Buy, hold, or fold?
• 3 blue-chip ASX 200 shares touting the highest dividend yield in September

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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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.

The world’s second biggest cryptocurrency just got a little bit better — and greener. Ethereum (CRYPTO: ETH) completed what’s known as “the merge” this past week. The much-waited-for event changed the way the blockchain verifies transactions — and dramatically cut Ethereum’s energy use.

Ethereum had postponed the merge several times before getting to this point. Today, investors, users, and developers all can breathe a sigh of relief. The merge happened without any glitches or mishaps. So now, the big questions are: What does the merge mean for investors and users? And what’s next?

Let’s find out.

A driving force in the market

First, a bit of background on Ethereum and the merge itself. The Ethereum blockchain has proved that it could be one of the driving forces in the crypto market. It hosts more than 2,900 decentralized applications, according to the website State of the dApps. And when it comes to non-fungible tokens, Ethereum is the biggest blockchain by sales volume, CryptoSlam data shows.

A few big problems have plagued Ethereum, though: energy use, lack of speed, and high fees. That’s why software engineers have been working on an enormous multistage upgrade. The merge was the second step. It marked the official transitioning of Ethereum to a proof-of-stake validation method from proof of work.

Proof of work involves solving complex computational puzzles to verify a transaction. As a result, Ethereum used about the same amount of energy annually as the Netherlands. This switch to proof of stake means Ethereum’s energy use dropped by more than 99%.

That’s a big plus for the planet. And this greener profile makes Ethereum more attractive to a broader range of investors and users. Proof of stake offers validation power to high stakeholders — eliminating the need for major computer power.

So the merge solved one of Ethereum’s big problems. Otherwise, the move doesn’t change the way individuals use Ethereum.

The next step

As for the problems of speed and fees, Ethereum is in the process of tackling them in the third part of this general update. This step is called “sharding,” and Ethereum aims to launch it next year. Sharding splits up the database horizontally to relieve congestion. As a result, transactions will pick up speed — and get cheaper.

Now, let’s look at the upgrades from a price perspective. The merge eventually may result in a decrease in Ethereum coin supply. That’s because the blockchain no longer will be paying miners ETH for adding blocks of data to the blockchain. This decline in supply supports the idea of a higher price.

Ethereum’s price actually dropped following the merge. But it’s important to keep in mind the price rose about 20% over the past three months. Today, some investors may be locking in gains.

I don’t see the merge or sharding as events that will send Ethereum soaring overnight. Instead, they should progressively drive gains in value over time. The merge will help as it starts pushing coin supply down and leads to less energy use. And sharding, as it draws more users to Ethereum — they’ll appreciate fast, inexpensive transactions.

What does all of this mean for you as an investor?

Should you buy Ethereum now or wait? That’s always the big question. Cryptocurrency is a risky area because it’s rather new. We don’t know what the landscape will look like several years down the road. The important thing is to never invest more than what you can afford to lose.

With that in mind, Ethereum looks promising. This crypto is a leader now and is on the road to maintaining that leadership. If cryptocurrency does reshape the way business is done, Ethereum has what it takes to be one of the top players. And that’s why now is a great time to get in on this exciting cryptocurrency.

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

The post Ethereum’s merge is done: now what? appeared first on The Motley Fool Australia.

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More reading

• 3 reasons the Ethereum price could gain in the post-Merge months
• Ethereum’s merge spotlights a key strength, says Coinbase exec
• 5 reasons I wouldn’t touch Shiba Inu with a 10-foot pole
• Why Ethereum is diving today
• Will the Ethereum Merge leave the crypto at greater risk of hacking?

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

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

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The PolyNovo Ltd (ASX: PNV) share price has started the week with a bang.

In morning trade, the medical device company’s shares are up 11% to $1.50.

Why is the PolyNovo share price storming higher?

Much to the dismay of short sellers, investors have been bidding the PolyNovo share price higher this morning following the release of an announcement.

According to the release, the company has received FDA 510(k) clearance for NovoSorb MTX, which it describes as a major new product innovation for soft tissue regeneration for the management of complex wounds.

The release notes that MTX leverages the technology platform underpinning the clinical success of BTM, but without a sealing membrane. It was developed in this way to satisfy clinician demand for a product for use in indications where the sealing membrane is not required.

BTM and MTX are complementary, and it is expected that clinicians will use both products for the treatment of soft tissue deficits.

Addressable market

The release reveals that MTX is indicated for use in partial and full thickness wounds, pressure ulcers, venous ulcers, chronic and vascular ulcers, diabetic ulcers, and surgical and trauma wounds. Management feels that this offers clinicians greater versatility in wound management.

Combined, the MTX product portfolio expands PolyNovo’s addressable market in the U.S. by an estimated A$500 million.

PolyNovo’s CEO, Swami Raote, was very pleased with the news. He said:

The creation of MTX is an exciting example of surgeon led product development that opens a significant new market for us. We are proud to bring MTX to U.S. surgeons and patients, and believe a product specifically designed for use in a single-stage procedure will leverage and expand our penetration of the advanced wound care space. We expect clinicians to carry BTM and MTX and provide them a richer tool kit for patient care. We aim to quickly put MTX in the hands of Key Opinion Leader surgeons.

The post PolyNovo share price jumps 11% on FDA update appeared first on The Motley Fool Australia.

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More reading

• Polynovo share price halted amid FDA news
• 3 ASX 300 healthcare share winners on Wednesday
• Why did the Polynovo share price plunge 17% today?
• Why Aussie Broadband, Grange, NextDC, and PolyNovo shares are being hammered
• Polynovo share price plummets 15% despite surging full-year revenue

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 POLYNOVO FPO. 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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Commonwealth Bank of Australia (ASX: CBA) and its shares may be known for being the biggest bank in Australia. The other big S&P/ASX 200 Index (ASX: XJO) bank shares are names like Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB).

As the biggest banks, and essentially too big to allow to fail, they are required to hold the most amount of capital out of all banks in Australia.

One of the key ways that banks are measured by how strong their balance sheets are, and therefore how capitalised they are, is the common equity tier one (CET1) capital ratio.

Every quarter, banks tell investors what their CET1 ratio is. So we regularly get a view of the bank balance sheets.

Big ASX 200 bank share CET1 ratios

Seeing as we’re focused on CBA shares, we’ll first look at what CBA has most recently reported.

CBA’s FY22 result ended on 30 June 2022. It said that its CET1 capital ratio was 11.5%, which was a reduction of 160 basis points (1.60%) compared to FY21.

The biggest ASX 200 bank share said that it “maintained a strong capital position after returning $13 billion to shareholders via dividends and [share] buybacks, and absorbing a significant increase in risk weighted assets associated with the interest rate risk in the banking book”.

At 30 June 2022, Westpac said that its CET1 capital ratio was 10.75%, down from 11.33% at 31 March 2022. It was lower due to the dividend payment (45 basis points), higher risk-weighted assets (42 basis points) and higher capital deductions.

For the end of June 2022, NAB said that its group CET1 capital ratio was 11.6%. It was 12.5% at March 2022. It was reduced by 54 basis points due to the 2022 interim dividend, 31 basis points due to the acquisition of CitiGroup’s Australian consumer business and 19 basis points due to the ongoing share buyback.

For ANZ, it had a group CET1 capital ratio of 11.1%, with the interim dividend impacting it by 41 basis points and broad-based lending growth across the portfolio affecting the ratio by 17 basis points compared to the last update.

What does this mean for the CBA share price?

I think what this shows is that CBA and NAB have stronger, more capitalised balance sheets than ANZ and Westpac.

That extra capital could be used to fund more lending growth, pay stronger shareholder returns, or simply maintain a strong position for those two banks so that they can easily get through whatever happens over the next couple of years.

However, some brokers think that the current CBA share price is overvalued. For example, Morgan Stanley has an underweight rating on the ASX 200 bank share, with a price target of $83. Over the next year, that implies a fall of around 12% from today’s price.

The post Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up appeared first on The Motley Fool Australia.

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More reading

• Westpac shares: Buy, hold, or fold?
• Top brokers name 3 ASX shares to buy next week
• Brokers say these ASX 200 dividend shares are buys now
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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 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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The Medibank Private Ltd (ASX: MPL) share price has been volatile in recent months. It has managed to rise slightly in 2022 – up 3.5% – but since 30 August 2022 it’s actually down by 5.6%.

The last three years have been an interesting time for private health insurance businesses.

There was a lot of disruption caused by the COVID-19 pandemic. But, that also led to a number of elective surgeries being delayed, which may have helped increase Medibank’s profit during this period.

FY22 saw net resident policyholder growth of 60,900 (or 3.2%). Revenue rose 3.2%, with operating profit rising 12.5% to $594.1 million. However, the actual net profit after tax (NPAT) fell 10.7%. That was after the net investment income of $120 million in FY21 turned into a net investment expense of $24.8 million in FY22, as investment markets plummeted in the last few months of FY22.

Underlying NPAT, which aims to remove that investment volatility, rose by 9.1% to $435.1 million. The annual dividend per share increased 5.5% to 13.4 cents.

FY23 outlook

Growth within the business could have a positive effect on the Medibank share price.

In terms of FY23 policyholder growth, it’s expecting a rise of 2.7%. That’s assuming a modest decline in the growth rate of industry participation.

Looking at the comments about claims, it’s expecting the underlying net claims expense per policy unit to grow. The growth rate of 2.3% in FY22 is its “best indicator” of growth in FY23 among resident policyholders.

The company expects productivity with its management expenses to largely offset the inflation of expenses.

In terms of customer relief, it continues “to assess claims activity and any permanent net claims savings due to COVID will be given back to customers through additional support in the future”.

Management is focused on growth for the business. It’s looking at both organic growth and acquisition opportunities for Medibank Health and health insurance, supported by a “strong capital position”. It had health insurance business-related capital of $983.7 million at 30 June 2022, which was at the top end of its targeted range.

It has unallocated capital of $148 million, which “provides flexibility to fund future inorganic growth” and it will “consider further capital management if suitable opportunities do not arise”.

What do experts think of the Medibank share price?

The brokers Citi and Ord Minnett both rate Medibank as a buy. Both brokers thought the FY22 result was good.

Ord Minnett has a price target of $3.75 on the business, which implies a possible rise of around 5% over the next year.

Meanwhile, Citi has a price target of $4. That suggests that the Medibank share price could rise by more than 10% over the next year.

The post What’s the outlook for the Medibank share price in FY23? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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Wilson Asset Management (WAM) is one fund manager that likes to hunt for smaller ASX shares that could have solid investment outlooks.

WAM runs a number of different listed investment companies (LICs) including WAM Capital Limited (ASX: WAM), WAM Active Limited (ASX: WAA), and WAM Research Limited (ASX: WAX).

The fund manager likes to look for compelling, undervalued growth opportunities on the ASX share market. The below companies are two investment ideas that WAM recently highlighted.

IPH Ltd (ASX: IPH)

WAM described IPH as Asia Pacific’s leading intellectual property (IP) services group with a network of member firms and clients in more than 25 countries.

Last month, IPH announced that it was buying Canadian IP agency Smart & Biggar for a total of $387 million.

The fund manager noted the acquisition will extend IPH’s international secondary markets network beyond the Asia Pacific region for the first time and lift IPH “towards being a global leading IP services group”.

IPH expects that the transaction will result in adding to underlying earnings per share (EPS) of approximately 10% in the first year of ownership and deliver access to more growth opportunities.

August was also reporting season. Last month, the company announced its full-year result, revealing a 14% year-over-year increase of underlying net profit after tax (NPAT) to $86.7 million as well as an 11% rise in underlying earnings before interest, tax, depreciation and amortisation (EBITDA).

Here is what WAM had to say about the company:

We remain positive on IPH and believe the business has a strong runway for organic and acquisition-led growth over the medium term.

Capitol Health Ltd (ASX: CAJ)

Capitol Health is described by the fund manager as a diagnostic imaging provider to the Australian healthcare market.

Last month, the ASX share announced the full-year result for its 2022 financial year which was better than the market was expecting. It also included the acquisition of Future Medical Imaging Group, a diagnostic imaging services provider, for a total cost of $56.1 million.

WAM pointed out the acquisition is expected to add to EPS in the high single digits. The fund manager said:

With a strong balance sheet and continued investment in well-defined growth opportunities, we believe the outlook for Capitol Health remains strong as diagnostic imaging providers recover from the coronavirus pandemic.

The post 2 little-known ASX shares that this fund manager says have ‘strong’ outlooks 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 recommended IPH Ltd. The Motley Fool Australia has recommended IPH Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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