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Two opposing views by Wall Street gurus will only add to investors’ angst as the market ends the week deep in the red.

The S&P/ASX 200 Index (ASX: XJO) lost 1.4% to 6,747 on Friday and is down around 3% for the past week.

The weakness won’t surprise many as history has shown September and October to be among the worst times of the year for global share markets.

What is the market’s next move?

But those debating whether to buy the dip for the much anticipated Christmas rally will be torn by conflicting forecasts from Cathie Wood and Ray Dalio.

Wood is the founder of Ark Investment Management and was named top stock picker of 2020 by Bloomberg. Dalio is a billionaire investor and founder of the world’s largest hedge fund, Bridgewater Associates.

Wood is using the market weakness to snap up shares while Dalio is warning of another sharp drop for equities.

Inflation outlook will decide market direction

Their opposite views can be essentially boiled down to inflation expectations. Ark Investment bought 27 shares on Tuesday amid the sharpest sell-off on the NASDAQ-100 (NASDAQ: NDX) since March 2020, reported Bloomberg.

Wood is playing chicken with the US Federal Reserve. The Fed unleashed the market volatility by aggressively hiking interest rates to control runaway inflation.

The buying spree is likely related to Wood’s prediction that high inflation will soon turn into deflation.

As inflation is bad for share valuations, deflation will arguably have the opposite effect. This is particularly so for tech shares, which have borne the brunt of the market sell-off.

Warnings of a new bear market

But not many would share her view on deflation. If anything, Ray Dalio reckons the market is underestimating the inflation problem.

In a tweet to his 234k followers, Dalio said:

Right now, the markets are discounting inflation over the next 10 years of 2.6 percent in the US. My guesstimate is that it will be around 4.5 percent to 5 percent long term, barring shocks (e.g., worsening economic wars in Europe and Asia, or more droughts and floods) and significantly higher with shocks.

He is also predicting that rates will have to rise to around 4.5% too and that will trigger a 20% drop in share prices. A peak-to-through fall of 20% or more would officially put shares in a bear market.

Foolish takeaway

However, Dalio stressed that these are only “guesstimates”. Who can blame him when central banks have gotten their inflation forecasts so wrong?

Perhaps the more important lesson from history is not to try to pick market bottoms. Over the longer-term, persistent investors have made good returns from buying quality shares – regardless of the market cycle.

The post Chalk and cheese: 2 iconic share investors couldn’t be further apart on the market’s next move appeared first on The Motley Fool Australia.

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More reading

• Why experts say these ASX growth shares are buys
• Netflix Stock: Headed to $240?
• Goldman Sachs names 3 mid cap ASX shares to buy
• Could the latest news out of China bode well for ASX 200 iron ore shares?
• Up 50% in a month, fundie reveals ASX micro-cap share in a ‘beautiful position’

Motley Fool contributor Brendon Lau 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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Looking for growth shares to buy? Listed below are two growth shares that have recently been named as buys.

Here’s what you need to know about these ASX growth shares:

IDP Education Ltd (ASX: IEL)

The first ASX growth share that analysts are tipping as a buy is language testing and student placement company IDP Education.

In respect to language testing, IDP is the co-owner of the IELTS test, which is the English test that is trusted by more governments, universities and organisations than any other. Demand for this test softened during the worst of the pandemic, but has since rebounded very strongly. This led to the company reporting bumper sales and profit growth for FY 2022 last month.

Goldman Sachs is confident that the company’s growth can continue in the coming years thanks to strong underlying system demand. It commented:

IEL is trading c.40% below its 5-yr average P/E premium to the ASX200 Industrials with a forecast 37% FY22-25E EPS CAGR, we remain Buy-rated. We have upgraded EPS in FY23/FY24 by 1.7%/0.8% on the back of the stronger FY22 result, continued strong revenue growth and margin expansion. The balance sheet is in a resilient position with c.A$40mn of net cash to facilitate any bolt-on acquisitions or ramp up in organic investment in new offices and technology.

Goldman has a buy rating and $35.50 price target on the company’s shares.

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX growth share that has been tipped as a buy is Treasury Wine.

It is the wine giant behind popular brands including 19 Crimes, Wolf Blass, and the jewel in the crown, Penfolds.

It has been a turbulent few years for Treasury Wine. After being effectively kicked out of the lucrative China market, the company has been busy reallocating its sales into other markets. The good news is that this has been successful and the company is back on track again.

The even better news is that Morgans is expecting this strong form to continue in the coming years. It commented:

TWE owns much loved iconic wine brands, the jewel in the crown being Penfolds. We rate its management team highly. The foundations are now in place for TWE to deliver strong earnings growth from the 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.

Morgans has an add rating and $13.93 price target on the company’s shares.

The post Why experts say these ASX growth shares are buys appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 of the best ASX shares to buy now
• Up 9% this year, could Treasury Wine shares still be ripe for the picking?
• 2 ASX growth shares analysts rate as buys right now
• ‘Unparalleled’: 2 experts reckon this ASX share is a long-term buy
• 2 ASX 200 shares named as buys by a top broker

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 Idp Education Pty Ltd. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

After getting annihilated in the first half of 2022, shares of streaming-TV giant Netflix, Inc. (NASDAQ: NFLX) have seen some upward momentum recently. Indeed, since July 1, the stock has risen about 25%. Of course, this gain still leaves the stock far from where it was at the beginning of the year. Shares are down more than 60% year to date.

An analyst from JPMorgan Chase thinks the stock could continue to rise from here. There’s increased investor interest in the stock ahead of the company’s upcoming launch of its ad business, Doug Anmuth said in a note to investors on Wednesday. How far could the stock rise? The JPMorgan analyst has a $240 12-month price target for the stock, indicating he believes there’s still meaningful upside for the streaming service company’s shares ahead.

Subscriber headwinds

While it’s encouraging to hear that Anmuth is betting Netflix stock can add to its already-impressive gains since the middle of this summer, a $240 price target notably only represents 7% upside from where shares are trading at the time of this writing. The reason for Anmuth’s conservative outlook for the stock? He believes there’s uncertainty surrounding how the company’s subscriber trends will add in the second half of 2022. So even if he’s optimistic about the potential for Netflix’s long-awaited ad-supported tier, headwinds to subscriber growth are keeping many investors on the sidelines.

Second-quarter subscribers fell sequentially for the second quarter in a row, declining from 221.6 million in the first quarter of 2022 to 220.7 million. Fortunately, Netflix guided for sequential growth in Q3, though the expected uptick is anemic. Netflix guided for 1 million new members in Q3. 

Until Netflix’s subscriber growth starts to pick up some speed, some investors and analysts may worry about the company’s long-term prospects.

Betting on ads

Fortunately, however, Netflix may soon drive enough top-line growth from the launch of its ad-supported tier to help soothe any investor concerns about the company’s suppressed subscriber growth. Management said in its second-quarter update that it expects to launch its first ad-supported tier early next year.

Investors are likely hoping the addition of a new way for consumers to watch Netflix content will attract incremental revenue. Indeed, it’s one of the key pillars behind management’s plan to reaccelerate its revenue growth.

“While it will take some time to grow our member base for the ad tier and the associated ad revenues, over the long run, we think advertising can enable substantial incremental membership (through lower prices) and profit growth (through ad revenues),” Netflix said in the company’s second-quarter letter to shareholders.

Given Netflix’s near-term challenges with subscriber growth, Anmuth may be right to be conservative with his 12-month price target. But with shares priced at just 19 times earnings at the time of this writing, investors may not be fully appreciating the potential impact of a new ad business next year. Shares may be more undervalued than Anmuth’s $240 price target suggests.

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

The post Netflix Stock: Headed to $240? appeared first on The Motley Fool Australia.

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More reading

• Why Netflix was a star stock today
• What makes ‘Dividend Aristocrats’ a great investment for you?
• 3 great foreign companies to invest in right now

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Daniel Sparks 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 Netflix. The Motley Fool Australia has recommended Netflix. 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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If you’re looking for some options in the mid cap space, then you might want to check out the ones listed below.

Here’s why analysts at Goldman Sachs recently named these ASX mid cap shares as buys:

Adairs Ltd (ASX: ADH)

This homewares retailer is a mid cap ASX share to buy according to Goldman Sachs. Its analysts are very positive on the company due to its loyal customer base and store expansion opportunity. The broker currently has a buy rating and $3.05 price target on its shares. It commented:

The core Adairs business has a highly loyal customer base, and ongoing store roll-out opportunity: ADH is has a strong brand presence across Australia, a highly engaged and loyal customer base (>1mn Linen Lover members), and ongoing opportunity to roll out new and upsized stores. […] Attractive valuation and high dividend yield: we view valuation as undemanding with ADH trading on 6.9x FY23E P/E

Hipages Group Holdings Ltd (ASX: HPG)

Another mid cap ASX share that Goldman Sachs rates highly is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider. The Hipages platform connects tradies with residential and commercial consumers, and also allows them to communicate and run general admin duties. Goldman sees it as a great long term option for investors. It currently has a buy rating and $2.20 price target on its shares. It commented:

Longer term, we believe HPG presents a compelling long growth opportunity as it builds out an essential ecosystem of services for tradies

Temple & Webster Group Ltd (ASX: TPW)

This online furniture retailer is another mid cap share to buy according to the broker. Goldman likes the company due to its leadership position in a market that is in the process of shifting online. The broker recently initiated coverage on the company’s shares with a buy rating and $7.55 price target. It said:

We believe the business has a material runway for long-term growth, supported by a large and growing TAM driven by increasing e-commerce penetration which still lags other comparable markets (Aus 16% vs. UK/US 28%/25%), even after a large pull forward in online sales over the last 2-3 years. […] We believe TPW can deliver long term structural growth, despite a slowdown in the near term macro environment.

The post Goldman Sachs names 3 mid cap ASX shares to buy appeared first on The Motley Fool Australia.

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More reading

• I think this exciting ASX 300 share is a buy in the sell-off
• Top brokers name 3 ASX shares to buy today
• I think these 2 high-yield All Ords ASX dividend shares are buys in September
• 2 ASX growth shares analysts rate as buys right now
• Goldman Sachs names 2 exciting small cap ASX shares to buy

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 ADAIRS FPO, Hipages Group Holdings Ltd., and Temple & Webster Group Ltd. The Motley Fool Australia has positions in and has recommended ADAIRS FPO and Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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 iCollege Ltd (ASX: ICT) share price finished in the green on Friday, up 7.7% to 21 cents. Over the past month, the ASX share has ascended 50% in value.

The micro-cap ASX share is having a great 2022 so far. While the S&P/ASX All Ordinaries Index (ASX: XAO) has been falling 12%, the iCollege share price has gained 71%. Now that’s an outperformance.

iCollege is a leading vocational education provider comprised of businesses providing accredited and non-accredited training across Australia.

In an interview on Livewire, 1851 Capital’s Chris Stott says iCollege shares are a buy.

Stott said:

This company’s in the beautiful position that they’ve got extraordinary demand for their product in the form of students coming back into the country post-COVID-19.

They can travel again, they’re having to add capacity in the form of new facilities to house a lot of these students.

So again, strong balance sheet, very well run, with the merger with RedHill not so long ago, so buy.

Stott is referring to iCollege’s off-market takeover of RedHill Education Limited in October 2021. The deal was that RedHill investors would receive 9.5 iCollege shares for every RedHill share they owned.

iCollege received 94% support from RedHill shareholders, which enabled it to compulsorily acquire the remaining shares in October 2021.

What’s news at iCollege?

iCollege released its FY22 full-year results on 29 August.

Revenue was up 187% to $46.8 million on the prior corresponding period (pcp), with RedHill contributing $31.5 million.

Its earnings before interest, tax, depreciation, and amortisation (EBITDA) went up 37%. The company said growth was “driven by [the] RedHill acquisition and recovering international student revenues”.

The company said it expected revenue and profit “to materially increase in FY23”.

This is due, in part, to student numbers exceeding pre-COVID levels, growth in bachelor degree intakes, restructuring activities, and higher campus utilisation to improve earnings.

The company has a market capitalisation of $213.59 million.

The post Up 50% in a month, fundie reveals ASX micro-cap share in a ‘beautiful position’ appeared first on The Motley Fool Australia.

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More reading

• Could the latest news out of China bode well for ASX 200 iron ore shares?
• 2 ASX shares now at a buying opportunity after a shocking 2022: fundie
• Top brokers name 3 ASX shares to buy next week
• 60% of Warren Buffett’s portfolio is invested in these 3 stocks
• Experts name 2 ASX dividend shares for your retirement portfolio

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. 

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China is stepping up support for the housing industry and easing lockdowns in some areas. But how does this impact iron ore shares?

ASX 200 iron ore shares include BHP Group Ltd (ASX: BHP). Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG).

Could China’s property woes ease?

ASX 200 iron ore shares BHP, Rio Tinto and Fortescue are all major iron ore producers. Demand for iron ore from China, along with the iron ore price, can impact their overall profit and share price.

News on easing lockdowns in the city of Chengdu and measures to stimulate the property sector could boost demand for iron ore. Iron ore is used to make steel, and China is the world’s largest steel producer.

In a research note on Friday, ANZ head of Australian economics David Plank said easing curfews in Chengdu have aided the demand outlook for iron ore. He added:

The megacity has relaxed restrictions in some areas, spurring optimism that there won’t be a repeat of Shanghai’s two-month lockdown.

A report on measures to revive China’s real estate sector also helped sentiment.

China’s industrial production leapt 4.2% in August, higher than expected, a report from CNBC stated.

Meanwhile, an executive at a major global iron ore producer has also expressed optimism for the iron ore market amid tight supply.

Vale SA (NYSE: VALE) head of strategy and business transformation Luciano Siani Pires reportedly believes China’s lockdowns and real estate issues have been priced in already, with iron prices predicted to hold at US$95 to US$100 a tonne. Siani said:

The good news is that from now on it can only get better.

Share price snapshot

The BHP share price has gained nearly 4.6% in the past year, while Rio shares have lost 11%. Meanwhile, the Fortescue Metals share price has gained 2.6% in a year.

For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has lost 3.5% in the past year.

The post Could the latest news out of China bode well for ASX 200 iron ore shares? appeared first on The Motley Fool Australia.

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More reading

• Hanging out for your Rio Tinto dividend? Here’s the latest
• BHP shares: Buy, hold, or fold?
• 3 blue-chip ASX 200 shares touting the highest dividend yield in September
• Morgan Stanley just boosted its outlook for aluminium. Here’s which ASX shares have exposure
• How big will the Fortescue dividend be in 2023?

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

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Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Elvest Co portfolio manager Adrian Ezquerro tells what he’d do with a trio of ASX shares that have plunged in 2022.

Cut or keep?

The Motley Fool: Now let’s take a look at three ASX shares that have fallen a heap recently, to see whether you’d buy or stay away. 

The first one is Hansen Technologies Limited (ASX: HSN), which has dropped more than 20% since reporting season. What are your thoughts?

Adrian Ezquerro: Hansen’s a stock I’ve followed for a long period of time. Over 10 years now. And I agree, it’s certainly been a topical stock coming out of reporting season. 

For those who are unaware, it’s a utilities billing software company. It’s got a fantastic long-term track record with an owner-manager again at the helm. In fact, I think its compounded EPS [earnings per share] is close to 20% per annum over the past 15 years. Been [an] incredible performer. 

Specifically the FY22 result, the result itself was in line with expectations. But I think the outlook largely disappointed. So we’re looking ahead in terms of management guidance to slightly lower margins, probably more modest top-line growth than what may have been expected. 

But really, the reaction for us, to a degree, provides potential opportunity. 

History suggests Hansen excels in executing really value accretive M&A. They’ve done it for many years, have got a great playbook and they’ve added a lot of value for shareholders over the past 10 or 15 years. 

As they’re currently placed, they’ve got a strong balance sheet. We think in this market maybe vendor expectations might be becoming a little more realistic and the business is on a circa 7% free cash flow. We remain pretty optimistic on Hansen’s prospects. 

In this market, of course, it pays to be patient. Take your time. We’d say it’s probably a buy for a moderate position in a diversified portfolio, particularly for investors with a pretty long-term time horizon.

MF: The next one is online fashion retailer City Chic Collective Ltd (ASX: CCX). The share price has lost almost 70% this year.

AE: It’s always nice in hindsight that you can look back and say that prices have clearly stretched for what we think is still a pretty good quality business. I think it’s done well to get a growing position of emerging leadership within its niche, which is plus-size ladies’ fashion. 

As you say, it’s largely via the online channel. We think we’ve now got a pretty good foundation to grow its business and that’s on a global basis. Like Hansen, we think it’s not without risk, but it’s probably a buy for small to moderate weight in a diversified portfolio. 

I think the current market price of about 12 or 13 times forward earnings more than fully accounts in value for some of the concerns related to its inventory balance. 

More on that: the recent result was topical in that FY22 earnings were largely in line with previous guidance, but inventory was clearly higher than what was expected and that’s clearly spooked some investors. 

Management did flag strategic investment in inventory last year, and that was particularly around non-seasonal or evergreen clothing that will sell regardless of the time of year. And it did that from our discussions largely as it sought to diversify its supply chain. 

Once upon a time it was almost exclusively procuring product out of China, and I think in our view it’s quite sensible to seek to diversify that. Now there’s a ring around southeast Asia where they’re procuring product. And in order to secure that, they’ve had to put in initial orders from really different suppliers. 

Now management have actually guided to a running down of that inventory over the coming year, and this “we feel” will be a powerful driver that will release strong free cash flow if and when achieved. 

Certainly one to watch and we’re leaning towards a buy at this point, City Chic.

MF: The third one is Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), which has painfully dropped 43% year to date.

AE: Yeah, I’d suggest it’s a hold. If you’re in there, for what it’s worth, I’d probably hold on. 

I mean, it was a very clear COVID beneficiary and they were really forthright about that. Basically said that hospitals were anxious about the potential impact and the strains that they might feel as a result of the impacts of COVID. The CEO himself actually said that they had 10 years’ worth of demand pushed into two years. They ramped up production and fulfilled that need. Clearly, there’s a bit of a glut sitting within their customer base. It was a clear COVID beneficiary and I think the recent difficulties and a subsequent share price reaction reflects the unwinding of the trends that we saw through COVID.

Earnings [are] now being rebased to perhaps a greater extent than what consensus was expecting, yet it’s still trading at a pretty significant premium in terms of earnings multiples, et cetera. 

To be fair, I think Fisher & Paykel is a high quality business, it’s really well placed with a strong brand and product set that’s been around for a long period of time. It’s got a great track record of execution. While I’d say it’s a hold on valuation grounds and while this excess inventory sort of pushes its way through, it’s certainly something I’d be very happy to have on the watch list of interest for the coming year or two.

The post 2 ASX shares now at a buying opportunity after a shocking 2022: fundie appeared first on The Motley Fool Australia.

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More reading

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tony Yoo has positions in Fisher & Paykel Healthcare Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hansen Technologies. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

According to a note out Citi, its analysts have retained their buy rating and $29.00 price target on this banking giant’s shares. Citi is feeling positive about the banking sector thanks to rising rates and the unprecedented levels of excess liquidity. Its analysts are expecting this to underpin strong returns and drive a meaningful increase in net interest margins. The ANZ share price ended the week at $23.55.

Charter Hall Group (ASX: CHC)

A note out of Goldman Sachs reveals that its analysts have initiated coverage on this property company with a buy rating and $16.50 price target. The broker made the move largely on valuation grounds. It highlights that Charter Hall trades at 11x EBITDA compared to its five-year average of 15x EBITDA. The broker also notes that its shares are trading at a sizeable discount to both the ASX 200 and ASX 200 REITs index and sees scope for that to change. The Charter Hall share price was fetching $12.32 at Friday’s close.

Mineral Resources Limited (ASX: MIN)

Analysts at UBS have retained their buy rating and $83.00 price target on this mining and mining services company’s shares. According to the note, UBS has been busy looking at what could happen if Mineral Resources decided to demerge its lithium operations and list them on Wall Street. The broker suspects that the business could command a 6x FY 2024 EBITDA multiple, which it estimates would give it a valuation of A$17 billion. This is notably more than the company’s entire market capitalisation of A$13 billion, which includes more than just its lithium operations. The Mineral Resources share price ended the week at $66.39.

The post Top brokers name 3 ASX shares to buy next week 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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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.

Warren Buffett is one of the best investors of all time. Since 1965, Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B), the masterfully crafted conglomerate he helped build, has returned over 20% annually, creating fortunes for its share-owners along the way.

Berkshire’s public stock portfolio is thus closely watched by investors seeking to build lasting wealth in the stock market. Investing alongside great investors can be an excellent strategy for those seeking outsize returns. Here are Buffett’s largest stock holdings.

Apple: 41.6% 

Buffett once called Apple Inc. (NASDAQ: AAPL) “probably the best business I know in the world.” That’s high praise from the master investor, who has become one of the richest people in the world by carefully identifying elite businesses with powerful competitive advantages.

It’s perhaps unsurprising, then, that Apple is Berkshire’s largest position by far. Buffett’s investment company owns more than 915 million shares of Apple that are currently valued at a staggering $142 billion. 

Buffett values Apple’s beloved brand and sticky ecosystem. He has come to understand the iPhone’s central place in the lives of more than 1 billion people. Buffett also knows that once someone buys an iPhone, they tend to buy other Apple products and services and remain a loyal customer.

Moreover, Buffett appreciates the tech titan’s tremendous cash flow production. Apple generated more than $90 billion in free cash flow during just the first nine months of its fiscal 2022. That whopping sum allows Apple to reward its investors with a steadily rising dividend income stream and a massive stock buyback program. These share purchases have helped to boost Berkshire’s ownership percentage of Apple’s earnings over time, which Buffett applauds. 

Bank of America: 10.2% 

Bank of America Corporation (NYSE: BAC) is Berkshire’s second-largest holding and another Buffett favorite. BofA, as the company is often called, accounts for over 10% of Berkshire’s portfolio, a stake valued at roughly $35 billion. 

Buffett thinks highly of CEO Brian Moynihan, who has helped to strengthen BofA’s operations following its near collapse during the Great Recession and financial crisis of 2007-2009. Since taking the helm on Jan. 1, 2010, Moynihan has prioritized risk management and a return to traditional banking fundamentals.

Although pandemic-related disruptions and a difficult macroeconomic backdrop have been challenging for BofA and other financial institutions, Buffett views the bank as a core, long-term holding. And over longer periods of time, top-tier banks tend to grow and profit along with the expansion of the overall economy.

To maximize its odds of success, BofA is cutting expenses in its traditional branch operations and investing aggressively in digital banking technology. This has positioned BofA to benefit from the boom in mobile banking and app-based transactions — and gain market share from its less tech-savvy rivals.

With Bank of America’s stock price down about 22% in 2022 due mostly to short-term recessionary fears, you currently have the opportunity to scoop up shares of this best-of-breed bank at a hefty discount.

Chevron: 7.8% 

The oil sector has recently become the apple of Buffett’s eye. It’s easy to see why. Energy stocks tend to perform well during inflationary times. And Chevron Corporation (NYSE: CVX) is particularly well positioned to profit from higher oil and gas prices.

The war in Ukraine is driving many countries in Europe and around the world to seek out new sources of dependable energy supplies. Chevron is working to meet this vital global need for energy by ramping up its production of oil and liquified natural gas. 

The energy titan’s profits, in turn, are soaring. Chevron’s revenue surged 83% year over year to $68.8 billion in the second quarter, while its adjusted earnings rocketed 245% to $11.4 billion. Chevron is committed to passing on much of its profits to shareholders via a hefty dividend — its shares currently yield 3.5% — and stock buybacks.

These factors have no doubt contributed to Buffett’s decision to make Chevron Berkshire’s third-largest public stock holding. Berkshire owns more than 163 million shares of the oil and gas giant, a stake valued at nearly $27 billion. 

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

The post 60% of Warren Buffett’s portfolio is invested in these 3 stocks appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Joe Tenebruso 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 Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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Are you looking to boost your retirement income with some dividend shares? Then you might want to look at the two listed below.

Both of these dividend shares are expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share for retirees to consider is supermarket giant Coles.

It could be a top option due to its defensive qualities, positive exposure to inflation, and solid growth outlook. The latter is being underpinned by the company’s bold refreshed strategy, which is focusing on cutting costs through automation and efficiencies. This is expected to boost Coles’ profitability in the coming years.

Citi is positive on Coles and has a buy rating and $20.10 price target on its shares.

In respect to dividends, the broker is forecasting fully franked dividends of 74 cents per share in FY 2023 and 79 cents per share in FY 2024. Based on the latest Coles share price of $16.60, this will mean yields of 4.45% and 4.75%, respectively.

Telstra Corporation Ltd (ASX: TLS)

Another ASX share for retirees to consider is Telstra.

This telco giant could be a good option now that its outlook is arguably the most positive it has been in over a decade.

For example, last month the company released its FY 2022 results and revealed a return to growth and a surprise dividend increase. But it won’t stop there, with Telstra’s T25 strategy now in place, the company is targeting high-teens underlying earnings per share compound annual growth through to FY 2025.

The team at Morgans are positive on the telco giant. Its analysts currently have an add rating and $4.60 price target on the company’s shares.

Morgans is also forecasting another 16.5 cents per share dividend in FY 2023. Based on the current Telstra share price of $3.81, this equates to a 4.3% dividend yield.

The post Experts name 2 ASX dividend shares for your retirement portfolio 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 positions in and has recommended COLESGROUP DEF SET and Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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