ASX News LIVE | ASX 200 Set to Recover from Fourth Day Down, Iron Ore Drops

With earnings season beginning, I thought it would be worth exploring what underlying metrics readers can look at to decide if a stock is worth their valuable time and money.

The answers may surprise you — hint: it’s not earnings

When assessing the worth of a stock, dividends play a significant role alongside earnings.

While earnings reflect a company’s profitability and ability to generate income, dividends provide a direct return on investment to shareholders.

Here’s a basic explanation as to why dividends are important for assessing a stock’s worth:

1. Cash Flow to Investors: Dividends represent a tangible way for investors to receive a portion of the company’s profits. Distributing earnings in the form of dividends demonstrates a company’s commitment to returning value to shareholders. Dividends provide a direct cash flow to investors without having to sell their shares.
2. Income Generation: Dividends can be particularly attractive to income-oriented investors, such as retirees or those seeking regular income streams. By investing in dividend-paying stocks, investors can build a portfolio that generates consistent income, which can be especially important in times of low-interest rates or uncertain market conditions.
3. Long-Term Stability: Dividends can serve as an indicator of a company’s financial health and stability. Consistently paying dividends, especially if they are increased over time, signals that a company has a strong and sustainable business model.
4. Total Return Perspective: Assessing a stock’s worth should not be limited to earnings alone. When combined with potential capital appreciation, dividends form the total return on investment. By reinvesting dividends or considering their impact on the stock’s overall performance, investors can have a more comprehensive understanding of the stock’s worth over time. This total return perspective provides a more holistic assessment of the investment’s profitability.

It is important to note that the significance of dividends versus earnings may vary depending on an investor’s investment strategy, risk tolerance, and financial goals.

For a more detailed look and some recommended growth stocks that also pay a dividend for your portfolio, click below.

https://www.moneymorning.com.au/20230711/dividends-the-key-to-finding-a-stocks-true-worth.html

Megaport Ltd [ASX: MP1] has announced an upgrade in its earnings guidance for FY2023 and provided insights into its anticipated performance for FY2024.

The company now expects its FY2023 Normalised EBITDA to be in the range of $19 million to $21 million, surpassing the previous guidance of $16 million to $18 million.

Megaport also reported it achieved net positive cash flow in Q4FY23, even after accounting for redundancy payments of approximately $2.6 million.

Looking ahead to FY2024, Megaport anticipates exceeding the previous EBITDA guidance of $41 million to $46 million.

The company says it is finalising its budget and hinted at positive news surrounding network expansion, product development, and revenue-generating headcount

Megaport’s upgraded EBITDA guidance and positive cash flow have wowed investors who are piling in today with the share price up nearly 30%.

Source: TradingView

ASX 200 continues its strong bounce, up 0.97%
ASX Tech XTX is up 1.72%

The best individual performers:

• Capricorn Metals [ASX:CMM], up 6.16%
• De Grey Mining [ASX:DEG], up 5.25%
• TELIX Pharmaceuticals [ASX:TLX], up 5.18%
• Paladin Energy [ASX:PDN], up 4.17%
• Sayona Mining [ASX:SYA], up 4.17%

The worst performers:

• Stanmore Resources [ASX:SMR], down 2.43%
• Mercury NZ [ASX:MCY], down 1.80%
• Infratil Ltd [ASX:IFT], down 1.68%
• Amcor Plc [ASX:AMC], down 1.62%
• Johns Lyng Group [ASX:JLG], down 1.49%

All figures shown are from 12:20 pm AEST

The huge growth seen in US tech on the back of AI mania has led to ‘overconcentration’ according to Nasdaq Inc.

The index provider says it will, ‘address overconcentration in the index by adjusting the wights’ on the 24th of July.

The details are not yet known as to the extent of the change, but regardless, this signals an extraordinary move by the index.

It should be regarded as ‘a good thing as it reduces the concentration risk from those players,’ said Todd Sohn, managing director of ETF and technical strategy at Strategas Securities. ‘On the other hand, it increases the burden for the rest of the index — what I like to call ‘the bench’ — to continue to improve and strengthen.’

Microsoft, Apple, Alphabet, Nvidia, Amazon, and Tesla account for approximately 50% of the current NASDAQ — something the index would like to see drop to around 40%.

While in the S&P 500, concentration is now at levels seen in the last tech bubble. There have been no indications by the S&P500 for a reweighting, but watch this space as markets react to the Nasdaq changes later this month.

Bell Financial Group [ASX: BFG] is set to deliver impressive financial results for the first half of 2023.

The company announced today that it expects its profit before tax to reach approximately $16.2 million, marking a substantial 21% increase compared to the same period last year.

The solid performance can be attributed to the strong contributions from Bell Financial Group’s Technology & Platforms and Products & Services businesses.

The announcement also attributed Equity Capital Markets transactions as playing a significant role in bolstering the company’s profitability.

ASX opens up 0.40% to 7,031.8

• $AUD up +0.01% at 66.76 US cents
• ASX futures up +0.09% to 7,014.5
• S&P 500 up +0.24%
• NASDAQ up +0.18%
• DOW up +0.62%
• FTSE up +0.23%
• STOXX up +0.25%
• SSE up +0.22%
• Bitcoin up +0.65% to $US 30,365.99
• Spot gold up +0.74% to $US 1,925.89
• Iron ore down-1.54% to $US 110.54
• Brent Crude down -0.87% to $US 77.79pb

All figures shown are from 10:00am AEST

Canadian mineral explorer Patriot Battery Metals [ASX:PMT] responded to a short seller report by Night Market Research that sturred controversy and drove the share price down.

The rumour mill included a claim the company used ‘curiously timed buyout rumours‘ to inflate its share price.

Night Market Research alleged that the lithium reserves were 40% lower than the company’s claims, and suggested Patriot had deliberately delayed its resource update, ‘seven times and counting’.

Recent news has seen successful tests carried out for its spodumene extraction, but with rumours flying, the company has pushed back on claims.

Patriot hit back, saying that the assertions made were ‘factually inaccurate and misleading.‘

They have also confirmed the interest by mining majors in a potential buyout was real, stating, Pilbara Minerals, Orocobre, and Galaxy Resources were all looking at the company.

Morning All, Kiryll here with another day on the markets.

Here’s today’s Bing AI-generated image with a difficult day miners and resources sector as Iron fell sharply due to weak Chinese inflation data signalling a slow recovery for China.

Central banks and China remain at the top of investors’ watchlists, with the RBNZ set to make a call on rate hikes tomorrow. Many are betting that there will be a pause this month as the NZ economy struggles to find its mojo with its recession looming large in everyone’s mind.

Earnings season begins with reports flowing in. I’ll be here to cover all the biggest news and updates from around the globe.