Share Picks
Don’t let the Booze Bus catch you off guard this Freedom Day, rather check out these ASX shares which could give your portfolio a different buzz.
3 Aussie share picks you “Defo” need to check it out!
Whether we like it or not, thermal coal and natural gas are both used to generate electricity around the globe, and demand is increasing, which brings this energy beauty into focus. Whitehaven Coal Limited develops and operates coal mines in New South Wales and Queensland.
The current Russian invasion of Ukraine has placed the energy sector firmly on everyone’s radar. While sanctions are flying left and right on Russia, the world's third-largest coal exporter is not supplying gas to Europe, driving up energy prices and demand for thermal coal.
This is unfortunate good news for coal miners like Whitehaven, which has seen its share price up by 37.16% YTD and climbing as demand for Aussie coal and gas suppliers escalates. Positivity on the share was a far cry in January than before the coal supplier posted half-year results (H1 FY22) and after the geopolitical tensions intensified.
Whitehaven posted record first half-year numbers across the top and bottom lines, with profitability soaring as revenue grew 106% YoY. The coal share’s Net debt was 50% lower and posted a net profit after tax (NPAT) of $340.5 million with an average coal price for H1 FY22 of AU$ 202/tonne. The company has also reinstated dividends and implemented an on-market share buyback program.
Outlook – Whitehaven Coal Limited's near-term outlook is that we might see a pullback in price, however, still positive considering the geopolitical landscape, which should see demand across the energy sector rise. The share is currently trading at fair value estimates but should continue to gain traction as thermal coal prices reach multi-year highs, which should benefit the miner greatly in CY22.
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Corporate Travel Management Ltd (CTD)
As global economies emerge from their respective pandemic lockdowns and restrictions, the airline, hotels, restaurants, and leisure industries become focal points for investment opportunities.
Corporate Travel Management Ltd has gained our attention by reopening Australian borders to international travel. The travel management solutions company manages the purchase and delivery of travel services for the corporate market across the globe.
It covers all the bases and provides strategic account management, small business travel, event travel management services, and resource travel management products, including shift management tools, emergency evacuation solutions, charter negotiation, expense solutions, and sports and leisure travel management services.
Looking at Corporate Travel Management's recent half-year results (1HF22), it is evident that travel shares should continue to do well in areas where travel restrictions have been lifted. Some of the impressive first half 2022 results highlight a rise in total revenue of 120% compared to the previous reporting period. Underlying earnings before interest, tax, depreciation, and amortization (EBITDA) of $18.2 million, a 219.7% compared to the previous corresponding period (PCP).
Outlook – Corporate Travel Management could not give us any profit guidance for FY22 due to short-term uncertainties but estimated that it could achieve exceptional returns when the market fully recovers. That is not too farfetched, considering that the global Travel and Tourism industry is expected to grow at a compound annual growth rate (CAGR) of 10.47% until 2026. By our estimates, the share is currently undervalued and should be an excellent long-term holding, especially if its acquisition of travel company Helloworld travel company is approved in Q3 of 2022.
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BetaShares US Dollar ETF (USD)
The current buzzword in the global economy is interest rates, and with the United States leading the charge to increase rates, the U.S Dollar comes firmly into focus. The U.S Dollar Index has gained over 5% and with rate hikes insight, we might see more strength filtering through to the greenback.
The BetaShares U.S Dollar ETF is a cost-effective way to get access to the movement in the U.D Dollar as the ETF aims to track the performance of the U.S. Dollar against the Australian Dollar. So, in essence, if the U.S Dollar moves higher by 10% against the Australian Dollar before fees and expenses, the ETF will also move higher and vice versa.
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Sources –EasyResearch, Australian Securities Exchange (ASX), Australian Securities & Investments Commission (ASIC), Koyfin, DMARGE, Zach Bristow, U.S Energy Information Administration (EIA), Reuters, Whitehaven Coal Limited (WHC), Mining.com, Travel Management Ltd (CTD), Statista, Monica O'Shea, SimplyWallSt, MorningStar, BetaShares.
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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table.
