The ASX February reporting season has started in earnest, and it's a critical one.

With consumers and businesses starting to reel from nine months of interest rate rises, all eyes will be on whether ASX companies can survive the downturn in one piece.

The team at Wilsons is upbeat.

"We believe the reporting season will be relatively positive," equity strategist Rob Crookston said in a memo to clients.

"The cyclical sectors may provide more positive results than the market expects after continued strength in the global and domestic economies in the last half."

However, investors will need to be selective about the ASX shares they buy, with every word of outlook statements pored over.

Fortunately, Crookston's team has done the hard yards to come up with four stocks that they believe have the best prospects heading into their February updates:

Advertising businesses could surprise 

Late on Wednesday, Nine Entertainment Co Holdings Ltd (ASX: NEC) announced it had grabbed the Olympics off incumbent Seven West Media Ltd (ASX: SWM).

The $315 million agreement gives Nine the broadcast and digital rights for the next five games, consisting of three summer and two winter events.

Nine, due to report on 23 February, is one of Wilsons' picks.

"We may see upgrades in the sector over reporting season as higher-than-expected consumer spend corresponds to higher-than-expected ad spend," said Crookston.

"Nine should be a key beneficiary of this opportunity, especially as the stock derated over 2022 and currently sits on a relatively modest PE of ~11x."

Jobs classified site Seek Ltd (ASX: SEK) has stunningly rallied 23.5% year-to-date, but Crookston reckons "there is still room" for its 21 February report to positively surprise.

"We expect a strong showing from Seek as it benefits from a resilient jobs market."

The Wilsons team is looking for a confirmation of its previously stated full-year guidance and "continued strength in the ANZ labour market". 

"A strong interim result could lead to consensus earnings upgrades for FY23/FY24," said Crookston.

"We also like the structural story for Seek — significant upside from dynamic pricing model, strategic initiatives and growth fund — that should mitigate any fallout in a cyclical peak in the job market."

'Start of an earnings upgrade cycle'

After years of underperformance, the share price for biotech giant CSL Limited (ASX: CSL) is finally starting to approach its pre-COVID highs.

The post-pandemic era could not come fast enough for healthcare stocks, according to Crookston.

"We expect CSL's earnings recovery to be a beat, driven by better-than-expected plasma collections," he said.

"This, coupled with new product approvals, could lead to a possible guidance upgrade."

The signs point to a potential "start of an earnings upgrade cycle for CSL", he added, revealing that his team is overweight on the stock.

CSL will report Tuesday.

The Qantas Airways Limited (ASX: QAN) share price is up 50% since June, but Wilsons reckons the party will continue into its 23 February results announcement. 

"Qantas is set for a bumper earnings season. After being forced to postpone travel plans due to the pandemic, consumers are shrugging off 15-year high ticket prices," said Crookston.

"The business has the capacity to surprise the market positively, and we do not think the valuation is pricing a further upgrade."

Wilsons analysts suspect China's post-COVID reopening could give the airline another tailwind to take off on.

"We think the market underestimates the recovery in Chinese tourists as it did for domestic travel over the last 12 months. This could be discussed in trading updates of travel or international education stocks."

The post 4 top ASX 200 shares to pounce on for reporting season: Wilsons appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back today are listed below. Here's why they are rising:

HT&E Ltd (ASX: HT1)

The HT&E share price is up over 3% to 99.7 cents. This morning the advertising and media company announced the sale of its ~25% interest in Soprano Design to Potentia Capital for $66.3 million. Management believes the all-cash deal will allow the company to focus on its position as a leading provider of audio services in Australia.

Seven West Media Ltd (ASX: SWM)

The Seven West Media share price is up 2.5% to 40.5 cents. This follows news that the company has signed a new agreement with Cricket Australia. The seven-year deal extends the company's media rights from the 2024-25 season to the 2030-31 season. Seven West Media will be paying $65 million a year, which is a 13% reduction on its previous deal.

Tabcorp Holdings Limited (ASX: TAH)

The Tabcorp share price is up 2% to $1.10. This is despite there being no news out of the gambling company. However, given its relatively defensive earnings, investors may see it as a safe haven during the current market volatility.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is up 6% to $3.45. This morning, the semiconductor company announced that it has released its first 22-nanometre demonstration chip to manufacturing. Weebit Nano's demo chip aims to provide a low-power, cost-effective embedded non-volatile memory solution able to withstand harsh environments.

The post Why HT&E, Seven West Media, Tabcorp, and Weebit Nano shares are rising appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price is marching higher on this first day of trading in 2023.

Shares in the ASX-listed media company are up 3.8% in morning trade at 41 cents per share.

This comes despite the broader market facing some headwinds today, with the All Ordinaries Index (ASX: XAO) down 1.0% at this same time.

So, why is the Seven West Media share price defying the sell-off?

What's piquing ASX investor interest?

The Seven West Media share price looks to be getting a boost after the company announced a new agreement with Cricket Australia.

The new, seven-year deal extends Seven West's media rights from the 2024-25 season to the 2030-31 season.

The company said that its 7plus channel will become the "live and free home of cricket", providing a digital package of rights atop the broadcast on its Seven Network. Seven West Media has never held digital rights to cricket before this agreement.

Commencing in 2024, Seven West Media will see a 13% decrease in its media rights fees from its current agreement. The new agreement will see the media company pay $65 million in cricket media rights fees a year. SWM said that it has achieved cash savings from rights reduction and production savings of more than $50 million over the term compared to the existing rights deal.

Cricket Australia has said it will reduce the number of Big Bash League (BBL) games to create a shorter tournament that will run for five to six weeks.

Seven West and Cricket Australia had been involved in a legal stoush over prior contract issues. With the new agreement in place, both sides have agreed to drop the court proceedings, with each paying its own costs.

Commenting on the agreement that looks to be sending the Seven West Media share price higher today, CEO James Warburton, said:

We are delighted to extend our partnership with Cricket Australia until 2030-31. A comprehensive package of digital rights to the cricket for 7plus will ensure that for the first time, our viewers will be able to access cricket, live and free, in a way that suits them.

Our combined broadcast and digital rights for both cricket and the AFL means Seven and 7plus will be the home of sport all year round… We look forward to working with Cricket Australia to grow Test cricket, women's internationals and the BBL and WBBL in the years ahead.

Seven West Media share price snapshot

As you can see in the below chart, the Seven West Media share price came under pressure in 2022, falling almost 35%. With that year behind us, we imagine investors will be cheering a positive start to the new year.

The post Seven West Media share price lifts off on new cricket announcement appeared first on The Motley Fool Australia.

Headed by Steve Johnson, Forager Funds aims to invest in undervalued businesses, holding them within a concentrated portfolio, for the long term.

Since inception in October 2009, the Forager Australian Shares Fund (ASX: FOR) has handily out-performed its benchmark, gaining 9.25% per annum versus 7.79% for the All Ordinaries Total Accumulation Index (ASX: XAOA).

In its August 2022 monthly update, the fund says that although most of corporate Australia is on high alert – with expectations high inflation, higher interest rates and falling house prices must eventually curtail consumer spending – there is no sign of a consumer strike just yet.

"While there is a justifiably high level of concern, record low unemployment, increasing wages and high levels of savings from the past few years are allowing Australian consumers to keep spending."

"We are not expecting that to continue but the amount of pessimism baked into share prices back in June provided shareholders with a lot of room for profits to fall."

The fund goes on to call out two ASX shares that are susceptible to an economic slowdown, yet which still trade at very attractive prices.

Forager notes motorcycle and accessories retailer MotorCycle Holdings Ltd (ASX: MTO) is exposed to the most discretionary part of consumer spending, with its most profitable business being the sales of Ducati and Harley-Davidson motorbikes, typically optional purchases.

The fund says that although the MotorCycle Holdings share price is up more than 30% from its June lows, the roughly six times profit multiple it trades at today, and 8% fully-franked dividend yield, should prove attractive for long-term investors.

While share prices in the advertising sector were "absolutely walloped" in anticipation of a slowdown in economic activity, Forager notes the recent earnings season hasn't shown much evidence of a slowdown, with industry data suggesting August and September will be strong.

Forager says that although the Seven West Media Ltd (ASX: SWM) share price has risen over 50% from its June lows, the shares are trading at around four times last year's profits, "a level you would normally associate with a Russian telecommunications company".

The post Leading value fund Forager names two ASX shares trading at dirt cheap prices appeared first on The Motley Fool Australia.

As interest rates head up yet again, there's no longer a question of whether an economic downturn will come, but it's now a matter of how severe it will be.

Some of the ASX shares that are most impacted by a slowdown in spending is anything related to advertising.

The logic is that marketing spend is one of the first to be trimmed when businesses try to tighten their belts through tougher times. Promotion of goods and services is less effective anyway when consumers have less money to spend.

Because of this perception, most ad-related ASX shares have plunged in recent weeks.

However, Forager Funds portfolio manager Alex Shevelev and analyst Gaston Amoros reckon there are a couple of stocks that will fare better than the market expects.

The stock that's cheap as a Russian telco

In their reporting season review, the pair argued that August updates showed advertising hasn't actually slowed down that much, at least for some.

So some ASX shares are just selling at absurdly cheap levels at the moment.

"Seven West Media Ltd (ASX: SWM) is trading at around 4x consensus earnings, the level you would normally associate with a Russian telecommunications company, not one of the near-duopolistic owners of broadcast TV stations in Australia."

The Forager experts noted that Seven West is so bullish about advertising activity in the coming period that it backed up the rhetoric with actual cash.

"The company is so confident in its outlook that they have just announced a 10% buyback," they said. 

"And we tend to agree with them – buying its own stock at these levels seems like a very good deal."

Seven West shares have lost about a quarter of their value so far this year.

The rest of the professional community is divided on the media conglomerate. Out of the 12 analysts surveyed on CMC Markets, five rate it as a buy, four think it's a hold, and three recommend selling.

Bouncing back from COVID-19 but as cheap as 2020

Outdoor advertising provider oOh!Media Ltd (ASX: OML) is another example of a stock that's too cheap to ignore.

"Their business continues to bounce back strongly from the pandemic," said Shevelev and Amoros.

"While the core Street, Road and Retail segments have sustained the recovery thus far, Airports and Offices are still to make a comeback, providing more runway for growth into FY23."

Similar to Seven West, the oOh!Media share price has lost 22.4% year to date.

The Forage experts see this as a golden buying opportunity.

"Its share price… is back to the pre-vaccine days of 2020!"

Other fund managers share Shevelev and Amoros' enthusiasm for oOh!Media much more than Seven West.

According to CMC Markets, six out of nine analysts currently recommend the stock as a buy, with five of them rating it a strong buy.

The post 'A very good deal': Expert names 2 ASX shares to buy for CHEAP now appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price closed higher on Tuesday following the company's announcement of a new record AFL deal.

At market close, the media company's shares finished up 3.16% to 49 cents apiece after touching an intraday high of 51 cents a share.

Let's take a look in more detail at the company's latest announcement.

Seven West Media shares jump on bonanza AFL deal

Investors rallied up the Seven West Media share price today after the company announced a record AFL television rights deal.

According to The Australian, Seven advised it has signed Australia's biggest broadcast rights deal with the AFL.

This will see the Seven network, alongside Foxtel, retain television broadcast rights under a seven-year $3.85 billion contract.

In contrast, the AFL secured an extension of two seasons with Seven and Foxtel for $946 million during COVID-19.

However, one key detail that isn't clear is how much free-to-air televised footy will be shown.

The Seven network provides free access to a number of games over the week, while Foxtel is a pay-to-air service.

Seven West Media managing director and CEO James Warburton said:

We are delighted to extend our partnership with the AFL until 2031. Securing a comprehensive package of digital rights to the AFL for 7plus was our absolute focus. For the first time, fans will be able to access the best AFL games and video content, live and free, in a way that suits them.

More importantly, this new combination of broadcast and digital means SWM will be ideally positioned to drive and capture a significant share of the growing total television market.

Together, the AFL and Seven have made the code the #1 winter sport across the country and we look forward to working with the AFL Commission to extend the sport's leadership.

Seven West Media share price summary

After tumbling to a 52-week low of 33.5 cents during mid-May, the Seven West Media share price is staging a comeback.

The share fell almost 50% between May and June but has not looked back since. In that time, the company's shares are up 48%.

Seven West Media presides a market capitalisation of approximately $803 million.

The post Seven West share price lifts on new record AFL deal appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price is plummeting on Tuesday despite the release of what the company's management called its "strongest financial performance … in over a decade".

As The Motley Fool Australia reported earlier, the media group posted a 60% increase in underlying after-tax profit – coming to around $201 million – for financial year 2022 and announced an on-market share buyback this morning.

At the time of writing, the Seven West share price is 48 cents, 5.77% lower than its previous close.

Let's take a closer look at today's news from the All Ordinaries Index (ASX: XAO) stock.

Seven West share price plunges on full year earnings

The Seven West share price is tumbling following the release of the company's full year earnings and news of an on-market buyback aiming to snap up 10% of its outstanding stock.

The company clocked a 21% improvement in revenue – lifting to $342 million – and a 35% lift in earnings before interest, tax, depreciation, and amortisation (EBITDA), which came in above guidance at $1.5 billion.

On top of that, its operating costs amounted to nearly $1.2 billion, which was within its guided range, while its net debt deepened to $256.5 million.

Seven West managing director and CEO James Warburton celebrated the company's financial performance, saying:

These results represent the best Seven television EBITDA results in 11 years, the best EBITDA from West Australian Newspapers in five years, and our best group EBITDA result in six years.

Perhaps it's the company's outlook that's weighing on its stock on Tuesday.

Seven West expects its total TV advertising market to fall this quarter, mainly due to the impact of the Tokyo Olympic Games, broadcast on the company's free-to-air network last year.

It also predicts its share of total TV revenue will stay flat at 39% this financial year while its operating costs are tipped to come in slightly higher at between $1.2 billion and $1.22 billion.

Today's fall included, the Seven West share price is trading 22% lower than it was at the start of 2022. Though, it's still 2% higher than it was this time last year.

The post Seven West Media share price tumbles 5% on full-year earnings appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price is in focus following the release of the company's financial year 2022 earnings and news of an on-market share buyback.

The Seven West share price closed Monday's session at 52 cents.

Seven West share price on watch as profit lifts 60%

Highlights of Seven West's full-year results include:

• Underlying net profit after tax (NPAT) of $200.8 million – a 60% increase on that of the prior corresponding period (pcp)
• Revenue of $1.54 billion – a 21% improvement
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $342.2 million – a 35% improvement and ahead of guidance
• Earnings per share (EPS) came to 12.7 cents – up from 8.2 cents

The company's reach grew alongside key financial metrics over the year ended 25 June.

The company boasted a 39.1% share of the national television advertising market across financial year 2022.

Its metro TV revenue lifted 9%, while its regional TV revenue increased 6%. Additionally, West Australian Newspapers delivered its best result since financial year 2017 on the back of digital growth.

The company's operating costs also rose 17% to $1.198 billion – within its previously guided range despite rising inflation.

It also announced an on-market buyback of up to 10% of its shares on issue. The buyback will be conducted on an opportunistic basis over the coming 12 months and funded from existing debt facilities. It was born from improvements in the company's balance sheet over the past two years.

Seven West closed the financial year with a net debt level of $256.5 million – a 6.9% year-on-year increase.

What else happened in FY22?

The big news from the company last financial year was its acquisition of formerly ASX-listed Prime Media. The Seven West share price surged 14% when the acquisition was announced in November.

The Prime brand has since been retired and the company has today noted cost synergies will be at the top end of prior guidance.

Of course, the company was front of mind at the beginning of the financial year as Seven aired the 2022 Tokyo Olympic Games. The games were said to provide a launch pad for Seven's 2022 financial year content line-up, including The Voice, SAS Australia, Dancing With The Stars: All Stars, The Voice Generations, the AFL Finals Series, Bathurst 1000, the Ashes Cricket Test Series, and the Beijing Winter Olympics.

What did management say?

Seven West managing director and CEO James Warburton commented on the company's earnings, saying:

These results mark the strongest financial performance by our company in over a decade and reflect the successful completion of the group's three-year strategy.

[They] represent the best Seven television EBITDA results in 11 years, the best EBITDA from West Australian Newspapers in five years, and our best group EBITDA result in six years.

What's next?

Seven West has updated the market on its performance over the current quarter and its outlook for the rest of this financial year.

It noted trading conditions in the September quarter have been skewed by the impact of the Olympics. The company estimates its quarterly total TV advertising market is down around 2% excluding the Olympics and around 7% including the games. The December quarter, however, is expected to be positive year-on-year.

Seven West is targeting a 39% share in total TV revenue in financial year 2023. Seven Digital is forecast to grow its EBITDA this financial year. Meanwhile, its digital platform news revenue is expected to be consistent with financial year 2022.

The company's operating costs for the current financial year are expected to come in at between $1.2 billion and $1.22 billion.

Seven West share price snapshot

The Seven West share price has had a rough trot on the ASX lately.

It has slipped 17% since the start of 2022. Though, it's currently trading 8% higher than it was this time last year.

Meanwhile, the All Ordinaries Index (ASX: XAO) has dumped 8% year to date and 7% over the last 12 months.

The post Seven West Media share price in focus following best financial performance in a decade appeared first on The Motley Fool Australia.

Shares in Seven West Media Ltd (ASX: SWM) are tracking lower today and now trade around 2% down at 64.25 cents apiece.

The Seven West share price is on the move today amid the release of its investor presentation and trading update, presented at the Macquarie Australia Conference.

Seven West updates guidance

In its presentation, Seven West mentioned that it is on track to report FY22 EBITDA from its 7Digital segment to $130 million, based on internal guidance.

As such, it also updated full group projections "from the previous guidance of between $315 million and $325 million to between $335 million and $340 million."

Seven West CEO, James Warburton, noted the reasons for such a change:

The recent acquisition of Prime Media Group, coupled with the winning performance of the Seven broadcast television business and the strong growth of 7plus, make SWM the undisputed leader in the national total television market – a position that we plan to build on in the future.

The company also quoted Bloomberg consensus figures that show analysts expect it to report underlying net profit after tax (NPAT) of $178 million in FY22.

"The earnings upgrade reflects the strength of advertising markets and the ongoing success of Seven's broadcast and digital businesses," Warburton added.

Further to updating guidance, the group also recovered its FY21 revenue of $1.27 billion and group EBITDA of $254 million.

The bolus of both revenue and earnings came from its TV Broadcast segment, precisely where Seven West sees continued growth into the coming years.

Seven West Media share price snapshot

In the last 12 months the Seven West share price has held onto a 35% gain. However, since trading resumed in January, it has slipped less than 1% into the red.

That's after soaring to a new 52-week high of 80 cents back in February.

The post What's with the Seven West Media share price today? appeared first on The Motley Fool Australia.

Three ASX shares that have just been given sell ratings by brokers are listed below. Here's why they are bearish on them:

Air New Zealand Limited (ASX: AIZ)

According to a note out of Macquarie, its analysts have retained their underperform rating but lifted their price target on this airline operator's shares slightly to NZ$1.15 (~A$1.08). This follows news that New Zealand is opening its borders sooner than previously expected. While Macquarie acknowledges that this is a positive, it appears to believe it may be too soon to get excited. The broker expects it to take a bit of time before capacity rebounds and travel is booming again. The Air New Zealand share price is trading at $1.37 today.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $3.90 price target on this insurance giant's shares. Following the floods, the broker has concerns that IAG is at risk of elevated catastrophe budget increases in FY 2023. It suspects that this could further increase the cost of capital for the insurer. The IAG share price is fetching $4.58 on Thursday afternoon.

Seven West Media Ltd (ASX: SWM)

Analysts at Goldman Sachs have downgraded this media company's shares to a sell rating with a 60 cents price target. According to the note, the broker made the move on valuation grounds and due to its belief that Seven West Media will fall short of the market's earnings estimate in FY 2023 and FY 2024. It also sees less long term opportunities to offset total TV revenue declines than peers. The Seven West Media share price is trading at 63 cents on Thursday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There's also one called WAM Microcap Limited (ASX: WMI) which targets small cap ASX shares with a market capitalisation under $300 million at the time of acquisition.

WAM says WAM Microcap targets the most exciting undervalued growth opportunities in the Australian microcap market.

The WAM Microcap portfolio has delivered gross returns (that's before fees, expenses and taxes) of 21.7% per annum since inception in June 2017, which is superior to the S&P/ASX Small Ordinaries Accumulation Index average return of 9.3%.

These are the two small cap ASX shares that WAM outlined in its most recent monthly update:

Seven West Media Ltd (ASX: SWM)

Seven West is a media corporation business with a "market-leading" presence on content production across broadcast television, publishing and digital, according to WAM.

In February 2022, the company announced its financial result for the six months to 25 December 2021.

WAM noted that the small cap ASX share's profit before significant items, net finance costs and tax from continuing operations was $204 million, up 34% compared to the prior year.

The fund manager said that the strong result was reflective of its television network Seven returning to the number one position in ratings and the solid growth of the television advertising market.

Wilson Asset Management believes that Seven West Media's future growth runway will be driven by its strong balance sheet and its potential expansion into subscription streaming services.

Swoop Holdings Ltd (ASX: SWP)

Swoop is an ASX share that provides national internet and telecommunications to wholesale business and residential customers with a focus on fibre and fixed wireless infrastructure.

The fund manager noted that in February 2022, the company reported its half-year result to 31 December 2021, which showed revenue growth of 62% as well as a 130% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) compared to last year.

Swoop finalised three acquisitions which will add to earnings with a further two acquisitions to be completed in the coming months.

At the end of the half-year period, the small cap ASX share had $44.6 million of cash and a $30 million loan facility which is close to finalising.

WAM noted that the Swoop share price didn't do well in February. It dropped 9%. Swoop shares are down another 11.7% since the start of March 2022.

However, the fund manager is confident about the future because of the organic growth profile of the business, with additional potential upside coming from acquisitions.

The post Top fund manager rates these 2 small cap ASX shares as buys appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price is sinking after a strong start to today's session. It's currently down 5.41% at 70 cents, having shot up 5.4% to 78 cents at market open.

Seven West shares closed yesterday at 74 cents.

It comes after the ASX media conglomerate released its financial results for the half-year ending 25 December (H1 FY22). Below we take a look at the highlights.

Seven West share price falls despite strong results

• Group revenue of $819.5 million, up 27.2% on the prior corresponding period
• Earnings before interest, tax, depreciation and amortisation (EBITDA) of $215.3 million, up from $164.9 million in H1 FY21.
• Underlying net profit after taxes (NPAT) of $128.7 million, up from $87.1 million year-on-year
• Underlying earnings per share (EPS) of 8.4 cents, up from 5.7 cents in the prior corresponding half-year.

What else happened during the half-year?

The Seven West share price is slipping despite the company reporting it took the No. 1 spot in broadcast television. Additionally, 7plus was first in broadcaster video on demand (BVOD).

The TV advertising market was described as "robust", with a 13% year-on-year increase in metropolitan TV advertising, a 7.2% increase in regional advertising, and BVOD advertising increasing by 58%.

Driven by strong digital growth in the metropolitan TV advertising market and the growth of 7plus, net debt during the half-year was cut by $212.4 million to $116.7 million as at 25 December.

Regarding the group's Seven West Ventures, Seven West Media's CEO James Warburton said:

Seven West Ventures has strong momentum, completing six investments in the period, including four new companies with large addressable markets. The investments are predominantly via media for equity which can be supercharged by SWM's assets. The portfolio value increased 56% to $87 million in the period.

What did management say?

Commenting on the half-year results, Warburton said:

This result reflects the successful execution of our strategy over the past 30 months… We have completed the acquisition of the assets of Prime Media Group, which unlocks an unrivalled opportunity for the business to capture a greater share of the $3.8 billion total television market.

The balance sheet has been significantly strengthened over the past 18 months, with leverage now at 0.9x net debt/EBITDA on a pro-forma basis after the acquisition of Prime. The Board will assess capital management options during the second half to further enhance shareholder value.

We had an amazing start to the financial year with the Olympic Games Tokyo 2020, which was the biggest television and streaming event in Australian history.

What's next?

The Seven West share price is struggling despite the company upgrading its full-year group EBITDA guidance to $315 million-$325 million (including $10 million second-half contribution from Prime).

Management noted that the strong performance of the television and BVOD advertising markets witnessed in the first half are continuing into the second half-year.

Seven West share price snapshot

The Seven West share price has gained 44% over the past 12 months. That compares to a gain of 5% posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, Seven West shares are up almost 12%.

The post Seven West (ASX:SWM) share price heads south despite soaring earnings appeared first on The Motley Fool Australia.

Key points

• Traditional ASX media shares could be among the winners this reporting season, according to UBS
• The broker identified four tailwinds that could bolster earnings in the sector
• All traditional ASX media shares under UBS' coverage are rated as "buy"

The reporting season is about to kick off and a leading broker reckons that traditional ASX media shares could fare well this month.

This is because the sector is enjoying four tailwinds, according to UBS. These factors could boost their earnings when they hand in their results in a few weeks.

ASX media shares that are rated "buy"

The broker's bullish view is reflected in its "buy" recommendation for all the traditional ASX media shares under its coverage.

These include the HT&E Ltd (ASX: HT1) share price, Nine Entertainment Co Holdings Ltd (ASX: NEC) share price, News Corporation (ASX: NWS) share price, Seven West Media Ltd (ASX: SWM) share price and Southern Cross Media Group Ltd (ASX: SXL) share price.

"In traditional media, our focus will be on the 2H outlook, which may provide evidence on the sustainability of the post-COVID rebound in FTA ad spend," said UBS.

"[Although] in radio we believe any potential trajectory towards pre-COVID levels may continue to be delayed given its advertisers appear to be more impacted by COVID-19 (e.g. local direct advertising, retail)."

Earnings tailwinds

The strength in the combined TV ad market, particularly in the first half, is one of the tailwinds that UBS has identified.

Another is the deal that traditional Australian media companies have struck with Facebook, now Meta Platforms Inc (NASDAQ: FB), as well as Google, which is owned by Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG).

The deal will see these online giants pay content creators for their news stories. Nine Entertainment stands to get around $30 million to $40 million added to its earnings before interest, tax, depreciation and amortisation (EBITDA).

Other growth drivers for ASX media shares

Revenue growth in the digital assets of these ASX shares is the third driver highlighted by UBS.

The broker also points to the balance sheet repair that was undertaken by the sector through asset sales and capital raises. This will allow the sector to resume paying dividends, undertake capital returns and make acquisitions.

The only negative trend that could weigh on the sector is rising costs due to cyclical factors and the loss of the government's COVID-19 support payments.

The other good news is that rising interest rates and inflation are less likely to negatively impact the group compared to their online peers, such as Carsales.Com Ltd (ASX: CAR) and SEEK Limited (ASX: SEK).

The post 4 reasons to buy these ASX media shares this month: UBS appeared first on The Motley Fool Australia.

Key points

• Analysts have identified two leading ASX 200 shares that look cheap
• Fund manager Pendal is losing FUM, but brokers see positives and good value
• Seven Group's industrial businesses are showing good progress with expectations of ongoing opportunities for growth

Analysts have been on the search for undervalued S&P/ASX 200 Index (ASX: XJO) shares.

Share prices are always changing, but sometimes a business update or a drop in the share price can make it into an opportunity.

When a business is well-liked by a number of analysts, it might suggest that it's an opportunity. But, there's also a chance that all of those analysts end up being wrong at the same time.

With that in mind, these two have been rated as leading opportunities:

Pendal Group Ltd (ASX: PDL)

Pendal is one of the larger fund managers on the ASX. It is rated as a buy by at least six brokers, including Morgan Stanley. This broker has a price target of $8.80 on the business, suggesting a possible upside of around 70% over the next 12 months if the broker ends up being right.

The latest influence on the broker's thoughts was the latest quarterly update. Whilst Pendal continues to suffer outflows, Morgan Stanley sees the ESG segment as a useful long-term positive.

Pendal had $135.7 billion of funds under management (FUM) at 31 December 2021. It suffered a total net outflows of $6.8 billion across the business, with $5.5 billion of outflows from the Europe, UK and Asia division. Investors already knew about two notable redemptions by UK institutional clients which was announced at the AGM in December.

The ASX 200 share's management is disappointed with the net flow performance, but it's responding with a "clear set of actions".

It's investing in distribution in key target markets, Pendal is working closely with fund managers to strengthen investment performance and has launched new impact and thematic products that are quickly gaining traction.

On Morgan Stanley's numbers, it is currently valued at 10x FY22's estimated earnings. The broker is expecting a grossed-up dividend yield of 12.75%.

Seven Group Holdings Ltd (ASX: SVW)

Seven Group is currently rated as a buy by at least four brokers, including UBS. That broker has a $27.15 price target on the business. 

This business has investments and operations in a few different areas. In industrial services, WesTrac is the sole authorised Caterpillar dealer in Western Australia, New South Wales and the Australian Capital Territory in Australia. It also owns Coates Hire, Australia's largest equipment hire business and AllightSykes, a supplier of lighting towers, generators and pumps.

The ASX 200 share owns around 70% of Boral Limited (ASX: BLD). Seven is looking to expand its presence in oil and gas projects in Australia and the United States. Seven also has a 30% shareholding in Beach Energy Ltd (ASX: BPT).

Seven Group also owns almost 40% of Seven West Media Ltd (ASX: SWM).

UBS thinks that the ongoing economic recovery of Australia will be helpful for the business.

In a recent trading update, Seven Group said that WesTrac was benefiting from continuing strong demand, with good mining demand in WA and NSW. Construction demand remains strong.

Seven West Media is benefiting from advertising spending and video on demand growth. It is targeting annual savings of between $15 million to $20 million. It's also improving its balance sheet by improving its net debt position.

Seven Group also thinks that Coates is well positioned for new opportunities and growth.

On UBS numbers, the Seven Group share price is valued at 13x FY22's estimated earnings.

The post 2 cheap ASX 200 shares rated as top buys appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price slipped on Thursday despite the company's acquisition of Prime Media Group Limited (ASX: PRT) clearing its final hurdle.

The takeover can now go ahead and will be completed on 31 December. However, the news didn't elicit a positive response from the market.

As of today's close, the Seven West share price is 61 cents, 0.81% lower than its previous close.

Meanwhile, the Prime Media share price surged 2.27% higher to trade at 45 cents.

For context, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.31% higher.

Let's take a closer look at the latest update on Seven West's proposed takeover.

Seven West share price flops despite takeover news

The market bid the Seven West share price lower today despite its latest takeover surpassing the progress of its previous attempt to buy Prime Media.

Back in 2019, Seven West's merger proposal was blocked by 53.5% of Prime Media's shareholders. Today, more than 99% of Prime Media shareholders approved of the transaction.

Seven West is now set to take over its media peer for $131.88 million. That will see Prime Media shareholders receiving 36 cents per security they hold.

While that's currently 20% less than the Prime Media share price, at the time Seven West posed its offer it represented a 56% premium on Prime Media's previous close.

Prime Media operates the Prime7 television network in Eastern Australia and its sister network GWN7 in parts of Western Australia.

The transaction will be conducted through the acquisition of Prime Television, Seven Affiliate Sales, and all their subsidiaries, by Seven West.

The company believes the takeover will "create the leading wholly-owned commercial premium broadcast, video, and news network".

Despite today's dip, the Seven West share price is 32% higher than it was prior to announcing the acquisition. It has also gained 69% year to date.

The post Seven West (ASX:SWM) share price slumps despite good news of Prime acquisition appeared first on The Motley Fool Australia.

Share prices are changing all the time, so different companies can become opportunities at different times.

When many analysts think that a business is a buy, it could mean that the company is an opportunity. That's the case with these two:

Baby Bunting Group Ltd (ASX BBN)

Baby Bunting is the leading retailer of baby and toddler products in Australia. It's currently rated as a buy by at least five different brokers including Citi.

The broker thinks that sales were going to improve over the rest of the first half of FY22 after a slow start in the first couple of months.

It was the annual general meeting (AGM) that also revealed a couple of other positive trends that Citi liked the look of.

The ASX share revealed that in FY22 to the beginning of October 2021, its gross profit margin had increased by 120 basis points to 38.7%. That company attributed this improvement to private label and exclusive products, product mix and supply chain efficiencies.

Private label and exclusive products in the year to date (at the time) made up 44.3% of sales. It was 38% in the prior corresponding period. Baby Bunting has a long-term goal for private label and exclusive products making up half of sales.

On Citi's numbers, Baby Bunting is valued at around 20x FY23's estimated earnings.

Seven West Media Ltd (ASX: SWM)

Seven West is one of the leading media businesses in Australia, with the key channel 7 channels.

It's currently rated as a buy by four brokers including UBS which has a price target on the business of $0.95. That's around 50% higher than where it is today.

The broker has already seen a strong start to FY22 from Seven West.

Seven West is looking to grow digital earnings before interest, tax, depreciation and amortisation (EBITDA) by 100% from $60 million to $120 million in FY22.

Management said that the ASX share is well positioned to achieve its targeted share of 40% in the first half of FY22.

The delivery of its recurring savings target of between $15 million to $20 million is progressing to expectations.

Seven West said at its annual general meeting (AGM) that it was expecting to exceed analyst consensus EBITDA of $260 million by between 7% to 10%.

The company is also in the process of buying all the business and related assets of Prime Media Group Limited (ASX: PRT) which management said would significantly add to earnings, both before and after synergies. A key part of the attraction of the deal was that it would unlock the potential of a combined metro and regional audience base across broadcast and digital platforms. The ACCC said it would not oppose this deal.

According to UBS, the Seven West share price is valued at 5x FY23's estimated earnings.

The post 2 ASX shares rated as strong buys by brokers appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Alcidion Group Ltd (ASX: ALC)

The Alcidion share price is down 14% to 27.5 cents. This follows the completion of the institutional component of the healthcare technology company's capital raising. Alcidion raised a total of $43.4 million at a 21.9% discount of 25 cents per new share. These funds are being used to acquire UK healthcare technology company Silverlink PCS Software.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price is down a further 4.5% to $28.98. This fund manager's shares have been sold off this week following the surprise exit of its Chief Executive Officer, Dr Brett Cairns. Magellan advised that Dr Cairns is leaving for personal reasons. The company has promoted its Chief Financial Officer, Ms Kirsten Morton, to the top job on an interim basis.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has sunk 9% to $3.01. This ecommerce company's shares have been sold off this week after being dumped out of the ASX 200 at the quarterly rebalance. In other news, this morning UBS initiated coverage on this ecommerce company's shares with a neutral rating and $3.45 price target.

Seven West Media Ltd (ASX: SWM)

The Seven West Media share price is down 3% to 62 cents. This is despite the media company's takeover of Prime Media Group (ASX: PRT) getting a boost today. This morning the Australian Competition and Consumer Commission (ACCC) revealed that it will not oppose the sale of Prime's business and assets to Seven. Shareholders will be voting on the transaction later this month.

The post Why Alcidion, Magellan, Redbubble, and Seven West shares are dropping appeared first on The Motley Fool Australia.

The Seven West Media Ltd (ASX: SWM) share price is in the red today despite good news regarding its planned acquisition of Prime Media Group Limited (ASX: PRT).

The Australian Competition and Consumer Commission (ACCC) has given the deal the thumbs up. The ACCC concluded that combining the companies won't affect media competition in a major way.

Despite the good news, the Seven West Media share price is tumbling. At the time of writing, it is trading at 62 cents, 3.91% lower than its previous close.

Let's take a closer look at the acquisition and the ACCC's verdict.

Seven West share price slides despite ACCC approval

For the second time in 2 years, Seven West Media is trying to buy fellow Australian media entity, Prime Media.

Seven announced it was going to make a second attempt to buy Prime Media in early November. The ACCC has approved the deal, as it did back in 2019, but Seven still has to win over Prime shareholders.

That was the hurdle that tripped up the pair's first proposed merger in 2019. It was scrapped when 53.5% of Prime Media shareholders voted against the transaction.

The Prime Media Board has unanimously recommended that shareholders vote in favour of this second proposal.

ACCC chair, Rod Sims said that while the merger received the watchdog's approval in 2019, the media market's importance drove it to conduct another review.

Sims commented:

Consistent with our findings in 2019, we concluded that the proposed acquisition was unlikely to substantially lessen competition or choice for advertisers and consumers. This is because Seven West Media and Prime are not particularly close competitors in the supply of advertising opportunities or the supply of media content, and other competitors will constrain the merged entity.

Prime Media's shareholders will cast their vote on the acquisition on 23 December.

The Seven West Media share price is up 18% since it announced its second attempt to buy Prime on 1 November.

The Seven West Media share price is also 70% higher than it was at the start of 2021.

The post Seven West Media (ASX:SWM) share price dips despite ACCC green light on Prime Media deal appeared first on The Motley Fool Australia.

The Raiz Invest Ltd (ASX: RZI) share price is moving almost 8% higher at the time of writing following the company's latest announcement.

Before market open, the micro-investing platform informed shareholders of a strategic investment from Seven West Media Ltd (ASX: SWM). The Australian media giant will leverage its country-wide audience to assist in accelerating Raiz's customer growth.

This strategic move on behalf of Seven West is less than a month after it announced the acquisition of Prime Media Group Limited (ASX: PRT). Making the Raiz investment the company's second strategic play in the past month.

What is spotlighting the Raiz share price today?

It was only a few weeks ago when Raiz proudly announced it had reached a major milestone in the company. On 10 November 2021, the mobile-based investing platform paraded its achievement of hitting $1 billion in funds under management (FUM).

Today, news of the $960 million diversified media company, Seven West Media, getting involved with Raiz will likely grab the market's attention.

According to the release, ASX-listed Seven West will take a strategic investment of a 6.6% stake in Raiz. This will be facilitated through a $10 million share placement. Additionally, the new Raiz shares were priced at the 10-day volume-weighted average price of $1.617.

Aligning both parties, the media giant will make payment for the investment via two components. Firstly, Raiz will receive $2 million in cash. Secondly, Seven will conduct advertising across its various avenues to the equivalent value of $8 million. This will give the Raiz platform reach to over 18 million Australians through the media giant's publications.

Management commentary

Commenting on the announcement, Raiz joint group CEO Brendan Malone said:

With Seven we will be able to re-engage with many of these customers as well as expand our reach to a fresh audience and explain why Raiz is an excellent product for them for saving and investing in and outside of superannuation, even if they have broking accounts or high interest saving accounts with other organisations. We are not an either-or product.

Meanwhile, Seven West Media managing director and CEO James Warburton said:

Raiz is a disruptive digital player that is targeting a huge market opportunity. Combining Raiz's consumer offering, which has widespread appeal, with SWM's scale and audience reach provides a significant opportunity to grow the business and is a strong fit with the strategy of our Seven West Ventures group.

The Raiz share price has strengthened by 62% since the beginning of 2021.

The post Raiz (ASX:RZI) share price climbs 8% as Seven West Media makes strategic investment appeared first on The Motley Fool Australia.

Shares in national media company Seven West Media Ltd (ASX: SWM) have soared to new heights today and are now trading at 58.5 cents apiece.

The free-to-air TV giant's share price is now back on the podium by setting a corresponding 3-year high, after rallying 42% in the last month.

With Seven West shares inching higher in afternoon trade today, they have also outpaced the benchmark S&P/ASX 200 Index (ASX: XJO) which is 1.25% in the red.

Here's a closer look at what has investors chasing a position in Seven West.

New multi-year highs are a good thing

Seven West's share price shot up in an almost vertical fashion to finish the month of October, after a series of positive catalysts – positive due to the market's reaction.

First, the company informed investors that it folded all of its debt instruments into one facility last month.

Seven notes the move will result in immediate benefits to its balance sheet and earnings potential. These include more favourable interest payments and flexibility to retain more cash each earnings cycle.

As a result, the company sees its net debt reduce by $158 million or 57% on a net debt ratio of 0.95x, per the release.

One way for a company to drive growth is through acquisitions. Seven certainly followed this manta when it announced the acquisition of Prime Media Group Limited (ASX: PRT) to kick it off for November.

Seven acquired Prime Television and all of its subsidiaries on a valuation of $131.9 million, equalling 36 cents per Prime share.

As Seven will absorb all of the cash and distributions on Prime's balance sheet, the net cost for the company in the transaction finalises at just $72 million.

The net result of both announcements sent Seven West shares flying in the days afterwards, and the pace hasn't slowed down since.

After a small hiccup last week, they took off once again, after Seven released its AGM on Tuesday. There, it advised that the group has assumed position as the dominant free-to-air TV network in Australia.

Shareholders must now be fist-pumping in Rocky-like fashion celebrating the multi-year highs.

What are brokers saying about Seven West shares?

Following the commentary at its AGM, analysts from Swiss investment bank UBS weren't so sure if Seven's results are truly organic or not.

UBS questions if Seven did actually outperform its peers, or was simply the beneficiary of a buoyant TV ad market.

It is waiting on media competitor Nine Entertainment Co Holdings Ltd (ASX: NEC) to make commentary before making up its mind.

Yet, despite the reservations, the broker retained its buy rating on the share, reiterating its 95 cents price target in the process.

JP Morgan is also bullish on the direction of Seven West's share price. It reckons the Prime acquisition "places [Seven] in a better position to deliver a consolidated national media partnership, with more data across a faster growing market".

It notes the acquisition has the potential to bring an accretive gain of $5 million to $10 million to Seven through various cost and revenue synergies.

The broker also reckons that structural headwinds from "continued migration of advertising spend away from the company's core TV broadcasting and print businesses to other digital platforms" are already priced into the Seven West share price.

As such, JP Morgan raised its price target on Seven West shares by 8% to 70 cents neat, implying an upside potential of almost 20% at last check.

What about in the last year?

The Seven West share price has been an outperformer over the past 12 months, delivering outsized returns to shareholders.

In that time, it has climbed over 178%, after rallying another 77% since January 1. It has gained 11% in the last week alone.

Each of these returns has outpaced the broad index's gain of around 14% for the past year of trading.

The post 42% in a month: Seven West (ASX:SWM) share price just hit 3-year highs appeared first on The Motley Fool Australia.