Four ASX shares that are rising more than Most today are listed below. Here's why they are climbing:

Avjennings Ltd (ASX: AVJ)

The Avjennings share price is up 7% to 65 cents. This morning, the residential land and housing developer revealed that it has accepted a takeover offer from an investment vehicle of Proprium Capital Partners Australia and Property Group. The parties have agreed on a deal that will see shareholders receive $0.655 cash consideration per share. The company stated: "AVJennings' Board of Directors unanimously recommend that AVJ shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of the AV shareholders."

Black Cat Syndicate Ltd (ASX: BC8)

The Black Cat Syndicate share price is up 6% to $1.02. This morning, the gold miner announced the completion of the 1.2Mtpa Lakewood processing facility acquisition. It is now part of the 100% owned Kal East Gold Operation. This deal is inline with the company's more gold, sooner strategy. Black Cat's Managing Director, Gareth Solly, said: "Black Cat has taken a transformational step forward now that Lakewood is under the Company's ownership. With processing starting immediately, the more gold sooner strategy is underway."

Evolution Mining Ltd (ASX: EVN)

The Evolution share price is up 2.5% to $7.28. This follows another strong rise for the gold price overnight. Traders were bidding the precious metal higher ahead of the start of US trade tariffs. It isn't just Evolution Mining that is pushing higher today. There are gains across the industry, which has led to the S&P/ASX All Ordinaries Gold (XGD) index rising 0.7% today.

Southern Cross Electrical Engineer Ltd (ASX: SXE)

The Southern Cross Electrical Engineer share price is up a further 11% to $1.84. Investors have been buying SCEE shares this week after it announced the acquisition of Force Fire Holdings. It is a leading New South Wales and Queensland-based provider of fire safety solutions to the commercial and industrial sectors. SCEE is paying an initial upfront consideration of $36.3 million. This could increase to a total consideration of up to $53.5 million if the business delivers on its EBIT growth targets in FY 2026 and FY 2027.

The post Why Avjennings, Black Cat, Evolution Mining, and SCEE shares are racing higher appeared first on The Motley Fool Australia.

The soaring stock in question is Melbourne-based residential development company AVJennings Ltd (ASX: AVJ).

AVJennings shares closed down 5.7% yesterday at 33 cents. Which would have been an opportune time to buy them.

In morning trade on Thursday, shares are changing hands for 63 cents apiece, up 90.9%.

Investors are piling into the ASX All Ords share following news of a potential takeover bid.

Here's what's happening.

ASX All Ords share leaps on acquisition offer

The AVJennings share price is flying higher after the company announced an unsolicited, incomplete and non-binding indicative proposal from Proprium Capital Partners and AVID Property Group (together, AVID) to acquire all of its shares.

AVID is offering 67 cents per share by way of a scheme of arrangement.

That's more than double yesterday's closing price and sending the ASX All Ords share soaring to multi-year highs today.

And with 557.69 million shares outstanding, the deal values the residential developer at $373.7 million.

If the deal goes through in its current form, AVJennings shareholders will receive the 67 cents per share minus any dividends they might currently be entitled to.

But investors in the ASX All Ords share could garner some extra benefits from franking credits.

According to the release:

AVID also proposes to permit AVJ to pay a fully franked special dividend on or before the scheme implementation date, allowing eligible AVJ shareholders to receive additional value of up to approximately $0.06 per share in franking credits.

The consideration paid pursuant to the scheme would be reduced by the cash amount of any such special dividend paid to AVJ Shareholders.

AVJennings directors said they've entered into an exclusivity deed with AVID to finalise the indicative proposal and the exclusivity terms that apply in this period.

The finalisation of the indicative proposal remains subject to a number of conditions. Those include approval from the Australian Foreign Investment Review Board (FIRB), as well as court and AVJennings shareholder approval.

Subject to the satisfactory completion of due diligence, the board said it intends to unanimously recommend that AVJennings shareholders vote in favour of a scheme.

Prior confidential negotiations

Management revealed that the ASX All Ords share first received a preliminary takeover offer from AVID on 2 August. They noted that "confidentiality was a condition of the preliminary offer".

The board said:

Since the initial approach, both parties have held extensive discussions and negotiations, resulting in the improved Indicative Proposal of $0.67 per AVJ share received on 27 November 2024.

Shareholders were advised that they do not need to take any action at the present time.

The post Guess which ASX All Ords share just rocketed 91% on $374 million takeover news appeared first on The Motley Fool Australia.

Here's a short recap of the Australian market:

• S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) lower 0.30% to 6,768.60
• ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) lower 0.38% to 6,846.10
• AUD/USD at US 68 cents
• Gold at US$1,433.82 an ounce
• Brent Oil at US$62.00 a barrel

The best-performing ASX 200 share today was the share price of Saracen Mineral Holdings Limited (ASX: SAR) which went up 10.9%.

Indeed, it was a very strong day for gold miners as the trade war was ramped up yet again by US President Donald Trump. The Resolute Mining Limited (ASX: RSG) share price went up by 10.7% and the Newcrest Mining Limited (ASX: NCM) share price rose 7.2%.

Positive Malaysian PM comments sent the Lynas Corporation Ltd (ASX: LYC) share price higher by 6.3%.

A sizeable drop in the oil price has damaged the share price of Beach Energy Ltd (ASX: BPT) which fell over 5.2%.

The trade war is also hurting investor sentiment about Fortescue Metals Group Limited (ASX: FMG), its share price fell 6.1%.

The share price of Graincorp Ltd (ASX: GNC) has fallen over 5% over providing FY19 guidance.

Finally, the Avjennings Ltd (ASX: AVJ) share price dropped 2.5% after it gave a market update.

Here are some of today's top stories:    

• Macquarie tips Xero share price to hit $76.50
• More royal commission woes is hurting the NAB share price
• 3 ASX shares rated as strong buys by brokers
• Top ASX Stock Picks for August

The post ALL ORDINARIES finishes lower Friday: 8 shares you missed appeared first on The Motley Fool Australia.

What did the update tell us?

Firstly, AVJennings confirmed that Profits before Tax (PBT) for the 2019 financial year will come in at approximately $23 million, which was below expectations and a substantial fall from the $45.1 million in PBT that the company posted for the 2018 financial year. The company stated that the result was "impacted by the deterioration of market conditions, particularly in Melbourne and Sydney".

However, the company remains bullish on the outlook for FY20, stating:

"The company expects an improved result for FY20. A continued improvement in market sentiment is anticipated moving forward. Market fundamentals remain supportive with continued economic and population growth, low interest rates expected to continue for some time and a stable employment environment."

AVJennings also noted the rising confidence in markets following the recent Federal election as well as the state elections in NSW and Victoria. In addition, the company also notes the positive effects of APRA removing the minimum 7% debt servicing threshold that was formerly required to be applied by retail banks when considering loan applications.

The company also stated that "determination of the final dividend will be considered by the Board at its August meeting", where a final report and 'further commentary' will also be released to the market.

The AVJennings share price has fallen just shy of 16% in the past 12 months. 

The post Why the AVJennings share price is drifting lower today appeared first on The Motley Fool Australia.

Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) have already tightened their lending standards in light of the Royal Commission report. They are probably going to stick to those standards with APRA & ASIC being told to keep on top of things.

But, another factors that could lead to falling prices is that vacant properties have increased by 40% to 22,426 according to SQM Research, as reported by the AFR.

The vacancy rate is currently sitting at 3.2%, with more and more completions occurring this year.

Louis Christopher from SQM Research said that the vacancy rate could rise up to 4% this year, which was last seen during the post-Olympics in 2004.

Sydney's asking rent prices fell 4.5% over the past 12 months for houses and 2.8% for units. As share investors know, a fall in earnings usually leads to a drop in the value of shares, so if property acts somewhat like shares then a drop in rent could also lead to a drop in house prices.

In January 2019 Sydney saw its dwelling prices fall by 1.3% in just one month, which is an annualised decline of 15.6%. Of course, I don't expect Sydney prices to fall by another 14% this year, but some market commentators think house prices could fall by 10% this year.

Foolish takeaway

Over the past 12 months, Sydney house prices have fallen by 9.7% and I think this could make things challenging for a variety of businesses, from Avjennings Ltd (ASX: AVJ) to Stockland Corporation Ltd (ASX: SGP) and Boral Limited (ASX: BLD).

The post Why Sydney house prices could plunge further this year appeared first on The Motley Fool Australia.

The market had been expecting a negative result given the weakness in Australia's housing market and prior warning that fiscal year 2019 earnings would be skewed towards the second half. The company's share price has been on a steady decline over the past six months.

AVJennings noted that consumer confidence has suffered in the face of political uncertainty, 'sensationalist' media commentary regarding Australia's housing market and a credit squeeze by the banks.

Managing Director and CEO, Peter Summers pointed to the Banking Royal Commission as having played a role in the tightening of lending conditions. Last Friday, the Reserve Bank of Australia denied that tougher lending policies were responsible for a credit crunch that was fueling the decline in house prices.

The company is optimistic, however, that currently, soft market conditions aren't here to stay, pointing to positive economic conditions, solid market fundamentals and the reduced likelihood of a rate hike in 2019. Additionally, the company predicts that stronger wage growth and inflation, positive net migration into capital cities and improving affordability will be tailwinds for housing demand.

The statement also mentioned loosening of lending conditions as a potential upside: "Importantly, the banking regulator APRA has acknowledged that some of the curbs imposed upon bank lending over the past few years have done their job and must be reconsidered to avoid unintended consequences, particularly as new construction activity diminishes, and developers pare back supply."

Today's declines saw the AVJennings share price down almost 25% over the last 12 months.

The post Housing malaise sees AVJennings' share price drop as profits suffer appeared first on The Motley Fool Australia.

Four shares that have failed to follow the market higher today are listed below. Here's why they are ending the week in the red:

The Argosy Minerals Limited (ASX: AGY) share price is down 5.5% to 25.5 cents. On Thursday the lithium company's shares rocketed higher after it advised that a successful and scalable chemical process solution to produce battery quality lithium carbonate product had been achieved. This means the company will soon send samples to its preferred off-take party before looking to finalise the preliminary off-take agreement for Stage 1 product. Today's decline appears to be a case of profit taking from some investors.

The Australian Mines Limited (ASX: AUZ) share price has fallen 4% to 4.7 cents despite releasing positive drilling results from the Greenvale nickel, cobalt, and scandium deposit at its Sconi project in Queensland. Although the results demonstrated the potential for its mineral resource to be extended in multiple mineralised zones, it seems some investors were expecting stronger results.

The Avjennings Ltd (ASX: AVJ) share price has dropped almost 5% to 69 cents. This morning the shares of the land development, integrated housing and apartment development, and home improvements company went ex-dividend for its fully franked 3 cents per share final dividend. This will be paid to eligible shareholders on October 11.

The Eden Innovations Ltd (ASX: EDE) share price has tumbled 5% to 3.9 cents. Like Argosy Minerals, I suspect that today's decline is down to profit taking after its shares rallied notably higher on Thursday. Eden Innovations' shares jumped after it appointed Parchem as its exclusive ANZ distributor of its EdenCrete product. Parchem is a leading manufacturer and supplier of products and equipment to the Australian and New Zealand concrete and construction markets.

The post Why these 4 ASX shares are ending the week in the red appeared first on The Motley Fool Australia.

First and foremost, the shares are cheap on valuation measures. They trade on just 10.7x consensus net profit forecasts, and a yield of 6.1% (50% franked).

Secondly, despite the discount rating, the quality of the business is high. Earnings have grown for the last five years, EBIT margins are in the healthy mid teens, operating cashflow is strong, and CSR has no debt.

Thirdly, I believe that concerns about the one thing that always holds CSR back, the housing market, are overblown.

It's not about top end property prices, it's about new build in the residential, commercial, industrial and infrastructure sectors. The first three are forecast to remain strong, while substantial growth is expected in infrastructure.

Dealing specifically with residential housing, the macro-economic indicators are favourable, as is the main micro-economic one, namely the constraints put on supply by planning regulations.

Following this theme, an even cheaper, smaller stock that should be on investors' radar is AV Jennings Ltd (ASX: AVJ).

This residential housebuilder constantly gets tarred with top end apartment glut/falling prices talk, yet it actually serves the low to mid tier of the East Coast market. Far from a glut, there is actually a shortage of new build in that space.

Like CSR, AV Jennings has delivered for several years now. In fact, over the last three years earnings have grown at 23.8% compound.

Yet despite this record, the group trades on a 31% discount to NAV. This is even more astonishing given that NAV has been steadily rising, not falling. But the main thing that should attract investors here is the fully franked 5c dividend, which grossed up, gives a yield of 10.4%.

Foolish takeaway 

Because of the market's fixation on house prices, not housing demand, stocks like CSR and AVJ Jennings are very cheap. This despite them having extremely strong franchises. Both stocks are well off their highs, and offer compellingly high yields.

The post CSR Limited & AV Jennings Ltd: 2 bargain shares built to last appeared first on The Motley Fool Australia.

If you missed the week one reporting season wrap up, check it out here.

Winners

BWP Trust (ASX: BWP) – Half year distributable profit up 8.5% to $53.3 million compared to pcp.

Cochlear Limited (ASX: COH) – Half year net profit attributable to members up 32% to $94 million compared to pcp.

Transurban Group (ASX: TCL) – Half year net profit excluding significant items up 19.2% to $62 million compared to pcp.

Virgin Australia Holdings Ltd (ASX: VAH) – Half year net profit attributable to owners up 186% to $45.7 million compared to pcp.

Mirvac Group (ASX: MGR) – Half year net profit attributable to the stapled securityholders up 69% to $472.7 million compared to pcp.

Idp Education Ltd (ASX: IEL) – Half year net profit attributable to the owners up 19.4% to $20.3 million compared to pcp.

Goodman Group (ASX: GMG) – Half year net profit attributable to securityholders up 79% to $919.3 million from $512.7 million compared to pcp.

ASX Ltd (ASX: ASX) – Half year net profit from ordinary activities (including significant items) up 7.3% to $213.1 million compared to pcp.

SKYCITY Entertainment Group Limited-Ord (ASX: SKC) – Half year net profit attributable to security holders up 30.2% to NZ$71 million compared to pcp.

OZ Minerals Limited (ASX: OZL) – Full year net profit attributable to equity holders up 168.5% to $130.2 million from $48.5 million compared to pcp.

Computershare Limited (ASX: CPU) – Half year net profit attributable to members up 443.7% to $84.26 million compared to pcp.

Stockland Corporation Ltd (ASX: SGP) – Half year net profit attributable to securityholders up 50.6% to $696 million compared to pcp.

Commonwealth Bank of Australia – (ASX: CBA) – Half year net profit attributable to equity holders up 2% to $4.6 Billion compared to pcp.

Boral Limited (ASX: BLD) – Half year net profit attributable to members up 30.7% to $136.6 million from $104.5 million compared to pcp.

Carsales.Com Ltd (ASX: CAR) – Half year net profit attributable to members up 10% to $51.3 million compared to pcp.

JB Hi-Fi Limited (ASX: JBH) – Half year net profit attributable to members up 7.52% to $95.2 million compared to pcp.

National Storage REIT (ASX: NSR) – Half year net profit attributable to members up 35% to $20.6 million compared to pcp.

Avjennings Ltd (ASX: AVJ) – Half year net profit attributable to members up 39.2% to $16.5 million from $11.9 million compared to pcp.

Nick Scali Limited (ASX: NCK) – Half year net profit attributable to owners of Nick Scali Limited up 40.7% to $14.1 million compared to pcp.

Losers

Suncorp Group Ltd (ASX: SUN) – Half year net profit attributable to owners down 16% to $530 million compared to pcp.

Ansell Limited (ASX: ANN) – Half year net profit attributable to members down 20.6% to $69.6 million compared to pcp.

Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) – Half year net profit attributable to members down 7.5% compared to pcp.

Cimic Group Ltd (ASX: CIM) – Full year net profit attributable to members down 23% to $520.4 million from $676.5 million compared to pcp.

AGL Energy Ltd (ASX: AGL) – Half year net profit attributable to shareholders down 245.8% to $449 million from $308 million compared to pcp.

Platinum Capital Limited (ASX: PMC) – Half year net profit attributable to members down 120.39% to $3.79 million compared to pcp.

Aquarius Platinum Limited (ASX: AQP) – Half year net profit attributable to equity holders down 35% to $76.1 million compared to pcp.

The post February 2016 Reporting Season – Week 2 Wrap Up appeared first on The Motley Fool Australia.

Week one's winners included Navitas Limited (ASX: NVT), Capilano Honey Limited (ASX: CZZ) and REA Group Limited (ASX: REA). While week one's losers included Magellan Flagship Fund Limited (ASX: MFF), Genworth Mortgage Insurance Australia Limited (ASX: GMA) and Tabcorp Holdings Limited (ASX: TAH).

If you missed the week one reporting season wrap up, check it out here.

Now, here's the week two reporting season winners and losers to date:

Winners

OZ Minerals Limited (ASX: OZL) – Full year net profit attributable to equity holders up 168.5% to $130.2 million from $48.5 million compared to pcp.

Stockland Corporation Ltd (ASX: SGP) – Half year net profit attributable to security holders up 50.6% to $696 million compared to pcp.

Commonwealth Bank of Australia – (ASX: CBA) – Half year net profit attributable to equity holders up 2% to $4.6 billion compared to pcp.

Boral Limited (ASX: BLD) – Half year net profit attributable to members up 30.7% to $136.6 million from $104.5 million compared to pcp.

Carsales.Com Ltd (ASX: CAR) – Half year net profit attributable to members up 10% to $51.3 million compared to pcp.

JB Hi-Fi Limited (ASX: JBH) – Half year net profit attributable to members up 7.52% to $95.2 million compared to pcp.

National Storage REIT (ASX: NSR) – Half year net profit attributable to members up 35% to $20.6 million compared to pcp.

Avjennings Ltd (ASX: AVJ) – Half year net profit attributable to members up 39.2% to $16.5 million from $11.9 million compared to pcp.

Nick Scali Limited (ASX: NCK) – Half year net profit attributable to owners up 40.7% to $14.1 million compared to pcp.

Losers

Ansell Limited (ASX: ANN) – Half year net profit attributable to members down 20.6% to $69.6 million compared to pcp.

Shopping Cntrs Austrls Prprty Gp Re Ltd (ASX: SCP) – Half year net profit attributable to members down 7.5% to $90.8 million from $98.2 million compared to pcp.

Cimic Group Ltd (ASX: CIM) – Full year net profit attributable to members down 23% to $520.4 million from $676.5 million compared to pcp.

AGL Energy Ltd (ASX: AGL) – Half year net profit attributable to shareholders down 245.8% to $449 million from $308 million compared to pcp.

Platinum Capital Limited (ASX: PMC) – Half year net profit attributable to members down 120.39% to $3.79 million compared to pcp.

Aquarius Platinum Limited (ASX: AQP) – Half year net profit attributable to equity holders down 35% to $76.1 million compared to pcp.

The post Winners and losers from the February 2016 reporting season so far appeared first on The Motley Fool Australia.

Here are some highlights from the half year report:

• Revenue soared 58% to $187 million
• Profit before tax leapt 42% to $24 million
• Earnings per share jumped 39% to 4.3 cents per share (cps)
• A 1.5 cps fully franked dividend was declared with represents an increase of 50% on the interim result paid for financial year 2015
• Gearing remained reasonable at 23%

Outlook

Avjennings has increased its land holdings to 10,436 lots which provides plenty of scope for further growth. Commenting on the outlook management noted that it has no exposure to high-rise apartments and minimal reliance upon foreign buyers – two areas that are believed to be facing headwinds.

Avjennings sees the market for traditional housing as still positive with tailwinds from low interest rates, shortages of affordable detached housing in major capital cities along the east coast and positive population growth.

The Managing Director Mr Summers noted that: "The directors and management expect a typically stronger second half in fiscal 2016 and reiterate the Company's contract signings guidance for the current financial year of 1,00 to 2,100 lots. Our markets are undersupplied so demand should remain strong for some time."

According to data supplied by Thomson Consensus Estimates, Avjennings is forecast to achieve EPS of 9.1 cps for the full year. At today's share price, this implies the stock is only trading on a price-to-earnings ratio of 6.5 times – which appears cheap.

The performance of Avjennings could suggest other property developers including Lend Lease Group (ASX: LLC) and Stockland Corporation Ltd (ASX: SGP) may also report solid results which could mean there is some upside available to investors in the sector.

The post Avjennings Ltd reports: what you need to know appeared first on The Motley Fool Australia.

Not only is it a standard topic of conversation at dinner parties but for many it is their single largest investment. For this reason alone it's definitely understandable that Australians have a natural bias against believing anyone who proposes that property may be overvalued.

Out on a limb

Last week it was reported in the Australian Financial Review that the chief economist at investment bank Goldman Sachs had concluded that based on his analysis:

"Australian house prices are currently 20% above fair value – the most expensive since December 2007."

Perhaps more alarming however was a further comment that if Australia's economic growth rate turns out to be slower than expected, that 20% overvaluation would rise to 36%!

This warning from Goldman Sachs could be a timely warning for investors in property-related stocks, with a number of these stocks trading near their 52-week highs and about to report what are likely to be very good results.

For example, home builder Avjennings Ltd (ASX: AVJ) has gained nearly 17% in the past 12 months which is significantly better than the 1.3% return from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). The company recently provided an upgrade to its full year guidance for profit before tax of $47 million or higher, which was a significant upgrade to the circa $40 million guidance previously provided.

Meanwhile, Villa World Ltd (ASX: VLW) only has a 2.6% gain to show for the past year, however, it is up around 400% over the past five years! The group also provided a pleasing profit update to the market in the lead up to August reporting season with guidance for net profit before tax (excluding a $6.5 million one-off litigation provision) of between $32.5 million and $34.5 million.

Music about to stop?

As most investors will be aware, the property sector is extremely cyclical. While the timing of shifts in the cycle are hard to predict; one thing that's near-to-certain is that above average growth in property prices and above average growth in demand for new homes and apartments won't last forever.

The post Here's why property-related stocks could be about to crash appeared first on The Motley Fool Australia.

Shares in the company surged 3.1% to a two-month high of 67 cents after management upgraded its pre-tax profit guidance to be no less than $47 million for the year ended June 30, 2015.

This compares to its previous profit before tax guidance of "$40 million or higher" that it issued three months ago and the $27 million it posted in 2013-14.

The profit upgrade comes in spite of bad weather in its key market of New South Wales as AVJennings managed to complete more projects than anticipated in the last month of the 2014-15 financial year.

I suspect we are close to a 20% upgrade to consensus earnings per share forecasts for 2014-15, which would put the stock on an undemanding price-earnings (P/E) of around 7.7x.

As long as the wheels in the Australian housing market don't fall off, I think there could be a further 20%-30% upside for the stock given that Sydney and Melbourne are AVJennings' largest markets. The two cities are seen as the growth engine for Australian residential developments.

AVJennings has seven residential developments in New South Wales and six developments in Melbourne that will contribute to 2015-16 earnings.

More importantly, the builder has little exposure to Western Australia, which is seen to have the weakest outlook due to the slowdown in the mining sector.

What's more, the stock will also appeal to income investors as it is expected to generate a yield of over 8% for 2015-16 once franking credits are included.

But AVJennings isn't the only stock well placed to benefit from home construction growth in Sydney and Melbourne. Building supplies group CSR Limited (ASX: CSR) is another stock that I am bullish on as it trades at around a 20% discount to its peers.

The latest data from the Australian Bureau of Statistics also points to a good outlook for CSR, which supplies glass and bricks for construction projects. The price of glass in June is up 13% year-on-year while the price of bricks is 7% higher over the period.

CSR's key markets are also Sydney and Melbourne, and while the cloudy outlook for aluminum prices is dragging on sentiment, I believe the risks are more than reflected in the current share price as the stock has underperformed the market with a 2% dip since January.

The post How to benefit from the Sydney and Melbourne property boom appeared first on The Motley Fool Australia.

Australia's 104 quarters of continuous economic expansion have overtaken the 103 quarters recorded by the Netherlands between the early 1980s and 2008, Canada's 82 quarter record and France's 68 quarters.

Housing Boom to Blame?

An interesting part of the research was the conclusion that the record Dutch economic expansion was primarily as a result of a long-term rising housing market coupled with rising household indebtedness. This has an eerie resemblance to what's going on in Australia. The housing market, even though the GFC put a slight pause on growth, has had an incredible run and has been largely responsible for the wealth of the baby boomers generation.

Are we in for a recession?

Only time will tell if we see an economic recession. Wikipedia notes that a recession can be defined as when, "GDP (gross domestic product), investment spending, capacity utilisation, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise".

A recession could have a profound effect on the share market and will most likely be as a result of falling commodities prices or any setbacks in the local housing market.

Stocks to watch out for

If we're going to have a recession then there are a few things you can do to your share portfolio to make sure you won't lose your shirt.

1. Avoid the banks, such as Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB), which are potentially overly exposed to the investor mortgage market.
2. Watch out for building companies and developers such as Avjennings Ltd (ASX: AVJ), Stockland Corporation Ltd (ASX: SGP) and Lend Lease Group (ASX: LLC), which have residential developments either in progress or set to commence construction.
3. Watch out for leveraged resources companies. A recession will most likely be brought on by a fall in the iron ore and oil price. Those companies with large debt loads compared to their market cap will see share price falls. Fortescue Metals Group Limited (ASX: FMG) and Santos Ltd (ASX: STO) are two of the riskiest, so beware.

The post 3 tips to protect your portfolio in a recession appeared first on The Motley Fool Australia.

Two themes which have been popular lately are firstly, the weakening Australian dollar and secondly, the strong housing market – in both cases the Reserve Bank of Australia's (RBA) interest rate decisions are playing an important part in the momentum of both of these themes.

One stock which is benefiting from lower interest rates and the subsequent boom in home building is Avjennings Ltd (ASX: AVJ).

AV Jennings has just reported a 13.7% increase in revenue to $118.5 million and a 42.1% increase in net profit after tax to $11.9 million for the first half of financial year 2015. The board has also declared a one cent per share fully franked dividend.

Other pleasing news to greet shareholders was a discussion of the progress of the company's renewed presence in Perth and data showing that lots under development had increased by nearly 300 to 1,539, with total lots controlled standing at 9,418.

The interim results bode well for the remainder of the year with the Chairman Mr Simon Cheong reminding investors that the group's results are usually biased towards the second half due to production staging and seasonality. This year they will also be underpinned by contracts signed in the first half.

With the cash rate expected to be sent even lower by the RBA in the coming months and forecasts suggesting a continued shortage of housing across the nation, the outlook remains good for companies exposed to the residential housing market.

For investors keen to play this theme AV Jennings is certainly a stock worth looking at; others that could also be worthy of a place on your watchlist are Devine Limited (ASX: DVN) and Villa World Ltd (ASX: VLW).

The post Avjennings Ltd builds shareholders a big profit: Should you buy? appeared first on The Motley Fool Australia.

Here are three property plays which stand out for being "cheap" on the metric of price to net tangible assets (NTA).

1)      AVJENNINGS Ltd (ASX: AVJ) reported a significantly improved second-half result for financial year 2013. While the company made a loss in the first half, AV Jennings produced a $3.8 million profit in the second half. The stated NTA as at 30 June 2013 was 76 cents per share (cps). With the shares currently trading at 58 cps this implies a discount of 23.7%. It appears funds associated with wealth manager IOOF Holdings Ltd (ASX: IFL) have been tempted by the price, with the manager recently increasing its position from 5.7% to 6.8%.

2)      Devine Limited (ASX: DVN) was forced in October to lower the market's expectations for earnings for the half year to 31 December 2013, with the company guiding the market towards an underlying loss of $15 million, plus expectations of an impairment charge of up to $70 million. For the full 2014 financial year however, Devine expects to deliver an underlying pre-tax profit between $7 million and $10 million. Based on stated NTA the stock currently trades at a 56% discount, but investors should await the release of the half-yearly results as this discount will decline once impairment charges are brought to account.

3)      Aspen Group Limited (ASX: APZ) has been on a path to simplify and focus its business which has involved the sale of non-core assets. At the AGM, management gave an update on trading for the first quarter which stated that permanent staff had been reduced by 26% over the quarter and that a distribution of 7.5 cps for the first half would be targeted (since confirmed). After a 1-for-10 consolidation of shares on issue the stated NTA of Aspen is $2.20. With the share price currently at $1.42 this implies a 35% discount.

Foolish takeaway

As investors it is always important to acknowledge that while the market may not be perfectly efficient, on balance it generally gets it right. Stocks that are trading below their NTA are doing so for a reason – rarely because they have simply been overlooked or missed by other investors. While occasionally the market will be wrong and a discount to NTA will close by the share price moving higher, on other occasions the market will correctly forecast a declining value and the NTA will subsequently fall towards the share price.

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