This ASX 200 retail and industrial conglomerate initially rose up to $52.75 a share in early trading but has since retreated to $52.35 a share, down 0.07%.

This share price volatility comes on a big day for Wesfarmers and its shareholders, with two important bits of news to discuss.

Silk Laser acquisition moves forward

Firstly, let's talk about the announcement Wesfarmers put out last night after market close. As most company investors would know, Wesfarmers has been pursuing the full acquisition of Silk Laser Australia Ltd (ASX: SLA).

Back in August, the Australian Competition and Consumer Commission (ACCC) gave Wesfarmers the green light to pursue its takeover of Silk Laser through its API (Priceline) subsidiary. Existing Silk Laser shareholders will receive $3.35 in cash per share if the acquisition is to go through.

The announcement last night confirmed that the Federal Court has approved a meeting of Silk Laser shareholders to vote on the proposed acquisition by Wesfarmers, as well as the distribution of an explanatory statement to shareholders.

Silk Laser shareholders will now vote on the acquisition next month on 10 November.

Silk Laser has also told investors that it has prepared an "independent expert's report" on the acquisition. According to Lonergan Edwards & Associates Limited, the proposal is "fair and reasonable to, and therefore in the best interests of, SILK shareholders in the absence of a superior proposal".

This has led to the Silk Laser board recommending the takeover to shareholders. Here's what the board has told investors:

The SILK Directors unanimously recommend that SILK shareholders vote in favour of the Scheme, in the absence of a superior proposal and provided that the Independent Expert continues to conclude that the Scheme is in the best interest of SILK shareholders.

Furthermore, each of the SILK Directors intends to vote all the SILK shares held or controlled by them in favour of the Scheme, in the absence of a Superior Proposal and provided that the Independent Expert continues to conclude that the Scheme is in the best interests of SILK Shareholders

So that's one bit of major news worth discussing today.

It's pay day for Wesfarmers shares

The next bit of news concerns Wesfarmers' latest dividend payment. Back in late August, we warned investors that if they wished to receive Wesfarmers' upcoming final dividend, they had to own Wesfarmers shares before the company traded ex-dividend on 30 August.

Well, for those lucky investors who did so, today is dividend payday. Yep, all eligible Wesfarmers shareholders are set to receive the final dividend worth a fully franked $1.03 per share. Investors will appreciate the fact that this final dividend represents a 3% rise over last year's equivalent payment worth $1 per share.

So a good day all around for Wesfarmers shares this Thursday. At the current Wesfarmers share price of $52.51, this ASX 200 stock is up 15.5% in 2023 so far and has a dividend yield of 3.64%.

The post It's a big day for Wesfarmers shares today. Here's why appeared first on The Motley Fool Australia.

Wesfarmers is the parent business behind Australian Pharmaceutical Industries (API), which operates Priceline and Clear Skincare Clinics.

Silk Laser Australia describes itself as one of Australia's largest specialist clinic networks, offering "a range of non-surgical aesthetic products and services" – it offers laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products.

ACCC green-lights the deal

Wesfarmers is looking to buy Silk Laser Australia for $3.35 cash per share. Silk Laser Australia is allowed to pay a fully franked dividend of 10 cents per share, with the cash offer to be reduced by the cash component of any permitted dividends.

API told Silk Laser that it has received written confirmation from the Australian Competition and Consumer Commission (ACCC) that it does not intend to conduct a public review of the proposed acquisition.

The ACCC condition that was part of the takeover offer from API has therefore been satisfied.

It has also been confirmed to API by the New Zealand Commerce Commission (NZCC) that having reviewed and considered the submission, the NZCC won't consider the acquisition further.

Is that the final step?

Owners of Wesfarmers shares can't get too excited yet because the takeover is still subject to some conditions, such as Silk Laser shareholders approving the deal, the independent expert's report concluding that the takeover is in the best interests of Silk Laser shareholders, and a few other "customary conditions."

Why does this deal make sense?

For Silk Laser shareholders, the takeover offer is a 38.4% premium to the share price of $2.42, which was just before the API offer.

The Silk Laser Chair Boris Bosnich said:

Wesfarmers Health represents a logical, long-term owner for the SILK business, with the expertise and capacity to support continued growth for SILK and its franchise partners.

The API offer provides certainty for shareholders, and we have been pleased with the alignment between the businesses seen through due diligence.

For Wesfarmers Health, the company believes it will complement the division's existing presence in the sector through its ownership and operation of Clear Skincare Clinics. Wesfarmers sees a good long-term future in the healthcare space, with attractive tailwinds such as Australia's ageing population.

Wesfarmers share price snapshot

Since the start of 2023, Wesfarmers shares have risen by around 10%, as we can see on the chart below.

The post Wesfarmers share price climbs amid ACCC green light appeared first on The Motley Fool Australia.

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

Capricorn Metals Ltd (ASX: CMM)

The Capricorn Metals share price is up almost 5% to $4.24. This morning, this gold miner revealed that it has reduced its gold hedge book by 51,000 ounces. This is to provide further exposure to any increase in the A$ gold price over the next 15 months. Capricorn advised that the closure of this gold hedging results in it having no hedging delivery obligations until September 2024.

DDH1 Ltd (ASX: DDH)

The DDH1 share price is up over 6% to 91.5 cents. Investors have been buying this drilling services company's shares after it agreed to be acquired by Perenti Ltd (ASX: PRN). If all goes to plan, DDH1 shareholders will receive 12.38 cents in cash together with 0.7111 Perenti shares per DDH1 share. This values DDH1 at an equity value of $410 million.

Metcash Limited (ASX: MTS)

The Metcash share price is up 4% to $3.73. This morning, this wholesale distributor released its full-year results and delivered profits ahead of expectations. Metcash reported group revenue growth of 6.2% to $15.8 billion and underlying profit after tax growth of 4.6% to $307.5 million. This compares to consensus estimates of $16,241 million and $304 million, respectively.

Silk Laser Australia Ltd (ASX: SLA)

The Silk Laser share price is up 17% to $3.31. This follows news that Wesfarmers Ltd (ASX: WES) has returned with an improved takeover offer of $3.35 cash per share. This values the non-surgical aesthetics clinic operator at $180 million. Wesfarmers had previously offered $3.15 per share and declined to match a higher offer from EC Healthcare.

The post Why Capricorn Metals, DDH1, Metcash, and Silk Laser shares are racing higher appeared first on The Motley Fool Australia.

In morning trade, the conglomerate's shares are up almost 2% to $48.90.

Why is the Wesfarmers share price?

The Wesfarmers share price is rising after investors responded positively to the release of an update in relation to the company's pursuit of Silk Laser Australia Ltd (ASX: SLA).

Back in April, the company made a non-binding $3.15 cash per share offer to acquire the non-surgical aesthetics clinic operator.

However, last month, EC Healthcare outbid Wesfarmers by tabling a competing offer of $3.35 per share to acquire Silk Laser.

Wesfarmers was given the opportunity to match this bid but decided not to exercise its matching rights under the process deed. At that point, it looked like the deal was dead for Wesfarmers.

But out of the blue, this morning Wesfarmers announced that its wholly-owned subsidiary, Australian Pharmaceutical Industries, has entered into a scheme implementation deed (SID) to acquire 100% of Silk's outstanding shares for $3.35 cash per share, by way of a scheme of arrangement.

This implies an equity value for Silk of approximately $180 million, based on its 53.76 million fully diluted shares outstanding.

The scheme also allows for the payment of a fully franked dividend of up to 10 cents per share. However, the cash consideration of $3.35 per share will be reduced by the cash component of any such dividends.

Why acquire Silk Laser?

Wesfarmers Health's managing director, Emily Amos, believes the acquisition would complement its existing Clear Skincare Clinics, providing scale and efficiency benefits through an expanded presence in the growing market for aesthetic products and services. Amos said:

Wesfarmers Health's acquisition of SILK would provide SILK franchisees and business owners with the benefits associated with being part of a broader healthcare, wellness and beauty network and access to capital to support future growth.

The due diligence process highlighted strong operational and cultural alignment between our businesses, and should the Scheme be successful we look forward to working with the SILK team and SILK's franchise partners to support their customers and deliver continued growth.

The Silk board has unanimously recommended that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert's report.

The Wesfarmers share price is now up 10% over the last 12 months.

The post Wesfarmers share price higher on Silk Laser takeover U-turn appeared first on The Motley Fool Australia.

But Wesfarmers' bevvy of other, smaller but diverse businesses makes it a rather unique share on the ASX. What other ASX share has interests ranging from Bunnings and Kmart to lithium, clothing and gas?

So given we've established how popular and wide-ranging Wesfarmers is as a company, let's take a look to see how the Wesfarmers share price fared over the month of May just gone.

Wesfarmers ended April at a share price of $51.97. But by the end of the month, the Wesfarmers share price had fallen to $47.67. That's a drop worth a rather nasty 8.27%. This loss was a significant underperformance of the broader S&P/ASX 200 Index (ASX: XJO), which also fell over May, but only by 3%.

You can see this illustrated below:

So what went so wrong for Wesfarmers shares last month?

Wesfarmers shares drop on the one that got away

Well, there was only one major development that involved Wesfarmers last month, and this may be responsible for the company's lacklustre performance over May. Back in April, Wesfarmers announced a proposal to acquire Silk Laser Australia Ltd (ASX: SLA) in its entirety for a price of $3.15 per share. Most investors assumed this was a done deal, until last month.

On 23 May, Silk Laser revealed that it had received a second, competing offer for its business. The company announced that it had also been approached by the Hong Kong-based EC Healthcare. EC Healthcare put up a much-improved $3.35 per share offer.

Silk has declared this bid superior, and it looks as though Wesfarmers isn't going to engage in a bidding war. That's because the 30 May deadline for Wesfarmers to respond has come and gone without a renewed bid from the company.

Wesfarmers investors seemed to be disappointed with this outcome, judging by the fact that most of the company's May share price losses occurred in the back half of the month when this saga was unfolding.

As such, it seems that Wesfarmers seemingly letting Silk Laser slip through its fingers is the major reason why this company had such a disappointing May. But even so, the Wesfarmers share price remains up by 5.6% in 2023 – an outcome which all shareholders can probably be happy with.

The post Own Wesfarmers shares? Here's how they performed last month appeared first on The Motley Fool Australia.

Readers may remember that just over a month ago, Wesfarmers announced it was in the process of buying Silk Laser Australia, one of the largest non-surgical aesthetics clinic operators in Australia and New Zealand with a network of more than 140 clinics.

But it seems it's not a done deal for Wesfarmers.

Competing bid for Silk Laser Australia shares

Silk Laser Australia announced this morning it has received a competing, non-binding, and indicative proposal from EC Healthcare, which claims to be Hong Kong's largest non-hospital medical service provider.

The bid from EC Healthcare is $3.35 cash per share, which is a 6.3% premium to the offer from Wesfarmers' Australian Pharmaceutical Industries (API).

The proposal from EC allows Silk to pay a fully franked dividend of up to 10 cents per share, which would reduce the cash consideration offered.

There are a number of conditions attached to the bid including completing confirmatory due diligence, unanimous recommendation from the Silk board, entry into a scheme implementation agreement, and all necessary regulatory approvals being obtained.

Which offer will be accepted?

Silk Australia said that after careful consideration and receiving advice from both its financial and legal advisers, the Silk board decided the EC proposal is the stronger offer. Indeed, this could be influencing the Wesfarmers share price today.

The ASX healthcare share has told Wesfarmers it has until 30 May 2023 to provide a proposal response. The Silk Laser Australia board will then decide which offer is the strongest.

Silk Laser Australia's board said shareholders don't need to take any action at this time. It will provide relevant updates to shareholders about any further offers from API.

It also noted there is no certainty the engagement between either Silk or EC Healthcare will result in a change of control transaction of an offer capable of acceptance by Silk shareholders.

What does this mean for the Wesfarmers share price?

The Silk Laser Australia business has a market capitalisation of around $160 million, whereas Wesfarmers has a market capitalisation of $58 billion. As such, it's a relatively small deal for Wesfarmers, whether it goes ahead or not.

If it's successful, it will bolster Wesfarmers' healthcare division and deliver it more earnings. We'll have to see what happens next in the fight for Silk.

The post Wesfarmers share price drops as Silk takeover competition heats up appeared first on The Motley Fool Australia.

Outperforming by around 1.6% is a solid result considering the business is large and that it's heavily exposed to the retail sector with its businesses of Kmart, Target, Officeworks and Bunnings.

What happened during April?

There was one major piece of news that happened during the month that related to Wesfarmers – it put a proposal to Silk Laser Australia Ltd (ASX: SLA) to acquire the entire business.

Wesfarmers described Silk Laser as one of the largest non-surgical aesthetics clinic operators in Australia and New Zealand with a network of over 140 clinics. If the $3.15 cash per share offer is successful, Silk Laser will become part of the Wesfarmers Health division and will complement the existing presence in the sector through the Clear Skincare Clinics business.

The offer implies a total equity value of $169 million for Silk Laser based on this offer. It's not a big deal for the Wesfarmers share price, in the grand scheme of its market capitalisation.

Wesfarmers has 30 business days to undertake exclusive due diligence, with the potential to extend the exclusivity period for a further 10 business days in certain circumstances. During this period, the two businesses will negotiate the scheme implementation deed, meaning the takeover agreement

Silk Laser's board has said that they intend to unanimously recommend that shareholders vote in favour of the takeover, and that each director intends to vote any shares they own in favour of the deal.

One of Silk's largest institutional investors, Wilson Asset Management (which owns/owned 9.3% of the business), has confirmed its support for the proposal and has entered into a voting agreement with Wesfarmers.

At the start of the month, we heard that the Reserve Bank of Australia (RBA) had decided to halt its interest rate increases, leaving the official cash rate at 3.6%, after the huge amount of increases since May last year.

That may have been promising for Wesfarmers shares because a higher interest rate could have put further pressure on households and businesses that could be Wesfarmers' customers in the coming months, which could have been a negative for the company's earnings.

Foolish takeaway

In the grand scheme of things, a takeover of Silk Laser may not change Wesfarmers' earnings that much, but it could be helpful. It shows the intent of management to grow this division. Interest rates pausing, and ending up lower than feared, could be a positive as well for the Wesfarmers share price.

The post Why did the Wesfarmers share price perform so well in April? appeared first on The Motley Fool Australia.

The ASX 200 may have started the week off on the wrong foot, but no one seems to have told Wesfarmers. Shares in this ASX 200 industrial and retail conglomerate are currently defying the market, gaining 0.63% today to $52.36 apiece.

A new 52-week high for this ASX 200 blue-chip share

Not only that, but this Monday has seen Wesfarmers shares hit a new 52-week high. This morning, the Wesfarmers share price climbed as high as $52.46. That's the company's new 52-week high watermark.

It's not too difficult to see why investors might be flocking to Wesfrmers shares today. The company announced some big news this morning, revealing that it has made an offer to acquire the skincare clinic operator Silk Laser Australia Ltd (ASX: SLA).

Wesfarmers has offered $3.15 a share for Silk Laser, which is a 30% premium to where this company closed last week. As we also covered this morning, this bid has seen the Silk Laser share price climb a whopping 25% following news of this bid.

So both Wesfarmers and Silk Laser investors clearly approve of this takeover offer.

But with Wesfarmers shares at a new 52-week high, this might cause some consternation. Wesfarmers is an ASX 200 share that has been on an absolute tear lately.

Not only are Wesfarmers shares up a hefty 15.3% year to date in 2023 so far, but the company is also now almost 30% higher than the 52-week low of $40.03 that we saw in the middle of last year:

So perhaps there might be some investors wondering if Wesfarmers shares are still worth buying today. One could argue that the company's shares are stretched after rocketing so much higher in 2023.

Are Wesfarmers shares still a buy at a new 52-week high?

Well, at least two ASX brokers have recently given the Wesfarmers share price a buy rating and share price targets well above today's new high.

As we covered earlier this month, ASX broker Morgans recently gave Wesfarmers shares an add rating, replete with a 12-month share price target of $55.6. That implies an upside of 6.2% from where the shares are right now.

Commenting on this recommendation, Morgans had this to say:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks.

The company is run by a highly regarded management team and the balance sheet is healthy. We believe WES's businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.

So that's pretty optimistic from this ASX broker.

But it's not just Morgans that still likes the look of Wesfarmers right now. As we covered last week, fellow ASX broker UBS also rates Wesfarmers as a buy, with a share price target of $55.50.

We also recently looked at fund manager TMS Capital and its high-conviction view on Wesfarmers. TMS Capital reckons Wesfarmers' Mt Holland lithium project could end up being in the top tier of global lithium mines, helping the company to access another avenue of earnings in the future, potentially worth up to $1 billion annually.

So a bevvy of ASX experts still like what they see with Wesfarmers shares right now, despite this company's new 52-week high.

No doubt Wesfarmers shareholders will be comforted by these bullish views today.

At the current Wesfaremers share price, this ASX 200 blue chip share has a market capitalisation of just under $60 billion, with a dividend yield of 3.6%.

The post Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy? appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are pushing higher:

Bank of Queensland Ltd (ASX: BOQ)

The Bank of Queensland share price is up almost 2% to $6.40. This follows the release of the regional bank's half-year results this morning. The bank reported a 4% decline in cash earnings to $256 million and a 9% reduction in its interim dividend to 20 cents per share. Management also eased investor nerves by saying: "BOQ is in a strong financial position as we enter this more challenging economic cycle."

Link Administration Holdings Ltd (ASX: LNK)

The Link share price is up 2.5% to $2.14. This follows news that the administration services company has reached a conditional agreement for the sale of its Fund Solutions business to the Waystone Group for an aggregate consideration value of between £110 million and £140 million. The deal excludes its Luxembourg and Swiss entities, as well as the Woodford related liabilities.

Silk Laser Australia Ltd (ASX: SLA)

The Silk Laser share price is up 24% to $3.00. This has been driven by news that Wesfarmers Ltd (ASX: WES) has tabled a $3.15 cash per share non-binding takeover offer for Australia's largest specialist clinic networks. The deal values Silk at $169 million. Wesfarmers expects the deal to complement its existing Clear Skincare Clinics business.

Zip Co Ltd (ASX: ZIP)

The Zip share price is up over 3% to 53.7 cents. This follows the release of the buy now pay later provider's quarterly update. Zip reported a 15% increase in revenue to $182 million on a 9% lift in transaction volume to $2.2 billion. The company also delivered a nice improvement to its margins during the quarter.

The post Why Bank of Queensland, Link, Silk Laser, and Zip shares are pushing higher appeared first on The Motley Fool Australia.

As The Motley Fool Australia reported earlier, a subsidiary of the Bunnings owner offered to pay $3.15 per share to take over the company – one of Australia and New Zealand's largest non-surgical aesthetics clinic operators.

The Silk Laser share price has rocketed 25.2% on the news to trade at $3.03 at the time of writing. That marks a new 52-week high for the stock.

Meanwhile, the Wesfarmers share price has risen 0.6% to trade at $51.905 in early Thursday trade. That compares to the ASX 200's 0.01% slump.

Let's dive into the key details of the acquisition proposal put to the ASX small cap stock.

Wesfarmers bids $169 million for Silk Laser

The Silk Laser share price is leaping after the company revealed a $3.15 per share, all cash acquisition offer – a 30% premium to the stock's previous close.

The bid comes from Australian Pharmaceutical Industries (API). API was itself acquired by Wesfarmers a little over 12 months ago.

The Silk Laser board seems to think the $3.15 bid is fair. It's granted API access to its books to conduct due diligence.

It also intends to recommend shareholders vote in favour of the takeover, subject to an independent expert finding it's in shareholders' best interests.

Silk Laser founder and managing director Martin Perelman commented on the bid, saying:

SILK has grown from a single store in South Australia, to listing on the ASX a few short years ago, growing the network to more than 140 stores today. The SILK Board has determined that it is in the best interests of shareholders to engage with API.

WAM Capital Limited (ASX: WAM) – which holds 9.3% of the takeover target – has shaken on a conditional agreement with API to vote its stake in favour of the deal.

Silk Laser share price snapshot

The bid comes in nearly 4% higher than the Silk Laser share price's new 52-week high.

However, it will still see those who jumped on board the company at its 2020 initial public offering (IPO) out of pocket.

It sold around 5.8 million shares for $3.45 apiece prior to floating on the ASX in December that year.

The stock has more than halved since peaking at $5.20 in March 2021. It's gained 27% so far this year and has fallen 14% over the last 12 months.

The post Silk Laser share price rockets 25% following Wesfarmers takeover bid appeared first on The Motley Fool Australia.

Why is the Wesfarmers share price on watch?

The Wesfarmers share price will be on watch on Thursday after the company identified its next takeover target.

Just a matter of days after selling down its stake in Coles Group Ltd (ASX: COL), the company is ready to put the funds to work to acquire Australia's largest specialist clinic networks, Silk Laser Australia Ltd (ASX: SLA).

According to the release, Wesfarmers Health has tabled a non-binding offer of $3.15 cash per share. This represents a 30% premium to its last close price and values Silk Laser's equity at $169 million. It is, however, worth noting that the offer is below the Silk IPO price of $3.45 per share.

The indicative proposal also provides for the payment of a fully franked dividend of up to a maximum of 10 cents per share. However, the cash component of any such dividend will reduce the cash consideration accordingly.

Wesfarmers notes that Silk is one of the largest non-surgical aesthetics clinic operators in Australia and New Zealand with a network of over 140 clinics. If the takeover is successful, it will become part of the Wesfarmers Health division. Management expect it to complement the division's existing presence in the sector through its ownership and operation of Clear Skincare Clinics.

What's next?

The release notes that Silk Laser has granted Wesfarmers up to 30 business days to undertake exclusive due diligence, with potential to extend the exclusivity period for a further 10 business days in certain circumstances.

As things stand, the Silk board of directors intends to unanimously recommend to its shareholders that they vote in favour of the scheme of arrangement. Each director intends to vote any shares they control in favour of the scheme.

Both are subject to the parties agreeing a scheme implementation deed on terms no less favourable than in the indicative proposal, the independent expert's report, and there being no superior proposal.

One of the company's largest shareholders, WAM Capital Limited (ASX: WAM), which owns 9.3% of Silk's outstanding shares, has confirmed its support for the indicative proposal. So much so, it has entered into a voting agreement which is subject to there being no superior proposal and the independent expert's report.

Silk Founder and Managing Director, Martin Perelman, was "pleased" with the news and believes "it is in the best interests of shareholders to engage" with Wesfarmers.

The post Wesfarmers share price on watch amid $169m Silk Laser takeover offer appeared first on The Motley Fool Australia.

While the term defensive shares can evoke images of dour investments offering anaemic growth in return for protection of capital, that doesn't necessarily have to be the case in reality.

In fact, Wilsons equity strategist Rob Crookston recently talked about what his team calls "growth defensives".

"The focus portfolio holds a selection of high-quality, high-margin, defensive businesses with strong competitive advantages, pricing power, and relatively attractive long-term growth prospects," Crookston said in a memo to clients.

"We believe these companies are likely to grow their earnings faster than the market over the medium term, which should translate to outperformance over time."

Now, without confusing Wilsons with Wilson Asset Management, experts from the latter this week named two ASX shares to buy that fit the bill:

'Lipstick effect' in full swing

As a non-surgical cosmetic services provider, Silk Laser Australia Ltd (ASX: SLA) is not a name that immediately comes to mind when talking about defensive stocks.

But Wilson equity dealer William Thompson has seen it differently, calling it a "big buy".

"They had a really interesting last half because no one really believed their story," Thompson said in a Wilson video.

"[The market] thought the cosmetics business was probably more discretionary, and it's really showed that it's defensive."

Thompson cited what economists call the "lipstick effect", which is when consumers still buy feel-good goods and services through tougher economic times.

"These products, they're actually quite defensive because… when there is potentially a recession, they still want to look good and still want to spend money on themselves."

Silk Laser's growth numbers impressed Thompson during the recent reporting season.

"They posted a 20% sales increase half-on-half, and nearly 45% EBITDA increase half-on-half, so it's looking really good," he said.

"Like-for-like sales are up 10% for the first seven weeks of the year. So it's definitely a buy."

Thompson's peers largely agree, with 4 out of 5 analysts currently surveyed on CMC Markets rating Silk Laser shares as a buy.

The Silk Laser share price has roughly halved over the past year.

'Pricing momentum is going to continue'

As the world's largest pallet and crate provider, Brambles Limited (ASX: BXB) probably better fits the traditional definition of a "defensive" stock.

Indeed while other non-mining shares have struggled, Brambles has soared more than 38% over the past 12 months. This is all while paying out a handy 2.6% dividend yield.

Wilson equity analyst Anna Milne called it a buy, while admitting that the share price has already had a good run.

"We do think the pricing momentum is going to continue," she said.

"The focus on profitability is only going to grow over the coming year."

Milne, however, did raise a caveat that recently popped up.

"Given all the market volatility, it's around anything that's earning US dollars," she said.

"So that's a watch for us, but operationally, Brambles is still a buy."

According to CMC Markets, 11 out of 17 analysts are rating the stock as a buy.

The post 'Big buy': Wilson's 2 surprisingly defensive ASX shares to cruise through 2023 appeared first on The Motley Fool Australia.

Here's what you need to know about these buy-rated small cap ASX shares:

Readytech Holdings Ltd (ASX: RDY)

The first ASX small cap share to look at is Readytech. It is an enterprise software provider with a focus on underserved market verticals such as higher education and local government.

Demand for its sticky software continues to grow and has been underpinning strong revenue growth in recent years.

This continued in FY 2022, with Readytech reporting revenue of $78.3 million. This was up 16.8% on a like-for-like basis and ahead of its guidance of mid-teens organic growth.

The good news is that Goldman Sachs is forecasting more of the same in the coming years. It is expecting Readytech to "continue to grow mid-teens organically while making accretive acquisitions."

In light of its bullish view, Goldman currently has a buy rating and $4.60 price target on its shares.

Silk Laser Australia Limited (ASX: SLA)

Another small cap ASX share that has been tipped as a buy by brokers is Silk Laser.

It is the operator of one of Australia's largest specialist clinic networks, offering consumers a range of nonsurgical aesthetic products and services. These include laser hair removal, cosmetic injectables (botox etc), skin treatments, body contouring, and skincare products.

Demand for Silk's services has been strong in recent years and continued during the pandemic and then in FY 2022. This and recent acquisitions helped the company deliver a 91% increase in sales to $162.7 million.

And while the current economic environment could be difficult for consumer spending, management remains positive and "expects to continue its growth trajectory in FY23."

Wilsons is a fan of the company. The broker currently has an overweight rating and $3.62 price target on its shares.

The post Brokers name 2 growing small cap ASX shares to buy appeared first on The Motley Fool Australia.

However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio due to the potential returns on offer.

After all, if you can find a future mid or large cap whilst it is still a small cap, the returns could be incredible.

With that in mind, listed below are two small cap ASX shares that have been tipped as buys. They are as follows:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX small cap share to look at is Hipages. It is a leading online platform and software as a service (SaaS) provider that connects consumers with trusted tradies.

The Hipages platform helps tradies grow their business by providing job leads from homeowners and organisations looking for qualified professionals.

Goldman Sachs is a very big fan of Hipages and believes "HPG presents a compelling long term growth opportunity as it scales to become the leading trade services marketplace in Australia."

The broker currently has a buy rating and $2.20 price target on its shares.

Silk Laser Australia Limited (ASX: SLA)

Another small cap ASX share that has been tipped as a buy is Silk Laser.

It is one of Australia's largest specialist clinic networks. Silk offers a range of nonsurgical aesthetic products and services including laser hair removal, cosmetic injectables, skin treatments, body contouring, and skincare products.

Demand for Silk's services has been strong in recent years and continued in FY 2022. This and recent acquisitions helped the company deliver a 91% increase in sales to $162.7 million.

Pleasingly, management remains positive on the future and "expects to continue its growth trajectory in FY23."

This went down well with the team at Wilsons. In response to its results, the broker has put an overweight rating and $3.62 price target on the company's shares.

The post 2 growing small cap ASX shares analysts rate as buys appeared first on The Motley Fool Australia.

The stock opened 3% higher at $2.68 before surging higher.

At the time of writing, the SILK Laser share price is $2.71, 4.23% higher than its previous close.

SILK Laser share price gains as revenue lifts 38%

Here are the key takeaways from the specialist non-surgical aesthetics clinic networks' FY22 earnings:

• Network cash sales reached $162.7 million – 91% higher than that of the prior corresponding period (pcp)
• Revenue lifted 38% to $81.3 million
• Adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 27% to $22 million
• Net profit after tax (NPAT) lifted 24% to $6.4 million
• Ended the period with 127 clinics – more than double what it had at the end of the pcp

SILK Laser beat its initial public offering (IPO) EBITDA guidance by 10% in FY22.

The company's cash sales surged 91% last financial year. Though, its like-for-like sales remained flat, maintaining the 52% growth in like-for-like sales achieved the prior year.

The company's client base grew to 1.4 million customers in FY22, with most booking multiple treatments per appointment. Average customer spend was $661. Its own skincare brands also continued to expand online sales.

SILK Laser closed FY22 with $18.6 million of cash and net debt of $3.8 million.

What else happened in FY22?

The company acquired Australian Skin Clinics and The Cosmetic Clinic in September for $47 million. The businesses' initial integration has now been completed.

Last financial year also marked the first full fiscal year in which the company operated as a listed entity, having floated on the ASX in December 2020. SILK Laser shares are currently trading for 21% less than their IPO offer price of $3.45.

What did management say?

SILK Laser co-founder and managing director Martin Perelman commented on the company's earnings, saying:

After operating in challenging market conditions this past year, I'm so proud at how hard the SILK team has worked to deliver these robust financial results.

We continue to execute against SILK's growth strategy outlined at the time of our IPO, beating EBITDA guidance by 10% while diversifying our service mix with Injectables and Body proving to be our key growth drivers.

What's next?

The company hasn't provided any new earnings guidance today. Though, it did post a trading update.

Over the period between 1 July and 28 August, its like-for-like sales grew 5% on that of the pcp, with service mix continuing to skew towards injectables. It also implemented strategic price increases to mitigate the cost of inflation with no reduction in transaction volume recorded.

The company's growth strategy remains in line with its IPO plan which is expected to see it boasting 150 clinics. It's also evaluating organic growth and merger and acquisition opportunities, including clinic buybacks.

Finally, its investing in upgraded corporate systems, with a total estimated project spend of $2.5 million for FY23.

SILK Laser share price snapshot

It's been a rough year for the SILK Laser share price.

It has fallen 36% since the start of 2022. It's also 31% lower than it was this time last year.

For context, the All Ordinaries Index (ASX: XAO) has dumped 9% year to date and 7% over the last 12 months.

The post SILK Laser share price surges as FY22 earnings beat guidance 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 focuses on small-cap ASX shares with a market capitalisation under $300 million at acquisition.

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

These are the two small-cap ASX shares the fund manager outlined in its most recent monthly update:

Silk Laser Australia Ltd (ASX: SLA)

Silk Laser was described as one of Australia's largest specialist clinic networks, offering a range of non-surgical aesthetic products and services.

The Silk Laser share price recovered in July after being sold off at the end of FY22 because of concerns about a recession and how consumers might tighten their spending, according to WAM.

The fund manager noted that the small-cap ASX share "strategically" acquired Victoria-based Unique Laser clinics, expanding Silk Laser's presence on the east coast.

Why did WAM invest in the company? The investment team said:

Our investment thesis is based on growth in the overall non-surgical aesthetic market, supporting the consolidation and rollout of a greater number of clinics around Australia. We are positive on the outlook for the business as we see significant clinic rollout and consolidation opportunities for the company across Australia and New Zealand.

Dusk Group Ltd (ASX: DSK)

WAM described Dusk as an Australian specialty retailer of home fragrance products, offering a range of "premium quality products at competitive prices".

One of the main things that caught investor attention about the small-cap ASX share during the month was that Dusk revealed a trading update and guidance for FY22 that was "ahead of market expectations."

Dusk's vertical retail model and long-term supply partnerships have allowed it to maintain "well-balanced" inventory levels to meet consumer demand.

WAM said:

We believe that Dusk Group is an undervalued growth company with a niche offering and a large store rollout opportunity into new regions such as New Zealand and the United Kingdom.

The post 2 ASX shares this fund manager thinks fits the bill for 'undervalued growth' appeared first on The Motley Fool Australia.

So it's an excellent time for buying up some bargains. 

But investors do need to be selective.

They need to think about whether a particular stock is cheap for legitimate reasons or if the sell-off has been excessive.

It is crucial to avoid the cognitive trap of anchoring. That is, thinking a stock could rise from $2 to $10 just because it previously reached a high of $10.

Shares have no memory. The current and future performance of the underlying business is all that matters. 

Fortunately for The Motley Fool readers, one expert has nominated two ASX shares to buy that he believes are cheaper than they should be.

'Focus on increasing profitability'

With the Reserve Bank just raising interest rates four consecutive months, it's a tough time for lenders.

But Wilsons investment advisor Peter Moran told The Bull he feels like Plenti Group Ltd (ASX: PLT) has much going for it.

"The online lender has generated solid loan growth in recent years, driven by its personal and automotive lending divisions."

Plenti shares have halved in value so far in 2022.

Moran admitted conditions have been challenging for the business, but reckons it is adapting.

"Plenti's level of new originations in the first quarter of fiscal year 2023 fell by 10% on the prior quarter," he said.

"However, this reflects its focus on increasing profitability at a time of rising interest rates."

Analyst coverage is sparse for the small cap. However, according to CMC Markets, at least Shaw and Partners agrees with Wilsons that Plenti shares are a buy at the moment.

Sell-off of this stock has been 'overdone'

Silk Laser Australia Ltd (ASX: SLA) shareholders have also had a stressful time, watching their investment halve since October.

Moran reckons the stock price weakness doesn't fairly reflect its prospects.

"The share price of this laser clinic operator reflects a weak outlook, but we believe it's been overdone," he said.

"Although consumer spending is likely to fall in response to higher interest rates, we expect personal service providers, such as Silk, to benefit as consumers focus on what's most important to them."

Will customers of the cosmetic services provider stay loyal through an economic downturn?

At least a couple of Moran's peers agree that they will. Two analysts surveyed on CMC Markets rate the stock as a buy.

Silk Laser's last update in April pleased investors, pushing the stock 12% higher that morning. It will report its full-year results on 24 August.

The post 2 ASX shares to buy that have halved this year appeared first on The Motley Fool Australia.

The laser clinic company's shares are whooshing 9.5% higher at the time of writing to $2.88 apiece. However, in earlier trading, the shares hit an intraday high of $2.95. That's a 12% jump on yesterday's closing price of $2.63.

What did SILK Laser announce?

According to its release, SILK Laser is on track to deliver its projected EBITDA target for FY22. Ahead of analysts' consensus, this has led the SILK Laser share price to roar during today's session.

For the nine months ending 31 March 2022, the company achieved network cash sales of $116.6 million. This reflected a 91% increase over the prior corresponding period (pcp). It included seven months of sales from its recent acquisitions, Australian Skin Clinics and The Cosmetic Clinic in New Zealand.

In addition, like-for-like cash sales, adjusted for lost trading days due to COVID-19 lockdowns, grew to $101.6 million, up 4%.

Management noted that despite the tough macroeconomic conditions impacting the industry, the business continued to perform strongly.

Notably, a substantial proportion of the above revenue comes from injectable services (45%). This category generates higher transaction values, higher margins, and repeat purchases for SILK Laser.

The company's franchise partner network continues to expand with three new clinics opening in 2022. It plans to open between 6 to 10 clinics over the next twelve months.

With 121 clinics operating across Australia and New Zealand, SILK Laser is forecasting FY22 EBITDA of at least $20 million.

What did management say?

SILK Laser founder and managing director Martin Perelman commented:

The foundations of the SILK business are strong, especially as we continue to expand our service mix — growing the share of the Injectables category that is especially resilient, even in a tough operating environment.

About the SILK Laser share price

Over the past 12 months, SILK Laser shares have posted a loss of 36%. They are down 32% year to date.

The share price hit an all-time low of $2.62 yesterday.

Based on today's improved price, SILK Laser presides a market capitalisation of roughly $139.41 million.

The post Here's why the SILK Laser share price is zipping 12% higher today appeared first on The Motley Fool Australia.

"As interest rates rise, if you don't have any profit or cash flow coming through then your valuation is going to deteriorate very rapidly," Burman Invest chief investment officer Julia Lee told Switzer TV Investing this week.

"So it is important to back those more mature companies… that do have a stable growth outlook as well as profit coming in through the door."

On top of this, the team at Wilsons reckon small cap ASX shares are especially due for a revival.

"On a valuation basis, small cap PE ratio multiples have compressed almost 20% since the peak in 2020 and now sit in line with the 5-year average," read its memo to clients.

"This suggests Australian small caps are now approaching an oversold level."

So combining the need for cash flow and small-cap potential, Wilsons analysts named 5 ASX shares from its Australian Equity Focus List that are worth considering at the moment.

Small caps that are also profitable

All of Wilson's picks are currently profitable except for Telix, which is scheduled to head into the black in the 2024 financial year:

• Pinnacle Investment Management Group Ltd (ASX: PNI)
• Healthco Healthcare and Wellness REIT (ASX: HCW)
• Judo Capital Holdings Ltd (ASX: JDO)
• Silk Laser Australia Ltd (ASX: SLA)
• Telix Pharmaceuticals Ltd (ASX: TLX)

Out of the group, the analysts rate Silk Laser and Telix as the highest conviction buys.

"Silk Laser offers laser hair removal and other non-surgical aesthetic products and services," read the Wilsons memo.

"Operational performance remains encouraging, leveraged to COVID reopening."

The team added that the stock price might be depressed due to "a perceived overhang" from private equity firm Advent International's shares recently coming out of escrow.

Wilsons isn't the only advisory firm bullish on the stock. Morgans investment advisor Jabin Hallihan also rated Laser Silk shares as a buy last week.

"The full-year outlook is for solid growth," he told The Bull.

"The company generated revenue of $182.5 million in the 2022 first half — an 18.5% increase on the prior corresponding period."

Telix, meanwhile, has just received clearance from the US Food and Drug Administration (FDA).

"We look for news flow on sales and revenue success beginning later this half," stated Wilsons.

"Large capital raising in 4Q21, with cash break-even still 12-24 months away."

The post 5 profitable small-cap ASX shares to buy right now: Wilsons appeared first on The Motley Fool Australia.

They've both been named as ASX shares to buy right now by experts.

And they're both named Silk.

Silky 59% upside in share price

The share price for Silk Logistics Holdings Ltd (ASX: SLH) has plunged 5.9% for the year so far, but Morgans investment advisor Jabin Hallihan reckons it's a buying opportunity.

"Silk Logistics utilises an asset-light, technology-enabled, flexible business model that guards against increasing costs as they are passed through to customers with a margin," he told The Bull.

The Melbourne-headquartered business handles logistics from the port and wharf to warehousing and supply chain distribution.

Hallihan thought Silk Logistics had a positive February reporting season.

"The company generated revenue of $182.5 million in the 2022 first half — an 18.5% increase on the prior corresponding period," he said.

"The full-year outlook is for solid growth. Our 12-month price target is $3.31 a share."

That is a stunning 59% upside from the closing stock price on Monday. 

Silky move into New Zealand and Victoria 

The Silk Laser Australia Ltd (ASX: SLA) share price has dropped a painful 30.6% already this year.

But Wilsons investment advisor Peter Moran is still recommending the laser clinic network to clients as "overweight".

He liked the look of the first-half result despite potential customers being unable to visit due to COVID-19 lockdowns and precautions.

"The company also benefited from the acquisition of Australian Skin Clinics (ASC), which moved under Silk Laser's control in September," Moran said.

"The 56 ASC clinics are being smoothly integrated and provide a growth opportunity in Victoria and New Zealand, which had been previously missing from Silk's footprint."

While coverage for the $158 million small-cap company is scarce, both analysts surveyed on CMC Markets rate Silk Laser as a "buy".

The Silk Laser share price closed Monday at $2.97.

The post 2 ASX shares to buy for CHEAP that have the same name: experts appeared first on The Motley Fool Australia.