It has been a down year across the board for many ASX bank shares. 

Bank stocks make up a core part of many investors’ portfolios. This means that when they fall, they can drag down your portfolio’s overall performance. 

Not only do the big four dominate market share, but they are also targeted for relatively stable earnings and dividends.

Let’s look at how they are performing this year, and the lesser-known bank stock earning positive ratings from experts. 

Big four bank shares struggle

Since the start of 2026, the big four bank shares have underperformed the broader ASX 200. 

Year to date: 

• Commonwealth Bank of Australia (ASX: CBA) is essentially flat with the start of the year
• National Australia Bank (ASX: NAB) is down nearly 14%
• Westpac Banking Corporation (ASX: WBC) is down over 10%
• Anz Group (ASX: ANZ) shares have fallen 6%. 

Why are bank stocks down?

ASX bank stocks have weakened in 2026 as investors grapple with the implications of a higher interest rate environment. 

While rising rates can support bank margins, they also increase borrowing costs for households and businesses, raising concerns about slower loan growth and a potential increase in bad debts.

Investors are increasingly concerned about the risk that mortgage stress could rise if rates remain elevated for an extended period, particularly given Australia’s high household debt levels. 

At the same time, bank valuations had reached historically rich levels following a strong run-up in share prices in 2025, leaving little room for disappointment. 

As a result, even solid earnings results have failed to prevent profit-taking across the sector, sending ASX bank shares lower.

What are brokers saying?

There is little optimism from brokers surrounding the big four ASX bank stocks. 

CBA shares recently were listed as a hold by Red Leaf Securities, while NAB shares were listed as a sell by the team at Catapult Wealth. 

Elsewhere, Morgan Stanley has a sell rating on CBA, NAB and Westpac. 

The only glimmer of upside appears to be ANZ. 

UBS recently upgraded ANZ shares to a hold rating with a $36.50 price target.

This indicates a modest 7% upside from current levels. 

The surprising option emerging as a buy

While the big four bank stocks appear to have little upside, there is plenty of optimism about smaller rival bank stock Judo Capital (ASX: JDO). 

Its share price is down 20% year to date, however brokers are tipping a rebound for this smaller bank. 

The team at Morgans recently retained their buy rating on this small business lender’s shares with an improved price target of $2.15.

From current levels, this indicates an upside of 50%. 

Looking ahead, the broker believes Judo Capital will deliver strong earnings growth over FY 2026 – FY 2028.

The post Which ASX bank stock is the best buy right now? appeared first on The Motley Fool Australia.

More reading

• Broker says this ASX 200 bank stock could rise almost 70%
• Down 25%: Should I invest $5,000 into NAB shares?
• Is the CBA share price a buy in June?
• Why CBA, PLS, Resolute Mining, and Silver Mines shares are dropping today
• 3 ASX shares Warren Buffett would probably love right now

Motley Fool contributor Aaron Bell has positions in National Australia Bank. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

SpaceX is expected to be one of the biggest share market stories of the month and possibly even the decade.

The space technology giant is due to IPO in the United States with a valuation of US$1.75 trillion later this week. That is an enormous number, particularly when compared with its consolidated revenue of US$18.7 billion in 2025.

There is no denying SpaceX’s long-term potential. It has world-class technology, a powerful brand, and exposure to major opportunities across rockets, satellites, AI, defence, and communications.

But hype can be dangerous. At that valuation, investors may be paying a very high price for future growth.

A safer approach could be to look closer to home. The ASX has a number of high-quality technology stocks with proven business models, strong customer demand, and long runways for growth.

Here are two that could be worth considering right now:

Life360 Inc (ASX: 360)

The first ASX tech stock to look at is Life360.

This location technology company has built a family safety platform that is used by around 100 million people across the world. Its app helps families stay connected through location sharing, driving safety features, crash detection, emergency support, and other services.

It provides peace of mind for families, which can make the product highly engaging and difficult to replace once it becomes part of daily life.

The company also has several ways to grow revenue. Subscriptions remain central, but advertising, connected devices, and new services could all help increase monetisation over time.

Privacy and trust will always be critical for a platform built around location data. But if Life360 keeps expanding carefully, it could become one of the ASX’s best consumer technology businesses.

Xero Ltd (ASX: XRO)

A final ASX tech stock to consider instead of SpaceX is Xero.

Over the past decade, it has become a key financial platform for small businesses, accountants, and bookkeepers. Xero’s software helps manage invoicing, payroll, bank feeds, payments, reporting, and compliance.

What arguably makes Xero powerful is the amount of work it can remove from small business owners. Admin is time-consuming, and tools that save time while improving visibility over cash flow can become very valuable.

The company’s opportunity is to keep expanding from accounting software into a broader small business financial platform. That could include deeper payments, insights, automation, and adviser tools.

Xero still needs to execute well in large international markets, and technology valuations can move sharply. But compared with paying a blockbuster valuation for SpaceX shares, this ASX tech stock offers a more grounded way to invest in long-term software growth.

The post Forget SpaceX shares and buy these ASX tech stocks appeared first on The Motley Fool Australia.

More reading

• ASX 200 tech stocks led the market with big share price gains last week
• Are Wesfarmers, Xero and this ASX 200 share buys in June?
• 3 amazing ASX growth shares to buy with $15,000
• 3 ASX 200 shares that could be too good to ignore in June
• 3 ASX 200 tech shares to buy now: expert

Motley Fool contributor James Mickleboro has positions in Life360 and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360 and Xero. The Motley Fool Australia has positions in and has recommended Life360 and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Friday, the S&P/ASX 200 Index (ASX: XJO) ended the week with a decline. The benchmark index fell 0.7% to 8,625.1 points.

Will the market be able to bounce back from this on Tuesday after returning from the public holiday? Here are five things to watch:

ASX 200 to sink

The Australian share market looks set to sink on Tuesday after a selloff on Wall Street on Friday and a mixed session on Monday. According to the latest SPI futures, the ASX 200 is expected to open the day 86 points or 1% lower. In the United States, the Dow Jones fell 0.15%, but the S&P 500 climbed 0.3% and the Nasdaq pushed 0.85% higher.

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 0.75% to US$91.22 a barrel and the Brent crude oil price is up 1.2% to US$94.20 a barrel. This was driven by an escalation in tensions in the Middle East.

REA shares downgraded

REA Group Ltd (ASX: REA) shares will be in focus today after the team at Bell Potter put out a bearish broker note. According to the note, the broker has downgraded the property listings company’s shares all the way from a buy rating to a sell rating with a heavily reduced price target of $137.00 (from $217.00). It said: ” We downgrade our recommendation to Sell (prev. Buy). REA currently trades around 28x FY27e P/E, which is a level it has historically only traded at during EPS declines; VA consensus currently anticipates 14% EPS growth in FY27 (BPe: -2%). REA also appears expensive against other ASX classifieds on a FCF growth basis at 1.7x EV/FCFg in FY27e.”

Gold price softens

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a subdued session after the gold price softened overnight. According to CNBC, the gold futures price is down 0.3% to US$4,352.6 an ounce. Rising oil prices, inflation, and rate hike concerns have weighed on the precious metal.

Buy Eagers shares

Eagers Automotive Ltd (ASX: APE) shares have been given the thumbs up by the team at Bell Potter. This morning, the broker has retained its buy rating with a slightly trimmed price target of $28.00 (from $28.75). It said: “In our view the stock looks reasonable value trading on PE ratios of c.20x and 17x in 2026 and 2027 where the latter is the first full year of the CanadaOne investment (so is the more relevant in our view). We also see the recent trading update at the AGM as effectively “cleansing” the market as the H1 result has now been largely flagged – so there should be no surprises.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 tech stocks led the market with big share price gains last week
• Top brokers name 3 ASX shares to buy next week
• The average Australian superannuation balance: 50 vs 60 years old
• 3 ASX 200 mining shares to buy: experts
• Why is the ASX 200 falling when so many stocks are rising?

Motley Fool contributor James Mickleboro has positions in REA Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Judo Capital Holdings Ltd (ASX: JDO) shares are having a tough year.

Since the start of 2026, the ASX 200 bank stock has lost 20% of its value.

Could this be a buying opportunity? According to analysts at Ord Minnett, the answer is yes.

What is the broker saying about this ASX 200 bank stock?

Ord Minnett has been looking closely at Judo after the specialist SME lender completed a major note securitisation issue.

The broker highlights that Judo raised $750 million through the issue, which was upsized from $500 million due to strong demand.

This was backed by the ASX 200 bank stock’s loans and attracted support from a range of investors, including local and offshore investors, superannuation funds, fixed-income and credit funds, and bank balance-sheet buyers. Ord Minnett said:

Judo Capital (JDO) has solidified its balance sheet via a $750 million note securitisation issue (upsized from $500 million due to strong demand) backed by its loans, sending shares in the lender to small- to medium-sized enterprises (SMEs) up more than 12% on the day.

Pleasingly, the issue was priced at 171 basis points over the one-month bank-bill swap rate. This compares favourably to the 273 basis points margin achieved in Judo’s first transaction in September 2023.

Balance sheet concerns eased

One of the key reasons Ord Minnett is positive on the transaction is that it reduces concerns about a potential equity raising.

The broker estimates the securitisation lifts Judo’s pro forma common equity tier-one capital ratio to 13.2% at 31 March, compared with its reported CET1 ratio of 12.6%.

It also forecasts a CET1 ratio of 12.6% at 30 June, which it believes is comfortably above the approximate 12% level that investors would view as acceptable.

In addition, Ord Minnett said the strong demand for the issue suggests Judo has opened up a new capital-efficient funding avenue.

While this funding is more expensive than wholesale funding, the broker believes the benefits of releasing regulatory capital and passing credit risk to third-party investors should support higher return on equity over time.

Buy rating retained

According to the note, Ord Minnett has retained its buy rating and $2.40 price target on Judo.

Based on the ASX 200 bank stock’s last close price of $1.43, this implies potential upside of almost 70% over the next 12 months.

The broker concludes:

Judo is highly exposed to broader macroeconomic conditions and its performance will be more volatile than most of its larger rivals. It is thus strongly leveraged to any Middle East war resolution and a return to calmer energy markets that had potentially threatened the asset quality of its SME loan book.

We forecast a compound annual growth rate of (CAGR) for EPS of 40% and view Judo as an appealing investment option on a medium-term outlook. This leads Ord Minnett to maintain its target price of $2.40 on Judo and reiterate our Buy recommendation.

The post Broker says this ASX 200 bank stock could rise almost 70% appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: ASX, Endeavour, and Judo Capital shares
• This ASX bank stock has rebounded 7% from a 2-year low, and is tipped to climb up to 76% higher
• Leading brokers name 3 ASX shares to buy today
• Here are the top 10 ASX 200 shares today
• 9 ASX 200 shares with renewed buy ratings this week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

At the start of each week, I like to look at ASIC’s short position report to find out which ASX shares are being targeted by short sellers.

That’s because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Lotus Resources Ltd (ASX: LOT) remains the most shorted ASX share after its short interest increased again to 20%. Short sellers have increased their positions after a disappointing quarterly update which revealed weak production and a sizeable cash burn. There are concerns another capital raising will be needed later this year.
• Domino’s Pizza Enterprises Ltd (ASX: DMP) has seen its short interest ease to 15.2%. Short sellers don’t appear to have confidence that management will successfully execute its turnaround plans for the pizza chain operator.
• Telix Pharmaceuticals Ltd (ASX: TLX) has seen its short interest rise to 15.1%. Short sellers have loaded up on this radiopharmaceuticals company over the past 18 months amid concerns over US FDA approvals.
• Boss Energy Ltd (ASX: BOE) has short interest of 14%, which is flat since last week. The market continues to have fears over the uranium miner’s uncertain production outlook beyond 2026.
• Treasury Wine Estates Ltd (ASX: TWE) has 12.9% of its shares held short, which is down week on week. Short sellers will have been disappointed to see the market react positively to the wine giant’s investor day update this month.
• Guzman Y Gomez Ltd (ASX: GYG) has short interest of 12.5%, which is down week on week. Short sellers have been closing positions after the quick service restaurant operator shut its loss-making US operations.
• DroneShield Ltd (ASX: DRO) shares have returned to the top ten with short interest of 11.4%. This may be due partly to the recent news of an ASIC investigation into some of the counter-drone technology company’s announcements and insider share trades.
• CAR Group Limited (ASX: CAR) has short interest of 11.2%, which is down since last week. It is possible that short sellers think higher interest rates and rising fuel costs could weigh on the automotive market.
• PLS Group Ltd (ASX: PLS) has entered the top ten with short interest of 10.9%. This could be due to a combination of valuation concerns and recent lithium price weakness.
• Flight Centre Travel Group Ltd (ASX: FLT) has 10.8% of its shares held short. There are fears that the Middle East conflict could weigh on this travel agent’s performance.

The post Here are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• 3 cheap ASX shares I’d buy before sentiment turns
• BHP and these ASX 200 shares are up 30%+ in 2026
• Brokers name 3 ASX shares to buy right now
• 3 ASX 200 mining shares to buy: experts
• Which are the best ASX shares to buy now for FY27?

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, Telix Pharmaceuticals, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended CAR Group Ltd, Domino’s Pizza Enterprises, Flight Centre Travel Group, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When it comes to thematic investing, putting money into exchange-traded funds (ETFs) is a great way to gain broad exposure without having to research every company.

In the technology sector, there are plenty of ETFs available, but I have focused on three that have performed well over the past year.

Let’s have a look.

Asia Technology Tigers ETF (ASX: ASIA)

This ASX ETF has returned an impressive 104.9% over the past year and 15.9% over a longer five-year horizon.

The ETF aims to track the performance of an index comprising the 50 largest technology and online retail stocks in Asia, not including Japan.

As the Betashares website says:

In one trade, ASIA provides diversified exposure to a high-growth sector that is under-represented in the Australian share market, and a complement to investors with US technology exposure. Due to its younger, tech-savvy population, Asia is surpassing the West in terms of technological adoption and the sector is anticipated to remain a growth sector.

Major holdings include South Korean semiconductor company SK Hynix, Samsung Electronics, Taiwan Semiconductor, and Alibaba Group.

ASIA pays a low dividend yield of 0.4%.

Electric Vehicles and Future Mobility ETF (ASX: DRIV)

This ASX ETF has not performed as well as the Energy Transition Metals ETF (ASX: XMET), which is focused on companies that mine resources such as copper and lithium, but has still notched up a 36.6% gain over the past year.

The ETF, Betashares says, “provides cost-effective exposure to the growth potential of the electric vehicles and automotive technology thematic in a single ASX trade”.

Major holdings include Sumitomo Electric Industries, Tesla, Volvo, and BYD.

Vehicle manufacturers account for 27.5% of its investments, followed by semiconductor and machinery manufacturers.

The ETF pays a dividend yield of 1%.

NASDAQ 100 Currency Hedged ETF (ASX: HNDQ)

As the name suggests, this ASX ETF aims to track the performance of the NASDAQ-100 Index (NASDAQ: NDX), while hedging its currency exposure.

The Betashares website says further:

With its strong focus on technology, HNDQ provides diversified exposure to a high growth potential sector that is under-represented in the Australian share market. HNDQ is currency-hedged to the Australian dollar, which seeks to minimise the effect of currency fluctuations on returns.

HNDQ is currently outperforming its unhedged counterpart, returning 40.2% over the past year compared to 27.2%.

Major holdings include Nvidia, Apple, and Microsoft.

It pays a dividend yield of 1.5%.

The post Want to invest in the future? These technology ETFs are killing it appeared first on The Motley Fool Australia.

More reading

• 3 incredible ASX ETFs for Australian investors in June
• Where to invest $10,000 in ASX ETFs in June
• 3 ASX ETFs that could help investors tap into global growth
• The top 3 Betashares ASX ETFs over the past year
• 2 of the best ASX ETFs to buy and hold

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alibaba Group and BYD Company. The Motley Fool Australia has recommended Apple, Betashares Nasdaq 100 ETF – Currency Hedged, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the hardest parts of investing is not finding ideas.

It is dealing with too many of them.

There are banks, miners, healthcare shares, retailers, technology companies, dividend shares, growth shares, and exchange-traded funds (ETFs). Every week brings new broker notes, market moves, and headlines.

So, how should an investor put money to work when they do not know what to buy?

This is how I would think about it.

Start with the job the investment needs to do

Before choosing a share, I would ask a simpler question: What do I want this investment to achieve?

If the goal is broad exposure, an ASX ETF could be the easiest answer. Something like the Vanguard Australian Shares Index ETF (ASX: VAS) can give investors exposure to a large group of Australian companies in one trade.

If the goal is global growth, an ETF such as the Vanguard MSCI Index International Shares ETF (ASX: VGS) could open the door to companies and sectors that are harder to access through the ASX alone.

If the goal is individual stock picking, I would then focus on business quality rather than trying to guess which share will move next week.

That first step matters because not every good investment does the same job.

Look for repeatable strengths

When I look at individual ASX shares, I want to understand why the business might be more valuable in five or 10 years.

That could come from a trusted brand, a powerful market position, recurring revenue, customer loyalty, scale, cost advantages, or a product that is difficult to replace.

For example, ResMed Inc (ASX: RMD) has a strong position in sleep health, with devices, masks, accessories, and software supporting ongoing treatment needs.

Macquarie Group Ltd (ASX: MQG) has a very different appeal. It is a global financial group with exposure to infrastructure, asset management, commodities, private capital, and market activity.

Neither business is perfect. But both have qualities that could allow them to keep building value over time.

That is the sort of thinking I would use. I would not ask only whether a share is popular today. I would ask whether the business has strengths that can keep showing up over many years.

Avoid needing one perfect pick

I do not think investors need to find the single best ASX share before getting started.

That can create too much pressure. Instead, I would think in layers. One investment might provide broad market exposure. Another might add global growth. Another might be a high-quality Australian business. Another might be a more ambitious growth idea.

This does not mean making things complicated. It just means accepting that different investments can play different roles, depending on what the investor is trying to achieve.

It also reduces the risk of putting too much weight on one decision.

Foolish Takeaway

Not knowing exactly what to buy is not a reason to stay on the side lines forever.

I think the better approach is to slow the decision down. Work out what the investment needs to do, focus on quality, and avoid making the whole plan depend on one perfect pick.

The share market will always feel uncertain. But investors do not need certainty to begin. They need a sensible process they can keep using, even when the headlines are noisy.

The post How to invest in ASX shares when you don’t know what to buy appeared first on The Motley Fool Australia.

More reading

• Where to invest $2,000 in ASX 200 shares in June
• If I invest $8,000 in Macquarie shares, how much passive income will I receive in 2027?
• Looking to FIRE? Here are 2 ASX ETFs to get your portfolio started
• 7 ASX 200 shares with strengthened buy ratings this week
• Which are the best ASX shares to buy now for FY27?

Motley Fool contributor Grace Alvino has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortescue Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) are two of the biggest mining shares on the ASX.

Both give investors exposure to iron ore, both can pay large dividends, and both are trying to position themselves for the next phase of resources demand.

But they are not the same investment.

Fortescue offers a larger forecast dividend yield today, while Rio Tinto gives investors a broader commodity mix and, in my view, a more balanced long-term opportunity.

So, which one would I buy?

The case for Fortescue shares

Fortescue remains one of the ASX’s great mining success stories.

The company built a world-class iron ore business in the Pilbara and has rewarded shareholders handsomely over the years when iron ore prices have been strong.

According to CommSec, consensus estimates point to earnings per share of $1.73 in FY26 and $1.42 in FY27. Based on the current share price of $20.47, that puts Fortescue on around 12 times FY26 earnings and 14 times FY27 earnings.

But the main attraction today is income. Dividend estimates sit at $1.19 per share in FY26 and 94 cents in FY27. That implies forward dividend yields of approximately 5.8% and 4.6%.

Those are attractive numbers, particularly for investors looking for resources income.

I also think it is worth noting that Fortescue is no longer only talking about iron ore and green energy. It has turned more attention to copper, which could be a smart move if the company can build meaningful exposure over time.

Copper should benefit from electrification, grid investment, data centres, renewable energy, and industrial demand. So, I like the direction of travel.

The challenge is that Fortescue remains highly exposed to iron ore today. If iron ore prices weaken, earnings and dividends can move quickly. That does not make it a bad investment, but it does make the income outlook more cyclical than the headline yield might suggest.

The case for Rio Tinto shares

Rio Tinto is also heavily exposed to iron ore, but I think it offers a broader and more attractive long-term mix.

CommSec’s consensus estimates point to earnings per share of $11.88 in FY26 and $12.38 in FY27. With the share price around $185.59, that puts Rio Tinto on roughly 16 times FY26 earnings and 15 times FY27 earnings.

Dividend estimates are $6.54 per share in FY26 and $6.81 in FY27. That implies forward yields of approximately 3.5% and 3.7%.

Those yields are lower than Fortescue’s, but I do not think yield alone should decide this comparison.

Rio Tinto has exposure to iron ore, copper, aluminium, lithium, and other materials tied to global industrial growth and the energy transition. That broader commodity base is the main reason I prefer it.

Iron ore may remain a major profit driver, but I like miners that have more than one path to create value. Rio Tinto has the balance sheet, project pipeline, and global asset base to keep investing across several important commodities.

Copper is particularly important to me. The world will likely need more copper over the coming decades, and building new supply is not easy. Rio Tinto’s copper exposure gives it a valuable long-term growth angle that Fortescue is still trying to develop.

Which would I buy?

I would choose Rio Tinto shares.

Fortescue’s yield is attractive, and I can see why income investors may prefer it. If iron ore prices remain supportive, Fortescue can continue to generate strong cash flow and dividends.

But Rio Tinto is the better buy for me because it offers a more diversified resources exposure.

The valuation is not demanding, the dividend yield is still useful, and the business has more ways to benefit from the long-term demand for critical materials. I also think its copper exposure gives it a stronger position for the next decade.

Fortescue’s copper ambitions are worth watching, but Rio Tinto already has a wider base to work from.

The post Are Fortescue or Rio Tinto shares the better buy? appeared first on The Motley Fool Australia.

More reading

• ASX 200 iron ore shares down 5%: Should you buy the dip?
• 3 ASX 200 mining shares to buy: experts
• Buy, hold, sell: IPD, Kogan, Rio Tinto shares
• Guess which ASX 200 share is jumping 17% on earnings guidance upgrade
• China’s PMI data beat forecasts. Investors should be looking at these ASX resource stocks

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some of the most interesting buying opportunities can appear before the market feels comfortable again.

I am not looking for businesses where everything is perfect today. I am looking for companies where expectations have been reset, but the long-term opportunity still looks attractive.

Three ASX shares I would consider buying before sentiment improves are named in this article.

CSL Ltd (ASX: CSL)

CSL is one ASX share I think investors should be studying closely.

The healthcare giant has been through a difficult period. Confidence has weakened, guidance has disappointed, and the market no longer treats the company as the simple long-term compounder it once appeared to be.

I think that shift is important. Investors should not pretend the old story is still intact. CSL needs to rebuild trust, improve execution, and show that the pressure in parts of its business can be managed.

But I also do not think the company’s long-term strengths have disappeared. CSL remains a global healthcare leader with valuable positions across plasma therapies, vaccines, and specialist medicines.

The dividend yield has also become more interesting after the share price weakness. I would not buy CSL only for income, but I do like being paid something while waiting for the business to regain momentum.

Sentiment may take time to turn. That is normal after a long derating. But I think patient investors could look back on this period as a useful opportunity to buy a global healthcare leader when expectations were unusually low.

WiseTech Global Ltd (ASX: WTC)

WiseTech is another ASX share I would buy before confidence fully returns.

The logistics software company has been sold down heavily from its high, but I still think the business has an excellent long-term position.

Global trade is complicated. Freight forwarders and logistics providers deal with customs, documentation, compliance, warehousing, transport, tariffs, and constant exceptions. That kind of complexity creates a need for software that can sit deep inside daily workflows.

That is what I like about WiseTech. Its CargoWise platform is not a casual tool that customers use once and forget. It helps run important parts of global logistics operations. If the software saves time, reduces errors, and improves control, it can become very difficult to replace.

I am also positive on its exposure to artificial intelligence (AI) and think it could become genuinely useful in this part of the economy. Logistics still contains a lot of repetitive admin, document handling, and manual checking. If WiseTech can use AI to make those processes faster and more accurate, the platform could become even more valuable.

There are risks around valuation, execution, and integration. But I think the share price fall has made the long-term risk/reward more appealing.

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine Estates is a different type of opportunity.

This is more of a recovery story than a clean compounder today. The market has become cautious on the business, and that is understandable. The US wine market has been difficult, execution has been questioned, and confidence in the earnings outlook has weakened.

But I still think Treasury Wine owns assets worth paying attention to. Penfolds remains a powerful premium wine brand. Those kinds of brands are not built quickly. They need history, trust, distribution, quality, scarcity, and pricing power.

If the company can rebuild momentum in China, improve its US performance, and focus more effectively on its strongest brands, I think sentiment could improve over time.

However, recovery stories often take longer than investors hope, so patience will be needed. But after a heavy sell-off, I think the market may already be pricing in a lot of disappointment.

Foolish Takeaway

Weak sentiment can make even good opportunities feel uncomfortable.

That is why I think this is a useful time to look at businesses where the market has lost patience, but the long-term case has not disappeared. The share prices may not recover quickly, and there will almost certainly be setbacks.

But investors do not need everyone to agree with them on day one. In my opinion, they need the businesses to keep improving while expectations remain low. If that happens, the market may eventually catch on.

The post 3 cheap ASX shares I’d buy before sentiment turns appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Treasury Wine Estates, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates and WiseTech Global. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

National Australia Bank Ltd (ASX: NAB) shares are trading around $36.70 at the time of writing, which puts them close to their 52-week low of $36.03.

That is a long way from their 52-week high of $49.45.

For investors looking at the major banks, that creates an interesting question. Is NAB now a buying opportunity after dropping 25% from its high, or is the market right to be cautious?

I think the answer depends on what an investor wants from the banking sector.

The valuation looks more reasonable

The first thing that stands out is valuation.

According to CommSec, consensus estimates are for NAB to generate earnings per share of $2.43 in FY26 and $2.62 in FY27.

Based on the current share price, that puts the bank on around 15 times FY26 earnings and 14 times FY27 earnings.

That is not bargain-basement territory, but it does look far more reasonable than some other parts of the banking sector.

For comparison, Commonwealth Bank of Australia (ASX: CBA) is trading around $162.10. CommSec estimates point to earnings per share of $6.54 in FY26 and $7.04 in FY27.

That puts CBA on around 25 times FY26 earnings and 23 times FY27 earnings.

CBA deserves a premium in my view. It is the highest-quality major bank, with a stronger retail franchise, excellent digital capabilities, deep customer relationships, and a long record of market confidence.

But NAB is much cheaper on forecast earnings. For investors who want exposure to the major banks without paying CBA’s premium multiple, I think NAB shares are worth considering.

The income looks attractive

The second reason NAB interests me is income.

CommSec’s consensus estimates are for dividends per share of $1.72 in FY26 and $1.78 in FY27.

Based on the current share price, that implies forward dividend yields of around 4.7% and 4.9%, respectively.

Those are attractive yields, especially if the dividends are fully franked.

The key point is that investors are not relying only on capital growth. If NAB can deliver on those dividend forecasts, shareholders could receive a useful income stream while waiting for sentiment to improve.

Bank dividends are never guaranteed. Earnings, bad debts, margins, capital requirements, and the economic cycle can all affect payouts. But at today’s share price, I think the forecast yield adds to the investment case.

Would I invest $5,000?

Yes, I would buy NAB shares at current prices.

The share price is near its 52-week low, the valuation appears reasonable, and the dividend yield appears attractive relative to consensus expectations.

I do not think NAB is my preferred exposure in the banking sector. That remains CBA because I think it is the better business.

But price is important too.

At the right valuation, a lower-preference stock can still be a good investment. NAB gives investors exposure to a large Australian bank with a strong business lending position, a major household banking operation, and the potential to recover if the market becomes less cautious.

I would not expect a straight-line rebound. The banks still face pressure from competition, funding costs, margins, credit quality, and a slower economy. But I think a lot of caution is already reflected in NAB’s share price.

The post Down 25%: Should I invest $5,000 into NAB shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.