Day: 30 March 2023

There are plenty of options for investors to choose from in the lithium industry on the ASX.

Two popular options right now are Liontown Resources Ltd (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS).

And while it could be tempting to add both to your portfolio, for diversification reasons it would probably be best to limit your exposure to just one.

But which one is the best ASX lithium share to buy now? Here are my thoughts:

Is Liontown the ASX lithium share to buy?

Liontown is the owner of the Kathleen Valley lithium project in Western Australia. It is targeting spodumene production of around 511,000 tonnes+ per annum (tpa) from 2024, before eventually expanding to 658,000 tpa in the future.

This spodumene is already in demand with end users before it has been pulled from the ground. The company has signed binding offtake agreements with Ford, LG Energy Solution, and Tesla.

As you might have seen, Liontown shares have been on fire this week after lithium giant Albemarle tabled a non-binding $2.50 per share takeover offer, which was swiftly rejected by management.

But despite this incredible rise, I do see scope for the Liontown share price to keep rising. In fact, Bell Potter suggested that its shares could be worth as much as $3.35. This is approximately 28% higher than where they trade today.

However, it is worth remembering that the company is still developing the Kathleen Valley lithium project in a highly inflationary environment. This means there are risks that its costs could continue to rise beyond currently planned capex spending.

In addition, the company does not have the required cash to complete construction and will have to raise funds in the near future. Given its recent share price rise, a capital raising may now be more attractive than debt funding. If this were to happen, it could put downward pressure on Liontown’s shares.

Overall, I think Liontown is an attractive option for investors looking for lithium exposure, but perhaps not the best way to do it.

Is Pilbara Minerals a better option?

Of these two ASX lithium shares, I suspect that Pilbara Minerals could be the better buy.

It is a lithium mining and exploration company and one of only a small number of major hard-rock lithium producers globally. It operates the 100% owned Pilgangoora Project, which is located just 120km from Port Hedland. It comprises two processing plants with a combined nameplate capacity of 580,000 tpa of spodumene concentrate.

However, just yesterday, the company announced board approval to increase its spodumene concentrate capacity to 1 million tpa in the coming years.

The good thing about this production growth is that it should help limit the impact that potentially weaker lithium prices could have on its earnings in the future.

And with Pilbara Minerals announcing its capital management framework late last year, this may bode well for future dividend payments.

In fact, a note out of Citi from this morning reveals that its analysts expect this lithium share to pay fully franked dividends of 24 cents per share in FY 2023, 17 cents per share in FY 2024, and 20 cents per share in FY 2025. This would mean yields of approximately 6%, 4.2%, and 5%, respectively.

And with a buy rating and price target of $4.60, Citi also sees a potential upside of 14% over the next 12 months.

The verdict

Overall, while the potential returns may be lower than what’s on offer with Liontown shares, I believe the risk/reward is more compelling with Pilbara Minerals shares. As a result, I think it is the better ASX lithium share to buy now.

The post Best ASX lithium share to buy: Liontown Resources vs. Pilbara Minerals appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why ALS, Centaurus Metals, Pilbara Minerals, and Westgold shares are rising today
• Which ASX lithium shares could be at risk of a short attack?
• Top brokers name 3 ASX shares to buy today

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.

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The Telstra Group Ltd (ASX: TLS) share price is pushing higher again on Thursday.

This has led to the telco giant’s shares rising to a multi-year high of $4.24.

This means the Telstra share price is now up over 8% since this time last year, which compares favourably to a 5% decline by the ASX 200 index.

Why is the Telstra share price hitting a new high?

Demand for Telstra’s shares has been strong this year thanks to the company’s defensive qualities.

As it offers an essential service that few would go a day without, Telstra is well-placed to navigate the current economic environment. Particularly now that it has inflation-linked mobile plans.

In addition, the mobile market is benefiting from rational pricing, which should be supportive of margins and customer retention.

Last week, Goldman Sachs noted that “[i]ndustry feedback suggests that mobile rationality is set to continue, with the only potential risk (in our view) to further pricing increases, if TLS/Optus postpaid sub growth was to decline for an extended period.”

The good news is that the broker sees “this as unlikely given improving quarterly cadence & meaningful recent Vodafone pricing increases.” It also expects to tier 2 pricing to “continue to increase and provide scope for Optus to follow Telstra price rises higher.”

It is partly for this reason that Goldman Sachs recently upgraded the company’s shares to a buy rating with a $4.50 price target. Based on the current Telstra share price, this implies potential upside of 6.1% for investors over the next 12 months.

Another leading broker believes its shares can rise beyond this. A recent note out of Morgans reveals that its analysts have an add rating and $4.70 price target on them. This suggests almost 11% upside from current levels.

And let’s not forget the dividends! Both brokers are expecting 17 cents per share fully franked dividends in FY 2023. This represents an attractive 4% yield for investors.

Goldman then expects an increase to 18 cents per share in FY 2024, which will mean a 4.25% yield.

All in all, these brokers appear confident that it’s not too late to pick up shares.

The post Why did the Telstra share price just hit a multi-year high? appeared first on The Motley Fool Australia.

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More reading

• Analysts name 2 ASX dividend shares to buy right now
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Telstra shares: Bull vs. Bear
• ‘Safer than houses’: 2 ASX 200 shares that are pumping out the dividends
• Buy these ASX 200 dividend shares for income: Goldman Sachs

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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Short interest in Core Lithium Ltd (ASX: CXO) shares is at a near all-time high this month, coming in at more than 10% at last count.

Interestingly, it comes as the company passes notable risk-reducing milestones. It officially kicked off spodumene concentrate production last month and realised its maiden direct shipping ore (DSO) sale – worth around $20 million – in January.

Still, short sellers appear to remain convinced it’s overvalued. Thus, they’re effectively betting against the stock.

The Core Lithium share price is trading at 87.75 cents at the time of writing. That leaves the company with a market capitalisation of around $1.6 billion.

So, should investors be worried about the growing short interest in Core Lithium shares? Let’s break down why the lithium stock and many of its peers might appear attractive to short sellers.

Why might short sellers be drawn to ASX 200 lithium stocks?

Short sellers appear increasingly bearish on the Core Lithium share price. And that might be due to concerns about the battery-making metals’ future value.

As a result of the burgeoning demand for lithium in recent years, many players in the space are still working to reach production. Thus, most remain unprofitable, with few exceptions such as Pilbara Minerals Ltd (ASX: PLS) and Allkem Ltd (ASX: AKE).

That means the market has to find another way to value most ASX lithium shares – including Core Lithium. Often, it does so by estimating their future earnings.

Lithium producers’ earnings are normally tied to the price of lithium. Thus, experts typically use the law of supply and demand to predict where the price of lithium might go from here. Though, even leading brokers often struggle to accurately forecast lithium prices.

If short sellers believe the market is overestimating the battery-making material’s future worth – and therefore, producers’ future earnings – they’ll likely move to short lithium stocks.

Meanwhile, as Totus Capital portfolio manager Ben McGarry points out, courtesy of The Age, the valuations of some lithium stocks have likely been bolstered by their inclusion in the likes of the S&P/ASX 200 Index (ASX: XJO).

That has forced index funds to buy ASX 200 lithium shares despite their situations. McGarry said:

So, from an outsider’s or short seller’s point of view, you’re looking at a company that has got no real business and is priced as if everything is going to work out best for the long term.

Is rising short interest in Core Lithium shares a red flag?

Let’s get back to the question at hand: Should rising short interest in Core Lithium shares deter investors?

Personally, I don’t think a jump in shorting should discourage an otherwise entirely bullish investor.

However, I do think one would be wise to take the time to consider why an ASX share might be getting shorted before buying. There could be an underlying reason that hasn’t yet surfaced.  

Short sellers’ interest in Core Lithium might also be an indication of sliding market sentiment. That has the potential to weigh on a company’s share price.

The post Short interest in Core Lithium shares is growing. Is this a red flag? appeared first on The Motley Fool Australia.

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More reading

• Which ASX lithium shares could be at risk of a short attack?
• Is the lithium price now on the way back up?
• Why the outlook for these ASX 200 lithium shares could be ‘very favourable’
• Here are the top 10 ASX 200 shares today
• 8 ASX 300 lithium stocks surging over 10% today

Motley Fool contributor Brooke Cooper 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.

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These two ASX rare earths shares are outperforming the S&P/ASX 200 Materials Index (ASX: XMJ) today.

American Rare Earths Ltd (ASX: ARR) and RAREX Ltd (ASX: REE) both soared by more than 25% at some point today.

For perspective, the materials index is up 1.48% at the time of writing.

So why are these ASX rare earths shares soaring ahead today?

American Rare Earths

American Rare Earths is currently fetching 26 cents a share, up almost 24% and just off its intraday high of 26.5 cents a share. American Rare Earths today provided a maiden JORC Resource estimate for the Halleck Creek project in Wyoming, USA. The total JORC Resource estimate is 1.43 billion tonnes including an estimated 4.73 million tonnes of total rare earth oxides (TREO). The average TREO grade is 3,309 parts per million (ppm), while the average neodymium and praseodymium grade is 734 ppm.

Commenting on the results, CEO and managing director Chris Gibbs said:

These results confirm the company has a strategically significant rare earth asset critically, in the United States, which should enable the largest economy in the world to reduce its dependence on China or other imported rare earths.

Rarex

Rarex shares are soaring nearly 28% at 6 cents apiece. Earlier today, Rarex shares rocketed nearly 45% to 6.8 cents each. Today, Rarex reported a significant increase in the mineral resource estimate at the Cummins Range Rare Earths-Phosphate project in the Kimberley region of Western Australia. The new resource estimate is 397Mt at 0.33% total rare earths oxide (TREO) and 4.2% P2O5 (phosphate). This is 500% more TREO and 800% more phosphate than the 2021 resource estimate.

Commenting on the phosphate price, Rarex said:

Recent world events have put enormous strain on the world supply of phosphate, with the phosphate price increasing by 100% last year.

The post Guess which 2 ASX rare earths shares just rocketed over 25% (Hint: not Lynas!) appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share is surging 10% on a ‘very significant’ find
• Multiple directors are buying this beaten-up ASX 300 healthcare stock
• This little-known ASX share is down 40% in a year, and one insider just bought $1m worth
• Zip share price leaps 14% on $20 million windfall
• I think these 2 ASX growth shares have been heavily oversold, I’d buy them in April

Motley Fool contributor Monica O’Shea 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.

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The S&P/ASX 200 Materials (ASX: XMJ) index is climbing 1.65% today, but this ASX lithium share is soaring far higher.

The Patriot Battery Metals Inc (ASX: PMT) share price soared 10% this morning from $1.485 to $1.63. However, the company’s share price has since retreated and is now rising 5.56% to $1.568.

Let’s take a look at what this ASX lithium share reported to the market.

Patriot drilling results

Patriot is a lithium explorer that started trading on the ASX in December 2022.

Today, Patriot presented assay results for 16 drill holes at the company’s Corvette Property, in the James Bay region of Quebec.

The results reveal an extension of the high-grade Nova Zone to the east by 400 metres.

Highlights included:

• 83.7 metres at 3.13% lithium oxide (Li2O) including 19.8m at 5.28% Li2O and 5.1m at 5.17% Li2O in drill hole CV23-105
• 132.2m at 1.22% Li2O including 11.2m at 2.99% Li2O and 6.0m at 2.92% Li2O in drill hole CV23-106
• 65.4m at 1.30% Li2O including 37.1m at 2.09% Li2O or 3.0 m at 5.43% Li2O in drill hole CV23-107
• 54m at 1.55% Li2O including 26.6m at 2.44% Li2O or 5.0m at 4.30% at Li2O in drill hole CV23-108

Multiple assays showed more than 6% lithium oxide, including 1.3 metres at 6.53% lithium oxide.

Samples for a further 27 drill holes have now arrived at the analytical lab. Six drilling rigs are active at the CV5 pegmatite.

Commenting on the results, exploration vice president Darren Smith said:

The first core sample assays of our winter drill program have confirmed the extension of the high-grade Nova Zone to the east, including a 20m intersection at greater than 5% Li2O in CV23-105

The lithium grades found in this zone are very significant, and include a 3-25 metre
thick (core length) band of greater than 5% Li2O over a significant strike length of 200+ metres

The company is planning to provide a mineral resource estimate in the second quarter of 2023.

Patriot Battery share price snapshot

The Patriot Battery Metals share price has exploded 161% since the company joined the ASX and has risen 35% in the past week alone.

This ASX lithium share has a market capitalisation of about $387 million based on the latest share price.

The post Guess which ASX lithium share is surging 10% on a ‘very significant’ find appeared first on The Motley Fool Australia.

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More reading

• Multiple directors are buying this beaten-up ASX 300 healthcare stock
• This little-known ASX share is down 40% in a year, and one insider just bought $1m worth
• Zip share price leaps 14% on $20 million windfall
• I think these 2 ASX growth shares have been heavily oversold, I’d buy them in April
• This ASX 300 stock has plunged 25% in 2023, and one director is going thrift shopping

Motley Fool contributor Monica O’Shea 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.

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When a director buys up stock of their own ASX 300 share, investors like to know about it. Director, CEO, insider, and management buys encourage investors to have confidence in a company. It shows that they are aligning their financial interests with shareholders, and putting real skin in the game — especially if the markets have beaten down that ASX 300 share.

This is the situation we are currently looking at with ASX healthcare share Mayne Pharma Group Ltd (ASX: MYX).

Mayne Pharma has not been having a great time on the ASX lately. To be fair, this company is up almost 4% to $3.77 a share so far this Thursday. But the company still remains down a painful 10.2% in 2023 so far.

Mayne shares are also nursing a 28% loss over the past 12 months, and are down an even more depressing 85.5% from the all-time high of over $26 a share that we saw back in 2018.

But these losses don’t seem to be bothering management too much. In fact, over the past week, not one, but two Mayne directors have been buying up their own company’s shares.

ASX 300 directors buy up stock of Mayne Pharma

Yesterday, we discussed the buys of none other than Mayne pharma chair Frank Condella Jr.

Condella has gone on a buying spree over the past week or two. Prior to 24 March, he owned 37,777 shares of Mayne, but thanks to some heavy buying, he has now boosted that number by more than 55% up to 58,775 shares.

But today, we’ve got the news that another of Mayne’s directors has joined the buying party. According to an ASX notice this morning, Condella’s fellow director Kathryn MacFarlane has just acquired 20,000 shares of Mayne Pharma. MacFarlane made the buy on 29 March (yesterday) and spent $76,157 on those 20,000 shares, implying a buy price of roughly $3.81 per share.

MacFarlane actually didn’t own any Mayne shares prior to this date, so this is her first investment in the company.

But even so, this buy, together with Condella’s, is probably just what investors in this ASX 300 healthcare share need to hear right now.

The post Multiple directors are buying this beaten-up ASX 300 healthcare stock appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 300 directors buying up their company shares in the past week

Motley Fool contributor Sebastian Bowen 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.

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You would be forgiven for never having heard of ASX consumer discretionary share MotorCycle Holdings Ltd (ASX: MTO).

The $125 million company tends to fly under investors’ radars despite being behind more than 40 motorcycle dealerships and accessories retail franchises across Australia.

And one of its newly instated insiders appears to have made the most of recent weakness in the stock.

The MotorCycle Holdings share price has tumbled more than 41% over the last 12 months to trade at $1.72 at the time of writing.

Let’s take a closer look at the insider buying going down at the ASX share this week.

Insider forks out $1m on embattled ASX share

MotorCycle Holdings director and executive Michael Poynton has topped up his stake in the ASX share – forking out more than $1.1 million to do so.

The insider snapped up 750,000 of the company’s shares for $1.53 apiece last Friday, leaving him with a 9% stake. And what a buy it’s proven to be – the parcel has already provided $150,000 of capital returns.

Interestingly, however, just a few months back Poynton didn’t have any position in the ASX share.

The now-insider was the co-founder of motorcycle wholesale business Mojo Motorcycles – which was snapped up by MotorCycle Holdings for $60 million last year.

Of the purchase price, $20 million was paid in cash, up to $10 million was deferred, and the rest provided as scrip with each share valued at $2.60. That left Poynton with a notable stake in the ASX-listed company.

And he isn’t the only insider buying up the stock this month.

MotorCycle Holdings founder, managing director, and CEO David Ahmet bought 50,000 shares for $1.72 each in an ASX market trade on 14 March. The following day, director Peter Henley snapped up 8,900 shares for $1.69 apiece.

What’s been dragging on MotorCycle Holdings shares?

So, what might be weighing the MotorCycle Holdings share price down lately? Well, the company operates in a cyclical environment.

When the cost-of-living rises – perhaps spurred by interest rate hikes – people tend to put a pause on non-essential purchases. Indeed, the company noted demand for motorcycles has tumbled in last month’s half-year earnings release.

Meanwhile, the cost of doing business is increasing, driven by higher wages, transport, and logistics costs.

MotorCycle Holdings posted $277.5 million of income last half – a 17% year-on-year improvement. Though, its net profit after tax (NPAT) slumped 17% to $10.5 million.

But management is confident it can turn things around – and recent buying suggests insiders might be too. Ahmet commented:

Despite the current economic challenges, the group has continued to invest for future growth including our people and digital capability, our dealer network, and our warehouse and supply chain management systems.

We are confident that the business improvements and capabilities we are investing in will strengthen our competitive position and generate long-term value for shareholders.

The post This little-known ASX share is down 40% in a year, and one insider just bought $1m worth appeared first on The Motley Fool Australia.

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More reading

• Could this high-yielding dividend share be the best-kept secret on the ASX?

Motley Fool contributor Brooke Cooper 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.

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The Zip Co Ltd (ASX: ZIP) share price is rocketing higher on Thursday morning.

At the time of writing, the buy now pay later (BNPL) provider’s shares are up 14% to 61.5 cents.

Why is the Zip share price racing higher?

Investors have been scrambling to buy Zip’s shares today after it released a very positive announcement.

According to the release, Zip has signed agreements to divest its wholly owned businesses in Central and Eastern Europe (Twisto) and South Africa (Payflex). In addition, it is on track with the wind-down of its business in the Middle East.

Management highlights that subject to closing conditions, including regulatory approval, it expects to receive aggregate net cash inflows of approximately $20 million during the second half of FY 2023.

Another positive is that these operations were operating at a loss and acting as a drag on its earnings. The company notes that its cash operating earnings for its EMEA businesses was -$10.2 million during the first half of FY 2023.

As a result, upon completion of these transactions and other actions, Zip will have successfully delivered on its objective of neutralising cash burn from its Rest of the World (RoW) footprint by the end of this financial year.

On target to achieve profit goals

The release also reveals that Zip continues to progress other activities in line with its strategic priorities.

All in all, management remains confident that it has sufficient available cash and liquidity to deliver on positive group cash EBTDA during the first half of FY 2024.

Zip’s co-founder and global CEO, Larry Diamond, commented:

Twelve months ago, in response to the changes in market conditions we pivoted our strategy from a focus on global growth to a focus on sustainable growth in our core markets, and accelerating our path to profitability. While we continue to see increased demand globally for our products from both customers and merchants, we made the decision to allocate resources to areas of our business that are either profitable or have a near and clear path to profitability.

The completion of these RoW assets sales marks another step in Zip’s transition as we become a stronger and leaner business, focused on core products in core markets. With sale proceeds of approximately $20m, RoW cash burn neutralised and the up to 50% improvement in Core Cash EBTDA we are expecting in H2 FY23, we remain confident that we have sufficient cash and liquidity to deliver on our target of group positive cash EBTDA during H1 FY24.

The Zip share price is now up 20% since the start of the year.

The post Zip share price leaps 14% on $20 million windfall appeared first on The Motley Fool Australia.

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More reading

• Zip share price dips amid Apple’s BNPL US launch
• Here are the 10 most shorted ASX shares this week
• Why is the Zip share price soaring 7% today?
• Why New Hope, Pilbara Minerals, Westpac, and Zip shares are pushing higher
• Here are the 10 most shorted ASX shares 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 positions in and has recommended Zip Co. 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.

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The ASX share market has gone through some seismic shifts over the last three years. I think this is a great time to be looking at fallen ASX growth shares as recovery buys.

It’s understandable why some e-commerce players have fallen substantially over two years. COVID lockdowns are over, life is essentially back to normal and bricks and mortar shops are open.

However, I believe that the long-term trend of online shopping growth will continue from this level of ‘new normal’.

Younger cohorts of shoppers are seemingly as digitally savvy as ever, so I think we’ll see a larger percentage of the population buy more things online as time goes on. Plus, I think Australia’s growing population is a useful tailwind for businesses because the potential customer base is increasing.

I think the higher interest rates and inflation situation have made the following two ASX growth shares very appealing.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty describes itself as an “integrated content, marketing and e-commerce retail platform that partners with a broad and diverse portfolio of more than 270 brands and over 12,000 products.”

The Adore Beauty share price has fallen by around 80% over the past two years.

It seemed clear that the ASX growth share wasn’t going to be able to keep sustaining its COVID-period numbers once the lockdowns ended. The FY23 half-year result showed a fall in revenue of 17% to $93.6 million.

But, in that same result, returning customers grew by 10% to 481,000 and they contributed 78% of all revenue.

Despite the fall in revenue and inflationary pressures, the company still managed to achieve a positive earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 0.4% and grow the cash balance by $0.3 million to $30.1 million.

I think the company’s initiatives like its app and owned-marketing channels (such as podcasts) can help grow the margins of the business.

It’s also growing its portfolio of own-brand products. Adore Beauty currently has two owned brands – Viviology and AB Lab. The company says that “new brands and products support customer retention and acquisition.”

Once it’s not cycling against elevated COVID sales, I think it will start showing growth again.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster describes itself as Australia’s largest pure-play online retailer of furniture and homewares. It sells over 200,000 products, though a lot of those are from hundreds of suppliers and are directly shipped to customers by those suppliers.

The ASX growth share does have its own private label range, sourced from overseas suppliers.

While it was cycling against a comparative period of lockdown demand, Temple & Webster was able to generate $207.1 million of revenue and an EBITDA margin of 3.5% in the FY23 first half.

The Temple & Webster share price is down over 60% in the last two years.

However, I think the company has a very promising future. It’s investing to offer online shoppers very useful tools like augmented reality, so households can see an item in their space. It’s also developing an AI interior design service.

The business has big plans to expand with home improvement items (like painting, plumbing, flooring) with its Big Build website business, as well as expanding its exposure to commercial customers.

The company makes the point that the UK and the US have much higher levels of online shopping adoption than Australia. But Australia is following a similar trend, so there could be a natural boost for the ASX growth share’s customer numbers in future years simply by higher levels of e-commerce adoption for furniture shopping.

It’s expecting to earn higher profit margins in the future thanks to scale benefits, which I think will helpfully boost the Temple & Webster share price.

The post I think these 2 ASX growth shares have been heavily oversold, I’d buy them in April appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Tristan Harrison 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 Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has recommended Adore Beauty Group and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Temple & Webster Group Ltd (ASX: TPW) share price is heading in the right direction again on Thursday.

In morning trade, the ASX 300 stock is up 1.5% to $3.49.

Though, this is little consolation for longer term shareholders that have watched the Temple & Webster share price lose a quarter of its value in 2023.

Why is this ASX 300 stock rising today?

Investors have been buying this ASX 300 stock on Thursday after it revealed that an insider has been buying shares.

According to a change of director’s interest notice, the online furniture and homewares retailer’s independent non-executive director, Belinda Rowe, has added to her position.

The release notes that Rowe picked up 8,600 shares through an on-market trade on 27 March.

The director paid a total of $30,000 for this parcel of shares, which equates to an average of $3.49 per share.

This more than tripled Rowe’s holding to a total of 12,100 Temple & Webster shares.

Should you be buying?

Analysts at Goldman Sachs would approve of Rowe’s purchase of shares.

Its analysts are very bullish on this ASX 300 stock and have a buy rating and $6.50 price target on its shares.

Based on the current Temple & Webster share price, this implies potential upside of 86% for investors over the next 12 months.

Goldman is positive on the company’s outlook due to its structural growth opportunity. It explained:

The long term structural growth opportunity is unchanged: we forecast a 21% 10-yr EBITDA CAGR driven by consolidation of market share and growing online penetration. TPW is early in its maturity cycle which supports long term sustainable growth. Market share gains are driven by a favourable market structure (with a long tail of small, less well-capitalised competitors), growing online penetration, and TPW’s sustainable competitive advantages (scale; dropship inventory; brand; tech capabilities).

The post This ASX 300 stock has plunged 25% in 2023, and one director is going thrift shopping appeared first on The Motley Fool Australia.

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setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Want big returns? Buy these ASX growth shares: analysts
• Buy Pilbara Minerals and this exciting ASX growth share: analysts
• Want to invest $10,000 in great ASX shares? I’d pick these 3
• 2 undervalued ASX shares to buy this month: expert
• Brokers name 3 ASX shares to buy now

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 positions in and has recommended Temple & Webster Group. The Motley Fool Australia has recommended Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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