Stock Pick

Author: openjargon

  • 3 lower-risk ASX shares for beginner investors

    Invest written on a notepad with Australian dollar notes and piggybank.

    Getting started on an investing journey into the Australian share market can be a daunting prospect. We all know that the ASX can be a risky place to invest your hard-earned dollars. And buying the first ASX shares on your investing journey is often where a prospective investor makes their first mistake.

    That’s fair enough of course. There are hundreds of different ASX shares to choose from on the ASX. With the varying opinions and recommendations one is often inundated with when first starting out in the share market, this can make it easy to follow the wrong advice and go for a company that may not be a wise choice for a long-term investment.

    As such, today, I’ll be discussing three ASX shares that I think would make great, lower-risk picks for a beginner investor. No ASX share is a risk-free investment, of course. But I think these three picks are about as safe as an ASX share can be.

    3 lower-risk ASX shares for a beginner investor

    Coles Group Ltd (ASX: COL)

    It’s my view that the lowest-risk shares on the ASX are companies that provide goods or services that we need rather than want. Of life’s basic needs, none come above food. That’s why I think Coles is a great choice for investors looking for a safer entry point into the Australian stock market.

    Coles has a nationwide network of supermarket grocers that many Australians go to to buy food, drinks, and household essentials. We can be reasonably sure that this isn’t going to change anytime soon, as Coles is always under pressure to sell us these basics at the cheapest pricing it can.

    This isn’t an investment that will make anyone rich overnight, but I think Coles has the potential for some modest capital gains going forward. The company also offers a hefty (and fully-franked) dividend, which is currently yielding just under 4%.

    Telstra Group Ltd (ASX: TLS)

    In a similar vein, I also view Telstra as a good choice for beginner investors who are looking for a low-risk share to dip their toes into the stock market world. While food, drinks, and household essentials are at the top of our basic needs, reliable internet access is also a top priority in today’s modern world.

    Telstra is the gold standard stock to invest in if you want a slice of that action. It is the largest provider of both mobile and fixed-line internet services in Australia, and its mobile network is almost universally regarded as superior to those of its competitors.

    Like Coles, Telstra’s earnings are unlikely to be severely affected by any problems in our economy. Whether we are dealing with high inflation or an economic recession, Telstra’s customers are probably not going to stop paying for phone usage or internet access. This inherent defensiveness makes this company another great choice for any beginner investor today.

    Telstra shares also offer investors a decent, fully franked dividend yield. At inflation prices, this was just under 5%.

    Argo Investments Ltd (ASX: ARG)

    A final ASX share that I think any beginner can consider as a low-risk starter investment is Argo Investments. Argo is a listed investment company (LIC), which means it actually functions as something akin to a managed fund.

    Rather than producing or selling goods or services itself, it runs a portfolio of other investments on behalf of its investors. Argo has been around for a very long time. It first opened its doors back in 1946. Since then, it has built up a reputation as a conservative and reliable steward of its investors’ capital.

    Argo’s strength comes from its diversified portfolio of ASX shares. It consists of dozens of underlying ASX shares, which (as of 31 May) included everything from Commonwealth Bank of Australia (ASX: CBA) and Telstra Group Ltd (ASX: TLS) to Suncorp Group Ltd (ASX: SUN) and TechnologyOne Ltd (ASX: TNE).

    Thanks to this huge, diversified portfolio of different ASX companies, I think Argo represents a very low-risk ASX share that any beginner investor can feel comfortable holding. Argo also pays out a regular, fully franked dividend, which was recently trading at a yield of around 4%.

    The post 3 lower-risk ASX shares for beginner investors appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Argo Investments Limited right now?

    Before you buy Argo Investments Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Argo Investments Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • 3 high-quality ASX 200 shares to buy forever

    Business women working from home with stock market chart showing per cent change on her laptop screen.

    One of the best ways to grow your wealth is arguably to invest in high quality companies with a long-term view.

    The latter gives your investment time to compound and supercharge your returns and wealth creation.

    As for the former, they say the cream always rises to the top. And this is usually the case in the share market with the very best companies delivering the best returns over the long term.

    But which ASX 200 shares could be classed as high quality? Let’s look at three that could be buys according to analysts. They are as follows:

    CSL Limited (ASX: CSL)

    CSL could be one of the highest quality companies on the ASX boards. It is one of the world’s leading biotechnology companies with a collection of businesses that are leaders in the respective fields. This includes CSL Behring, CSL Vifor, and Seqirus businesses, which focus on blood plasma products, kidney therapies, and vaccines, respectively.

    But CSL is never one to rest on its laurels. Each year it reinvests in the region of 12% back into its research and development activities. This ensures that it has a pipeline of potentially lucrative treatments.

    Macquarie is a big fan of the company sees scope for its shares to rise to $500 in the coming years. But in the immediate term, the broker has an outperform rating and $330.00 price target on them.

    Goodman Group (ASX: GMG)

    A second high quality ASX 200 share for investors to look at is Goodman Group. It is a leading integrated commercial and industrial property company with a world class portfolio of assets in key locations across the globe.

    Strong demand for these assets has underpinned stellar earnings growth over the last decade. The good news is that Morgan Stanley thinks this positive form can continue. Especially given its belief that Goodman’s exposure to artificial intelligence through its data centre pipeline will be another driver of future growth.

    Morgan Stanley currently has an overweight rating and $36.65 price target on its shares.

    ResMed Inc. (ASX: RMD)

    Bell Potter thinks that this sleep disorder treatment company could be a high quality ASX 200 share to buy.

    The broker likes ResMed due to its significant opportunity as a leader in obstructive sleep apnoea (OSA) and other sleep disorders. It notes that “the market for OSA and chronic obstructive pulmonary disease (COPD) remains under penetrated, and we expect industry volume growth to continue in the 6-8% range for the foreseeable future.”

    This bodes well for its sales and earnings growth over the next decade. Particularly given that one of its key rivals has been battling a major product recall.

    Bell Potter has a buy rating and $36.00 price target on its shares.

    The post 3 high-quality ASX 200 shares to buy forever appeared first on The Motley Fool Australia.

    Should you invest $1,000 in CSL right now?

    Before you buy CSL shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CSL wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

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

  • If I’d put $5,000 into DroneShield shares just 1 year ago, here’s what I’d have now

    A smiling woman with a handful of $100 notes, indicating strong dividend payments

    If I had invested $5,000 into DroneShield Ltd (ASX: DRO) shares a year ago, I would be laughing all the way to the bank now.

    That’s because during the last 12 months, the counter drone technology company’s shares have been among the very best performers on the Australian share market.

    To demonstrate just how successful an investment in DroneShield has been, let’s take a look and see what a $5,000 investment a year ago would be worth now.

    $5,000 invested in DroneShield shares

    Investors that were savvy enough to invest into the company’s shares in June 2023, would have been able to snap them up for 24 cents a piece.

    This means that with $5,000 to invest, I would have been able to acquire approximately 20,833 shares in the high-flying share.

    As of yesterday’s close, DroneShield shares were changing hands for $1.37 each. This means that those 20,833 units now have a market value of $28,541.21.

    That’s a whopping return on investment of $23,541.21, which is almost five times your original outlay.

    Why has it been such a good investment?

    DroneShield’s rise is not entirely surprising. In fact, I named it as one of my top ten ASX shares to buy in 2024 due to how well-positioned it is to benefit from the increasing demand for counterdrone systems.

    In the company’s annual report, its chairman summarised why demand is surging for its technology. Peter James said:

    Drones and counterdrone systems are now used in every conflict globally, including the Ukraine war, Hamas attacks on Israel, Houthi attacks in the Red Sea, and most recently, the attacks on the U.S. bases in Jordan which killed 3 and injured over 30. Significant non-military use cases for drones continue for the intelligence community, airports, prisons, border security, stadiums, and other facilities. Nefarious use of drones is a global and rapidly rising threat, with DroneShield providing a proven market leading suite of solutions, directly and via its network of 70+ in-country partners globally.

    DroneShield has also let its results do the talking for it. During the first quarter of FY 2024, the company’s revenue increased 10x over the prior corresponding period to $16.4 million.

    Since then, it has been able to raise $100 million from investors through a capital raising.

    The proceeds from this will be used to capitalise on strong momentum experienced in the first quarter and favourable geopolitical environment. Management also noted that it has a sales pipeline of over $500 million, with over 90 qualified projects at different stages with high quality government customers.

    All in all, it’s no wonder that DroneShield shares are the talk of the town right now. Here’s hoping its run can continue.

    The post If I’d put $5,000 into DroneShield shares just 1 year ago, here’s what I’d have now appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Droneshield Limited right now?

    Before you buy Droneshield Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Droneshield Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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 DroneShield. 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.

  • I took over my family’s collapsing business at 27, made it profitable, and managed to sell it to a private equity group. Here are the 5 principles I followed.

    Lauri Union took over her family's corrugated roofing company in 1992.
    Lauri Union (R) took over her family's corrugated roofing company in 1992.

    Lauri Union

    • After graduating, Lauri Union took over her family's failing corrugated roofing business in 1992.
    • As a 27-year-old president and CEO, she managed to turn the company around and sell it years later.
    • Union shared five principles she said helped her save the sinking business tied to her name.

    I never set out to take over the family business. My grandfather started a corrugated roofing company in North Carolina in 1946, and in the 1990s it was run by my parents while I finished business school. My plan after graduation was to live in Boston with my husband.

    But when my father fell ill, the company was in dire financial straits. My mother, who had no business leadership experience, stepped in and tried to turn things around, asking me for help. The business seemed hopeless, but I wanted to help clear my parents' debts.

    That meant that in 1992, at age 27, I became president and CEO of a sinking ship. Morale was low, and we'd just lost our biggest client, who contributed 25% of our revenue.

    I had to overhaul the company and was able to turn it around to profitability, eventually growing our staff head count to 350 and selling to a private equity firm in 2004. Here are five lessons for running a family business that helped me get there.

    Check your ego at the door, and be comfortable with saying 'I don't know'

    People often think being a leader means knowing what to do. When I joined my family's business, I arrived with prestigious academic degrees including an MBA from Harvard. But I only worked there before for 6 weeks in one summer, so I knew very little about it. I also had never led any organization.

    I quickly realized that the people who worked in the business had tremendous knowledge and that I could contribute far more by asking open-ended questions than by trying to take control and tell people what to do. I spent most of my first few months interviewing people in the company and figuring out the business.

    As a result, within a few short months, I had more knowledge about the business and industry than virtually anyone else in the company. While each person knew their role, I was the only one who had interviewed so many people that I had a broad perspective on the company. I envisioned it as everyone having their own pie slice, but my goal was to see the entire pie.

    Stay close to your family, but don't let family emotions interfere with your decisions.

    Working with family can bring up strong emotions, like frustration when a parent tells you what to do in front of other employees you are trying to lead. Or a feeling of rejection when a parent doesn't recognize what you consider to be a great achievement.

    Families pass emotions between members, so negative emotions can spiral. Those negative emotions can lead people to make decisions that make them feel better, rather than decisions that work best for the business. And those negative emotions can seriously damage family relationships.

    Be aware of your emotions and empathetic to your family, but be willing to make decisions that achieve shared goals, even if they are hard. Spending personal time away from work with my mom also helped us to stay close, even if we might disagree about something at work.

    It's easier to get employees on board with your family's values. Use that.

    Family businesses have a superpower in their ability to consistently lead through a set of values that employees and customers can relate to. That makes the work of running the business meaningful to you and to other stakeholders.

    In my case, I realized that longtime employees remembered what my grandfather's company used to stand for, and were discouraged by many of the firm's more recent practices. Employees were lying to customers, and everyone behaved like they were on a losing team.

    When I met one of the firm's retired former workers, he recalled how my grandfather insisted on not increasing roofing prices after Hurricane Hazel in 1954. That story spoke to me, so I shared it at a company meeting.

    Other employees stood up and told similar stories. At the end of the meeting, we agreed that whatever happened, we would always do the right thing, even if that meant lower profits. We would never lie to a customer and always admit if we couldn't deliver what a client wanted.

    That was a turning point for the company. Our employees felt they could be authentic, and it guided the company going forward and contributed to our growth.

    Don't be afraid to take the business in a new direction from what your parents did

    Family businesses can be slow to change because holding on to traditions or long-term relationships with employees and customers is valuable. Parents leading a family business may expect their children to join and follow in their footsteps.

    But the average business today only lasts around 10 years. Families that try to get the next generation to follow the mold are at risk. The next generation may not be fully engaged, and the business may not be able to keep up with the times.

    My advice is to find your own shoes and lead the business forward.

    In my case, what was obvious about my family company was that it was a not very good business, and poorly positioned in a declining market. Our customer base was shrinking, our equipment was old, and employees hadn't been given raises for five years. We had six facilities in multiple states, most piling up with old products.

    As I took over, we decided to change the company's model entirely. Instead of delivering in bulk to lots of customers in a large area, we focused on a small area of clients and delivered smaller shipments quickly. Eventually, we had enough money to buy one new machine, and we built on that success from there.

    Don't try to live up to someone else's leadership style.

    In family businesses, leaders can shape their own leadership style. Understand how others have led the business in the past, but don't be limited by that.

    I was a young woman running a business in a male-dominated construction materials business. All leaders in the business, not just positions like the CEO, were men. Many managers' approaches were more authoritarian, with harsh language and aggressive stances.

    I wasn't comfortable with that, but it was my family's business, so I could experiment with different ways to lead. I tried to be more calm and curious.

    Finding my own leadership style, rather than trying to live up to someone else's, made me a more effective and genuine leader.

    Read the original article on Business Insider

  • Former SpaceX employees allege Elon Musk and execs appeared in a video joking about spanking coworkers

    Elon Musk
    Elon Musk.

    Beata Zawrzel/Getty Images

    • Eight former SpaceX employees are suing the company and Elon Musk.
    • They say they were fired after speaking up about a hostile work environment.
    • The lawsuit alleges Musk treated women as "sexual objects" and used lewd banter.

    Eight former SpaceX employees have sued the company and its CEO, Elon Musk, alleging they were wrongfully fired for speaking out against a hostile work environment in 2022.

    The suit, filed in California, notes employees wrote an open letter to SpaceX management about their concerns. Musk then personally ordered their terminations, the suit alleges.

    The complaint alleges Musk "runs his company in the dark ages — treating women as sexual objects to be evaluated on their bra size, bombarding the workplace with lewd sexual banter, and offering the reprise to those who challenge the 'Animal House' environment that if they don't like it they can seek employment elsewhere."

    The lawsuit accuses Musk and other upper management of appearing in a video that made light of sexual misconduct, which was screened at an employee holiday party.

    One scene shows VP of human resources Brian Bjelde "having an employee demonstrate how to spank him in the 'correct' manner," according to the suit.

    SpaceX did not immediately respond to a request for comment from Business Insider.

    "Filing this suit marks an important milestone in our quest for justice, for holding leadership accountable, and for implementing responsible changes in workplace policies," one of the plaintiffs, Paige Holland-Thielen, said in a statement.

    The lawsuit accuses SpaceX of creating a hostile work environment, retaliation, failure to prevent harassment, gender discrimination, whistleblower retaliation, and wrongful termination.

    The same group of former SpaceX employee previously filed a complaint with the National Labor Relations Board alleging they were targeted for retaliation.

    But that case has been tied up after SpaceX sued the agency and said its enforcement processes violated the US Constitution. In May, an appeals court granted Musk's firm a temporary block that keeps the NLRB from pursuing its case.

    Separately, the Wall Street Journal published a report on Wednesday alleging Musk had inappropriate interactions with female SpaceX employees, including a sexual relationship with a former intern.

    The refreshed allegations of sexual misconduct come at a complicated time for Musk. On Thursday, Tesla shareholders will vote on Musk's contentious $55 billion pay package, potentially handing the billionaire a massive boost in wealth.

    Read the original article on Business Insider

  • The Houthis just scored their first drone boat hit on a Red Sea ship

    FILE - In this June 19, 2018 file photo, a boat that officials described as being a "drone boat" once loaded with explosives by Shiite rebels in Yemen, is on display at a military installation in the United Arab Emirates.
    In this June 19, 2018 file photo, a boat that officials described as being a "drone boat" once loaded with explosives by Shiite rebels in Yemen, is on display at a military installation in the United Arab Emirates.

    AP Photo/Jon Gambrell, File

    • The Houthis struck a commercial vessel with an uncrewed surface vessel on Wednesday.
    • It's the first time the rebels have scored a hit with a USV amid their ongoing Red Sea attacks.
    • Past attempts have been unsuccessful.

    The Houthis used an uncrewed surface vessel to strike a commercial ship in the Red Sea on Wednesday, the US military revealed.

    The Iran-backed rebels have employed USVs, also known as naval drones or drone boats, as part of their attacks on shipping lanes in the Red Sea and Gulf of Aden, but they have been unable to actually score a hit with one until now.

    The likely explosive-laden vessel struck the M/V Tutor, a Liberian-flagged, Greek-owned bulk carrier, US Central Command said, noting in its statement on the incident that "the impact of the USV caused severe flooding and damage to the engine room."

    Prior to the release of the CENTCOM statement, United Kingdom Maritime Trade Operations, an element of the British Royal Navy, posted an incident bulletin earlier on Wednesday saying that a "small craft" had hit a vessel off the coast of Yemen in the Red Sea. It described the craft as white in color and between 5-7 meters (16-23 feet) in length.

    The UKMTO later said that the vessel is "taking on water, and not under command of the crew." In a follow-on update, it said the ship reported being hit "for a second time by an unknown airborne projectile," and "military authorities are assisting."

    The current status of the vessel that was hit is unclear.

    One official at the Ambrey maritime security firm told The War Zone, which first reported on the incident, that the Tutor is a "dead ship" and will require "salvage operations."

    The Houthis have employed USVs in years past, although it wasn't until earlier this year that the rebels actually began using the drones as part of their monthslong attacks on shipping lanes.

    Wednesday's attack marks the first successful strike by a Houthi USV during the campaign. Prior to this incident, the drone boats were either destroyed by Western forces, or they were detonated in the water without hitting anything.

    Beyond USVs, the Houthis have relied on their sizeable arsenal of anti-ship ballistic missiles and cruise missiles, as well as various one-way attack drones, to wreak havoc off the coast of Yemen. Since the fall, the rebels have used these weapons to hit a number of commercial vessels. It has sunk one and killed crew members on another.

    Over the weekend, the Houthis hit two commercial vessels in the Gulf of Aden with anti-ship missiles. In both incidents, however, the vessels managed to continue underway. The Tutor is the latest attack.

    The string of attacks comes after the Pentagon recently extended the deployment of the US Navy carrier strike group that's been battling the Houthis, as American intelligence officials warn that the conflict may go on for a while.

    Read the original article on Business Insider

  • If I buy 1,000 ANZ shares, how much passive income will I receive?

    Man holding a calculator with Australian dollar notes, symbolising dividends.

    ANZ Group Holdings Ltd (ASX: ANZ) shares are traditionally a popular option for passive income investors.

    This isn’t surprising.

    After all, the banking giant regularly shares a good portion of its sizeable profits with its shareholders every six months.

    For example, in FY 2023, ANZ’s solid financial performance allowed the bank to pay an interim dividend of 81 cents per share and then a final dividend of 94 cents per share. The latter comprised an 81 cents per share dividend partially franked at 65% and an additional one-off unfranked dividend of 13 cents per share.

    This brought the total dividends for FY 2023 to 175 cents per share, which represents a dividend payout ratio of 71% of cash profit from continuing operations.

    But those dividends have been and gone. What sort of passive income could be coming next for investors that buy ANZ shares today? Let’s find out.

    Passive income from ANZ shares

    Let’s imagine that you buy 1,000 ANZ shares, let’s see what income you could receive from this sort of investment.

    With the ANZ share price currently trading at $28.78, it would set you back $28,780 to buy 1,000 units. That’s not a small investment but would it be worth it?

    Well, according to a note out of Goldman Sachs, its analysts expect the bank to pay shareholders dividends of $1.66 per share in FY 2024, FY 2025, and FY 2026.

    If Goldman is on the money with its estimates, this will mean passive income of $1,660 for investors over the next 12 months from their 1,000 ANZ shares.

    And given how Goldman expects ANZ to continue paying the same amount for the foreseeable future, you can likely expect to receive the same amount of income from your shares in the following 12 months.

    Should you invest?

    While Goldman Sachs has a buy rating on ANZ’s shares, its price target of $28.15 is actually lower than where they trade today.

    As a result, this could make it worth keeping your powder dry for the time being and waiting for a better entry point.

    Though, it is worth noting that Ord Minnett sees reasonable upside for the bank’s shares. Despite only having a hold rating, its price target of $31.00 implies potential upside of almost 8%.

    In addition, Ord Minnett agrees that a $1.66 per share dividend is coming this year, but expects an increase to $1,70 per share in FY 2025.

    The post If I buy 1,000 ANZ shares, how much passive income will I receive? appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Australia And New Zealand Banking Group right now?

    Before you buy Australia And New Zealand Banking Group shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Australia And New Zealand Banking Group wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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 Goldman Sachs Group. 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.

  • Guess which ASX tech stock could double in value

    Vanadium Resources share price person riding rocket indicating share price increase

    Investors with a high tolerance for risk might want to check out the ASX tech stock in this article.

    That’s because if analysts at Bell Potter are on the money with their recommendation, it could double your money for you over the next 12 months.

    Which ASX tech stock?

    The tech stock in question is environmental technology company Calix Ltd (ASX: CXL).

    It is focused on solving global challenges in industrial decarbonisation and sustainability. This includes CO2 mitigation, sustainable minerals processing, advanced batteries, biotechnology, and water treatment.

    Bell Potter highlights that Calix is commercialising and developing a range of environmentally friendly solutions for industry. These solutions are derived from its patented minerals processing technology, the Calix Flash Calciner (CFC). It notes that the CFC is a patented reinvention of the calcination process that produces very high surface area nano-active materials, without the safety concerns or high production costs of nanoparticles.

    In addition, Bell Potter points out that the technology can be used to separate and capture the CO2 by-product when decomposing carbonates into oxides, such as during the manufacture of cement and lime.

    The broker notes that this CFC technology can be adapted for a broad range of applications based on a variety of minerals. However, the company has prioritised solutions for five target areas with a combined addressable market of $70 billion.

    Big returns but high risk

    Bell Potter is cautiously positive on the company’s long-term outlook and has reaffirmed its speculative buy rating with a $2.40 price target. Based on its current share price of $1.17, this implies potential upside of 105% for this ASX tech stock over the next 12 months.

    To put that into context, a $10,000 investment in this stock today would turn into $20,500 if the broker is proven correct with its recommendation and valuation.

    Though, it is worth highlighting that you could just as easily lose half your money (or more) from a speculative investment like this. So, this is really one for only those with a very high tolerance for risk.

    Bell Potter concludes:

    CXL’s growing suite of CFC applications target global challenges, including decarbonisation of hard-to-abate industrial processes (lime, cement and steel making), and improvement to supply chain efficiency (lithium concentrate value adding). CXL represents a valuable sustainable investing opportunity for ESG-focussed investors. CXL is a development company with prospective operations and cash flows only. Our Speculative risk rating recognises this higher level of risk and volatility of returns.

    The post Guess which ASX tech stock could double in value appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Calix Limited right now?

    Before you buy Calix Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Calix Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    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.

  • Big bank bargain: Are this week’s tumbling ASX 200 bank shares a good buy?

    Friends at an ATM looking sad.

    ASX 200 bank shares delivered mixed results in the first half of 2024, and views on the sector’s outlook are also divided.

    The S&P/ASX 200 Banks Index (ASX: XBK) has had a notable year, up almost 13% year-to-date. Not yesterday, though. The banking basket slipped into the red by around 40 basis points at the close of trading on Wednesday.

    The big four banks — National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), and Westpac Banking Corp (ASX: WBC) — were down less than 1% on Wednesday, but have trended lower generally these past three months.

    With the pullback, are ASX 200 bank shares still a smart investment?

    What’s happening with the big four ASX 200 bank shares?

    All four banking majors trended lower yesterday amid a broader market selloff. The benchmark S&P/ASX 200 Index (ASX: XJO) drifted around 0.5% into the red at Wednesday’s close, similar to the banking index.

    However, over the past year, investors who held ASX 200 bank shares have outperformed the broader market.

    The benchmark index has lifted around 1.5% in the past year. Meanwhile, the banking sector is up 12.5% – an 11% advantage.

    What are experts saying?

    Despite these gains, some analysts are concerned about valuations in the sector. Goldman Sachs is one of those parties. It believes offshore banks might be more attractive to those interested in the space.

    In 2015 for example, the average Australian bank’s return on equity (ROE) was among the highest globally, the broker notes.

    However, from 2015 to 2023, the ROE and return on tangible equity (ROTE) have declined significantly. Now, they rank among the lowest globally.

    Goldman Sachs states, “Australian banks now actually earn the lowest ROTE of global comparable banks.” This decline is due to compressed net interest margins and reduced low capital-intensive non-interest income.

    Goldman Sachs rates Commonwealth Bank and Westpac as sell. It cites valuation concerns and risks in technology disruption for the view on these two ASX 200 bank shares. “We don’t think [Commonwealth Bank] justifies the extent of its valuation premium to peers,” it noted in its sector analysis.

    It has a neutral rating on NAB due to the balance of solid fundamentals but challenging valuations. ANZ meanwhile gets a buy rating for its productivity benefits and improved profitability in its institutional business.

    Meanwhile, Airlie Funds Management has reportedly trimmed its position in CBA, supposedly “the most underweight CBA in the history of [the] fund”, according to The Australian Financial Review.

    This is despite shares in the banking giant climbing 28% in the last 12 months and last week nudging a 52-week closing high of $124.85.

    Citi has some positive comments on CBA — despite rating it a sell. It said the bank’s exposure to, and performance in, retail banking may be enough to “justify continued outperformance versus its peer group”, the AFR reports.

    Citi added ASX 200 banks look to be priced at a premium above “core earnings growth fundamentals”.

    Valuation concerns

    Despite poor ROE and ROTE performance, Australian banks’ price-to-book multiples remain high, making them some of the most expensive banks globally, Goldman Sachs explains.

    Australian banks are currently trading at the 96th percentile versus history on a ROE vs. price-to-book multiples basis. The valuation discrepancy has expanded despite weaker relative profitability.

    Here is the current list of consensus recommendations for each of the banking majors, with the respective number of buys making up that view:

    • ANZ – Hold (7 buys)
    • CBA – Sell (4 buys)
    • WBC – Hold (4 buys)
    • NAB – Hold (2 buys)
    • (All recommendations per CommSec)

    Notably, despite the consensus view, each of the ASX 200 banking shares still shows a drop in positivity.

    Takeout on ASX 200 bank shares

    ASX 200 bank shares have shown strong returns over the past year. However, investors are wise to be cautious, in my view. With concerns about overvaluation and economic headwinds, experts warn it’s essential to consider valuations and profitability in the sector.

    As always, you should consider your own personal financial circumstances before any investment decisions.

    The post Big bank bargain: Are this week’s tumbling ASX 200 bank shares a good buy? appeared first on The Motley Fool Australia.

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  • Tim Cook says it’s a ‘significant possibility’ people use their iPhones less because of AI

    Tim Cook WWDC portrait
    Tim Cook has previously said that Apple doesn't strive to keep people on their phones all day.

    Justin Sullivan/Getty

    • CEO Tim Cook said Apple Intelligence may reduce iPhone usage in an interview with Marques Brownlee.
    • Cook said he believes AI will help people complete previously time-consuming tasks in less time. 
    • Apple unveiled a number of new AI features for iPhones, iPads, and Macs at its annual WWDC event.

    There's a good chance Apple's new AI updates may result in you spending less time on your device.

    Apple CEO Tim Cook said it's a "significant possibility" that people use their iPhones less with Apple Intelligence, according to an interview with tech YouTuber Marques Brownlee released Wednesday.

    The CEO said as Apple Intelligence continues to get smarter, previously time-consuming tasks may take less time.

    [youtube https://www.youtube.com/watch?v=pMX2cQdPubk?si=I9zAZTIFOee2HADi&start=406&w=560&h=315]

    The tech giant announced it will integrate AI into its systems at Apple's WWDC event on Monday. The CEO and other executives detailed a number of AI features that will be available on Apple devices with its latest software.

    Some of the updates include a new and improved Siri with better language understanding and text capabilities, integration across apps, systemwide Writing Tools, and a revamped Photos app that organizes photos into different categories.

    Apple also announced its partnership with OpenAI, which will allow users to opt into a ChatGPT-powered Siri. The AI chatbot is known to help people be more productive and get tasks done quicker.

    Cook added that Apple has never been motivated to have people spend their lives on their devices. The CEO has made similar comments before, saying that people need to focus more on the people in the room with them.

    "Our model is not one that needs engagement to succeed," Cook said in the interview. "Our model is one that where we want to empower you to be able to do things that you couldn't do otherwise."

    Apple has added several features to the iPhone that raise awareness of how much time consumers spend on their devices and which help make their usage more intentional.

    Features like Screen Time track how much time you spend on your iPhone and put it "a bit in your face," Cook said. The CEO said last year in an interview with GQ that he monitors his Screen Time "religiously." The CEO also mentioned Focus settings, which allow consumers to silence their phones or only receive specific notifications.

    Cook said Apple is homed in on giving consumers tools to do "incredible things" that they couldn't do otherwise.

    "That's what motivates us," Cook said.

    Apple did not return a request for comment.

    Read the original article on Business Insider