Author: openjargon

ASX gold stocks are cooling off after a phenomenal three-month run during which time the commodity price soared from US$2,034 per ounce on 28 February to an all-time high of US$2,449.89 on 21 May.

Since that peak, the gold price has slipped to US$2,302 per ounce at the time of writing. ASX gold stocks have also weakened, with the S&P/ASX All Ordinaries Gold Index (ASX: XGD) falling 7% since 21 May.

Among the biggest ASX gold stocks, Northern Star Resources Ltd (ASX: NST) shares are now 7.4% lower since the gold price peaked and Newmont Corporation CDI (ASX: NEM) shares are 6.5% lower.

Shaw and Partners portfolio manager James Gerrish says a fair bit of profit-taking, along with the falling gold price, has dragged ASX gold stocks lower over the past few weeks.

However, Gerrish and his Market Matters funds management team are still bullish on gold over the long term and decided to hold their overweight position amid the sell-off.

They’re now looking for opportunities to buy the dip “as the sector’s pullback gathers momentum”.

In a recent Market Matters newsletter, Gerrish said:

As medium–term bulls, we are looking at levels to potentially start increasing our exposure to the sector.

Remember, this is a sector that’s likely to witness plenty of M&A activity over the coming year.

For example, [in late May], Ramelius Resources Ltd (ASX: RMS) made a play for Westgold Resources Ltd (ASX: WGX).

Gerrish and his Market Matters team say their “ideal roadmap for gold” is the commodity price finding support beneath the US$2,300 per ounce mark.

Here are two gold stocks that Gerrish and his team say are buys when their share prices fall to the right levels.

Bellevue Gold Ltd (ASX: BGL)

This ASX gold stock closed on Tuesday at $1.88, down 5.53% for the day.

The team has a favourable view of Bellevue Gold at about the $1.70 mark, as Gerrish explains:

BGL has advanced over 15% so far in 2024, although recent bond jitters have dampened the performance of the $2.2bn WA-based gold miner.

On [3 June], a 4.8mn block of BGL exchanged hands at $1.93, arguably a good sign that the market still has the appetite for the miner around $2, assuming we don’t hear that directors were the sellers, investors wouldn’t want another Boss Energy Ltd (ASX: BOE)!

We like the risk/reward towards BGL around $1.70 …

Perseus Mining Ltd (ASX: PRU)

This ASX gold stock closed on Tuesday at $2.33, down 6.05% for the day.

The Market Matters analysts see value in Perseus shares at about $2.15 per share.

Gerrish says:

PRU has really outperformed in 2024, surging almost 30% since January 1st.

This $3.1bn stock looks set to break its $2.50 resistance area once the fear of rising interest rates subsides. It even pays a dividend of around 2%, but investors should be aware that its main revenue stream comes from Africa, which can, at times, increase a stock’s volatility.

We like the risk/reward towards PRU around $2.15 …

The post As ASX gold stocks cool off, here are 2 to buy when the price is right appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Why are ASX gold shares being trashed on Tuesday?
• Why Chalice Mining, Northern Star, Peninsula Energy, and Service Stream shares are sinking
• Here are the top 10 ASX 200 shares today
• Why this jumbo ASX gold stock is targeting a copper pipeline

Motley Fool contributor Bronwyn Allen 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.

If you don’t have exposure to the mining sector or want to increase your exposure to this side of the market, then read on.

That is because listed below are five top ASX mining stocks that brokers have given the thumbs up to this month.

In addition, making things even sweeter for investors, all five shares have been tipped to rise more than 10% from current levels over the next 12 months.

Let’s now see what these brokers are expecting from the five miners:

BHP Group Ltd (ASX: BHP)

The team at Goldman Sachs thinks that Australia’s largest miner could be a top option for investors this month. The broker recently reinstated coverage on the Big Australian’s shares with a buy rating and $49.00 price target. Based on its current share price of $43.74, this implies potential upside of 12% for investors over the next 12 months.

Lynas Rare Earths Ltd (ASX: LYC)

Goldman also thinks that this ASX mining stock could be a buy right now. In fact, it believes that the market is undervaluing this rare earths miner’s shares. So much so, it currently has Lynas’ shares on its coveted conviction list with a buy rating and $7.40 price target. This represents potential upside of 13% from where they currently trade.

Mineral Resources Ltd (ASX: MIN)

Over at Bell Potter, its analysts think that this mining and mining services company’s shares would be a great pick for investors this month. The broker currently has a buy rating and $84.00 price target on its shares. Based on its latest share price, this implies significant potential upside of 23% over the next 12 months.

Rio Tinto Group Ltd (ASX: RIO)

Goldman Sachs also thinks that Rio Tinto could be an ASX mining stock to buy this month. The broker currently has a buy rating and $138.90 price target on the iron ore and copper giant’s shares. This suggests that its shares could rise by 13% from current levels.

South32 Ltd (ASX: S32)

Finally, analysts at Macquarie think that diversified miner South32 could be a top ASX mining stock for investors to snap up this month. Due largely to its exposure to copper, late last month the broker reaffirmed its outperform rating on its shares with an improved price target of $4.25. Based on its current share price, this implies potential upside of almost 16% for investors over the next 12 months.

The post Buy Rio Tinto and these 4 ASX mining stocks in June appeared first on The Motley Fool Australia.

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• Is it time to cash in these 2 ASX large-cap stocks?

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

Having some ASX blue chip shares in your portfolio is always a good idea.

That’s because blue chips tend to have strong business models and talented and experienced management teams. This can make them lower risk options.

Overall, this can make them a great option if you want a firm foundation to build out your portfolio from.

But which ASX blue chips could be buys? Let’s take a look at three that analysts are tipping as buys:

Coles Group Ltd (ASX: COL)

Analysts at Bell Potter think that supermarket giant Coles could be a top option for investors right now. This is due partly to the hard work it is doing on the modernisation of its supply chain. It said:

In the medium term, 1) higher immigration should support grocery spending, and 2) Coles is entering a period of elevated capex intensity as it reinvests to modernise its supply chain and to catch up to competitors on online and digital offerings, which should help Coles maintain its market position.

Bell Potter has a buy rating and $19.00 price target on its shares.

Telstra Group Ltd (ASX: TLS)

Over at Goldman Sachs, its analysts think Telstra could be an ASX blue chip share to buy right now. It is of course Australia’s leading telecom operator.

The broker likes the company due to its low risk earnings growth and opportunities to unlock value through the monetisation of assets. It explains:

We believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive. We also believe that Telstra has a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn. Although there is some debate around the strategic benefits, we see a strong rationale for monetizing the recurring NBN payment stream, given its inflation-linked, long duration cash flows could be worth $14.5bn to $17.9bn, with no loss of strategic benefit.

Goldman has a buy rating and $4.25 price target on Telstra’s shares.

Woodside Energy Group Ltd (ASX: WDS)

Finally, Morgans thinks that Woodside could be an ASX blue chip share to buy this month. It believes that recent weakness has created an opportunity for investors to buy the energy giant. It said:

WDS’s share price has been under pressure in recent months from a combination of oil price volatility and approval issues at Scarborough, its key offshore growth project. With both of those factors now having moderated, with the pullback in oil prices moderating and work at Scarborough back underway, we see now as a good time to add to positions.

Morgans has an add rating and $36.00 price target on its shares.

The post Why analysts love Woodside and these ASX blue chip shares appeared first on The Motley Fool Australia.

More reading

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• 3 overlooked numbers key to the Telstra share price
• 4 top ASX 200 stocks to buy now for the AI revolution
• Why is the Woodside share price racing ahead of the benchmark today?
• Telstra and these ASX 200 income stocks could be top buys this month

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

Sayona Mining Ltd (ASX: SYA) shares were out of form again on Tuesday.

The lithium miner’s shares started the shortened week with a decline of 5% to 3.7 cents.

This latest decline means that its shares are now down a whopping 80% since this time last year.

To put this into context, if you had invested $10,000 into Sayona Mining’s shares in June 2023, you would now have approximately $2,000 left. That’s $8,000 in paper losses that shareholders are nursing.

But why has this happened? Let’s dig a little deeper and find out.

Why are Sayona Mining shares down 80% in a year?

Firstly, it is important to note that Sayona Mining isn’t an isolated case. A good number of ASX lithium stocks have been sold off over the same period.

For example, Core Lithium Ltd (ASX: CXO) shares are down 90% and Liontown Resources Ltd (ASX: LTR) shares are down over 60%.

The catalyst for this has been a collapse in lithium prices due to a surplus of the white metal.

And with many analysts believing that supply will outstrip demand for the foreseeable future, prices could remain at these levels for some time to come. You only need to look at Goldman Sachs’ forecasts for the lithium price to see this.

This could be particularly bad news for Sayona Mining and its shares. That’s because unlike Core Lithium, which has suspended its mining activities, it is continuing to mine lithium despite these low prices.

So much so, the company is actually spending more to pull lithium out of the ground than it receives from buyers. That’s a terrible business model and is burning through its cash reserves at a rapid rate.

Burning cash like kindling

According to its most recent quarterly update, Sayona Mining’s production increased 18% quarter on quarter to 40,439 dry metric tonnes (dmt).

This was achieved with a unit operating cost of A$1,536 of dmt, which was up 10% quarter on quarter. And while its sales volumes more than doubled to 58,055 dmt, it reported an average realised selling price of A$999 per dmt.

This means that it was losing over A$500 for every tonne of lithium it was sending to customers.

As a result, Sayona Mining’s cash balance dropped from A$158 million at the end of December to A$99 million at the end of March.

Clearly something has to change. But judging by the performance of Sayona Mining shares, investors aren’t overly confident that things will improve any time soon.

The post Why are Sayona Mining shares down 80% in a year? appeared first on The Motley Fool Australia.

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• Why are Sayona Mining shares up 43% in a month?
• Why Cettire, Lendlease, Neuren, and Sayona Mining shares are racing higher today
• Here is the latest lithium price forecast through to 2027

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.

If you haven’t taken a look at the Zip Co Ltd (ASX: ZIP) share price recently, you might be in for a bit of a shock. Zip, the ASX buy now, pay later (BNPL) stock that took the ASX by storm a few years ago, had an exceptionally rough few years following its stunning 2020.

Since peaking at over $12 a share back in early 2021, investors have endured a precipitous collapse of capital. By mid-2022, the BNPL stock was under 50 cents a share, which was succeeded by a new 52-week low of just 26 cents a share in October 2023.

But ever since then, the Zip share price has staged a stunning recovery. At market close on Tuesday, Zip finished trading at $1.29 a share, up 7.53%. That came after the company hit $1.60 a share back in March.

As it stands today, Zip shareholders have enjoyed a 107.26% return year to date, as well as a gain of 157% over the past 12 months.

Check all of that out for yourself below:

This recovery for the Zip share price can be put down to a number of positive updates from the company.

Most recently, investors appear to have been buoyed by Zip’s April quarterly update, which revealed a 14.6% rise in transaction volumes, as well as a 26.6% rise in quarterly revenues to $219.2 million.

So there would be more than a few Zip shareholders that would have welcomed these gains with gusto. However, one ASX expert is urging caution on the Zip share price moving forward.

ASX expert gives Zip share price a sell rating

As reported by The Bull, John Athanasiou of Red Leaf Securities has just issued the Zip share price with a ‘sell’ rating. Athanasiou doesn’t like the look of what he sees in the BNPL stock right now. He cited valuation concerns and inflationary pressures in Zip’s key markets for his negative view. Here’s what Athanasiou had to say in full:

Revenue of $219.2 million in the third quarter of fiscal year 2024 was up 26.6 per cent on the prior corresponding period. The revenue margin improved to 9.1 per cent. The shares have risen from 59 cents on January 3 to trade at $1.185 on June 6.

We believe the share price has risen too rapidly and is trading at a premium. We’re also concerned about inflationary pressures in the US impacting consumer spending. Investors may want to consider taking a profit at these levels.

That strikes a starkly different tone from the positive broker opinion we covered back in April. At the time, we went through the bullish views of ASX broker UBS. UBS maintained a buy rating on the Zip share price following its April quarterly results. That was alongside a 12-month share price target of $1.55.

Only time will tell which of these two ASX experts is on the money regarding this BNPL stock. They can’t both be right.

The post Has the Zip share price ‘risen too rapidly’? appeared first on The Motley Fool Australia.

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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 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.

Qantas Airways Limited (ASX: QAN) shares could be a great option for investors that are looking for outsized returns.

That’s the view of analysts at Goldman Sachs, which feel that the airline operator’s shares are being severely undervalued by the market.

In light of this, the broker feels that anyone buying today could enjoy a big return on their investment over the next 12 months.

What is the broker saying about Qantas shares?

According to a recent note, the broker has put a buy rating and $8.05 price target on its shares.

Based on the current Qantas share price of $6.16, this implies potential upside of just over 30% for investors between now and this time next year.

To put that into context, a $20,000 investment would become $26,000 if Goldman Sachs is on the money with its recommendation.

Three big reasons to buy

There are three big reasons why Goldman thinks Qantas shares are in the buy zone right now. The first is that its improved earnings capacity is not being reflected in its valuation. It said:

We expect QAN’s earnings capacity to sustainably improve relative to pre-COVID, which is not reflected in Qantas’ current valuation.

In addition, the broker feels that this unwarranted discount will disappear in time once the company demonstrates that its earnings are sustainable at these levels. It adds:

As noted previously, our FY24/25 PBT remains 51%/61% ahead of pre-COVID level despite relatively conservative/cautious RASK forecast settings. We forecast QAN’s FY24e/25e EPS to be at 49%/68% ahead of FY19. Despite this, QAN’s market cap is 4% below and EV is 7% below pre-covid levels. We believe that QAN’s continued demonstration of earnings sustainability will be the key driver of earnings revision hence share price going forward.

Another reason to buy Qantas shares is their valuation in comparison to peers. It highlights that the Flying Kangaroo trades at almost double the discount that they have traded at in recent times. It feels this discount is excessive. The broker adds:

QAN is trading at PE discount of 29% vs US+regional peers vs historical 5Y average discount of 14%. Given QAN’s more conservative revenue profile, recent operational performance improvements, which implies that further investment in customer service would not be required, we believe that the discount is excessive.

All in all, Goldman appears to believe that this makes Qantas a great option for investors that are looking for some new additions to their portfolios right now.

The post 3 big reasons to buy Qantas shares now appeared first on The Motley Fool Australia.

More reading

• 2 ASX large-cap stocks that look cheap right now
• 3 of the best ASX blue chip shares to buy in June
• Here’s where I see the Qantas share price ending in FY 2025
• Here are the top 10 ASX 200 shares today
• Why Qantas could be one the best shares to buy in the Asia-Pacific

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.