Author: openjargon

The lithium industry has been under significant pressure over the past 12 months due to a collapse in battery material prices.

While this has dragged most ASX lithium stocks significantly lower, that doesn’t necessarily mean that they are all buys.

Let’s now take a look at two popular options and see what analysts are saying about them at current levels. They are as follows:

Core Lithium Ltd (ASX: CXO)

This lithium miner’s shares are down almost 90% over the last 12 months. Investors have been hitting the sell button after weak lithium prices weighed heavily on its operations.

In fact, things have got so bad that the lithium miner is actually more of a processor than anything now. That’s because it has suspended mining operations indefinitely and is just processing ore stockpiles until they run out in the middle of the year.

Goldman Sachs thinks investors should stay well clear of the company. That’s because it still believes the ASX lithium stock is overvalued despite its significant decline. It said:

We rate CXO a Sell on: (1) Valuation, trading at a premium on ~1.1x NAV and an implied LT spodumene price of ~US$1,200/t (peer average ~1.05x & ~US$1,250/t (lithium pure-plays ~US$1,140/t)), with the lowest average operating FCF/t LCE on a more moderated/deferred production restart/ramp up, (2) Ongoing risk to restart timing in the current pricing environment, with a mine restart highly unlikely ahead of the next wet season and, given the Grants open pit has ~12 months of life, likely tied to a development decision on BP33 (with its own funding risks) to support a new processing contract, increasing the risk of a longer gap in production; (3) Potential resource growth/ development now likely longer dated.

Goldman has a sell rating and 11 cents price target on Core Lithium’s shares.

Arcadium Lithium (ASX: LTM)

With its shares down by a third since the start of the year, Bell Potter thinks that Arcadium Lithium is an ASX lithium stock to buy now.

Particularly given its very positive production growth outlook and its diverse operations. The broker explains:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. In supportive markets, LTM’s growth pipeline could see the company more than double production over the next three years.

Bell Potter has a buy rating and $9.50 price target on its shares.

The post One ASX lithium stock to buy and one to sell appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These ASX shares could rise 30% to 60%
• Forget Pilbara Minerals and buy this ASX 200 lithium stock instead
• At 14 cents, has the Core Lithium share price become a bit of a joke?
• Bell Potter names more of the best ASX 200 stocks to buy

Motley Fool contributor James Mickleboro owns Arcadium Lithium shares. 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.

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

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

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

• Pilbara Minerals Ltd (ASX: PLS) remains the most shorted ASX share with short interest of 21.5%. This is down slightly week on week again. Short sellers appear to believe that lithium prices will be staying lower for longer.
• IDP Education Ltd (ASX: IEL) has 16.3% of its shares held short, which is up week on week again. This may be due to the language testing and student placement company battling tough trading conditions caused by student visa changes.
• Syrah Resources Ltd (ASX: SYR) has short interest of 13.1%, which is down week on week. This graphite miner continues to burn through cash due to weak battery materials prices.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest increase week on week again to 11.9%. Last week, the travel agent revealed that it expects record sales in FY 2024. Short sellers didn’t appear fazed by this.
• Liontown Resources Ltd (ASX: LTR) has 10.9% of its share held short, which is up week on week. This lithium developer is making good progress with the Kathleen Valley Lithium Project. Despite this, short sellers continue to target the company.
• Core Lithium Ltd (ASX: CXO) has short interest of 8.2%, which is flat week on week. This lithium miner has suspended mining operations due to weak lithium prices.
• Sayona Mining Ltd (ASX: SYA) has short interest of 8.1%, which is also flat week on week. This lithium miner hasn’t suspended its operations despite selling its lithium for $500 less per tonne than it costs to produce.
• Westgold Resources Ltd (ASX: WGX) has short interest of 8.1%, which is up strongly since last week. Short sellers seem to be unsure about the gold miner’s plan to merge with Canada-based Karoa Resources.
• Chalice Mining Ltd (ASX: CHN) has entered the top ten with short interest of 7.7%. This mineral exploration company’s shares have lost 81% of their value over the last 12 months. It seems that short sellers don’t believe the declines are over.
• Strike Energy Ltd (ASX: STX) has returned to the top ten with short interest of 7.55%. This gas company’s shares have been hammered this year due to disappointment over drilling at the SE-3 well.

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

More reading

• One ASX lithium stock to buy and one to sell
• These ASX shares could rise 30% to 60%
• Liontown shares charge higher on lithium project update
• Forget Pilbara Minerals and buy this ASX 200 lithium stock instead
• Here are the top 10 ASX 200 shares 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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you have a higher-than-average tolerance for risk, then you might want to consider adding some small caps to your investment portfolio.

But which small cap ASX shares should you buy?

Listed below are three that Morgans has on its best ideas list. Here’s why it is bullish on them:

AVITA Medical Inc (ASX: AVH)

This regenerative medicine company’s shares could be seriously undervalued according to Morgans. Particularly given the recent expansion of the ASX small cap share’s RECELL technology into new and lucrative indications. The broker commented:

AVH is a regenerative medicine company focusing on the acute wound care market. It has recently expanded its indication into full thickness skin defects and Vitiligo (US$5bn TAM). The expanded indication in full thickness skin defects has the required reimbursement in place and sales have started. AVH has provided revenue guidance for FY24 of growth of ~64% and importantly has guided to achieving profitability by 3QCY25. At the same time, the company is seeking approval by the FDA for its automated device RECELL Go, which if successful will launch 1 June 2024, and will be a meaningful driver of rapid adoption by clinicians.

Morgans has an add rating and lofty price target of $6.40.

Camplify Holdings Ltd (ASX: CHL)

This peer-to-peer RV rental operator could be a small cap ASX share to buy according to Morgans.

It likes the company due to its market leadership position in a significant global market. The broker said:

We expect CHL to continue to grow into its large addressable market locally, with over 790k registered RVs in Australia and ~130k in NZ. CHL only has ~2% of these on its platform. It has broadly doubled its domestic fleet since listing and with its acquisition of Germany- based PaulCamper (PC) now has a total fleet of over 29,000, making it a true global player.

Morgans has an add rating and $2.85 price target on its shares.

Superloop Ltd (ASX: SLC)

Another small cap ASX share to consider buying is Superloop. It is a growing telco with over 400,000 customers.

The broker is a big fan of Superloop and has named it as its top telco pick. This is thanks to its strong balance sheet and earnings and free cash flow growth. It explains:

SLC is our key telco pick. It’s the fastest growing, has a solid balance sheet (virtually no debt), and the highest Free Cash Flow yield in our coverage. The share price has lifted following a substantial upgrade to earnings expectations and a takeover offer from ABB (which the SLC Board declined). Even though the share price is up ~100% over the past 6 months, earnings have more than exceeded this. EPSA and FCF have lifted ~150% over the same period so we still see good fundamental value in SLC.

Morgans has an add rating and $1.50 price target on its shares.

The post Morgans names the best small cap ASX shares to buy in May appeared first on The Motley Fool Australia.

More reading

• Morgans rates these ASX small-cap shares as best buys
• Morgans names more of the best ASX shares to buy
• Why Avita Medical, NextDC, Predictive Discovery, and Star shares are tumbling 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 positions in and has recommended Aussie Broadband and Avita Medical. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Camplify. The Motley Fool Australia has recommended Aussie Broadband, Avita Medical, and Camplify. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two of the hottest commodities around right now are copper and uranium.

With demand rising and supply struggling to keep up, prices have been increasing strongly. But how could you gain exposure to copper and uranium on the ASX?

Two ASX mining stocks that analysts at Bell Potter have recently tipped as buys are listed below.

Here’s why they could be in the buy zone right now:

Aeris Resources Ltd (ASX: AIS)

Bell Potter thinks that this ASX mining stock could be a great way to invest in the copper space.

The broker recently responded to the company’s quarterly update by reiterating its buy rating with an improved price target of 30 cents. This implies potential upside of almost 18% for investors over the next 12 months.

Commenting on the company, the broker said:

AIS is a copper dominant producer with all its assets in Australia. On balance, we maintain our production growth forecast for Tritton to which AIS’ financial performance and valuation is highly leveraged. With our higher commodity price forecasts our NPVbased valuation is up 30%, to $0.30/sh and we retain our Buy recommendation.

Lotus Resources Ltd (ASX: LOT)

The broker thinks that this ASX mining stock could be a great option for investors looking for uranium exposure.

Last week, Bell Potter retained its speculative buy rating on the uranium developer’s shares with an improved price target of 60 cents. This suggests that upside of 30% is possible over the next 12 months.

The broker highlights that Lotus Resources has just released an updated mineral resource estimate for the Letlhakane project (LM). This project was acquired through its merger with ACAP Resources.

It notes that “the updated MRE stands at 155.3Mt at 345ppm U3O8 for a total contained 118.2Mlbs U3O8, inclusive of 34.4Mlbs in Indicated Resources.” In response to the above, the broker said:

We maintain a Speculative Buy recommendation and our valuation lifts to $0.60/sh (previously $0.50/sh). Our valuation lift comes from an extension of potential operations at LM beyond our initial forecast (initial LOM production of 61Mlbs). We see positive catalysts at KM [Kayelekera] including 1) MDA finalisation, 2) FID and 3) offtake negotiations. Successful navigation of these hurdles will place LOT in the best position to advance project funding for KM, all whilst LM advances in the background.

Though, it is worth noting that Bell Potter’s speculative buy rating means this ASX mining stock may only be suitable for investors with a high tolerance for risk.

The post Copper and uranium: 2 ASX mining stocks to buy appeared first on The Motley Fool Australia.

More reading

• The little known ASX uranium stock that could rise 35%
• Is it too late to buy surging ASX copper shares like Sandfire?
• 2 ASX mining stocks to buy now for returns of 18% to 34%
• Why Aeris Resources, Mesoblast, Pointsbet, and Worley shares are sinking today
• ASX copper stocks in the spotlight as the red metal soars to 2-year highs

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.

QBE Insurance Group Ltd (ASX: QBE) shares have been a great investment over the past 12 months.

During this time, the insurance giant’s shares have generated a return of 19%.

But those returns are behind us now, what might happen if you were to invest $10,000 into the company’s shares today? Let’s find out.

$10,000 invested in QBE shares

With QBE shares currently changing hands for $17.61, if you were to invest $10,000 (and a further $2.48) you would end up own 568 units.

What could those shares be worth in a year? Well, Goldman Sachs has just responded to the insurance company’s quarterly update by reiterating its buy rating with an improved price target of $20.90.

This values those 568 shares at a total of $11,871.20. That’s a return of 18.7% or $1,868.72 on your original investment.

But wait, there’s more!

QBE is traditionally one of the more generous dividend payers on the Australian share market. Goldman expects this trend to continue and is forecasting a 5.3% dividend yield this year, a 5.4% dividend yield in FY 2025, and then a 5.5% dividend yield in FY 2026.

This will mean dividends of approximately $530 over the next 12 months, which boosts the total return to $12,400 or 24%.

Why is Goldman bullish?

Goldman was pleased with QBE’s “strong” quarterly update and notes that its guidance has been reaffirmed. It said:

1Q24 print was operationally strong a) Guidance reaffirmed – COR 93.5%/ GWP mid single digit b) Strong investment result (in line) – 4.8% running yield at May-24 c) Net impact across both Apr-24 YTD Perils experience & PYD flagged perhaps ~$50m positive (on our estimates) before full reserve calcs at half year. We had estimated PYD from the Italian hail event at $50m. Further, we note that QBE increased its risk asset allocation to 15% (from 12%) over the quarter which we think will be a capital strain of ~3-5bps to PCA ratio. Outside of capital management, this signals confidence in QBE’s capital position / ROE of business.

Commenting on its bullish view on QBE shares, the broker concludes:

QBE is a global commercial insurer with three main geographical operations across Australia Pacific, International (encomassing Europe) and North America. We are Buy-rated on QBE because 1) QBE has the strongest exposure to the commercial rate cycle. 2) QBE’s achieved rate increases continue to be strong & ahead of loss cost inflation. 3) North America on a pathway to improved profitability. 4) Valuation not demanding. 5) Strong ROE.

The post What could $10,000 invested in QBE shares be worth in 12 months? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• The QBE share price is marching higher on Friday. Here’s why
• Morgans names the best ASX dividend shares to buy in May
• 5 ASX dividend shares to buy next week
• Buy NAB and these ASX 200 dividend 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. 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.

In recent times, the Australian share market has provided income investors with an average dividend yield of approximately 4%.

While this is a good yield, you don’t have to settle for that. Especially given that there are analysts forecasting 6%+ dividend yields from some ASX dividend shares.

Let’s take a look at three that analysts are feeling bullish about:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share that analysts are tipping as a buy right now is Accent Group. It is the owner of numerous footwear retail store brands such as HypeDC and Platypus.

Bell Potter likes Accent Group due to its strong market position and its “growth adjacencies via exclusive partnerships with globally winning brands such as Hoka and growing vertical brand strategy.”

The broker currently has a buy rating and $2.50 price target on its shares.

As for income, Bell Potter expects the company to pay fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.84, this represents dividend yields of 7% and 7.9%, respectively.

APA Group (ASX: APA)

Another ASX dividend share that analysts are bullish on is APA Group. It is an energy infrastructure business that owns and operates a portfolio of gas, electricity, solar and wind assets valued at $27 billion.

The team at Macquarie thinks it would be a great option for income investors. Particularly given its belief that the company’s long run of dividend increases can continue.

Macquarie has an outperform rating and $9.40 price target on its shares.

As for those dividends, the broker is forecasting dividend increases to 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.78, this equates to 6.4% and 6.55% yields, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

A final ASX dividend share that analysts are bullish on is Healthco Healthcare and Wellness REIT. It is a property company with a focus on health and wellness assets such as hospitals, aged care, and primary care properties.

Bell Potter also sees it as a dividend share to buy and expects some big yields from its shares in the near term.

The broker is forecasting dividends per share of 8 cents in FY 2024 and 8.3 cents in FY 2025. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.19, this will mean yields of 6.7% and 7%, respectively.

Bell Potter has a buy rating and $1.70 price target on its shares.

The post These ASX dividend shares offer 6%+ yields appeared first on The Motley Fool Australia.

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• Why I’d buy high-yield ASX dividend shares for superannuation in retirement
• 1 compelling ASX dividend share I’d buy for its big yield
• Telstra shares and 4 other defensive income stocks to buy now
• 4 ASX retirement shares to buy in May

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