Author: openjargon

It seems everyone around the proverbial ASX water cooler has been talking about Commonwealth Bank of Australia (ASX: CBA) shares this week.

On the surface, that’s nothing too unusual. As the ASX’s second-largest (perhaps soon to be largest) share, as well as the spiritual leader of the ASX big four bank stocks, CBA is never far from the front of mind when discussing the Australian share market.

But this week, there are three reasons CBA shares might have been even more prominent than usual in the minds of ASX investors. Let’s get into them.

3 reasons everyone has been talking about CBA shares this week

An avalanche of new record highs for CBA shares

ASX investors have probably become used to seeing the CBA share price clock the odd new record high. After all, we’ve seen this ASX bank reset its high watermark quite a few times over the past 12 months.

But this week, we saw no fewer than three fresh records for Commonwealth Bank shares. Tuesday had the bank soar up to $128.97 a share. That record didn’t last too long though.

By yesterday, CBA had topped that, reaching up to $130.30 a share. But that high was to last for less than 24 hours. Today, investors have sent the bank higher yet again, with CBA topping out at its new record high of $131.70.

This cascade of new records is enough to get ASX chins a-wagging by itself.

The CBA dividend yield enters mediocre territory

Of course, these fresh new highs for CBA shares haven’t come without a cost. That cost would be this bank’s dividend yield.

As most ASX investors would know, the ASX banks are well-known for their chunky, fully franked dividends. CBA used to be in that club, with investors enjoying a typical yield of between 4-5% in days of yore.

But not anymore. The galloping CBA share price has had the perverse effect of lowering the bank’s dividend yield to something unrecognisable for an ASX bank.

Today, CBA is trading on a yield of just 3.46%.

Not only is that well below National Australia Bank Ltd (ASX: NAB)’s 4.55%, but it is getting close to half of the 5.98% that ANZ Group Holdings Ltd (ASX: ANZ) currently has on the table.

This un-banklike dividend yield would also be provoking some discussions amongst income investors this week.

ASX 200 hits new record high

It’s not just CBA shares hitting new records this week. We’ve also enjoyed a far rarer event today – a new all-time record high for the S&P/ASX 200 Index (ASX: XJO) itself. Yep, this Friday has seen the ASX 200 clock a new record of its own – 7,969.1 points.

What does this have to do with CBA shares? Well, as we went through earlier today, ASX 200 investors largely have CommBank to thank for this new high.

CBA shares are up a healthy 15.8% over 2024 alone. Since this bank is the second-largest stock in the ASX 200 by market capitalisation, its 9.22% weighting in the index means its share price performance has a disproportionately large impact on the broader index.

Put simply, if CBA wasn’t hitting new high after new high this week, we probably wouldn’t see the ASX 200 at a new record itself.

So even if investors don’t directly own CBA shares, they probably still have a reason to thank the bank today.

The post 3 reasons everyone’s talking about CBA shares this week appeared first on The Motley Fool Australia.

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• ASX 200 re-writes history. Which companies are leading the charge?
• Do ANZ shares offer the biggest dividend yield in the ASX bank sector?
• CBA and 7 other ASX 200 shares smashing new highs on Thursday
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• CBA shares hit new record amid higher revised predictions for home price growth

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

The S&P/ASX 200 Index (ASX: XJO) is up 2.5% and in new all-time high territory as we near the end of the second trading week of FY 2025. But some ASX shares have already done much better.

Now, two weeks is only a small snapshot for these ASX 200 shares and the broader market as far as what’s yet to come for the full financial year. But try telling that to the investors who bought these companies near market close on 28 June and are already banking gains of more than 20%.

Which stocks are we talking about?

Read on!

ASX 200 shares starting the 2025 financial year with a bang

The third best ASX 200 share to have bought at the end of FY 2024 is Whitehaven Coal Ltd (ASX: WHC).

Despite slipping over the past three trading days, shares in the Aussie coal stock remain up 13.0% since market close on 28 June, currently changing hands for $8.65 apiece.

There’s been no price-sensitive news from the miner since its 19 April quarterly update.

But Whitehaven shares got a big boost along with other coal stocks following news of an underground fire at Anglo American‘s (LSE: AAL) Grosvenor coal mine in Queensland on 29 June. Anglo American has suspended production at the mine for an indeterminate time.

Whitehaven shares trade on a fully franked trailing dividend yield of 5.7%.

Moving on to the second-best performing ASX 200 share in FY 2025, we have gold share Red 5 Ltd (ASX: RED).

Shares in the ASX gold stock have surged 16.7% since market close on 28 June.

The gold miner enjoyed a big boost on Monday when it reported it had entered into a restructured hedge facility and security package, repaid all outstanding loans, and restructured the hedging from its legacy Silver Lake Resources Limited (ASX: SLR) common terms deed.

Red 5 also reported full-year gold sales of 455,259 ounces.

Which brings us to the best ASX 200 share to have held for the first two weeks of FY 2025, Coronado Global Resources Inc (ASX: CRN).

That’s right, another big Australian coal stock, which also enjoyed a big boost from Anglo American’s mine closure.

The Coronado share price ended FY 2024 at $1.185 and currently stands at $1.427. That sees the stock up 20.4% in only two weeks.

And it could have a lot further to run.

According to Bell Potter:

Throughout 2024, CRN should realise improved production volumes and subsequent cost benefits following the self-funded investment across its Australian and US operations. We expect CRN to generate improved free cash flow and shareholder returns going forward.

Our buy recommendation is underpinned by a supply constrained met coal environment, supporting long term prices. We see the potential for CRN to participate in industry consolidation.

The broker has a ‘buy’ rating and a $1.85 price target for the ASX 200 share. That represents a further potential upside of almost 30% from current levels.

The post Do you own the 3 best performing ASX 200 shares of FY 2025? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• Shares vs. property: Which stocks and suburbs delivered the best growth in FY24?
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bernd Struben 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.

Liontown Resources Ltd (ASX: LTR) shares have faced a tough past year. From the 12 months to June 11, they lost 66% of their value.

Since entering the new financial year, the story is a little different. The stock is up 14% since July 1 and has surged 10% this week so far.

They currently fetch $1.02 apiece, more than 6% higher than yesterday’s close. The chart below shows the last twelve months of Liontown’s share price action.

Do the experts say Liontown is a buy? Here’s a look.

Recent developments for Liontown shares

Liontown has made substantial progress towards transitioning from a lithium developer to a miner. As a reminder, the company’s crown jewel is its Kathleen Valley Lithium Project.

Production is set to commence at the site, which could be a tailwind if successful, in my view.

In July, the company also secured a US$250 million convertible note agreement with LG Energy Solution to fund the development of its Kathleen Valley project.

After this transaction, it will have cash of around A$501 million, with $120 million set to be immediately invested into Kathleen Valley.

The remaining A$381 million and “additional liquidity provides balance sheet strength” for the site, it says.

What do analysts say?

Bell Potter is bullish on Liontown shares and praises the funding arrangement with LG Energy Solution. The broker reckons it removes some of the negative terms associated with undertaking traditional bank debt.

Goldman Sachs, on the other hand, recently provided a cautious earnings forecast for Liontown, considering its bearish outlook on lithium prices.

The firm estimates a gradual increase in revenue and profitability for Liontown from FY25 to FY29.

According to my colleague James’ analysis, the broker expects revenue of $143 million in FY25, leading to a loss of $162 million.

By FY 2029, Goldman forecasts revenue to reach $1,326 million, with a profit of $330 million.

These estimates reflect a significant growth trajectory as estimated production ramps up and operational efficiencies improve.

Despite this, Goldman Sachs holds a neutral rating on Liontown shares with a price target of $1.15, noting:

For LTR, though we expect more modest cost escalation based on our benchmarking we remain Neutral on relative valuation.

Although it acknowledges the potential valuation uplift from de-risking and improved lithium pricing, it still advises caution until production and cost management are clearer.

Bell Potter, however, is more optimistic, maintaining a speculative buy rating and a $1.85 price target. It says that with initial production at Kathleen Valley on the way, Liontown shares are well positioned, according to my colleague James.

Meanwhile, according to CommSec, the consensus of analyst ratings says Liontown is a hold.

Foolish takeaway

Liontown Resources is at a critical juncture. With production set to start soon, the company could see significant growth if it manages costs effectively and ramps up production smoothly.

While Goldman Sachs advises caution, Bell Potter’s bullish outlook suggests substantial upside potential. Based on this, there are risks in owning this stock before it successfully starts production, in my view.

In any case, it’s essential to conduct your own due diligence and seek financial advice when necessary.

The post Are Liontown Resources shares a buy after surging 9% this week? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Here’s the earnings forecast to 2029 for Liontown shares
• ASX lithium shares: Screaming bargains or falling knives?
• Why the Liontown share price could jump 25%+

Motley Fool contributor Zach Bristow 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.

It is a very happy Friday for most ASX shares so far today. The S&P/ASX 200 Index (ASX: XJO) quickly clocked a series of new record highs in early trading today, and has continued to push higher into the afternoon.

At the time of writing, the ASX 200 is up a healthy 0.93% at just over 7,960 points after hitting a new record high of 7,969.1 points this morning.

But let’s talk about some economic news out from the United States overnight that might have some consequences for ASX investors going forward.

The United States, like Australia, has been struggling with the economic impacts of inflation over the past few years. Like in Australia, the US has been steadily ratcheting up interest rates in an attempt to control inflation.

Last night, we got the latest news on how that struggle is going.

American CPI falls over June

According to reporting from CNBC, the American consumer price index (CPI) fell 0.1% between May and June. That drop puts the annual rate of inflation in the US economy at 3%, which is reportedly the lowest figure in more than three years. It’s the first time since May 2020 that monthly CPI declined.

Core CPI, which excludes volatile items like petrol and food costs, increased 0.1% month-on-month though, putting its annual rate at a higher 3.3%. Even so, this rise was the smallest increase in core inflation since April 2021.

This inflation report was welcomed by economic commentators. Here’s some of what Morgan Stanley’s Chris Larkin told CNBC:

The June inflation report means the [US Federal Reserve] is one step closer to a September rate cut… A lot can happen between now and September 18, but unless most of the numbers pivot back into ‘hot’ territory, the Fed’s reasoning for not cutting rates may no longer be justified.

As most ASX investors know, interest rates are usually raised to put downward pressure on inflation. Since inflation seems to be cooling in the States, the next interest rate move might be a cut, and perhaps sooner rather than later.

But what would this mean for ASX shares?

Well, this report is arguably great news for ASX investors as well. Interest rates may be different from country to country. But they are all interconnected too. It’s no coincidence that the US has raised interest rates over the past few years almost in tandem with our own Reserve Bank of Australia (RBA).

If American inflation is cooling, it bodes well for Australian inflation as well. Taking inflationary heat out of the global economy is what the RBA would want to see from the United States. And it just got a big dose of that.

If rates do start dropping over in the US, it would probably mean that an interest rate cut in Australia is more likely. That’s not a guarantee, of course. But this June inflation report out of the US is probably just what Michelle Bullock and the other bigwigs at the RBA were hoping to see.

Lower inflation will eventually lead to lower interest rates, both here and in the United States. And lower rates are great news for the share market. Remember, high interest rates tend to suck money out of ASX shares as investors flock to safer investments like cash and bonds. Lower rates would have the opposite effect.

As such, this inflation report is exciting for ASX investors, which might be at least partly why the Australian stock market is reaching new record highs today.

Let’s see what the RBA’s next move might be.

The post US inflation easing: What does it mean for ASX shares? appeared first on The Motley Fool Australia.

More reading

• ASX 200 re-writes history. Which companies are leading the charge?
• Why did ASX retail shares rise 19% in FY24 amid a cost of living crisis?
• 5 things to watch on the ASX 200 on Friday
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• 5 things to watch on the ASX 200 on Thursday

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.

One in five investors intends to spend their tax-cut savings buying shares, according to a survey of more than 2,000 Australian investors conducted by online trading platform, Stake.

Let’s find out what other investors intend to do with the extra money in their pay this month.

1 in 5 investors will put tax-cut savings into shares

Stage three tax cuts began this month. Every worker will receive a bit more in their pay following amendments to the original stage three tax cut plan.

The tax cuts will see a worker earning $55,000 per year saving $1,054 per annum in tax. A worker earning $140,000 per year will save $3,729 per annum in tax. You can check out the new tax rates here.

Stake’s survey showed most investors, or 31%, intend to use their tax-cut savings to help them with the cost of living.

Following 13 interest rate rises between May 2022 and November 2023, and indicators this month that inflation may prove stickier than expected, households are under significant pressure.

A further 31% of investors intend to save the extra cash for a rainy day or emergencies.

Here at The Fool, we suggest investors always have an emergency fund to cover unexpected expenses. This avoids having to sell assets like ASX shares at inopportune times to cover urgent expenses.

Another 24% of investors intend to pay off debts. The Fool distinguishes between ‘good’ and ‘bad debts’. Bad debts are short-term debts not associated with investment, like interest on credit cards.

Other ideas for the extra cash

As mentioned earlier, one in five investors, or 21%, intend to buy shares. The survey also revealed the five most popular ASX shares purchased by investors, which are listed below.

The survey results reflect Australians’ ongoing love of travel.

About 19% of respondents intend to use their extra cash to fund holidays and travel. This was the only discretionary expense featured in the top six responses.

Finally, 19% intend to use their additional income to save for retirement.

Some might use their tax cuts to make concessional contributions to superannuation, which would give them further tax savings.

This is because contributions are taxed at 15%, which is well below most people’s marginal income tax rates. You can learn about how to save tax through superannuation here.

Top 5 ASX shares among survey respondents

The survey found the five favourite ASX shares among investors comprised four exchange-traded funds (ETFs) and an ASX lithium share.

Here they are.

1/ Vanguard Australian Shares Index ETF (ASX: VAS) 

The Vanguard Australian Shares Index ETF is an index-based ETF that tracks the performance of the S&P/ASX 300 Index (ASX: XKO).

2/ iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF is an index-based ETF that tracks the 500 largest companies comprising the US S&P 500 Index (SP: .INX).

3/ Vanguard Msci Index International Shares ETF (ASX: VGS)

The Vanguard Msci Index International Shares ETF tracks the return of the MSCI World ex-Australia (with net dividends reinvested). This means exposure to about 1,500 companies from 23 developed countries.

4/ Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF tracks the performance of the tech-heavy NASDAQ-100 Index (NASDAQ: NDX).

5/ Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals has lost 41% of its value over the past 12 months due to plunging commodity values.

The post Buying shares and 5 other ways investors intend to spend tax cuts: report appeared first on The Motley Fool Australia.

More reading

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• Own iShares S&P 500 ETF (IVV) units? It’s payday for you!
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Motley Fool contributor Bronwyn Allen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX All Ordinaries Index (ASX: XAO) financial share GQG Partners Inc (ASX: GQG) has shown a remarkable performance this year.

Over the past 12 months, the United States-based asset manager’s share price has surged by 86%, outpacing the All Ords index’s modest 6% rise during the same period.

Since its initial public offering (IPO) in October 2021, GQG Partners shares traded below the IPO price of $2 for the first two years, reaching a low of $1.32 in November 2023. From there, the share price more than doubled to its current price of $2.85 as the company’s assets under management (AUM) continued to grow.

What drove the strong share price growth?

GQG Partners is an active asset management company specialising in equity investments across four categories: international, global, emerging markets, and US shares. The company is led by experienced stock picker Rajiv Jain, who serves as both chief investment officer and executive chairman.

The significant increase in share price can be attributed to rapid growth in AUM. In its latest update for June 2024, GQG Partners reported a surge in total AUM to US$155.6 billion. Net inflows nearly doubled to US$11.1 billion in the first six months of 2024, compared to US$6.2 billion for the same period the previous year.

In his interview with the Australian Financial Review in February 2024, GQG Partners CEO Tim Carver highlighted its superior investment returns and its relatively low fee structure compared to its peers as key success factors.

In addition, the company boasts a high insider ownership. Company insiders, including management and employees, own more than 75% of the company. Jain is the largest shareholder, with a 70% holding.

At the annual general meeting (AGM) in May 2024, Jain said:

An important part of this is being co-investors. Not only are we majority shareholders in the business, but our team has invested meaningfully in our strategies alongside our clients.

As the largest shareholder in GQG, I remain aligned with you in my expectations that the executive team will remain completely focused on delivering value to our clients, and thereby creating long-term shareholder value.

What do experts say about GQG Partners?

Goldman Sachs rates GQG Partners a buy with a target price of $3, indicating a 5% upside from here. The broker’s analysts believe GQG shares’ valuations are still attractive compared to those of its peers, considering the company’s strong growth.

Fund manager Blackwattle sees GQG’s valuations as undemanding, as my colleague Tristan highlighted. In its portfolio update, the investment team at Blackwattle said that GQG Partners still screened cheaply compared to its peers.

The fund manager pointed out that the 10-year average price-to-earnings (P/E) ratio of listed asset management companies is 16x. At the current share price, GQG Partners shares are valued at 13x on S&P Capital IQ’s FY25 earnings estimates.

The GQG Partners share price is down 0.87% at the time of writing trading at $2.85.

The post Up 86% in a year, could this ASX All Ords financial share keep on rising? appeared first on The Motley Fool Australia.

More reading

• Can ASX 200 tech shares produce another strong performance in FY25?
• Up 57% in 2024, this ASX All Ords stock ‘still screens cheaply vs the market’
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Motley Fool contributor Kate Lee 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.