Author: openjargon

There is no shortage of complex strategies when it comes to ASX investing.

But what I come back to is something much simpler. It is the habit of adding to quality investments regularly and giving them time to grow.

It does not rely on perfect timing. It does not depend on picking the next big thing. It is about building exposure over time and letting the underlying businesses do the work.

Here is how I think about it.

Start with businesses you understand

The first step is choosing ASX shares that make sense to you.

I find it easier to stay invested when I understand how a business makes money and why customers keep coming back. That tends to lead me toward companies with clear roles in the economy and steady demand.

For example, businesses like Wesfarmers Ltd (ASX: WES) or Coles Group Ltd (ASX: COL) operate in areas that are part of everyday life. That familiarity makes it easier to hold them through different market conditions.

Add to positions over time

Once I have identified a few ASX shares, the next step is consistency.

Adding to positions over time can help smooth out market movements. Some purchases will happen at higher prices and others at lower prices, which tends to even out over the long run.

This approach also removes the pressure of trying to decide when to invest a lump sum. Instead, the focus shifts to building the position gradually. This is often referred to as dollar-cost averaging.

Let the businesses do the work

Over time, the results tend to come back to the underlying performance of the ASX shares.

If earnings are growing and cash flow is improving, that usually flows through to the share price and dividends. It may not happen in a straight line, but the direction tends to follow the business.

That is why I focus more on how the company is tracking than on short-term share price movements.

Keep it manageable

I think there is value in keeping things simple.

A smaller number of positions makes it easier to follow what is happening and stay confident in the investment. It also helps avoid spreading capital too thinly across too many ideas.

That clarity becomes more important over time, especially as the portfolio grows.

Stay patient

Time is a big part of this approach and shouldn’t be overlooked.

Compounding takes time to show up, and that can test patience when markets move around.

Staying consistent and sticking to the plan is what allows it to work.

Foolish takeaway

Building wealth in the share market does not need to be complicated.

Focusing on quality businesses, adding to them over time, and staying invested can go a long way. It is a simple ASX investing habit, but I think it is one that can make a real difference over the long term.

The post I think this simple ASX investing habit can build wealth over time appeared first on The Motley Fool Australia.

More reading

• 3 reasons why the Coles share price is a buy
• How big will the Wesfarmers dividend yield be in 2027?
• Nervous investors turn to ASX 200 defensives as global energy shock drags on
• Wesfarmers shares: Buy, hold or sell?
• 2 great ASX 200 blue-chip shares I’d buy right now

Motley Fool contributor Grace Alvino has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In Australia, the Age Pension is a fortnightly sum paid to individuals aged 67 years or older to help fund their retirement years.

As of March this year, the Age Pension is a maximum payment of $1,100.30 per fortnight for singles. Couples can get up to $829.40 per person. This doesn’t include any additional potential supplement rates.

But it’s important to note that it isn’t available to everyone, and if you’re eligible, the amount you receive can vary wildly. The problem is that many Australians look at the income test and miss vital information about the asset test.

To help, here are eight things every Australian needs to know about the Age Pension asset test before it’s too late.

1. The Age Pension asset test includes everything except your home

What many Australians don’t realise is that the asset test literally includes everything you own in full, in part, or have an interest in. 

It generally excludes the home you live in.

Applicable assets include S&P/ASX 200 Index (ASX: XJO) shares, other financial investments, home contents, personal effects and vehicles, real estate, annuities, income streams, superannuation, SMSFs, partnerships, private trusts, and private companies.

It also includes any assets held outside Australia and any debts owed to you.

2. Yes, your superannuation balance also counts

Many people are surprised to learn that the asset test includes your superannuation balance if you’re over Age Pension age or you receive payment from it.

3. The limits and rules vary depending on if you’re single or in a couple

In order to receive the full Age Pension, single homeowners can own assets (including superannuation) up to a value of $321,500, and non-homeowners can own assets up to $579,500 in retirement.

But a couple has a different threshold, and it’s not double the amount of one person. A couple combined can own up to $481,500 in total if they own a property, or $739,500 if they don’t.

4. Exceed the limit? You can still get a part payment

If you earn over those limits, there is still hope. 

Your assets can total up to $722,000 if you’re a single homeowner, and $980,000 if you’re a non-homeowner. You can’t get the full Age Pension, but you’re still entitled to a part-payment depending on where you fall between the two brackets. 

Couples are also entitled to a part-payment so long as their combined assets aren’t more than $1,085,000 for homeowners. Non-homeowners can own assets totalling up to $1,343,000.

5. Gifting money can backfire

You’ve reached age 60, and you realise you’re over the threshold for the asset test. It can be tempting to gift a chunk of money to influence your Age Pension eligibility.

But Centrelink has strict rules to ensure that Australians don’t do this.

An individual can give away up to $30,000 over a five-year period before it will affect their assets test. Any amount over $30,000 will be counted, for five years, as an asset and included in the asset test.

6. Downsizing can leave you worse off

Your home is generally not included in the Age Pension asset test. If you downsized to something smaller, it could put you over the limit.

For example, if you sell a $1.5 million home and downsize to a $1 million property, that $500,000 difference becomes an assessable asset.

But, if you’re 55 or over and you’ve owned your home for at least 10 years, you can contribute up to $300,000 per person ($600,000 per couple) from your sale proceeds into your superannuation. This is called the downsizer super contribution rule, and it could save you a fortune in retirement. 

7. Deeming rules apply

Deeming is how centrelink calculates how much income you make from your assets when you apply for Age Pension. 

Under deeming rules, instead of looking at how much your assets actually earn, it’s assumed they earn a set amount of income.

As of March 2026, the financial assets of single Australians have a deeming rate of 1.25% for the first $64,320. Anything over this amount is deemed to earn 3.25%.

Couples have a 1.25% deeming rate on their first $106,200 of combined financial assets (this includes superannuation). Anything over $106,200 is deemed to earn 3.25%.

8. The rules constantly change

The final thing that every 60-year-old needs to know about the asset test is that the rules constantly change.

Anything from threshold rates, deeming levels, and even eligibility rules is constantly updated. So if you plan a strategy at age 60, it could be out of date by the time you reach retirement.

The post What Australians at 60 must know about the Age Pension asset test before they retire appeared first on The Motley Fool Australia.

More reading

• What I’d do with $15,000 in ASX 200 shares right now
• 3 exciting ASX ETFs for growth investors to watch in May
• Here are the top 10 ASX 200 shares today
• Moelis is tipping these two ASX gold miners will deliver better than 40% returns
• 3 oversold ASX shares to buy with $10,000

Motley Fool contributor Samantha Menzies 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 have $15,000 ready to invest, putting it to work in the share market could be a smart move.

The key question is where to invest it.

Here are three ASX 200 shares I’d consider buying with the money today.

Life360 Inc (ASX: 360)

The first ASX 200 share I would consider buying is Life360.

It continues to build momentum as its global platform scales. The company’s app has become embedded in users’ daily lives, which helps drive engagement and retention. This creates a strong base for monetisation as it expands its range of services.

Rather than relying on a single feature, Life360 is gradually adding new offerings such as driver protection and emergency assistance. These additions create more opportunities to lift revenue per user over time. In addition, its new advertising business could be a meaningful generator of revenue in the future.

With a large and growing user base, even incremental improvements in monetisation could have a meaningful impact on earnings.

Goodman Group (ASX: GMG)

Another ASX 200 share to look at is Goodman Group.

It offers exposure to areas of the market that are benefiting from structural demand. Its business is tied to logistics infrastructure and data-related assets, both of which are becoming more important as digital activity increases.

Ecommerce continues to drive demand for well-located distribution facilities, while the growth of cloud computing and artificial intelligence is supporting demand for data centres.

Goodman’s ability to develop and manage these types of assets has been a key driver of its growth.

With these trends continuing to play out, the company remains closely linked to long-term shifts in how goods and data move around the world.

TechnologyOne Ltd (ASX: TNE)

A final ASX 200 share that could be a top option for a $15,000 investment is TechnologyOne.

It has built a reputation for consistent execution. The company provides enterprise software to government and large organisations. These tend to be on long-term contracts.

Its transition to a Software-as-a-Service (SaaS) model has been highly successful and has strengthened its earnings profile, improving visibility and supporting margins.

But management isn’t resting on its laurels. The company continues to focus on expanding within its existing customer base, while gradually entering new markets.

This steady approach has translated into reliable recurring revenue and earnings growth over time. The good news is management expects this trend to continue and believes it can double in size every five years.

The post What I’d do with $15,000 in ASX 200 shares right now appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Goodman Group, Life360, and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Life360, and Technology One. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool Australia has recommended Goodman Group and Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Growth investing is often about identifying where the next wave of expansion will come from.

As May approaches, artificial intelligence (AI) and digital adoption continue to shape that landscape. But the opportunity is not limited to one part of the market. It is spreading across regions, industries, and layers of the technology stack.

Here are three ASX ETFs that tap into that growth in different ways.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ASX ETF to look at is the BetaShares Asia Technology Tigers ETF.

This ETF focuses on major technology companies across Asia, a region where digital adoption is still accelerating.

Its holdings include companies such as Meituan (SEHK: 3690), PDD Holdings (NASDAQ: PDD), and Samsung Electronics.

Samsung offers a good illustration of the opportunity. As a global leader in semiconductors and electronics, it sits at the centre of multiple growth areas, from smartphones to memory chips used in data centres.

As digital ecosystems continue to expand across Asia, this fund provides exposure to that ongoing growth.

Global X Artificial Intelligence Infrastructure ETF (ASX: AINF)

Another ASX ETF that stands out for growth investors is the Global X Artificial Intelligence Infrastructure ETF.

While much of the focus in AI has been on software and chips, this ETF looks at the systems that make it all possible.

Its holdings include companies such as Vertiv Holdings (NYSE: VRT), Arista Networks (NYSE: ANET), and Cameco Corporation (NYSE: CCJ).

Vertiv is a good example of this layer. It provides cooling and power systems used in data centres, which are essential as AI workloads increase in size and complexity.

The growth in AI is driving significant investment in infrastructure, with data centre spending expected to rise sharply in the coming years.

By focusing on the physical backbone of AI, this fund captures a part of the theme that is often overlooked.

Global X Artificial Intelligence ETF (ASX: GXAI)

A third ASX ETF worth keeping an eye on is the Global X Artificial Intelligence ETF.

This ETF takes a broader approach, investing across the full AI ecosystem, from hardware to software and applications.

Its holdings include stocks such as SK Hynix, Advanced Micro Devices (NASDAQ: AMD), and Broadcom (NASDAQ: AVGO).

SK Hynix highlights how demand for memory and processing power is increasing as AI adoption grows. Its products are critical for handling the large volumes of data required by AI systems.

The rapid commercialisation of AI is expanding its use across industries, from healthcare to agriculture, creating a wide range of growth opportunities.

With exposure across multiple segments and regions, this fund provides a broad way to invest in the continued development of artificial intelligence.

The post 3 exciting ASX ETFs for growth investors to watch in May appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Arista Networks, Broadcom, Cameco, and Vertiv. The Motley Fool Australia has recommended Advanced Micro Devices and Arista Networks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was another rough session for the S&P/ASX 200 Index (ASX: XJO) and many ASX shares this Tuesday. After yesterday’s lacklustre start to the trading week, things didn’t improve this session, as markets suffered another hefty drop.

By the time trading wrapped up this afternoon, the ASX 200 had fallen 0.64%. That leaves the index at 8,710.7 points.

This unhappy day for ASX investors follows a mixed start to the American trading week last night.

The Dow Jones Industrial Average Index (DJX: .DJI) gave up an early spike to close down 0.13%.

Things were better on the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) though, which pushed 0.2% higher.

But let’s return to the local markets now, and take stock of how today’s miserable trading conditions filtered down into the various ASX sectors.

Winners and losers

The post Here are the top 10 ASX 200 shares today 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 recommended Lynas Rare Earths Ltd. 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.

There’s plenty of high-quality gold miners on the ASX, but when it comes to finding a company that might have some share price upside, it’s not a bad strategy to ask the experts.

The analyst team at Moelis has run the ruler over two of the producers on the ASX and believes both represent good value at current levels.

Let’s have a look at what they’re saying.

Alkane Resources Ltd (ASX: ALK)

Alkane, in its quarterly report last week, announced that its cash pile had grown to $362 million, up $130 million for the quarter.

The company reported record gold production of 45,776 ounces at an all-in sustaining cost (AISC) of $ 2,928 per tonne, and maintained full-year guidance of 160,000 to 175,000 ounces of gold.

Alkane Managing Director Nic Earner said it was “another great quarter” for the company.

The Moelis team said Alkane “comfortably beat our production estimates while landing in-line with AISC forecasts for the March Quarter”.

They added:

At a group level, there was a slight increase in AISC primarily due to higher royalties (coinciding with higher realised gold prices) and the impact of diesel cost – albeit this only occurred later in the quarter. Reaching at least the bottom end of guidance looks to be a relatively simple target over the balance of the full year given the ~120koz gold equivalent produced to date.

Moelis has a price target of $2.30 on Alkane shares compared with the current price of $1.54, implying potential upside of 49.4%.

Black Cat Syndicate Ltd (ASX: BC8)

This company also last week released its quarterly production report, which showed the company had cash flow of $61 million generated from 10,374 ounces of gold produced.

Back Cat’s cash balance inched $1 million higher to $92 million, which the company said was a pleasing result considering its investments in growth programs.

This included a $46 million spend on the Kal East mine ramp-up.

Black Cat also said it was working on a new growth strategy, “focused on clearly articulating its capabilities, growth initiatives and capital deployment priorities, with an update expected within the next three months”.

Following completion of this process, the company said it intended to provide annual guidance, including on AISC.

Moelis said the quarter was softer than its estimates, “but in fairness, there has been relatively little laid out in the form of guidance and the nature of the operations at Kal East in particular have made predictions (and subsequent verification) challenging – up until now”.

Moelis said the company was transitioning to mining and treating its own ore, and while cash build was soft, “excess operating cashflow has been redeployed across the business where we think there is low hanging fruit”.

Moelis has a price target of $1.70 on Black Cat compared with $1.18 currently, implying potential upside of 44.1%.

The post Moelis is tipping these two ASX gold miners will deliver better than 40% returns appeared first on The Motley Fool Australia.

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• Up 180% in a year, this ASX gold stock climbs again

Motley Fool contributor Cameron England 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.

When share prices fall sharply, it can sometimes reflect short-term concerns rather than long-term fundamentals.

That can open the door for investors that are willing to look beyond the immediate noise and focus on the long-term opportunity.

With that in mind, here are three ASX shares that have pulled back and could be worth a closer look if you have $10,000 to invest:

Accent Group Ltd (ASX: AX1)

Accent shares have been under pressure and are down 66% over the past 12 months.

The company owns and operates a range of footwear and apparel brands, with a large store network across Australia and New Zealand. Like many retailers, it has faced softer consumer conditions following interest rate increases.

That has weighed on sentiment, but the underlying business remains active. Accent continues to expand its store footprint and build out its brand portfolio, which includes both owned and licensed labels.

Retail conditions can shift quickly, and any improvement in consumer spending could support a recovery in its performance.

Cochlear Ltd (ASX: COH)

Another ASX share that has experienced a significant pullback is Cochlear.

It is a global leader in hearing implant technology, with products used in multiple markets around the world.

Its shares are down 65% over the past 12 months, with a good portion of this coming this month following a poor update.

Cochlear downgraded its FY 2026 underlying net profit guidance range to $290 million to $330 million (from $435 million to $460 million). Management revealed that this was due to softer trading in developed markets, which is being driven by hospital capacity constraints and a decline in referrals from the hearing aid channel.

While this was disappointing, it doesn’t change the longer-term picture. Demand for hearing solutions is being supported by ageing populations and increasing awareness.

In addition, Cochlear continues to invest in research and development, maintaining its position at the forefront of its field.

So, with strong market positioning and long-term demand drivers, this could be an ASX share to buy while it is down.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster shares are also down around 65% over the past 12 months.

It operates an online furniture and homewares platform, benefiting from the gradual shift toward ecommerce in its category.

Spending on home-related items can be cyclical, influenced by housing activity and broader economic conditions. This can lead to periods of volatility in both performance and share price, especially when interest rates increase.

Despite this, the long-term trend toward online retail remains in place and Temple & Webster is positioned to capture a larger share of the market. This could make it an ASX share to buy for patient investors.

The post 3 oversold ASX shares to buy with $10,000 appeared first on The Motley Fool Australia.

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

It is getting harder to ignore what PLS Group Ltd (ASX: PLS) is doing right now.

The lithium stock is back on the move on Tuesday, adding to a run that has already turned heads this year.

At the time of writing, the share price is up 2.78% to $6.095. Earlier in the session, it pushed as high as $6.13 before easing back as some profit-taking came through.

Even with that pullback, the stock is sitting just below its record high of $6.14, which was set on 17 April.

When you zoom out, the move looks even more impressive.

PLS shares have climbed 44% so far in 2026. Over the past year, the gain is closer to 320%, which explains why the stock keeps getting attention.

Momentum builds after strong quarterly result

A big part of the latest move comes back to last week’s March quarter result, which gave investors little reason to step aside.

PLS delivered another solid production result from its Pilgangoora operation, with output lifting 12% on the prior quarter. The increase came through improved plant performance and more consistent run times across the site.

Sales volumes were softer, down 16% over the period, though that largely came down to shipment timing.

However, pricing did most of the heavy lifting. The company achieved a realised price of US$1,867 per tonne, which fed straight into revenue and margins.

That strength showed up in the cash numbers. Cash margin from operations jumped a massive 178% to $461 million for the quarter.

The balance sheet also moved higher, with cash increasing 52% to $1.45 billion by the end of the period.

What the market is telling us

What is interesting is how the market has responded.

PLS has delivered strong quarters before, but the follow-up has not always looked like this.

This time feels a bit different. Higher production and better realised prices are getting picked up more quickly by the market.

Lithium prices in China are sitting around CNY 175,000 per tonne, which is a 6% lift from where they were last month.

And that is starting to show up in the numbers, with stronger realised pricing feeding into the company’s margins.

At the same time, PLS is now generating some serious cash, which puts it in a different position. It has more room to fund growth, strengthen the balance sheet, and potentially return capital if conditions hold up.

What to watch from here

With the share price sitting just below record levels, investors will be closely watching what’s next for PLS.

Production guidance remains in place for FY26, with the company targeting between 820kt and 870kt.

From here, a lot still comes back to lithium pricing and whether it can hold around current levels.

The post PLS shares are flying again. Here’s why they’re near record highs appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

Commonwealth Bank of Australia (ASX: CBA) shares have been incredibly resilient so far this year.

After posting an unexpectedly positive half-year result in February this year, the banking giant’s shares jumped over 12%, and they’ve remained relatively consistent ever since.

At the time of writing on Tuesday afternoon, CBA shares are up 0.3% to $173.60. 

For the year to date, the shares are nearly 8% higher, and they’re up 6.6% on this time last year.

The gains go even further back, too.

CBA shares have risen mostly consistently since joining the ASX back in 1999.

How many shares could I have bought with $10,000 five years ago?

On this day five years ago, CBA shares were trading at $89.04 each. That means that $10,000 invested in CBA shares five years ago would have bought 112 shares.

What would that investment be worth now?

CBA shares have increased 95% over the past five years. That means that $10,000 invested in April 2021 would be worth $19,500 today.

And how many CBA shares would I get with the same $10,000 investment today?

While a $10,000 investment would have bought 112 shares in April 2021, today it would only buy 57 shares.

Are CBA shares still a buy today?

Not according to the experts. Analysts widely comment that the bank’s share price is overvalued relative to its peers, and that its bumper price tag isn’t supported by its business fundamentals. 

Brokers are mostly bearish on the outlook for CBA shares, with consensus of a steep share price downturn ahead.

TradingView data shows that 14 out of 16 analysts have a sell or strong sell rating on the stock. Another two rate CBA shares as a hold.

The average target price is $129.98, which implies a 25% downside at the time of writing. But some think the share price could crash 48% to just $90 within the next 12 months.

Are CBA shares worth buying for passive income?

While the 12-month outlook for CBA shares doesn’t look too positive, and a sharp correction is expected ahead, it’s worth remembering that the banking giant is a classic defensive stock. 

This means it is able to remain stable in times of economic crisis. Because of this, it generally has strong and consistent operational performance and earnings, even when markets are mostly weak.

Also, the bank is huge, dominant, and highly profitable, which means investors are struggling to see it as anything other than a safe haven during times of volatility. And so far in 2026, the sharemarket has been very volatile.

The best part is that because CBA is generally stable and defensive in nature, it is able to pay a reliable passive income to investors. 

CBA has paid dividends twice per year consistently since 2006. The bank last paid a fully-franked dividend of $2.35 per share to investors in late March.

The post 5 years ago, $10,000 bought 112 CBA shares. How many would it buy now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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.

Morgans has given its verdict on a few popular ASX 200 stocks this week, courtesy of The Bull.

Let’s see how it rates them:

BHP Group Ltd (ASX: BHP)

Morgans is a fan of this mining giant. It likes its diversified operations, strong balance sheet, and disciplined capital management.

However, the main attraction appears to be copper, which the broker expects to be a key earnings driver thanks to the electrification megatrend.

However, given recent strength in BHP shares, Morgans thinks that they are fairly valued rather than offering a compelling buying opportunity. As a result, the broker has named BHP as a hold this week.

Commenting on its recommendation, Morgans said:

BHP provides diversified exposure to iron ore, copper and future-facing commodities, backed by a strong balance sheet and disciplined capital management. Copper offers long term appeal through electrification, while iron ore continues to drive near term earnings. However, results remain sensitive to global growth and Chinese demand.

With commodity prices reflecting mixed economic signals, BHP’s valuation looks fair rather than compelling. BHP suits investors seeking stability and income, but upside appears balanced by cyclical risk, supporting a hold rating.

Sigma Healthcare Ltd (ASX: SIG)

Morgans is far more positive on the investment opportunity with Sigma Healthcare shares.

It believes the Chemist Warehouse owner is well-placed to deliver margin improvement through own label expansion and exclusive products.

The broker also sees opportunities for the company to improve operating leverage with supply chain efficiencies and the consolidation of distribution centres following its merger.

So, with Sigma Healthcare shares trading closer to their 52-week low than their 52-week high, Morgans thinks now could be an opportune time to snap up shares. As a result, it has named the company as a buy this week.

Commenting on the opportunity, the broker said:

SIG is a leading wholesale distributor and retail pharmacy franchisor with operations in Australia, New Zealand, Ireland and the United Arab Emirates. It has a solid balance sheet with conservative leverage and strong operating cash flows. We believe SIG can continue to widen margins through expanding labels it owns and exclusive products.

We expect improving operating leverage through efficiencies in the supply chain and consolidation in distribution centres. A softer share price provides a compelling buying opportunity for long term focused investors.

The post Morgans says hold BHP shares and buy this ASX 200 stock       appeared first on The Motley Fool Australia.

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