Author: openjargon

If you are looking for passive income from ASX dividend stocks, then it could be worth considering Universal Store Holdings Ltd (ASX: UNI).

That’s the view of analysts at Morgans, which see plenty of value in its shares at current levels.

In addition, the broker is forecasting dividend yields that are comfortably ahead of market averages.

Let’s see what a $10,000 investment in Universal Store’s shares could turn into.

What is Universal Store?

Firstly, in case you’re not familiar with the company, let’s take a quick look at Universal Store.

Universal Store owns a portfolio of premium youth fashion brands and omni-channel retail and wholesale businesses.

Its principal businesses are Universal Store and the Thrills, Worship, and Perfect Stranger brands.

At present, the company operates 100 physical stores across Australia, in addition to online channels. It notes that its strategy is to grow and develop its premium youth fashion apparel brands and retail formats to deliver a carefully curated selection of on-trend apparel products to a target 16-35 year-old fashion focused customer.

$10,000 invested in this ASX dividend stock

If you were to invest $10,000 (and an extra $2.97) into the company’s shares, you would end up owning 2,029 units.

According to a note out of Morgans, its analysts have an add rating and $6.50 price target on its shares. This implies potential upside of almost 32% for investors and would value your holding at $13,188.50.

Commenting on its bullish view, Morgans said:

Our positive view about the fundamental long-term appeal of Universal Store as a retail proposition and investment opportunity is undiminished. The growth opportunities are in place. Universal Store’s women’s banner Perfect Stranger is performing well, justifying an acceleration in its network expansion; the prospect of building out the wholesale distribution channels acquired with CTC is compelling; and customers continue to respond well to the Universal Store banner, rendering its plan to grow this network to more than 100 stores more than reasonable. Although its core youth customers are far from buoyant, they continue to spend.

And let’s not forget the passive income. Morgans expects the ASX dividend stock to pay fully franked dividends of 26 cents per share in FY 2024 and then 29 cents per share in FY 2025. This represents yields of 5.3% and 5.9%, respectively.

Let’s imagine that this means fully franked dividends of 27.5 cents per share over the next 12 months (the final dividend of FY 2024 and the interim dividend of FY 2025), this would mean passive income of approximately $558 from your shares.

Combined, that’s a very healthy 12-month return on investment of approximately $3,750. Not bad if you ask me!

The post Invest $10,000 in this ASX dividend stock for $550 per year in passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) shares are riding high on the seas of artificial intelligence (AI). The chip designer took an early lead in the AI hardware race, leading to incredible business results and skyrocketing stock prices.

The stock traded at a split-adjusted $14 per share when OpenAI released the ChatGPT generative AI engine, powered by thousands of Nvidia AI accelerator chips. Today, Nvidia’s share price has soared to $131. With a $3.2 trillion market cap, it’s one of the three most valuable companies in the stock market.

Did you miss the boat on Nvidia’s AI-based opportunity, or can the stock continue to rise from this lofty plateau? Let’s find out.

Nvidia’s upsides

Nvidia’s financial success is indisputable. Revenues more than tripled year-over-year in the last two earnings reports. Free cash flows are consistently growing by about 500% in the same time frame. Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL) are still more profitable than Nvidia, but the chip expert is catching up.

Many market observers like to point out that the generative AI revolution is only getting started. ChatGPT is less than two years old. Only a couple of tech giants have come up with comparably powerful large language models (LLMs) so far, though many are working on their own long-term generative AI plans. Until further notice, Nvidia’s accelerator chips are the gold standard against which other solutions must be measured. If you’re building a strong AI system, Nvidia’s solutions are the default and the industry standard. Others must develop and then prove some sort of unique advantage before winning AI contracts against Nvidia’s killer products.

Imagine Nvidia maintaining its lead as the generative AI market grows. It’s not hard to see the stock soaring even higher over the next few years.

Nvidia’s potential downsides

On the other hand, the good financial news and a whole lot of forward-looking expectations are already priced into Nvidia’s stock. Shares are changing hands at glossy valuation ratios such as 82 times free cash flow and 40 times sales — levels usually reserved for small-cap start-ups with more sizzle than substance.

At the same time, Nvidia doesn’t stand unchallenged in the AI accelerator market. Arch rival Advanced Micro Devices (NASDAQ: AMD) has its Instinct line of cost-effective AI chips. The Intel (NASDAQ: INTC) Gaudi series boasts impressive performance per watt of electric power. And that’s just the top of a large heap. There’s more than one way to design an AI-crunching system, and rival solutions may offer compelling alternatives for specific use cases. Who’s to say that Nvidia will hang on to its market-defining lead in the long run?

Separately, the issues of high valuation and strong competition should be enough to give most investors pause before slamming that “buy” button on Nvidia stock. Together, it’s a high-wire act with a long way down. Nvidia’s stock is priced for perfection and any misstep — such as a major AI contract lost to Intel or AMD — will probably result in a quick and painful price drop.

Should you buy, sell, or hold Nvidia?

I’m not saying you should sell every Nvidia share right now and never look back. The company could very well stave off the army of rivals and continue to innovate on a hard-to-match level. Indeed, a bit of Nvidia exposure could serve your portfolio well over the years.

Meanwhile, I highly recommend taking some profits off the table by selling a portion of your long-term Nvidia holdings. The gains are more than substantial and I’m sure you can find more stable and secure ways to invest that money in the AI market.

So on the scale of buy, sell, or hold, I see Nvidia as a stock to hold for the long run. I’d rather sell a few shares than buy more at these nosebleed-inducing share prices. Your mileage may vary, depending on your appetite for market risk and AI-driven excitement. Feel free to do your own research and reach different conclusions. Just don’t say I didn’t warn you if or when Nvidia’s big price correction comes.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is it too late to buy Nvidia stock? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Microsoft, and Nvidia. Anders Bylund has positions in Intel and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Intel and has recommended the following options: long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short August 2024 $35 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Everyone wants a good retirement, but some of us might be inadvertently self-sabotaging our superannuation.

When it comes to superannuation, there’s no shortage of comparison tools. We can compare our nest egg to the average for others our age and quickly find which superfunds take the smallest fee. But is enough attention being paid to our allocation?

Last month, my fellow colleague Bronwyn Allen wrote that 30% of Australians have a ‘vague idea or no idea’ of their superannuation balance. If people don’t know how much they have in their super, there’s a good chance they’re unaware of what it’s invested in.

It underscores a concern shared by Alex Vynokur, the founder of Betashares, Australia’s second-largest exchange-traded fund (ETF) provider. Everyday Australians could be giving up a wealthier retirement by overlooking a critical element of investing.

The lowest-cost option isn’t always the best

Fees can have an enormous impact on any investment portfolio over a long period of time. There is no denying that people should pay attention to the fees charged by a superannuation fund. The problem is that too much emphasis on cost might cloud other important factors.

In an interview with The Australian Financial Review, Vynokur raised his view on an underrated issue in super, stating:

It’s all good to ‘compare the pair’ and be proud of the low management fee, but there’s actually a lot you lose via poor asset allocation.

Vynokur believes too many young Aussies’ super are in a balanced option by default. And not because of risk-averse decision-making. Rather, the Betashares CEO puts it down to a lack of familiarity with the topic or a complete absence of interest.

Typically, a young investor can afford to take on higher risk with several decades until retirement, allocating more of their assets to stocks. However, a balanced fund can be around 30% invested in fixed-interest and cash, according to MoneySmart.

Where is your superannuation invested?

The difference in portfolio allocations could greatly change the outcome for Aussies in retirement.

In the 11 months to 31 May, Australian Retirement Trust’s balanced option returned 8.8%, while the growth strategy grew by 10.2%. Let’s assume these returns were applied as a per annum performance for a $50,000 superannuation account (with contributions of $5,000 each year) over 10 years; the outcome would be:

• Balanced option — $191,457
• Growth option — $212,520

There is no right or wrong allocation. What is important is knowing how your superannuation is invested. Only then can someone decide whether it is allocated appropriately based on your own individual needs and goals.

The post Maximising superannuation: Are you losing out due to ‘poor asset allocation’? appeared first on The Motley Fool Australia.

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• Should you buy Life360 shares after its latest stunning milestone?
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• What are the best ASX shares to buy with $500 in 2024?

Motley Fool contributor Mitchell Lawler 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.

Beach Energy Ltd (ASX: BPT) shares were under pressure on Tuesday.

The ASX 200 energy stock dropped almost 2.5% to $1.53 after investors responded negatively to its strategic review.

What did the ASX 200 energy stock announce?

Yesterday Beach Energy revealed the outcome of its strategic review. It has laid out a plan that it believes will result in operating cost and capital reductions totalling ~$135 million.

This will come from a 23% headcount reduction, ~$35 million field operating cost savings, and a ~$100 million sustaining capital expenditure reduction.

Management believes that this will help it deliver leading shareholder returns through the sustainable supply of energy.

In addition, the ASX 200 energy stock provided its guidance for FY 2025 with the review.

Its initial FY 2025 guidance is production of 17.5MMboe to 21.5MMboe and capex of $700 million to $800 million. This compares to FY 2024 guidance of ~18MMboe and capex of the top end of $900 million to $1,000 million.

Broker response

Although the market wasn’t overly enthralled by Beach Energy’s strategic review, the team at Bell Potter has seen enough to remain positive on the company and its shares.

And while it has trimmed its earnings estimates to reflect the ASX 200 energy stock’s updated outlook, it continues to see value in its shares. It commented:

The Strategic Review outcomes are largely as expected; strong on cost out targets and capital discipline. Adjusting for the updated outlook, EPS changes in this report are: FY24 +11%; FY25 -25%; and FY26 -11%.

Should you invest?

Bell Potter has responded to the review by retaining its buy rating with a trimmed price target of $1.75. This implies potential upside of 14.4% for investors over the next 12 months.

In addition, the broker expects a 2.6% dividend yield from its shares, which boosts the potential total return to 17%. Bell Potter concludes:

FY25 will be a year of consolidation as Waitsia Stage 2 ramps up and new Otway wells offset Western Flank decline. However, capex should now be trending lower and production growth will see free cash flow lift from FY26. BPT has retained a strong balance sheet capable of supporting the group’s dividend policy. BPT’s near-term production growth is a key differentiator when compared with domestic peers. With a positive view on Australian east coast gas and LNG markets, and a strong production and earnings growth outlook, we maintain a Buy recommendation.

The post Buy this ASX 200 energy stock if you want a big return 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 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.

Life360 Inc (ASX: 360) shares were on form on Tuesday and pushed higher again.

The location technology company’s shares rose almost 2.5% to $15.80.

This means that its shares are now up approximately 110% since the start of the year.

Why did Life360 shares charge higher?

Investors were buying the company’s shares after it announced the achievement of another key milestone.

According to the release, Life360 has reached over 2 million global app paying subscriber circles. Its CEO, Chris Hulls, commented:

Reaching 2 million paying circles is a testament to the value Life360 delivers to families globally. Life360 is woven into the fabric of everyday family lives, simplifying how they communicate, keep connected, and stay safe. Our core subscribers are parents with kids of mobile phone and driving ages, and our platform helps families with everyday coordination and provides them with peace of mind. At the same time, we continue to see growth in circles beyond the traditional family. Achieving new heights with our paid memberships reflects strong global engagement and growth across segments.

Should you invest?

Bell Potter was impressed with the news, noting that it has achieved this milestone well ahead of expectations. The broker commented:

Life360 put out a media release saying it has just reached 2m global paying circles. This was notably ahead of our forecast which was 1.98m at 30 June 2024 and an increase of 86k in 2Q2024. The figure at 31 March 2024 was 1.90m so this indicates the company has already added c.100k this quarter and will exceed the 96k added in 1Q2024. This far exceeds the growth of 73k in 1Q2023 and 62k in 2Q2023 which was admittedly after the material price rises which were put through for iOS users in the US in 4Q2022.

The good news is that Bell Potter believes that Life360 could build on this in the coming quarter. It adds:

We also note that Q1 and Q2 are traditionally not the strongest quarters for paying circle growth and this rather is in Q3 with back-to-school in the US so the current momentum suggests another quarter of around 100k or more in 3Q2024.

In light of the above, the broker has reaffirmed its buy rating and lifted its price target on Life360 shares to $17.75. Based on its current share price, this implies potential upside of 12% for investors over the next 12 months. Bell Potter concludes:

The next potential catalyst for the share price is the release of the Q2/H1 result in early to mid August which we expect to be good and we see some potential of an upgrade to the guidance if not a narrowing of the ranges.

The post Should you buy Life360 shares after its latest stunning milestone? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I’m a big fan of buy and hold investing and believe it is one of the best ways to grow your wealth.

That’s because the longer you invest, the more time you have to let compounding supercharge your returns.

Compounding is what happens when you earn returns on top of returns. It explains why a 10% annual return will turn $10,000 into $11,000 in one year and into $50,000 in 17 years.

And if you can add more funds as you go, then your returns will go up another level.

For example, a $10,000 investment with $1,000 annual contributions that compounds at 10% per annum will become almost $100,000 after 17 years.

With that in mind, let’s now take a look at two ASX growth shares that could be great buy and hold investment options. Here’s why analysts are bullish on them:

Pro Medicus Limited (ASX: PME)

Goldman Sachs thinks that this health imaging technology company could be a great ASX growth share to buy and hold.

And although its shares have rallied higher and are now approaching its price target, Pro Medicus could still be worth holding tightly to for potentially strong long term gains. Goldman commented:

We see PME’s software Visage 7 as an industry leading solution with two distinct advantages relative to peers — speed and cloud capabilities — that have influenced the choice of PACS vendor. Given this, PME is benefiting from an industry network effect, and we forecast share gains to 13% in FY30E (c.7% today) as more hospitals move to modern systems. PME is expanding into adjacent solutions including AI and Cardiology which could provide significant upside given we believe PME is the incumbent technology leader in radiology, and is well-placed to take share in both markets.

The broker has a buy rating and $136.00 price target on its shares.

NextDC Ltd (ASX: NXT)

Another ASX growth share that could be a great buy and hold option is NextDC. It is one of the Asia-Pacific region’s leading data centre operators.

Morgans is very positive on the company’s outlook and is forecasting strong earnings growth in the coming years thanks to the insatiable demand for data centre capacity. It said:

Structural demand for cloud and colocation remains incredibly strong. NXT’s new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.

The latter compares to NextDC’s underlying EBITDA guidance of $190 million to $200 million in FY 2024.

Morgans has an add rating and $19.00 price target on its shares.

The post 2 top ASX growth shares to buy today and hold for 10 years appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you have $500 burning a hole in your pocket, then it could be worth putting it into the share market.

After all, if you were to do this every month, history shows that you could grow your wealth significantly.

For example, based on an expected (but not guaranteed) return of 10% per annum, an investment of $500 a month into ASX shares would become worth $100,000 in 10 years.

And if you were to keep going for a further 10 years, your investment portfolio would grow to $360,000.

Finally, a further decade of investing this way would see you hit the million-dollar mark.

Clearly, even relatively modest investments have the potential to grow into something material thanks to the power of compounding.

With that in mind, let’s now take a look at a few ASX shares that could be good options for that first $500 investment.

Lovisa Holdings Ltd (ASX: LOV)

If you’re making a $500 investment, you ideally want to invest in something that you can buy and hold for the long term. This means you can avoid paying brokerage costs more than you need to, which eat into your returns.

Lovisa arguably ticks all the boxes for a long-term investment. It has a very bright future thanks to its global expansion, which is only really getting started.

It is because of this expansion that Morgans is very bullish on Lovisa and has an add rating and $35.00 price target on its shares. It has previously noted that its plan to “enter mainland China in FY24, [is] paving the way for significant longer-term growth.”

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another quality option for that $500 investment could be the BetaShares NASDAQ 100 ETF.

This exchange-traded funds (ETF) is home to 100 of the best companies that the world has to offer. This includes the likes of Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA), as well as a plethora of tech giants and household names.

Given the quality on offer among these names, this ETF looks well-placed to continue delivering strong returns for investors long into the future.

Xero Ltd (ASX: XRO)

Finally, this cloud accounting platform provider could be a great ASX share to buy and hold with a $500 investment.

Especially given its industry-leading position in a market that Goldman Sachs estimates to comprise over 100 million small to medium sized businesses globally. It believes that this gives it a “>NZ$100bn TAM [total addressable market].” This compares to Xero’s current subscriber base of 4.2 million.

Goldman currently has a buy rating and $164.00 price target on its shares.

The post What are the best ASX shares to buy with $500 in 2024? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF, Lovisa, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Lovisa, Nvidia, and Xero. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF and Xero. The Motley Fool Australia has recommended Apple, Lovisa, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.