Author: openjargon

Qantas Airways Ltd (ASX: QAN) shares encountered turbulence in FY24, “flying backwards” on the chart as my colleague Bernd put it.

At the time of writing, shares in the iconic flying kangaroo are swapping hands 0.082% higher at $6.11 apiece.

Reports have surfaced that The Australian Securities and Investments Commission (ASIC) recently raised questions about certain price movements in Qantas shares last year.

This came around the time Qantas was under investigation by the Australian Competition and Consumer Commission (ACCC), according to The Australian Financial Review.

Here’s a closer look.

ASIC queries Qantas’ knowledge

As a reminder, the ACCC began proceedings against Qantas in August 2023.

It alleged Qantas sold tickets for flights that had already been cancelled during the COVID-19 pandemic. This resulted in Qantas paying a $120 million settlement.

But from 24 July to 20 October last year, as news of the probe surfaced, Qantas shares plunged from highs of $6.69 to lows of $4.77, respectively.

ASIC reportedly wrote to its fellow corporate watchdog at the ACCC shortly after Qantas shares fell.

It was asking about the timeline of the ACCC’s investigation into the airline.

It aimed to determine if Qantas directors or executives knew about the investigation before it happened or before the significant drop in the company’s share price tied to these events.

The regulator also inquired about the board-approved share sales of its former CEO, Alan Joyce.

Joyce reportedly sold $17 million of his Qantas shares in June last year – equivalent to more than 90% of his stake – shortly before the ACCC made its proceedings against the airline public.

What’s next for Qantas shares?

Despite ASIC’s requests for information, there is no indication it will follow up with an investigation, or that Joyce and the company’s board acted on insider information.

The news is also a media report and not a market-sensitive update, so it’s unsurprising that Qantas shares did not react. However, the same couldn’t be said for the last financial year.

In FY24, the Qantas share price dropped nearly 6%, closing at $5.85 on the last trading day of the financial year.

This decline occurred despite strong financial results for FY23, which saw a 118% year on year increase in revenue to $19.8 billion and a pre-tax profit of $2.5 billion.

Despite this, Qantas shares have rebounded in FY25 and are up 13% this year to date.

The airline’s February H1 FY24 results showed revenue of $11.1 billion and a solid underlying profit before tax of $1.3 billion.

It also authorised another $400 million share buyback.

Goldman Sachs rates Qantas as a buy, with a price target of $8.05. This indicates a potential upside of nearly 32% from the current price.

Meanwhile, consensus rates it a buy, according to CommSec.

The post Why did ASIC take a look when Qantas shares fell last year? appeared first on The Motley Fool Australia.

More reading

• 10 ASX shares to buy in FY25
• Why did the Qantas share price fly backwards in FY 2024?
• Why these losing ASX stocks could be a better buy than AI right now
• Are Qantas or ANZ shares a better buy?
• Qantas share price drops 3% amid Qatar rumours

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.

Almost all of us would love the ability to quit work and rely on the passive income from ASX dividend shares to live. We might not want to stop working altogether. But merely having the option to work or not to work, safe in the knowledge that our dividends can cover all of our living expenses, is one that most Australians would relish.

But dreaming is the easy part. Plotting a viable pathway to financial independence is a little harder.

Hopefully, we can clear some of the fog from this path today with a look at how much cash you might need to quit work and live off of your dividend income for the rest of your days.

Well, there are quite a few variables we have to go through.

For one, we have to ask ourselves how much income we need to live off in order to give up our day jobs.

Some people might want to live lavish lifestyles after they stop working. These folks might want to travel the world and see the sights or host regular parties and gatherings for their friends and family.

Others might want to move to the country, buy a couple of chickens, plant a vegetable garden, and enjoy a simpler existence.

You’ll also need to consider other factors like whether you rent or, if you don’t, whether your mortgage is paid off.

Step one is working out how much money you will (not might) spend.

How much cash do you need to retire and live off ASX dividend income?

Step two involves assessing how much cash you have available to invest in a portfolio of income-producing ASX dividend shares.

Chances are you won’t want to (indeed, you shouldn’t) keep all of your net wealth tied up in shares, even if they are producing income for you. Keeping some of your wealth in cash for an emergency or rainy-day fund is important.

If you crash your car or have an expected medical bill in the depths of a stock market crash, you might be forced to sell your shares at the worst time possible. So make sure you take this into account as well.

But let’s get down to some numbers.

Here in Australia, our shares are well-known for their high dividend output. However, the level of cash you’ll need to invest will still vary from stock to stock. For instance, if you wish to bag $50,000 in annual dividend income from ANZ Group Ltd (ASX: ANZ) shares, you’ll need to invest approximately $825,000.

But to see that level of income from WiseTech Global Ltd (ASX: WTC) stock, you’ll have to invest more than $31 million.

Crunching the numbers on an early retirement

For simplicity’s sake, we’ll assume our would-be retiree buys a portfolio of generous ASX dividend payers that yields a collective 4%.

Some famous ASX dividend payers, like ANZ, Transurban Group (ASX: TCL) and Telstra Group Ltd (ASX: TLS), currently pay more than 4%. And some, like Woolworths Group Ltd (ASX: WOW) and Commonwealth Bank of Australia (ASX: CBA), pay less right now. But for an average, 4% arguably makes sense.

Harking back to our two lifestyles above, we’ll assume the person wanting to retire and maintain a lavish lifestyle would want $150,000 in annual income from their ASX dividend shares.

We’ll also assume that our more modestly inclined would-be retiree would be content with an annual salary of $75,000.

If one wishes to bag $150,000 in annual dividend income at a yield of 4%, they would need to aim for an ASX share portfolio worth $3.75 million.

For that $75,000 annual income, the figure one should aim for is $1.875 million.

Fortunately, dividends tend to rise over time, so we hopefully won’t have to worry about this annual income keeping up with inflation.

But this exercise just goes to show that building enough wealth to fund an early retirement is no easy feat, even if you are aiming for a modest early retirement. But with enough time and discipline, it is more than possible for most of us.

The post How much cash do you need to quit work and live off ASX dividend income? appeared first on The Motley Fool Australia.

More reading

• Are ASX 200 bank shares too expensive to buy right now?
• Why DroneShield, GenusPlus, Monadelphous, and Telstra shares are roaring higher today
• Telstra share price lifts off alongside its mobile pricing plans
• 2 ASX shares to buy for a retirement portfolio in FY25
• Are Macquarie or CBA shares a better buy?

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and WiseTech Global. The Motley Fool Australia has positions in and has recommended Telstra Group and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors that have a high tolerance for risk, may want to check out the speculative ASX stock in this article.

That’s because one leading broker believes this risky investment could triple in value from current levels.

Which speculative ASX stock could triple in value?

The stock in question is Meteoric Resources NL (ASX: MEI).

At present, its shares are being anything but meteoric. In afternoon trade, they are down 16% to 13 cents.

This means that the rare earths developer’s shares are now down a sizeable 28% since the end of last week. This has been driven by the release of the scoping study results for the Caldeira ion-adsorption clay rare earth project in Brazil.

While this is disappointing, analysts at Bell Potter think it could have created a buying opportunity for investors that are willing to take the risk.

Commenting on the scoping study, the broker said:

MEI have released the results of its scoping study (SS) on the Caldeira ion-adsorption clay rare earth project in Minas Gerais. The SS outlined a post-tax NPV8% of US$699m with Capex of US$297m (excluding $104m contingency) and operating costs of US$7/kg TREO on a basket price of US$45/kg (US$20/kg at spot) less payability discounts of ~30% provides an achieved price of US$31 (spot US$14/kg). On this basis, The Caldeira project makes a ~50% operating margin at spot before accounting for royalties (4.75% Togni Family & 2% Government) and transport costs. We have updated our model to incorporate the new information and provided some first-pass commentary.

And while its capital costs are higher than Bell Potter was expecting, this hasn’t been enough to put off its analysts. In response to the update, it has retained its speculative buy rating on the ASX stock with a reduced price target of 40 cents (from 50 cents). This implies potential upside of 207% from current levels. The broker concludes:

The results confirm the Caldeira project is of superior quality, with the ability to operate through all stages of the pricing cycle. Critical path items for the business now shift towards the permitting phase, with three distinct licences needed and an EIA prior to production commencement. Our valuation is reduced to $0.40/sh (previously $0.50/sh) in this note on the inclusion of higher capital costs and associated equity financing, and adjustments to our pricing formulas. At current levels MEI remains an attractive business and we retain our Spec Buy recommendation.

The post Broker says this speculative ASX stock could rise over 200% appeared first on The Motley Fool Australia.

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• Why Bowen Coking Coal, Clinuvel, Meteoric Resources, and Pilbara Minerals shares are falling
• Meet the speculative ASX stock that could rise 200%

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.

The Vanguard US Total Market Shares Index ETF (ASX: VTS) gives Aussie investors exposure to more than 3,700 United States stocks, including the Magnificent Seven and many small caps and micro caps.

And that was handy exposure in a year when US shares outperformed ASX shares by about 3:1.

The S&P 500 Index rose by 22.7%, and the tech-heavy NASDAQ Composite Index lifted 28.61% in FY24.

Here at home, the S&P/ASX 200 Index (ASX: XJO) rose by 7.83%.

So, how profitable was it to own the Vanguard US Total Market Shares Index ETF in FY24?

How profitable was ASX VTS for Aussie investors in FY24?

The ASX VTS exchange-traded fund (ETF) began FY24 at $329.34 per unit.

The ASX ETF reached a 52-week high of $408 per unit on the final trading day of FY24.

It closed out the financial year at $406.76 per unit. That’s a 23.51% uplift.

With ETFs, we need to take into account the fees we pay for their management. The ASX VTS has a management expense ratio (MER) of 0.03%, making it one of the 10 cheapest ASX ETFs on the market.

Back to our returns for FY24.

Let’s say you put $10,000 into the ASX VTS on 1 July 2023 at a price of $329.34 per unit.

That would have given you 30 units in ASX VTS.

The 23.51% uplift in value means your holdings are now worth $12,322.60.

But wait, there’s more!

What about dividends?

First of all, ETFs call dividends ‘distributions’, so let’s get the language right first.

In FY24, the ASX VTS paid four distributions to Aussie investors:

• On 24 July 2023, it paid $1.2077
• On 20 October 2023, it paid $1.2609
• On 24 January 2024, it paid $1.5212
• On 24 April 2024, it paid $1.4079.

Altogether, ASX VTS owners received $5.3977 per unit in distributions during FY24.

If you held 30 units, then you received a total of $161.931.

If we add that to our capital earnings of $2,322.60, we get a total return of $2,484.53 for FY24.

In percentage terms, that’s a return of just under 24.85% on your original $10,000 buy on 1 July 2023.

More about the ASX VTS

The ASX VTS seeks to track the performance of the CRSP US Total Market Index (NASDAQ: CRSPTM1) before fees.

And yes, before you ask, that index does include the Magnificent Seven stocks we are all obsessed with! They are Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta Platforms, and Tesla shares.

Other appealing US stocks are also in the mix. They include Warren Buffett’s Berkshire Hathaway and diabetes and obesity GLP-1 drug maker Eli Lilly And Co.

The post Here’s how profitable owning the Vanguard US Total Market Shares Index ETF was in FY24 appeared first on The Motley Fool Australia.

More reading

• 3 things about Vanguard US Total Market Shares Index ETF (VTS) every smart investor knows
• 2 of the best reasons to buy ASX ETFs
• Last chance to secure the latest Vanguard US Total Market Shares Index ETF dividend
• Own the Vanguard US Total Market Shares Index ETF (VTS)? Here’s your 12-month ASX outlook
• Why the Vanguard US Total Market Shares Index ETF (VTS) is a top long-term buy

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bronwyn Allen has positions in Vanguard Us Total Market Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you want to some exposure to the gold sector, then read on!

That’s because analysts at Goldman Sachs have picked out a number of ASX gold stocks that it currently rates as buys. Here are four:

Bellevue Gold Ltd (ASX: BGL)

The broker is a fan of Bellevue Gold and sees it as an ASX gold stock to buy. It has a buy rating and $2.20 price target on its shares. This suggests that its shares could rise 13.5% from current levels. It commented: “We note the recently proposed paste plant may add upside to consensus capex expectations (GSe ~A$50mn), though this supports increased underground resource recovery, where the commenced study for expansion to ~1.5Mtpa/250kozpa is expected 1HFY25.”

De Grey Mining Limited (ASX: DEG)

This morning, Goldman has a retained its buy rating on this gold developer’s shares with a trimmed price target of $1.35. This implies potential upside of 16% for investors over the next 12 months. It was pleased with the company’s receipt funding update, noting that it is “expected to fully fund the development cost of the Hemi Gold Project.”

Evolution Mining Ltd (ASX: EVN)

Another ASX gold stock that Goldman is positive on is Evolution Mining. This morning, it has reiterated its buy rating and $4.15 price target on its shares. This suggests that upside of 12% is possible from current levels. Ahead of the release of its quarterly update, the broker said: “Following the production update in mid-June, we expect FY24 production to be in-line with implied guidance of ~723koz. With reduced uncertainty over the medium-term, particularly following Northparkes/Cowal site visits, our expectations for ~750koz/75kt of gold/copper production appear consistent with market expectations.”

Gold Road Resources Ltd (ASX: GOR)

A fourth ASX gold stock that could be a buy according to Goldman Sachs is Gold Road Resources. It has retained its buy rating with an improved price target of $2.10. This implies potential upside of 18% for investors. While Goldman suspects that Gold Road could underperform expectations due to wet weather, it remains very positive. It said: “We expect QoQ production to be largely flat in the Jun-24 quarter (below consensus) on recovery from rain impacts (recovery through April limiting production despite a return to target mining/milling rates from May and the Great Central Road reopened for consumables delivery). GOR expect a strong second half, where we see more medium-term opportunities from Yamarna (100% owned) and toll treating through the JV.”

The post Goldman Sachs says these ASX gold stocks are buys appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
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• Will ASX gold shares again outshine the market in FY 2025?
• 5 things to watch on the ASX 200 on Friday
• 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 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.

Investors who own the ASX 200 bank share National Australia Bank Ltd (ASX: NAB) have more than a few reasons to be smiling today.

For one, the NAB share price is having a solid Tuesday so far, currently up a happy 0.64% at $35.56 a share.

But NAB shares have also had one of their best years in quite a long time over the past 12 months. A year ago, this ASX bank was going for $25.64 a share. That means investors have enjoyed a near 39% gain since July 2023. The shares are also up a healthy 15.21% in 2024 to date.

Check all that out for yourself below:

If we add on the returns from NAB’s generous dividends, we’re looking at a 12-month gain well north of 40%. And that’s before we even factor in the full franking credits from NAB’s dividends.

Needless to say, NAB shareholders can’t ask for much better than this.

But even so, there’s another piece of good news for NAB shareholders to digest this July. That would be a massive insider buy for this bank stock.

NAB insiders buy up shares

According to an ASX filing from 3 July earlier this month, one of NAB’s directors has picked up a significant parcel of new shares.

The filing reveals that NAB board member and non-executive director Sarah Carolyn Kay picked up an additional 2,000 NAB shares on 3 July in an on-market trade. Kay spent $70,880 on this trade, implying that she paid an average share price of $35.44 for those 2,000 shares of stock.

This trade increases Kay’s total NAB shareholding to 6,182 shares. At today’s share pricing, that parcel would be worth just under $220,000.

Kay has been on NAB’s board since July 2023. In May, she purchased 1,500 NAB shares, paying $34.75 a share.

But Kay isn’t the only NAB insider that’s been buying up shares in 2024.

May was a busy month for these insiders. Another board member in non-executive director Alison Kitchen purchased 4,380 NAB shares back on 7 May for a total sum of $148,920. That implies a purchase price of $34. Kitchen is now the proud owner of 6,120 NAB shares in total.

Christine Fellowes, another non-executive director, also bought up some shares on 8 May. She purchased 1,457 shares, paying $49,931.39 for the privilege. That works out to be an average buy price of $34.27. Fellowes now holds 4,895 NAB shares in her name.

All of these directors would now be glad they bought, considering NAB shares are trading at a higher level today than all of these purchase prices.

Investors of all stripes usually like to see management and insider figures buy up shares of the companies they are well-paid to run. It aligns their financial interest closer to other shareholders. It also ‘puts the money where the mouths are’ by showing to investors that they have some skin in the game.

So no doubt NAB shareholders will welcome all of this news. But let’s see where the shares of this ASX 200 bank stock go from here.

The post This insider just bought a bucketload of NAB shares appeared first on The Motley Fool Australia.

More reading

• Are ASX 200 bank shares too expensive to buy right now?
• ASX 200 bank shares ‘don’t appear overly expensive’ compared to global peers: UBS
• Own NAB shares? Here’s how much you’re about to get paid in dividends
• Own NAB shares? You just got a 44% return in FY24
• What is the outlook for ASX 200 dividend shares in FY25?

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.

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

Let’s face it: 2024 has been all about the megacaps. Nvidia (NASDAQ: NVDA) is up 147% year to date; Meta Platforms is up 44%; Alphabet is up 33%.

Moreover, Nvidia, Apple, Microsoft, Amazon, Alphabet, and Meta Platforms now boast a combined market cap of $15.6 trillion. That’s roughly equivalent to the size of the Eurozone economy, which has an annual gross domestic product of $15.4 billion, according to the latest estimates from the World Bank.

So, let’s compare two of the best megacaps, Nvidia and Microsoft (NASDAQ: MSFT), to see which is better positioned to rule the second half of 2024 — and beyond.

Nvidia

No company has experienced a more remarkable growth in its market cap over the past two years than Nvidia. The semiconductor giant has added a staggering $2.7 trillion in value, catapulting it to the position of the most valuable company on Earth, if only briefly.

Its rise is almost entirely thanks to the surge in demand for artificial intelligence (AI) and the hardware behind it. Nvidia designs graphics processing units (GPUs). These powerful devices are often linked together by the thousands — even hundreds of thousands — within data centers to help train the latest and greatest AI models.

While there are other companies in the GPU design space, Nvidia enjoys several key competitive advantages. The trust and familiarity AI developers have with Nvidia’s GPUs and its software make it challenging for them to switch to another supplier. Moreover, Nvidia’s extensive experience in GPU design prior to the AI boom gives it a unique edge over its competitors.

Microsoft

Despite the attention garnered by Nvidia’s rapid ascent, it’s important not to overlook Microsoft’s impressive stock performance. The company once again holds the title of the most valuable company on Earth, a position it regained after briefly being overtaken by Nvidia. To maintain this lead, Microsoft is demonstrating its adaptability to the evolving tech landscape, particularly the AI revolution.

On that front, Microsoft has already begun integrating AI into its signature software applications. It now offers a generative AI assistant through its Microsoft Copilot add-on, which can analyze data, respond to queries, create images, and generate code.

What’s more, Microsoft diverse business segments provide a layer of protection, should the AI revolution falter. The company has a massive cloud services unit and a successful gaming division among various other business segments.

Which stock is a better buy in the second half of 2024?

Simply put, both Nvidia and Microsoft are outstanding companies. They generate billions in revenue, profits, and free cash flow. They’re also led by some of the top CEOs on the planet: Satya Nadella at Microsoft and Jensen Huang at Nvidia.

However, there are differences to evaluate.

For one, Nvidia’s valuation is approaching record highs. Its price-to-sales (P/S) ratio is now 39x — more than double its 10-year average of 15x.

Meanwhile, Microsoft’s P/S ratio is also historically high at 14x. However, that value is less than half of Nvidia’s on an absolute basis.

MSFT PS Ratio data by YCharts

In other words, both stocks are historically expensive, but Nvidia is far more costly in a head-to-head comparison.

At any rate, the rapid growth of the GPU market is what investors are counting on to bring Nvidia’s valuation down. And while those growth estimates are impressive (analysts expect Nvidia’s sales to rise 98% over last year), any signs of slowing growth could lead to a sharp sell-off in Nvidia shares.

In conclusion, I prefer Microsoft, given the stock’s more reasonable valuation at current levels. That said, long-term Nvidia investors shouldn’t bail on the stock now. Rather, they should remember that one of the keys to successful buy-and-hold investing is to let winners run. 

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

The post Better megacap stock: Nvidia vs. Microsoft appeared first on The Motley Fool Australia.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.