Author: openjargon

The career rise of Bob Iger — and how the Disney CEO spends his fortune
Iger is believed to be richer than the Disney heir, Abigail Disney.

Valerie Macron/Getty Images
- Bob Iger has been heading one of the world's largest entertainment companies for nearly two decades.
- The House of Mouse boss stepped down as Disney CEO in February 2020 only to return in 2022.
- Here's a look at his wealth, spending, and career, from a lowly position at ABC to Disney CEO.
Bob Iger now has something money can't buy: the title of Honorary Knight.

He was given the title Knight Commander of the Most Excellent Order of the British Empire in a ceremony led by Prince William.

Perhaps most important on his résumé, though, is his tenure as the CEO of Disney.

Iger started his entertainment career in 1974 as a studio supervisor at ABC and climbed up the show business ranks to lead one of the most powerful businesses in the world.

Though he retired as CEO in 2020, Bob Iger returned to the role in a shocking shakeup two years later. Iger had stepped down as CEO in February 2020 but stayed on as executive chairman until December 2021, when he retired, albeit ultimately briefly.

Iger has amassed a sizeable personal fortune across his 15 years and counting as CEO.

Forbes reported in 2019 that Iger had a net worth of $690 million, which is thought to be higher than that of Disney heiress Abigail Disney, who said that year that she's worth about $120 million. Iger, meanwhile, received $31.6 million in total compensation in 2023, or 595 times what the median Disney employee makes.

Here's what we know about Iger's life and career rise, including how he makes and spends his multimillion-dollar fortune:

Iger was born Robert Allen Iger in Brooklyn, New York, and raised in the small town of Oceanside, New York.

Circled is Bob Iger, who graduated from Oceanside High School in 1969.

Oceanside High School

"I am very lucky," Iger told Laurene Powell Jobs at The Atlantic Festival in Washington in 2019. "I was a lower middle class kid or middle class. My father had manic depression so he had trouble holding a job. I started as a $150-a-week employee at ABC 45 years ago and rose up to be CEO of this company. It is a great story, but it is not necessarily because I was extraordinary."

He attended Ithaca College where he graduated magna cum lade in 1973 with a degree in Television and Radio.

Iger is an alum of Ithaca College.

Jae C. Hong / AP

At Ithaca College, Iger hosted a campus television show called "Campus Probe." He graduated originally wanting to be a news anchor and briefly worked as a local weatherman in Ithaca, New York.

In 1974, Iger joined ABC, working in New York City. He wrote in his memoir "The Ride of a Lifetime" that he did "menial labor" for basically every show ABC produced out of Manhattan at the time.

Iger got started at ABC through an unlikely connection.

Getty/Michael Tullberg

Iger wrote in his book that he got his first job at ABC because of his uncle, who was in the hospital for eye surgery. His uncle was in the room next to someone who claimed to be a top executive at ABC, who said he would give the younger Iger a job.

Iger took the "top executive" up on his offer, though he quickly realized that the person was not a "top executive" but instead a lower-level one. Still, the person ran a small department at ABC known as Production Services and was able to secure Iger an interview with the department.

At age 23, Iger was brought on as a "studio supervisor."

But after a confrontation with his boss, Iger was almost fired and forced to look for a new job. Soon after, he moved over to a position at ABC Sports.

Iger moved to ABC Sports after a confrontation with a boss.

Photo by Walt Disney Television via Getty Images

Iger has said that one of his bosses accused Iger of spreading rumors about him, causing the young Iger to almost be fired.

"He told me I wasn't promotable and I had two weeks to find another job somewhere in the company or I was gone," Iger recalled at the UCLA Awards Gala in 2013. "Fortunately, I was able to find another job in the company. They didn't think I wasn't promotable, I guess."

He worked his way up the ABC Sports ladder, working closely with Roone Arledge, "a relentless perfectionist," who was the head of ABC Sports at the time.

Iger, right, credits Roone Arledge, left, with teaching him a mantra of "Innovate or die."

BOB STRONG/AFP via Getty Images

Iger wrote in his book that Arledge was the person who taught him the mantra which would follow Iger for the rest of his life: "Innovate or die."

Iger went on to become the vice president of ABC Sports.

Iger climbed the ladder at ABC Sports to become vice president.

Photo by Jim Smeal/Ron Galella Collection via Getty Images

ABC was later sold to Capital Cities Communications for $3.5 billion in a deal finalized in 1986.

Shortly after, Tom Murphy and Dan Burke — the heads of Capital Cities/ABC — tapped Iger to become the head of ABC Entertainment, and Iger moved to Los Angeles.

Dan Burke (left) and Tom Murphy (right) wanted Iger to lead ABC Entertainment.

Photo by Steve Fenn/Walt Disney Television via Getty Images

Iger wrote in his memoir that the constant traveling put strain on his first marriage, to Kathleen Susan. Eventually, the two divorced. They have two daughters.

While at the helm of ABC Entertainment, Iger was the one who took a chance and put David Lynch's "Twin Peaks" on air.

Though "Twin Peaks" was cancelled after two seasons, Iger said taking a chance on it paid off in different ways.

Photo by Walt Disney Television via Getty Images Photo Archives/Walt Disney Television via Getty Images

The critically-acclaimed series was cancelled after two seasons, but Iger wrote in his book that the risk he took putting it on television caught the attention of other famed directors such as Steven Spielberg and George Lucas.

Iger and Lucas then developed a show based on the Indiana Jones franchise, which was cancelled after two seasons. But, Iger wrote in his book, Lucas never forgot the risk Iger took on his show, and he remembered it years later when he decided to sell Lucasfilm to Disney.

In 1993, Iger became president of ABC Network's Television Group.

Iger succeeded Dan Burke as president.

Photo by Paul Hawthorne/Getty Images

When Burke retired, Iger was tapped to replace him as president and COO of Capital Cities/ABC.

In 1995, Iger married journalist Willow Bay who, at the time, was a stand-in weekend news anchor on Good Morning America, and was poised to take over for then-full time host Joan Lunden.

Iger and Willow Bay married in 1995.

Photo by Kevin Winter/Getty Images

Iger and Bay became engaged in 1995. But after Disney agreed to buy Capital Cities/ABC that same year, Iger had quick decisions to make.

At that time, he wrote in his memoir, he had been commuting weekly to Los Angeles to meet his new Disney colleagues. He knew that after the acquisition was approved, he and Bay would not have much time to honeymoon. So, they quickly married later that same year.

"Willow and I also knew we'd have no chance for a honeymoon once the deal closed," he wrote. "We radically shortened our engagement and got married in early October 1995."

They are still married and have two children together.

In 1996, The Walt Disney Company bought Capital Cities/ABC for $19 billion, and renamed it ABC, Inc.

Then-chairman and CEO of Disney Michael Eisner (left) and then-chairman and CEO of Capital Cities/ABC Tom Murphy (right) shake hands after a joint news conference where the two announced the $19 billion merger of their entertainment and media companies.

BOB STRONG/AFP via Getty Images

Iger wrote in his memoir that he heavily considered walking away from Disney at this point. But as part of the Disney-ABC merger, Iger agreed to run a media division at Disney for five years.

In 1999, Iger became the president of Disney International, the business division overseeing Disney's global operations. A year later, he was tapped to become the COO of Disney, working directly under then-CEO Michael Eisner.

Eisner, right, was CEO from 1984 to 2005.

Photo by Kevin Winter/Getty Images

Forbes reported that between 1994 and 1999, Eisner made $631 million. In the year 1997 alone, Eisner reportedly made more than $550 million. Over the years, Eisner invested his Disney money and became a billionaire by 2008 — perhaps predicting a financial path Iger may follow.

In the early 2000s, tensions began to brew between Eisner and Disney heir Roy E. Disney. After Eisner stepped down, Iger became the CEO of the Walt Disney Company in 2005.

Iger became CEO in 2005.

Photo by Chris Farina/Corbis via Getty Images

Iger wrote in his book that, despite being the COO and thereby second in command behind Eisner, his promotion to CEO was not a guarantee. If anything, he wrote, many had associated him with the turbulence of Eisner's era and wanted an outsider for the job. Iger said he campaigned for months until he was officially named CEO in 2005.

Forbes reported in 2019 that in his first year as CEO, Iger made $22 million, a salary which did not include the stock options worth $2.9 million.

One of Iger's first major moves as CEO was to rebuild Disney's relationship with Pixar. At the time, the relationship between Disney and Pixar was strained, and Iger felt the future of Disney Animation relied on repairing it.

Edwin Catmull (left), former president of Walt Disney Animation Studios and Pixar Animation Studios, with Iger (right).

Photo by Alberto E. Rodriguez/WireImage/Getty Images

Before he officially became the CEO of Disney, he called to inform Steve Jobs — who was the majority shareholder in Pixar — that he was being appointed CEO and shared his hope they could discuss working together in the future. From there, the two began to slowly work on repairing the fraught relationship between the two companies.

Iger wrote in his memoir that he felt Disney needed Pixar to help enter the future of animation. Pixar at the time was using technologies to produce content that had never been seen before, Iger wrote in his book.

Iger wanted Disney to be in on it — not just as a distributor for the films, as their previous agreement had stated, but to actually own what Pixar was bringing to the table.

In 2006, Disney announced that it would acquire Pixar for $7.4 billion, making Jobs, the majority shareholder in Pixar at the time, the majority shareholder in Disney.

Iger and Steve Jobs, right, were friends before Jobs passed in 2011.

Getty

Iger wrote in his book that the two companies were able to come together after he reached out to Jobs to forge a friendship and address any issues between the two companies.

Iger and Jobs would go on to have a long friendship until Jobs passed away in 2011. A month after Jobs died, Iger joined the Apple board, where he remained until he stepped down in 2019 ahead of launching Disney+.

In 2009, Iger led Disney's acquisition of Marvel for $4 billion. This gave Disney access to the Marvel comic book library, which was the beginning of the now multibillion-dollar, box office record-breaking Marvel Cinematic Universe.

Iger and actress Lupita Nyong'o attend the premiere of Disney and Marvel's "Black Panther."

Photo by Emma McIntyre/Getty Images

Iger wrote that part of the reason Marvel CEO Isaac "Ike" Perlmutter was willing to sell the company was because Jobs called Perlmutter to "vouch for" Iger and praised how Iger had handled the Disney-Pixar merger.

Still looking to help Disney expand into the future, in 2012, Iger led Disney's acquisition of Lucasfilm for $4.05 billion. This gave Disney control of not just the Star Wars franchise, but also the Indiana Jones franchise.

Iger said George Lucas, left, was initially hesitant on the deal.

Allen J. Schaben/Los Angeles Times via Getty Images

Iger said that he knew Lucas was nervous to sell Lucasfim to Disney — mostly because the "Star Wars" creator knew he would be selling his legacy along with it. But eventually, Lucas warmed up to the idea.

Lucas enlisted Kathleen Kennedy to lead Lucasfilm right before the company was sold to Disney. The first Star Wars film made without Lucas was released a few years later, in 2015 — "The Force Awakens," directed by J.J. Abrams.

The company's acquisition spree continued in 2018, when Disney agreed to buy 21st Century Fox. At the time, Fox was owned by billionaire Rupert Murdoch who, after the sale, became one of the largest shareholders in Disney.

Rupert Murdoch with his sons Lachlan Murdoch (left) and James Murdoch (right).

Photo by Max Mumby/Indigo/Getty Images

Forbes reported in 2019 that, if Murdoch were to cash in all stock available to him from the Disney deal, he'd own about $10.5 billion worth of Disney stock. In addition, Variety reported that collectively, the Murdoch family members were "the largest individual shareholders in Disney."

Iger wrote in his memoir that Murdoch selling the company he had built from scratch was an indicator that the "disruption" threatening the entertainment industry was now inevitable.

"As [Rupert Murdoch] pondered the future of his company in such a disrupted world, he concluded the smartest thing to do was to sell and give his shareholders and his family a chance to convert its 21st Century Fox stock into Disney stock, believing we were better positioned to withstand the change and, combined, we'd be even stronger," Iger wrote in his book.

In March 2019, the merger between 21st Century Fox and Disney was completed, with a price tag of $71.3 billion.

Peter Rice (L), former president of 21st Century Fox, and Iger (R).

Photo by Presley Ann/Getty Images

This move made Disney the second-largest media company in the world at the time, Forbes reported.

That year, Iger was also named Time's businessperson of the year.

Time in 2019 called Iger "unassailable."

Josh Hallet via Flickr

"In a year when the tide has shifted against Big Business, Big Media and Big Tech, Iger has transformed his enormous media company into a gargantuan media and tech business while ensuring that the Walt Disney Co.'s products remain widely beloved," Belinda Luscombe wrote in Time's profile of him. "But for now, for just this moment, Iger is unassailable. He's transformed his company from a stuffy media doyen into a sexy cultural force."

In 2020, Iger — along with Seth MacFarlane and Cicely Tyson, among several others — was inducted into the Television Academy Hall of Fame.

Iger is an honoree of the Television Academy Hall of Fame.

Jordan Strauss/Invision/AP

Other inductees that year included the likes of Seth MacFarlane and Cicely Tyson.

In February 2020, Disney announced that Iger would step down as CEO and assume the role of executive chairman until his contract expired on December 31, 2021.

Iger stayed on as executive chairman after departing the CEO role.

Jeff Kravitz/FilmMagic / Getty Images

Iger was replaced by Bob Chapek, former chairman of Disney Parks, Experiences and Product. Iger would forgo his entire salary for the year, and Chapek would similarly take a 50% salary cut amid potential multibillion-dollar revenue losses due to the coronavirus pandemic, Business Insider's Ashley Rodriguez reported.

After a short-lived retirement, Bob Iger returned to Disney.

Iger returned to the CEO role in 2022.

Jesse Grant/Getty Images for Disney

In November 2022, Disney made the shocking announcement that Iger was back to lead the company for two years, during which he'd work with the board to find a successor.

However, Disney's board in 2023 voted to extend his contract to the end of 2026.

In 2019, he had a net worth of $690 million, per Forbes' estimates.

Iger is believed to have a greater net worth than Abigail Disney, grand-niece of Walt Disney.

Robyn Beck/AFP/Getty Images

Forbes reported at the time that Iger's net worth was actually higher than that of Abigail Disney, the Disney heiress, who said in 2019 that she was worth about $120 million.

In March 2020, it was announced that Iger would forgo his salary for the year, as Disney dealt with presumed multibillion-dollar losses due to the coronavirus pandemic and subsequent shutdowns. His base salary was $3 million in the previous fiscal year and he made $47.5 million in total compensation.

Iger is known among peers for being a very kind leader and has been praised by his contemporaries for the way he has handled the mergers of Pixar, Marvel, and Lucasfilm.

Iger is well-liked by many peers.

AP

During his first stint as CEO, Iger grew Disney's profits 335% to $260 billion, Business Insider reported.

Forbes also reports that under Iger, Disney created more than 70,000 new jobs.

"Literally, I have never heard one person say a bad thing about him and I have never seen him be mean," billionaire David Geffen told The New York Times in a profile on Iger. "To be honorable, decent, smart, successful, and a terrific guy is unusual anywhere. But it is most unusual in the entertainment business. He's in a category of one."

Iger's own increasing fortune has paralleled the rise in Disney's value over the years he's been at the helm.

Disney heiress Abigail Disney has criticized Iger's high compensation before.

Drew Angerer/Getty

Forbes reported that that Iger's fortune is split between his Disney shares "and cash or other investment from sales of Disney shares over the decades."

According to Forbes, Iger was compensated $65.6 million in 2018, which was 1,424 times the average Disney employee's salary. He had been given another $26.3 million in stock after he successfully closed the Disney-Fox merger and for agreeing to extend his contract until 2021. His initial compensation in 2018 was $39.3 million (not including stock rewards).

In April 2019, Abigail Disney publicly criticized Iger's high pay on Twitter and later wrote an op-ed in the Washington Post elaborating on her thoughts.

"I'm not arguing that Iger and others do not deserve bonuses. They do," Disney wrote. "They have led the company brilliantly. I am saying that the people who contribute to its success also deserve a share of the profits they have helped make happen."

Most recently, Iger received $31.6 million in total compensation in 2023, or 595 times what the median Disney employee makes.

As Iger is a very private person, not much is known about his spending.

Iger and Bay purchased a home from actress Michelle Pfeiffer.

Photo by Taylor Hill/Getty Images

He and his wife bought a home in Brentwood, California, in 2006 from actress Michelle Pfeiffer for about $19 million, the Orlando Sentinel reported that year.

The home reportedly was 7,500 square feet and had five bedrooms, nine bathrooms, a guest house, a tennis court, and a pool. As of a 2018 interview with Vogue, Iger was still living in Brentwood with his wife and their two children.

The Igers also previously owned an apartment on the Upper East Side of New York City. The property sold in 2018 for $18.75 million, Business Insider reported.

An interior shot of Iger's one-time Manhattan digs.

Courtesy of Stribling

The Igers' former home has a library, living room views of the Jacqueline Kennedy Onassis Reservoir in Central Park, and four bedrooms, including one master suite with two bathrooms and a walk-in closet.

Iger spends time — and likely money — maintaining his mental and physical health, about which he's notoriously rigorous. He told The New York Times that he wakes up at 4:15 every morning and doesn't touch his phone until he's finished with his morning exercise routine.

Iger follows a strict workout regimen.

Photo by David Livingston/Getty Images

Iger has also said that he doesn't eat carbs unless it's pizza, recalling that during his high school years, he worked at his local Pizza Hut.

Iger reportedly has multiple yachts.

Iger is also into yachting.

JC Olivera/Getty Images

He has a 180-foot superyacht called Aquarius, which he wrote about in Vanity Fair in 2014.

He's also having another built, expected to be 30 feet longer, according to The Wall Street Journal.

When he's "off the clock," he travels. Iger is a regular attendee at the Allen & Company Sun Valley Conference in Sun Valley, Idaho. The media conference is a hub for entertainment and tech moguls.

Iger and Bay at the 2014 Allen & Co. Sun Valley Conference.

Photo by Scott Olson/Getty Images

Variety reports that in 2019, Iger attended the conference along with Meta CEO Mark Zuckerberg, Shari Redstone, Airbnb CEO Brian Chesky, and even former Democratic presidential candidate John Hickenlooper.

In 2019, Iger and his wife committed $1 million to launch the Iger-Bay Endowed Scholarship at Iger's alma mater, Ithaca College. The scholarship aims to boost diversity in the media industry.

Iger and Bay created a scholarship in their names at his alma mater, Ithaca College.

Photo by Jeff Kravitz/FilmMagic/Getty Images

The scholarship was funded through the proceeds from Iger's memoir.

Iger also spends some of his fortune on vacations. Beyond their business dealings related to Disney and Pixar, Iger was also close personal friends with Jobs and has said the two would vacation together in nearby resorts in Hawaii.

Iger and Jobs were also friends outside of business.

Justin Sullivan/Getty Images

"We vacationed at adjacent Hawaiian hotels a few times and would meet and take long walks on the beach, talking about our wives and kids, about music, about Apple and Disney and the things we might still do together," he wrote in his book. "You don't expect to develop such close friendships late in life, but when I think back on my time as CEO — at the things I'm most grateful for and surprised by — my relationship with Steve is one of them."

According to The Hollywood Reporter, Iger has been seen on billionaire David Geffen's yacht. In August 2017, Iger was seen on the yacht with Oprah Winfrey, Diane von Furstenberg, and Diane Sawyer.

Iger (left) with David Geffen (right).

Photo by Frazer Harrison/Getty Images

Geffen owns a megayacht, known to be a common hang-out spot for celebrities and fellow billionaires, including Amazon founder Jeff Bezos, during the summer months, as seen on his Instagram page.

The yacht is worth $590 million, as previously reported by Business Insider.

In his personal life, Iger has a set of A-list friends who have been known to rave about him. One of those friends is Winfrey, who has said that if Iger were to run for president, she would not just vote for him but eagerly campaign on his behalf.

Oprah Winfrey has said Iger should run for president.

Photo by Andrew Toth/Getty Images for Save The Children

"I'll tell you the truth, this is not really where I intended to be tonight," Winfrey said at the Centennial Awards, where Iger was being honored, in 2019. "I was hoping that by this time in early fall, I would be knocking on doors in Des Moines, wearing an 'Iger 2020' T-shirt. Because I really do believe that Bob Iger's guidance and decency is exactly what the country needs right now."

Iger is also close to Jeffrey Katzenberg, cofounder of Dreamworks and former chairman of Walt Disney Studios.

Dreamworks cofounder Jeffrey Katzenberg, right, also tried to convince Iger to run for president.

hoto by Kevin Winter/Getty Images

After Comcast bought Dreamworks in 2016 for $3.8 billion, Katzenberg's net worth rose to $900 million.

Iger and Katzenberg have been friends for years, and Katzenberg is among the group of people who tried to encourage the Disney CEO to run for president.

"No matter how much I begged Bob," Katzenberg said while presenting the Simon Wiesenthal Center Humanitarian Award to Iger in 2019. "He just wasn't willing to run for president of the United States."

In his memoir, Iger admitted that he once considered running for president, but ultimately decided against it.

Iger considered but ultimately wasn't interested in pursuing the presidency.

Photo by Michael Loccisano/Getty Images

"I think the Democratic Party would brand me as just another rich guy who's out of touch with America who doesn't have any sense for what's good for the plight of the people," he told The New York Times in a 2019 profile.

Despite many people — including some major Hollywood players — urging him to run for president in late 2019, Iger publicly remained firm that he had no plans to pursue a presidential campaign.

Iger has also spent his free time involved in politics in the past. Shortly after Donald Trump was elected president, Iger joined Trump's Strategic and Policy Forum.

Iger was a member of Trump's Strategic and Policy Forum.

Photo by Mike Windle/Getty Images for Variety

Trump's Strategic and Policy Forum was a business council created to hear the perspectives of different leaders on how to improve job growth in the US.

But Iger stepped down from the role in 2017 after Trump announced the US would withdraw from the Paris Climate Agreement, Variety reported.

Iger resigned from the council after Trump withdrew the US from the Paris Agreement.

Photo by Drew Angerer/Getty Images

Iger announced his resignation from the council in a tweet stating: "As a matter of principle, I've resigned from the President's Council over the #Paris Agreement withdrawal."

The council, which ultimately disbanded, also included JPMorgan Chase CEO Jamie Dimon, and Stephen A. Schwarzman, the cofounder of private equity firm Blackstone.

In September 2019, however, Iger did outline what would have been the central themes of his campaign, had he decided to run.

Iger has spoken about what he would've focused on in a hypothetical campaign for president.

Photo by Kimberly White/Getty Images for Vanity Fair

"America is gravely in need of optimism, of looking at the future and believing that so many things are going to be all right, or that we as a nation can attack some of the most critical problems of our day," Iger said at The Atlantic Festival in Washington in 2019. "And that could be the environment, that could be income disparity, that could be the technology's impact on the world from a disruption perspective. It could be the cost of education, availability of affordable housing, healthcare. You name it."

Iger's 2020 plans to retire from Disney were derailed by the coronavirus pandemic.

Disney CEO, Bob Iger originally announced plans to retire in 2020.

Chip Somodevilla via Getty Images

In 2020, Iger announced his plans to retire at the end of his contract term, though the coronavirus pandemic derailed his plan. Disney's board extended Iger's term as chairman to the end of 2021. At the end of his term, Susan Arnold took his place as chairman.

With a $3 million salary in 2019, plus a $21.8 million bonus, $10 million worth of stock awards, and $9.6 million worth of stock options, Iger was consistently one of Hollywood's highest-paid CEOs prior to his departure, Business Insider previously reported.

As Disney's on-again-of-again CEO, Iger fended off challenges to his control of the company.

Billionaire Nelson Peltz, left, has lost his proxy battle against Disney and its CEO Bob Iger.

David A. Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images; Drew Angerer/Getty Images

Iger returned to Disney as the company's CEO following the ouster of his successor, Bob Chapek. His contract was originally set to expire in 2024, but Disney's board in 2023 voted to extend his contract to the end of 2026 — and increased his compensation package by several million dollars.

Upon his return, Iger faced challenges to his control over the company, including from activist investor Nelson Peltz over two board seats. Iger ultimately prevailed. The proxy fight over the seats is estimated to have cost all parties about $70 million.

Iger and Bay set their sights on purchasing the most valuable women's sports franchise in the world.

Iger and Bay are in talks to purchase the Los Angeles women's soccer franchise Angel City FC.

Scott Olson/Getty Images

In the summer of 2024, Puck and Semafor reported that Iger and his wife were planning to purchase a controlling share of the Los Angeles women's soccer franchise Angel City FC — the most valuable women's sports team in the world.

The proposed deal, with a pre-money valuation of $250 million, would see the pair replace Reddit cofounder Alexis Ohanian as the team's primary shareholder.

Read the original article on Business Insider
3 July 2024
Down 18% since listing, should you buy Guzman Y Gomez shares now?
Guzman Y Gomez (ASX: GYG) shares are taking a tumble today.

Shares in the Mexican fast-foodÂ restaurantÂ chain closed up 2.7% at $25.50 yesterday. In late morning trade on Wednesday, shares have given back those gains and more, currently changing hands for $24.70, down 3.1%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.3% at this same time.

As you can see on that chart above, Guzman Y Gomez shares have had a tough time of it since their debut on the ASX on 20 June.

Investors who were able to take part in the initial public offering (IPO) could have gotten in for $22.00 a share. For the rest of us, the fast-food stock opened on 20 June, trading at $30.00 per share. Shares hit an intraday high of $30.99 before ending the day back at $30.00.

That handed IPO investors a tidy 36% one-day gain.

Not bad.

Now, IPO investors are still in the green.

But with today’s losses factored in, the Guzman Y Gomez share price is down 17.7% from the opening price on its first day of trading on the ASX when most retail investors would have gotten a foot in.

Following that sizeable retrace, should you buy the Mexican fast-food stock now?

Are Guzman Y Gomez shares a buy?

The biggest concern you’re likely to hear about Guzman Y Gomez shares is their sky-high valuation.

Especially when compared to fast food rivals Collins Foods Ltd (ASX: CKF) and Domino’s Pizza Enterprises Ltd (ASX: DMP).

The key to the company’s success at current valuations is to deliver on its ambitious growth plans.

And it’s with this growth potential in mind that Morgans has placed an add rating on the stock with a $30.80 price target. That’s almost 25% above current levels.

According to Morgans’ analyst Billy Boulton (quoted by The Australian Financial Review), “To justify the current share price of GYG (or, indeed, to see upside to it), you have to believe that the long-term growth story is not just possible, but likely.”

Boulton added:

We believe investors buying into GYG at current prices will be well rewarded over time as the business realises its very significant long-term growth potential and its earnings benefit from strong operating leverage.

Guzman Y Gomez shares currently encompass 210 stores, with 185 in Australia. Morgans believes the company can eventually grow its Aussie footprint to 1,000 stores. If the broker has that right, early investors could indeed be amply rewarded.

The post Down 18% since listing, should you buy Guzman Y Gomez shares now? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Guzman Y Gomez right now?

Before you buy Guzman Y Gomez shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Guzman Y Gomez wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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 positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Collins Foods and Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
3 July 2024
Guess which ASX All Ords stock just received another $18 million investment from Rio Tinto
Rio Tinto Ltd (ASX: RIO) has been busy investing funds into an ASX All Ords stock this week.

Based on the mining giant’s investment, it seems to see a lot of promise in this company’s project in Africa.

Which ASX All Ords stock?

This morning, Sovereign Metals Ltd (ASX: SVM) revealed that Rio Tinto has exercised all its share options to increase its shareholding in the company to 19.76%.

The miner exercised a total of 34,549,598 share options to acquire the same number of new fully paid ordinary shares at $0.535 per share. This results in proceeds of $18.5 million for the ASX All Ords stock.

What now?

Management believes Rio Tinto’s further investment represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite.

It will use the proceeds from Rio Tinto’s additional strategic investment to continue advancing its tier one Kasiya Rutile-Graphite Project in Malawi.

This includes progressing the current optimisation study for Kasiya, which is focused on the development of a world-class mine that is capable of supplying critical minerals to the titanium pigment, titanium metal, and lithium-ion battery industries. After which, it will move to a definitive feasibility study.

Under the investment agreement between the parties, Rio Tinto continues to provide assistance and advice on technical and marketing aspects of Kasiya.

‘One of the most significant critical minerals projects globally’

The ASX All Ords stock’s chairman, Ben Stoikovich, was very pleased with the investment. He appears to see it as confirmation of the quality of the Kasiya project. Stoikovich said:

Rio Tinto’s further investment in Sovereign reaffirms Kasiya’s position as one of the most significant critical minerals projects globally. With Rio Tinto’s wealth of experience as one of the world’s largest and most accomplished global mining companies, Kasiya is well positioned to potentially become a market leader in low-CO2-footprint natural rutile and graphite.

Sovereign Metals’ managing director, Frank Eagar, adds:

In collaboration with Rio Tinto, we have made significant progress in advancing Kasiya over the course of this year, including the successful launch of the pilot phase mining in May. We are excited about Rio Tinto’s further investment in Sovereign, which represents another significant step towards unlocking a major new supply of low-CO2-footprint natural rutile and flake graphite.

Kasiya’s mineral resource estimate (MRE) is currently 1.8Bt at 1.0% rutile. This results in 17.9Mt tonnes of contained natural rutile and 24.4Mt of contained graphite. This makes it the largest in the world according to the company.

The post Guess which ASX All Ords stock just received another $18 million investment from Rio Tinto appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto Limited right now?

Before you buy Rio Tinto Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto Limited wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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.
3 July 2024
ASX passive income: How to make $1,000 per month
Receiving ASX passive income can be very rewarding because of how simple it is for the cash flow to hit the bank account every year. Depending on how much we invest and the dividend yield, investors can get an average of $100 per month, $1,000 per month or even more.

Most businesses try to make a profit every year and companies can decide how much of that profit to pay to shareholders each year as a dividend.

Some companies have been able to grow their earnings significantly over the years, leading to a substantial increase in the dividend payout.

Where I’d invest for ASX passive income

I believe investing should be done with aÂ long-termÂ mindset. It doesn’t necessarily matter what dividend yield a stock pays this year if there’s going to be a large cut next year. Ideally, I’d want to choose investments that seem like they can grow their earnings and increase the payouts in the coming years.

Some businesses have already built a record of steady ASX passive income growth and still have plenty of growth potential, in my opinion.

For example, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has grown its annual dividend every year since 2000.

Collins Foods Ltd (ASX: CKF) has grown its annual dividend every year since 2014.

Universal Store Holdings Ltd (ASX: UNI) has grown its dividend each year since it started paying one in 2021.

Brickworks Limited (ASX: BKW) has grown its dividend every year since 2014.

Propel Funeral Partners Ltd (ASX: PFP) has increased its annual payout each year since 2021.

Wesfarmers Ltd (ASX: WES) has grown its annual dividend each year since 2021.

I believe each of these businesses is capable of growing their dividend every year for the next five years. Growing earnings can help deliver share price growth because investors are usually willing to pay more for a business that’s earning more.

I also regularly write about some higher-yieldÂ ASX dividend shares, though businesses with a higherÂ dividend payout ratioÂ are less likely to grow their payouts consistently.

How to make $1,000 of dividends per month

Australians have the benefit of receiving franking credits, which can boost the after-tax dividend yield for investors.

To receive an average of $1,000 per month of ASX passive income, we’re talking about $12,000 per year. That’s a lot of dividends, but it’s certainly possible for most people to build up to that amount, thanks to compounding.

If someone’s portfolio had a 5% dividend yield, it would need a portfolio value of $240,000. If it had a 4% dividend yield, it would require a portfolio value of $300,000.

How long could it take to reach that amount? If someone invested $1,000 per month and it returned an average of 10% (including re-investing dividends), it’d take around 11 years to reach approximately $240,000, and it’d take 15 years to reach $300,000.

The post ASX passive income: How to make $1,000 per month appeared first on The Motley Fool Australia.

Should you invest $1,000 in Brickworks Limited right now?

Before you buy Brickworks Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Brickworks Limited wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
Motley Fool contributor Tristan Harrison has positions in Brickworks, Collins Foods, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
3 July 2024
ANZ shares smashed the ASX 200 return in FY24
ANZ Group Holdings Ltd (ASX: ANZ) shares performed substantially better than the S&P/ASX 200 Index (ASX: XJO) in FY24. ANZ shares rose by 19% over the 12 months to 30 June 2024, compared to an index rise of around 8%.

Considering ASX bank shares make up a sizeable part of the ASX 200’s returns, it may be surprising to see that ANZ shares delivered outperformance of more than 10%.

ANZ’s financial calendar doesn’t finish in June, it runs to September. So, while the Australian tax year finished on 30 June 2024, there are still a few more months to go for ANZ’s 2024 financial year.

Investors often pay the most attention to the latest six-month result when it comes to valuing a business, so let’s remind ourselves what the bank reported less than two months ago.

Earnings recap

In May, ANZ reported its result for the six months to 31 March 2024 and advised that statutory net profit after tax (NPAT) fell 4% to $3.4 billion compared to the second half of FY23, while cash NPAT declined by 1% to $3.55 billion.

The ASX bank share revealed its total provision charge decreased by 38% to $70 million, with the individual provision charge declining by 69% to $38 million. Arrears are performing better than some investors may have expected in this high interest rate environment.

However, the net interest margin (NIM) fell slightly from 1.65% in the second half of FY23 to 1.63% for the first half of FY24, excluding the impact of ‘markets’ activities. Further declines in the NIM may not be helpful for ANZ shares.

The bank generated productivity cost savings during the period across technology services ($62 million), head office enablement ($59 million), customer service and distribution ($36 million), product management ($29 million), and banking services and transaction processing ($15 million).

The bank also announced that the total dividend per share was hiked by 2% to 83 cents, compared to the FY23 second-half payout.

Management commentary

The ANZ CEO Shayne Elliot had a number of positives to say about the bank’s performance in HY24:

This half’s strong performance is a direct consequence of peer-leading diversification as well as our disciplined focus on productivity and delivery.

Our preparations to integrate Suncorp Bank are well advanced. While the time taken to progress the necessary approvals has taken longer than anticipated, we have used that time productively and we are more confident than ever about the benefits that will follow.

Elliot said the bank’s flagship digital offering, ANZ Plus, had grown to almost 690,000 customers and approaching $14 billion in deposits at the end of April â and the ability to create joint accounts had been introduced. He added:

Net promoter scores are consistently higher than our peers, while attracting on average 35,000 customers every month, around half of which are new to the bank.

Acquisition approved

ANZ has attempted to buy the banking operations of Suncorp Group Ltd (ASX: SUN) for several years.

Federal Treasurer Jim Chalmers recently approved the deal. This stage was one of the main roadblocks to the acquisition’s progress.

A bigger ANZ, particularly with a larger presence in Queensland, could give it more scale benefits, deliver a better growth profile, and, if the integration goes according to plan, generate bigger overall profits and pay larger dividends.

ANZ share price snapshot

Since the start of 2024, the ANZ share price has lifted around 9%, compared to a 1% rise for the ASX 200.

The post ANZ shares smashed the ASX 200 return in FY24 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Australia And New Zealand Banking Group right now?

Before you buy Australia And New Zealand Banking Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Australia And New Zealand Banking Group wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
Motley Fool contributor Tristan Harrison 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.
3 July 2024
This ASX stock just announced a special dividend with a 20% yield
A big pay day is coming soon for shareholders of one ASX stock.

That’s because this company has just announced a special dividend that will provide investors with a mouth-watering dividend yield.

Which ASX stock?

The ASX stock that is rewarding its shareholders is Red Hill Minerals Ltd (ASX: RHI).

It is an iron ore, gold, and base metals explorer based in the West Pilbara region of Western Australia.

While the company has a number of projects in its portfolio, the key one was the Onslow Iron Project. The company had a 40% stake in the project through the Red Hill Iron Ore joint venture.

It recently completed the sale of its interest in the joint venture to mining giant Mineral Resources Ltd (ASX: MIN) following last month’s delivery of the first shipment of ore from the Onslow Iron Project to China Baowu Steel Group.

This shipment triggered the second payment of $200 million to the ASX stock from Mineral Resources.

Red Hill’s executive chairman, Joshua Pitt, said:

Our Company worked closely within the RHIOJV over many years to advance this Project and found in MinRes an excellent team that is close to achieving the rare feat of completing a major project development, the Onslow Iron Project, on time and within budget. This second payment to the Company, followed by the royalty revenue stream generated from our royalty interest in the Project should benefit our shareholders while funding an effective gold and base metal exploration effort.

Special dividend

This morning, the ASX stock revealed that it has decided to return to shareholders funds raised from the Mineral Resources payment. It said:

[I] has resolved to pay a special dividend of $1.50 per ordinary share, fully franked at 25%. The dividend will be sourced from the second of two $200 million payments received from Mineral Resources Limited for the sale of the Company’s 40% interest in the Red Hill Iron Ore Joint Venture.

Based on its current share price of $7.13, this $1.50 per share pay out represents a whopping 21% dividend yield.

In order to receive this dividend, investors need to buy the ASX stock before it trades ex-dividend on 9 July. After which, payment will be made 10 days later on 19 July.

Pitt commented:

We congratulate Mineral Resources on achieving first ore on ship from the Onslow Iron Project. This milestone has resulted in the payment of the second $200 million and has triggered the commencement of our 0.75% royalty stream. It has enabled our Board to declare the Company’s sixth consecutive dividend and provides a great platform for the future.

The post This ASX stock just announced a special dividend with a 20% yield appeared first on The Motley Fool Australia.

Should you invest $1,000 in Mineral Resources Limited right now?

Before you buy Mineral Resources Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mineral Resources Limited wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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.
3 July 2024
Sayona Mining share price lifts off on new CEO appointment
The Sayona Mining Ltd (ASX: SYA) share price is lifting off today.

Shares in the S&P/ASX 300 Index (ASX: XKO) lithium stock closed yesterday trading for 3.4 cents. In morning trade on Wednesday, shares are swapping hands for 3.5 cents apiece, up 2.9%.

For some context, the ASX 300 is up 0.2% at this same time.

Here’s what’s happening.

New leadership for ASX lithium miner

The Sayona Mining share price is marching higher after the North American lithium producer announced that Lucas Dow will take over as managing director and CEO as of today, 3 July.

Lucas is a relative newcomer to Sayona Mining, having joined the board only back in February.

He’ll take over from interim CEO James Brown, who will remain executive director until 31 January 2025 to facilitate the handover and ensure business continuity.

Dow is a mining engineer with extensive executive and hands-on operational experience in mining and renewable energy.

Commenting on his appointment, which is boosting the Sayona share price today, he said, “I am thrilled to lead a company with such outstanding potential.”

Dow added:

Sayona is fortunate to have multiple emerging tier one assets including North American Lithium (NAL) and Moblan, which will underpin the success of the business into the future.

Commenting on the successful ramp-up of NAL, Dow said:

The operation is now delivering industry leading results for plant utilisation and recovery both of which are a testament to the commitment and leadership of James and the operational team in Quebec.

Interim CEO Brown said, “The board is pleased to appoint Lucas as the MD & CEO to lead Sayona through the next stages of the company’s development.”

Brown continued:

We are fortunate to have secured someone with such extensive technical and corporate experience. I am confident that under Lucas’ leadership, Sayona will further enhance its market position with a dynamic future and a steadfast commitment to excellence in the lithium sector.

Separately, Sylvain Collard was appointed president and COO of Sayona’s Canada operations. Collard joined Sayona in 2022 and is a specialist in mine project management for both open pit and underground mines.

Commenting on that appointment, Brown said:

With extensive experience in mine project management and operations across diverse environments, including significant roles at IAMGOLD and various mining projects in Canada and abroad, Sylvain is ideally positioned to lead our strategic initiatives in QuÃ©bec and drive continued growth and excellence.

Sayona Mining share price snapshot

If you look back to the chart up top, you’ll see the rather dismal year Sayona has faced amid cratering lithium prices. That rout sees the Sayona Mining share price down 79% over 12 months.

The post Sayona Mining share price lifts off on new CEO appointment appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sayona Mining Limited right now?

Before you buy Sayona Mining Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Sayona Mining Limited wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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.
3 July 2024
Goldman Sachs just upgraded this ASX 200 stock to a buy
It’s that time of year again when investors check their leaders and laggards and potentially rotate into cheap ASX 200 stocks. Analysts have already started the process.

Deterra Royalties Ltd (ASX: DRR) has caught Goldman Sachs’ attention. In a Tuesday note, the broker revised its rating on the ASX 200 stock from a hold to a buy.

Goldman’s note puts it out of sync with the consensus rating of hold, per CommSec.

Deterra on the other hand has opened Wednesday’s session at $4.10 apiece, up 1.87%. This produces a dividend yield of 7.29% with its trailing dividend of 30 cents per share.

Here’s a closer look at the reasons behind Goldman’s revised rating.

Goldman upgrades ASX 200 stock

Goldman Sachs has revised its forecasts on Deterra’s earnings per share (EPS) for FY24-26 by 2% in both years based on a better iron ore and forex outlook.

It also notes the large sell-off of the ASX 200 stock following management’s decision to acquire Trident Royalties Plc for $276 million. This, it says, could mean the stock is undervalued.

The market initially reacted negatively, with a sharp drop in share price. This was possibly furthered by Deterra’s decision to alter its dividend policy. Moving forward, it will move from paying 100% of net profit after tax (NPAT) to a minimum of 50%.

However, Goldman Sachs believes this move positions Deterra for long-term growth, backed by its strong balance sheet:

[U]ndervalued: The stock is trading at ~0.8x NAV, and pricing in ~US$64/t 62% [iron ore] Fe vs. spot at ~US$105/t and our long run US$78/t (real $, from 2028) 62% Fe iron ore price forecast.

Deterra is trading on c. 10x EBITDA for FY25 versus global precious in ~15x and bulk royalty companies ~5x.

The broker mentioned Deterra’s approximate 7% free cash flow and dividend yield implied for FY24, which is “broadly in line with major iron ore producers”. It also leaves its dividend forecast at 100% of NPAT for FY24.

Strong balance sheet

With a net cash position of $30 million and access to a $500 million debt facility, Goldman says Deterra could be well-placed to pounce on future opportunities.

[Deterra] will have ~A$30mn net cash at end of June on our estimates and has access to an A$500mn undrawn debt facility and we believe they are well positioned to capitalise on potential growth opportunities in the current high rate debt environment, including the Trident acquisition and potential other opportunities.

Aside from that, the ASX 200 stock is ” less leveraged” compared to other iron ore miners “given the high margin nature of [its] royalty business”.

Interestingly, Goldman analysts also took a peek at Trident’s potential advantages, noting that it has a portfolio of various gold offtakes.

Based on Trident’s 2023 financial result, we note underlying earnings were essentially 0 and [greater than] 60% of earnings come from the gold offtake agreements which DRR noted [it] will look to divest.

Goldman set a price target of $4.70 per share on the ASX 200 stock. This equates to a multiple of 12 times the next 12 months’ earnings before interest, tax, depreciation and amortisation (EBITDA).

Foolish takeaway

According to some experts, Deterra’s sharp sell-off in recent weeks could be an overreaction. For this ASX 200 stock, the upgrade from Goldman Sachs suggests investors are thinking long-term.

In the last 12 months, Deterra shares are down 10%. This is an underperformance of nearly 17% versus the S&P/ASX 200 Index (ASX: XJO).

The post Goldman Sachs just upgraded this ASX 200 stock to a buy appeared first on The Motley Fool Australia.

Should you invest $1,000 in Deterra Royalties Limited right now?

Before you buy Deterra Royalties Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Deterra Royalties Limited wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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.
3 July 2024
Here’s the outlook for 3 ASX artificial intelligence (AI) shares in FY25
ASX artificial intelligence (AI) shares have been all the rage in 2024. By all accounts, AI is set to revolutionise the way we eat, sleep, and think. You name it, and AI will probably have an impact on it at some point in the future.

What’s exciting is that ASX-listed companies are among the cohort leading this wave of innovation. Even more exciting is that investors now have many means to gain exposure to AI themes.

For instance, the Global X Fang+ ETF (ASX: FANG) exchange-traded fund (ETF) enables investors to buy AI-linked stocks without overextending the risk budget. According to my colleague Tristan, the ETF has delivered annualised returns of 21% since 2021 and contains many of the US tech behemoths driving the AI impulse.

For investors eyeing individual AI stocks on the ASX, Life360 Inc (ASX: 360), Megaport Ltd (ASX: MP1), and Dicker Data Ltd (ASX: DDR) offer promising prospects for FY 2025, according to analysts. Here’s a closer look.

ASX AI share Life360 in focus

One of the more successful growth stories in FY 2024 was Life360. The company’s share price has surged 105% this year, closing at $15.73 on Tuesday.

The company’s core product, a smartphone app for location sharing, has become indispensable for families. It helps track children, elderly individuals, and those with special medical needs.

In Q1 CY2024, Life360’s revenues jumped 15% year-over-year to US$78.2 million, while operating cash flow rose to US$10.7 million.

Analysts from Morgan Stanley are bullish on the ASX AI share, noting Life360’s vast data collection capabilities as a major AI advantage.

Solaris Investment Management is also optimistic. Chief investment officer Michael Bell recently praised Life360’s aggressive subscriber growth, which now boasts 66 million users. This expansive user base provides valuable data, fuelling AI-driven innovations.

Megaport in the AI revolution

Megaport’s shares, which are currently trading at $10.96 apiece, have climbed more than 50% over the past year.

The company offers Network as a Service (NaaS), connecting businesses to cloud services, which is crucial for AI integration.

In its latest quarterly update, Megaport reported a 30% revenue increase to $49.5 million and a 92% rise in EBITDA to $14 million. Founder Bevan Slattery’s ongoing strategic advisory role adds confidence, according to my colleague Bron. These are important takeouts for investors seeking exposure to ASX AI shares, in my view.

Goldman Sachs rates Megaport a buy with a $14.85 per share price target on its stock. In an April note, the broker says the ASX AI share was well positioned for growth in FY25:

We believe MP1 will benefit from strong structural tailwinds from the adoption of public cloud including multi-cloud usage and the transition towards NaaS technologies.

[W] are buy rated on the name as we remain confident MP1 has a clear product advantage vs. peers and a decade-long runway for robust growth.

Dicker Data â ASX AI share with mixed ratings

Dicker Data recently received a neutral rating upgrade from Goldman Sachs. The company’s strong balance sheet and defensive revenues are key highlights in the investment debate, Goldman says.

The broker set a price target of $9.85 per share, which indicates a potential 4% upside from Dicker’s closing price of $9.56 apiece at the time of writing.

Furthermore, the broker notes that effective inventory management and higher free cash flow generation could provide additional growth.

This, its high margins relative to peers, and “tight inventory management” means Dicker is well capitalised to grow its business â and potentially shares â in FY 2025.

The company had “a modest sales growth outlook of mid-single digit FY23-26E CAGR and appears fairly valued compared to peers and its cash flow generation potential”, Goldman said.

Foolish takeaway

Life360, Megaport, and Dicker Data are three ASX AI shares well-positioned to grow in FY 2025, experts say.

Life360’s extensive data collection, Megaport’s essential cloud connectivity services, and Dicker Data’s solid financial management could be standouts.

However, it’s crucial to consider the risks involved and remember that past performance is not a guarantee of future results.

The post Here’s the outlook for 3 ASX artificial intelligence (AI) shares in FY25 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Life360 right now?

Before you buy Life360 shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Life360 wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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 Life360 and Megaport. The Motley Fool Australia has positions in and has recommended Dicker Data. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
3 July 2024
‘We are excited’: Why this ASX mining stock is rocketing 14%
Rincon Resources Ltd (ASX: RCR) shares are among the best performers on the market on Wednesday.

In morning trade, the ASX mining stock is up a sizeable 14% to 12 cents.

Why is this ASX mining stock rocketing?

The catalyst for this strong gain has been the release of an announcement from the mineral exploration company today.

According to the release, Rincon Resources has received aboriginal heritage clearance for drilling activities to commence at the West Arunta Project in Western Australia.

The ASX mining stock will now be able to drill its high-priority Avalon niobium and rare earth elements (Nb-REE) target, as well as the Sheoak, K1, and K2 targets.

Management is particularly positive about its Avalon gravity anomaly. It highlights that the anomaly is comparable in size to the one underlying the Luna deposit owned, which is owned by WA1 Resources Ltd (ASX: WA1). That deposit was recently confirmed as the most significant niobium discovery globally in over 70 years with an inferred mineral resource estimate of 200Mt @ 1.00% Nb2O5.

Rincon Resources has planned an initial 3,000m diamond drilling/reverse circulation (DD/RC) drill program to primarily test the source of the Avalon gravity target. It will also test the 3 km lateral extent of weathered zone where potential niobium enrichment may be present.

Drilling is set to begin in the middle of July following the completion of site works. These activities will be supported by a recent $5.6 million capital raising.

‘We are excited’

The ASX mining stock’s managing director, Gary Harvey, revealed that the company was excited to start its drilling activities. He said:

We are excited to commence drilling at our Avalon target, which we interpret as a potential carbonatite intrusion with niobium and rare earth element (Nb-REE) enrichment in the upper weathered profile. The size and characteristics of the Avalon anomaly, compared to recent significant discoveries in the region, heighten our anticipation for this program.

The Luni discovery by WA1 Resources has demonstrated the potential for world-class niobium deposits in the West Arunta region. With Avalon’s comparable size, we are eager to explore its full potential. With $5.6 million recently raised, our strong financial position enables us to aggressively pursue these opportunities and potentially extend our initial program should positive results warrant it.

Following today’s gain, this mining stock has now doubled in value over the last 12 months. Though, it still only has a market capitalisation of approximately $34 million.

The post ‘We are excited’: Why this ASX mining stock is rocketing 14% appeared first on The Motley Fool Australia.

Should you invest $1,000 in Wa1 Resources right now?

Before you buy Wa1 Resources shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Wa1 Resources wasn’t one of them.

The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys…

See The 5 Stocks
*Returns as of 24 June 2024

More reading
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.
3 July 2024