Category: Stock Market

ASX index funds are becoming an increasingly popular option for investors. Exchange-traded funds (ETFs) allow investors to buy a whole group of shares or assets in a single investment.

But, investors shouldn’t just buy something because it’s popular – that could mean chasing a crowd and being late to the party, which could result in losses if someone overpays.

There are many compelling factors to like ASX index funds, and I’m going to outline some of my preferred reasons to like them below.

Low management fees

One of the best reasons to like ASX index funds is how low the costs are. The fund providers aren’t trying to do extensive analysis, outperform the market or other things that result in costs.

Simply copying an index, like the S&P/ASX 200 Index (ASX: XJO) or S&P/ASX 300 Index (ASX: XKO), can be done very cheaply. Active fund managers might charge 1% per annum, whereas an option like Vanguard Australian Shares Index ETF (ASX: VAS) has an annual management fee of 0.07%.

Lowering fees can make a big difference to the long-term returns. If $1,000 is invested in an ASX ETF for 20 years and it makes 9% per annum it would grow to $6,009. If it rose by 10% per annum, it becomes $7,227. That’s 20.27% better overall, simply because of a slight difference in return/fees.

Diversification

A lot of ASX index funds which are based on broad-based indices can offer pleasing diversification. It’s good not to have all one’s eggs in the same basket. If an ASX ETF is invested in plenty of different assets and businesses, I think this can reduce the risk.

Some of the ETFs that offer strong diversification with excellent holdings include iShares S&P 500 ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

Passive investing

Some investments take a lot of management. I’d guess that a lot of people would prefer for their investments to take up as little time and mental effort as possible.

There’s no need to try to manage ASX ETFs – it’s simply being invested in a particular share market and tracking whatever happens.

I think ASX ETFs are much easier to manage than a residential property, a farm or other things.

Regularly changing portfolio

One of the main advantages, in my opinion, is that an ASX ETF’s portfolio is regularly changing.

Plenty of businesses fall by the wayside over time, and staying invested in those businesses would be to our portfolio’s detriment, in my opinion.

The fact that the ASX index fund portfolios change means they include the upcoming winners and ensures they can still be long-term investments as they sell down poor-performing investments.

Imagine if the VGS ETF was still invested in the businesses that were the biggest 30 or 40 years ago – it wouldn’t have done anywhere near as well as it has.

I think this is one of the best reasons why ASX ETFs can make solid long-term returns.

Good performance

Plenty of the good ASX ETFs have delivered good long-term returns, which would help investors grow their wealth.

Over the long term, the ASX share market and global share market have returned an average of around 10%.

If an investor were able to invest $1,000 per month into ASX index funds and the ASX ETF delivered an average return per annum of 10%, it would turn into $687,000 in 20 years.

I think investing in ASX index funds can be a very useful wealth-building activity.

The post 5 reasons to buy an ASX index fund today appeared first on The Motley Fool Australia.

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More reading

• 8 popular ASX ETFs smashing new 52-week highs
• Should I buy the Vanguard Australian Shares Index ETF (VAS) now or wait for an ASX dip?
• How I’m investing in ASX shares for my child
• 4 quality ASX ETFs to buy in February
• These ASX income ETFs could be top buys

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 positions in and has recommended iShares S&P 500 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Popular furniture retailer Temple & Webster Group Ltd (ASX: TPW) hit a new 52-week high share price on Thursday amid Australian property values continuing to appreciate in the new year.

Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK) shares also smashed new 52-week highs today amid the S&P/ASX 200 Index (ASX: XJO) gaining 0.30%.

The Temple & Webster share price hit a new 52-week peak of $9.93 in intraday trading today. Nick Scali shares went to $15.20 apiece, and the Harvey Norman share price reached $4.65.

All three ASX retail stocks have increased substantially over the past six months by 48%, 39%, and 23%, respectively.

The 52-week highs come two days after the Reserve Bank (RBA) announced it was keeping interest rates on hold after its first board meeting for 2024.

How interest rates are impacting shares vs. property

Earlier in the week, we discussed how the changed outlook on interest rates was turbocharging shares vs. property in 2024.

We noted that ASX shares enjoyed a super-strong Santa Rally over November and December. This was driven mainly by surging US stocks due to optimism that the Federal Reserve would cut rates in 2024.

Then the ASX 200 hit a new record high last month after December quarter inflation came in lower than expected.

We also noted how unusual it was to see home values rising so strongly over 2023 when interest rates were still moving up. Traditionally, rising rates tamp down home values.

This strength in the property market appears to be continuing in 2024.

Firstly, there was more price growth in January. Then we saw a preliminary auction clearance rate of 74% on the first major auction day of the year.

Why has the property market been so strong?

Well, a lower-than-average number of homes for sale in many markets has definitely been a factor.

But more interestingly, there was more buying activity among cash buyers last year. Cash property buyers are obviously wealthy and therefore less impacted by rising rates and inflation.

People who buy homes with cash are typically one of three buyer types.

Foreigners buying a second family residence or investment. Expats returning home after making their fortunes overseas in low-taxing countries. Downsizers who have sold their family home and are purchasing a smaller property for retirement.

Why are these 3 ASX furniture retailers hitting new highs today?

We know there’s a correlation between how often Aussies buy furniture and how often they move house.

We also know that rising home values create a ‘wealth effect’ that can make people feel richer. This encourages them to buy discretionary goods and services that improve their lifestyles.

But at the same time, we have a cost-of-living crisis occurring in Australia. Not many middle-income families with mortgages are feeling wealthier right now. This is because their home loan repayments have risen faster than their home values, not to mention the cost of every household item has gone up.

During periods of high inflation, lower and middle-income households rein in their discretionary spending. This was probably a factor in luxury furniture seller Nick Scali revealing a 20% revenue dive and a 29% fall in net profit after tax (NPAT) for 1H FY24 earlier in the week.

But do you know what the Nick Scali share price did in response to these numbers?

It skyrocketed by 19.65% in one day to a (then) 52-week high of $14.37, which has been superseded today.

Why did that happen?

Well, the share market tends to look at what’s ahead of it rather than what’s behind it. So, maybe investors rushed to buy Nick Scali shares because they liked what they saw in the early sales numbers for 2H FY24.

Nick Scali said January written sales orders were up 3.6% on the previous year and noted this was “continuing the positive momentum of Q2 from the first half FY24”.

Perhaps investors are also positioning themselves in oversold retail stocks because they expect inflation to fall further and the RBA to start cutting rates later this year, as all of the Big Four banks predict.

Nick Scali was the first of this trio of ASX furniture retailers to report this earning season.

Temple & Webster will report next Tuesday, 13 February.

Harvey Norman has not yet announced a date for its 1H FY24 report. However, the company usually releases its numbers late in February.

The post Shares vs. property: 3 furniture retailers hit 52-week highs amid continually rising home values appeared first on The Motley Fool Australia.

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More reading

• This ASX All Ords stock is surging 6% amid multiple broker upgrades
• Here are the top 10 ASX 200 shares today
• Why Inghams, Janison, Myer, and Nick Scali shares are rising today
• Nick Scali share price rockets 19% on guidance beat
• History shows 2024 could be a big year for ASX 200 shares. Here are 3 to look at now

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman and Nick Scali. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Nick Scali and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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• 2 ASX 200 shares making big moves on strong earnings
• Why AGL, Cochlear, Mirvac, and News Corp shares are storming higher
• Liontown’s share price crash has cost its chair $641 million. What now?
• 3 ASX All Ordinaries shares rocketing over 10% today
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear and Lovisa. The Motley Fool Australia has recommended Cochlear and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Big, reliable dividends year after year? On the ASX, you can bank on ’em.

ASX income investors have loved ASX bank shares for their generous dividends for decades.

But the only bank among the Big Four that has a history of delivering both decent dividends and share price growth is Commonwealth Bank of Australia (ASX: CBA).

We’ll be hearing from CBA next Wednesday when the financial giant drops its 1H FY24 report and announces its interim dividend. The other three banks reported in late 2023.

So, what’s in store in terms of overall dividends from the Big Four ASX bank shares this year?

Which one will pay us the most passive income?

Let’s consult the experts.

Which ASX bank share will pay the best dividend this year?

In 2023, CBA shares paid $4.50 in annual dividends, fully franked.

The consensus forecast published on CommSec today is for CBA shares to pay exactly the same in 2024. Based on the current CBA share price of $115.71, this equates to a dividend yield of 3.89%.

In 2023, National Australia Bank Ltd (ASX: NAB) shares paid $1.67 in annual dividends, fully franked.

The consensus forecast is for NAB shares to pay just one cent more at $1.68 per share in 2024. Based on the current NAB share price of $32.39, this equates to a yield of 5.18%.

In 2023, ANZ Group Holdings Ltd (ASX: ANZ) shares paid $1.75 in annual dividends with partial franking.

The consensus from analysts is that ANZ will reduce its annual dividend in 2024 to $1.62 per share. Based on the current ANZ share price of $27.59, this would be a yield of 5.87%.

By the way, the ANZ share price hit a new 52-week high of $27.67 today.

In 2023, Westpac Banking Corp (ASX: WBC) shares paid $1.42 in annual dividends plus full franking.

Analysts have a consensus expectation of $1.44 per share in annual dividends from Westpac this year. Based on the current Westpac share price of $24.31, this would be a yield of 5.92%.

The Westpac share price also hit a new 52-week high of $24.40 on Thursday.

And the best payer will be…

Based on yield, Australia’s oldest bank, Westpac, will pay a better dividend than the other ASX bank shares in 2024.

In dollar terms, CBA shares will pay the most.

The post Which Big Four ASX bank share will pay the biggest dividend this year? appeared first on The Motley Fool Australia.

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More reading

• Why has the Westpac share price just hit a 52-week high?
• Buy ANZ and these ASX dividend stocks now
• Better ASX bank buy: ANZ or NAB shares?
• ASX news: ANZ share price hits new 52-week high
• CBA stock: What’s happening with the ASX 200 bank and Microsoft today?

Motley Fool contributor Bronwyn Allen has positions in Anz Group, Commonwealth Bank Of Australia, and Westpac Banking Corporation. 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.

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S&P/ASX 200 Index (ASX: XJO) shares have gained a combined 12.5% over the past three years.

Now that’s not including the dividends that many of these companies pay out to their shareholders.

For that, we turn to the S&P/ASX 200 Gross Total Return Index (ASX: XJT), which includes all cash dividends reinvested on the ex-dividend date.

This tells us the accumulated value of ASX 200 shares has gained 27.2% over three years.

If I’d achieved benchmark matching gains then, a $10,000 investment in the full basket of 200 stocks would see me sitting on $12,720 today.

Not bad.

But it’s nowhere near the returns delivered by this star player.

This ASX 200 share has soared 409% in three years

The company in question is ASX 200 coal share Whitehaven Coal Ltd (ASX: WHC).

On 12 February 2021, I could have bought Whitehaven shares for $1.51 apiece. Or 6,622 with my $10,000 investment.

This was right about when thermal and coking coal prices began to surge. Coal prices then continued to rise to all-time highs in September 2022, following Russia’s invasion of Ukraine earlier in February 2022.

Despite coal prices coming off the boil since then, and the Whitehaven share price retracing from its own record highs, the coal miner is currently trading for $7.69 a share. That sees the ASX 200 share up an eye-popping 409%, and sitting on a net cash position of $1.5 billion.

That in turn would have seen the value of my 6,622 shares grow to $50,923.

And we haven’t yet factored in the four dividend payouts I would have received from Whitehaven shares over this period.

Over the past three years, the ASX 200 share has delivered a total of $1.15 per share in dividends.

Adding that back (assuming I kept the dividends in cash and didn’t reinvest them) my 6,622 Whitehaven shares purchased for $10,000 three years ago would be worth $8.84 apiece.

Or a total of $58,538.

Boom!

The post If I’d invested $10,000 in this ASX 200 share 3 years ago I’d have $58,538 today! appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why EML, Jumbo, Mesoblast, and Whitehaven Coal shares are jumping today
• Why are Whitehaven Coal shares racing 7% higher on Friday?

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.

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It’s shaping up to be another positive day for the S&P/ASX 200 Index (ASX: XJO) this Thursday.

After turning an early-week slump around yesterday, the ASX 200 looks set to double down on those gains, with the index currently enjoying a 0.53% rise up to 7,656 points. But let’s talk about two ASX 200 shares that are making even bigger moves today.

The Charter Hall Long WALE REIT (ASX: CLW) and Mirvac Group (ASX: MGR) prices are both soaring today. And it’s thanks to both REITs dropping their most recent earnings reports.

ASX 200 property stock reports a 17% drop in earnings

At first glance, there weren’t too many pleasing numbers in Mirvac’s results for the six months to 31 December – otherwise known as the first half of the 2024 financial year (1H24).

The property group reported an operating profit of $252 million for the period, a 17% drop from the same period last financial year. That translated into a statutory loss of $201 million for the ASX 200 share, though, thanks to some valuation writedowns.

Mirvac’s earnings per security (EPS) also fell 17% to 6.4 cents.

However, Mirvac also revealed that it expects its previous guidance of operating EPS of between 14 and 14.3 cents to hold for the full FY2024. It also told investors to continue to expect an annual dividend distribution of 10.5 cents per security.

Perhaps investors were expecting something worse. Today, Mirvac shares have bounced by a pleasing 5.27% to $2.26 each.

Charter Hall gets a thumbs up for downsizing

Next up, we have Charter Hall Long WALE REIT.

This morning, Charter Hall also revealed its earnings for the first half of FY2024. Similarly to Mirvac, this ASX 200 real estate investment trust (REIT) told investors that its operating earnings had declined 7.1% over the prior corresponding period to $94 million. Earnings per security also dropped by 7.1% to 13 cents, as was previously guided.

Thanks to valuation writedowns, Charter Hall also posted a statutory loss of $258.4 million.

However, perhaps investors are responding positively to this REIT’s asset sales. Charter Hall confirmed that it has been offloading assets recently, with $145.82 million worth of assets sold over the half-year. The REIT is also planning additional sales worth more than $500 million, presumably to reduce the trust’s leverage.

At present, the Charter Hall Long WALE REIT unit price is up a happy 3.6% at $3.88 a unit.

The post 2 ASX 200 shares making big moves on strong earnings appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Cochlear, Mirvac, and News Corp shares are storming higher
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• This ASX All Ords stock is surging 6% amid multiple broker upgrades
• 5 things to watch on the ASX 200 on Wednesday

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

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Some of Australia’s favourite ASX exchange-traded funds (ETFs) are tearing up the charts on Thursday.

Several ASX ETFs have hit new 52-week highs amid the S&P/ASX 200 Index (ASX: XJO) rising 0.5%.

Let’s check out eight of these outperformers today.

ASX ETFs hitting new 52-week highs today

Vanguard Msci Index International Shares Etf (ASX: VGS)

The Vanguard MSCI Index International Shares ETF is up 0.70% to $118.76 at the time of writing. This ETF has bounced 22.8% higher over the past 12 months. Its 52-week high today was $118.99.

This popular ETF provides access to 1,500 of the world’s largest listed companies from 23 countries, excluding Australia. Among its largest holdings are Apple, Visa, and Eli Lilly and Co.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF (ASX: NDQ) is up 1.15% to $41.25. This ASX tech ETF has risen 45.7% higher over the past 12 months. Its 52-week high today was $41.31.

This ASX ETF buys you into the world’s best tech companies, including Amazon, Meta Platforms, and Nvidia.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF is up 0.81% to $50.97. This ASX index ETF has risen 27.7% higher over the past 12 months. Its 52-week high today was $51.06.

The world’s greatest investor, Warren Buffett, famously said the best strategy for amateur investors to generate wealth through shares was to consistently buy an S&P 500 low-cost index fund.

Buffett said:

I think it’s the thing that makes the most sense practically all of the time. Keep buying it through thick and thin, and especially through thin.

Among the 500 companies included in this ETF are Amazon, Apple, Warren Buffett’s Berkshire Hathaway, and Tesla.

VanEck MSCI International Quality ETF (ASX: QUAL)

The VanEck MSCI International Quality ETF is up 1.12% to $52.35. This ASX ETF has risen 36.5% higher over the past 12 months. Its 52-week high today was $52.43.

QUAL was among the top-performing ETFs of 2023. Its concept is simple: invest in the world’s highest-quality companies based on key metrics such as high return on equity (ROE) and low debt. The fund holds about 300 companies, and three-quarters are US stocks.

Betashares Global Quality Leaders ETF (ASX: QLTY)

The BetaShares Global Quality Leaders ETF is up 0.86% to $28.26. This ETF has risen 32.1% higher over the past 12 months. Its 52-week high today was $28.35.

This ASX ETF has the same concept as the one above. It chooses companies based on four metrics – return on equity (ROE), debt to capital, cash flow generation, and earnings stability. Two-thirds of the fund’s companies are US stocks. The others are from countries like Japan, the Netherlands and France.

BetaShares Global Cybersecurity ETF (ASX: HACK)

The BetaShares Global Cybersecurity ETF is up 0.17% to $12. This tech ETF has risen 44.1% higher over the past 12 months. Its 52-week high today was $12.06.

The HACK ETF gives ASX investors exposure to the rapidly growing global cybersecurity sector. Among its holdings are industry giants Accenture, Cisco, and Crowdstrike.

Vanguard Diversified High Growth INDEX ETF (ASX: VDHG)

The Vanguard Diversified High Growth Index ETF is up 0.86% to $62.04. This ETF has risen 9.1% higher over the past 12 months. Its 52-week high today was $62.11.

This ETF offers diversification in a pretty extreme way. You get exposure to about 16,000 ASX shares and international shares all in one transaction, for a single brokerage fee. The VDHG holds seven Vanguard index funds comprising 90% global and ASX stocks, and 10% bonds.

iShares Global Healthcare ETF AUD (ASX: IXJ)

The iShares Global Healthcare ETF is up 0.44% to $137.81. This healthcare ETF has risen 14.6% higher over the past 12 months. Its 52-week high today was $138.11.

The IXJ ETF is among the 6 global sector ETFs that delivered the best returns over the past five years. It tracks the S&P Global 1200 Healthcare Sector Index, so it has exposure to general healthcare stocks, biotechs, medical equipment suppliers, and big pharma. Its holdings include CSL Ltd (ASX: CSL), Ramsay Health Care Limited (ASX: RHC), Astra Zeneca, Johnson & Johnson, and Moderna.

In other news…

Several individual stocks are hitting 52-week highs today, including Westpac Banking Corp (ASX: WBC) shares which reached $24.40 today.

QBE Insurance Group Ltd (ASX: QBE) shares hit a new 52-week peak at $16.55, and Nextdc Ltd (ASX: NXT) reached $14.55.

Insurance Australia Group Ltd (ASX: IAG) shares hit a two-year high of $6.19 ahead of the company’s half-yearly report next week. Analysts expect IAG to almost double its dividend in 2024.

The post 8 popular ASX ETFs smashing new 52-week highs appeared first on The Motley Fool Australia.

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More reading

• 3 ASX ETFs for tech investors to buy and hold
• 2 ASX ETFs I wish I’d bought for my portfolio
• How I’m investing in ASX shares for my child
• 4 quality ASX ETFs to buy in February
• Buy these fantastic ASX ETFs for passive income and growth

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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Bronwyn Allen has positions in CSL, Vanguard Diversified High Growth Index ETF, and Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Accenture Plc, Amazon, Apple, Berkshire Hathaway, BetaShares Global Cybersecurity ETF, BetaShares Nasdaq 100 ETF, CSL, Cisco Systems, CrowdStrike, Meta Platforms, Nvidia, Tesla, Visa, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended AstraZeneca Plc, Johnson & Johnson, and Moderna and has recommended the following options: long January 2025 $290 calls on Accenture Plc and short January 2025 $310 calls on Accenture Plc. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF and BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon, Apple, Berkshire Hathaway, CSL, CrowdStrike, Meta Platforms, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is having another solid session. In afternoon trade, the benchmark index is up 0.5% to 7,652.8 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are storming higher:

AGL Energy Limited (ASX: AGL)

The AGL share price is up 10.5% to $8.82. This follows the release of the energy giant’s half-year results. AGL posted a 20% drop in revenue to $6,183 million but a whopping 358.6% jump in underlying profit after tax to $399 million. This strong profit growth was driven partly by higher wholesale electricity pricing. In light of this profit growth, the AGL board increased its interim dividend by 225% to 26 cents per share.

Cochlear Limited (ASX: COH)

The Cochlear share price is up 4% to $303.01. Investors have been buying this hearing solutions company’s shares after it upgraded its FY 2024 guidance. Cochlear now expects underlying net profit in the range of $385 million to $400 million, which will be a 26% to 31% increase year on year. It was previously guiding to underlying net profit of $355 million to $375 million. The upgrade was driven by stronger than expected cochlear implant revenue.

Mirvac Group (ASX: MGR)

The Mirvac share price is up 5% to $2.25. This is despite the property company reporting a sizeable profit decline for the first half. It reported operating profit of $252 million, down 17% on the prior corresponding period. Investors may have been expecting a larger decline.

News Corporation (ASX: NWS)

The News Corp share price is up 6.5% to $41.99. This has been driven by the release of the media giant’s second quarter update this morning. News Corp reported a 3% increase in quarterly revenue to US$2.59 billion and a 95% jump in net profit to US$183 million. Management said: “News Corp again saw growth in both revenue and profitability this quarter as we continue to realize the collective benefit of our strategic shift to digital and subscription revenues, and away from sometimes volatile advertising revenues.”

The post Why AGL, Cochlear, Mirvac, and News Corp shares are storming higher appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares rocketing over 10% today
• Guess which ASX 200 stock is jumping on a 95% profit surge
• AGL share price rockets 15% after half-year profit surge
• Cochlear shares jump 6% on guidance upgrade
• 5 things to watch on the ASX 200 on Thursday

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

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The materials sector can be merciless at times. Prone to the occasional oversupply and unceremonious price dumping, the ups and downs through cycles are not for the faint at heart. Few are likely as attuned to this experience as Tim Goyder after the agonising year that has transpired for the Liontown Resources Ltd (ASX: LTR) share price.

As chair and second-largest shareholder of the lithium developer, Goyder watched on while the lion’s share of his net worth evaporated during the last four months. From the height of $3.15 per share in 2023 to the sobering 95 cents on Wednesday afternoon, approximately $641 million has been wiped from the entrepreneur’s fortunes.

Where did it all go pear-shaped? More importantly, are Liontown’s prospects capable of reinstating Goyder’s billionaire status?

Lithium riches cost a king’s ransom

Between 2021 and early 2023, the lithium industry minted money like nobody’s business. A meteoric boom in electric vehicles outpaced supply at the time, sending the price of the battery ingredient to unbelievable heights.

Many shareholders — including board members, management, and founders — witnessed their on-paper wealth explode during this time. However, the price of admission turns out to be steep as the sector grapples with oversupply.

For Liontown Resources, the descending path has looked markedly different to the trajectory of lithium prices, illustrated above. The company’s share price and Goyder’s wealth were buttressed by a $3.00 per share proposed bid from lithium juggernaut Albermarle Corporation (NYSE: ALB).

Yet, the support was quickly dashed when Albermarle pulled the pin in October. Liontown resorted to tapping debt and equity markets to secure enough funding to develop its Kathleen Valley project independently.

Despite the shored-up finances, the market has had difficulty stomaching the company’s market capitalisation. The Liontown share price has toppled 45% since October, reflecting the reinstated uncertainty of a pre-revenue mining company.

What’s next for the Liontown share price?

Forging forward, Liontown is continuing with its development efforts at Kathleen Valley. Now chewing through investor capital and saddled with debt, the priority is getting the project to production for Liontown to become self-sustaining. As of last week, the project is at 72% completion.

Following in the footsteps of other ASX lithium shares, the company revealed in its quarterly activities report that it is assessing its operations due to ‘short to medium-term lithium price forecasts’. Specifically, Liontown is weighing up delaying its mine expansion until market conditions improve.

Fortunately, some commentators are cautiously optimistic about lithium from here. For example, Jon Bishop of Jarden Securities believes the bottom of the cycle is near. Additionally, restocking in China from late March could boost the electrifying material, according to S&P Global Commodity Insights.

It all sounds positive for the Liontown share price. However, a key moment will come when the miner begins producing lithium. Only then will shareholders know for sure whether it can produce material profitably at the prevailing price.

The post Liontown’s share price crash has cost its chair $641 million. What now? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 7 ASX lithium shares going gangbusters today
• 2 dirt cheap ASX lithium shares to buy when the rout is over
• 5 ASX mining shares with projects being spruiked by the Australian Federal Government
• Where will the bottom be for the scorched lithium price?

Motley Fool contributor Mitchell Lawler has positions in Albemarle. 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.

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The Westpac Banking Corp (ASX: WBC) share price has continued its positive run on Thursday.

So much so, the banking giant’s shares have just hit a 52-week high of $24.40.

This means that its shares are up an impressive 18% since the start of November.

Why is the Westpac share price at a 52-week high?

Investors have been piling into the banking sector over the last couple of months on the belief that tough trading conditions and competition pressures are now easing.

In addition, the recent re-rating of bank shares to higher multiples has been triggered by the prospect of multiple rate cuts and optimism over the economy and banks’ earnings over the next two years according to analysts at Morgan Stanley.

It recently noted that ASX bank shares are now trading on earnings multiples greater than 15 times. This is higher than the pre-COVID 10-year average of approximately 12.2 times earnings.

Clearly optimism is high. But is it too late to invest? Let’s find out.

Where next for Westpac’s shares?

Most brokers believes that the Westpac share price is either overvalued or fully valued.

For example, Morgan Stanley has an underweight rating and $21.70 price target, and Macquarie has an outperform rating but a price target ($24.00) which is lower than where its shares currently trade.

But there is one broker that is more bullish than the rest – Ord Minnett.

A recent note out of the broker reveals that its analysts have an accumulate rating and $28.00 price target on the bank’s shares. This implies potential upside of almost 15% for investors over the next 12 months.

And with the broker forecasting a $1.44 per share fully franked dividend in FY 2024 (and FY 2025), the total 12-month potential return stretches to 5.9%.

Time will tell which broker makes the right call.

The post Why has the Westpac share price just hit a 52-week high? appeared first on The Motley Fool Australia.

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More reading

• Want to buy ASX 200 bank shares? You need to read this
• 7 must-see results this ASX reporting season before buying or selling
• ASX passive income: Is Westpac stock a buy, sell, or hold?
• Here’s what Westpac says the RBA will do with interest rates next week
• 3 high-yield ASX shares for considerable passive income (7%-plus dividends!)

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

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