Category: Stock Market

BHP Group Ltd (ASX: BHP) stock and two other ASX mining giants are on watch in 2024, but for differing reasons.

Let’s take a look at the 12-month share price targets on three popular ASX mining stocks, and the outlook for the commodity prices relevant to each of these companies.

BHP Group Ltd (ASX: BHP)

The BHP stock price is $47, down 0.57% at the time of writing on Thursday. Goldman Sachs has a 12-month price target of $50.50 on BHP shares.

BHP mines iron ore, copper, metallurgical coal, and nickel. It’s also developing a potash operation.

In a recent report, Goldman said iron ore (62% Fe) averaged US$120 per tonne (pt) in 2023, steady on 2022. The broker estimates an average price of $US110 pt in 2024 and US$95 pt in 2025.

Copper averaged US$3.85 per pound (pp) in 2023, down from US$4 pp in 2022. The broker estimates US$4.17 in 2024 and US$4.76 in 2025.

Semi-soft (SSCC) coal averaged US$195 pt in 2023, down from US$287 pt in 2022. Goldman estimates US$168 pt in 2024 and US$130 in 2025.

Nickel averaged US$9.74 pp in 2023, down from US$11.66 in 2022. Goldman estimates US$7.26 pp in 2024 and $US7.03 pp in 2025.

Potash averaged US$500 pt in 2023, up from US$359 pt in 2022. The broker anticipates an average of US$450 pt in 2024 and US$463 pt in 2025.

Goldman maintains its buy rating on BHP stock, explaining:

We are Buy rated on: (1) Attractive valuation, but at a premium to RIO; o (2) GS bullish copper and met coal; (3) Optionality with +US$20bn copper pipeline and improved production growth; (4) Robust FCF, but still below RIO. We continue to believe that BHP’s major opportunity is growing copper production in Chile at Escondida and Spence, and growing copper production and capturing synergies in South Australia between Olympic Dam and the previous OZL assets.

Rio Tinto Ltd (ASX: RIO)

The Rio Tinto share price is $131.96, down 0.72% today. Goldman has a 12-month share price target of $141.80 on Rio Tinto stock.

Rio Tinto’s main commodities are iron ore, copper, aluminium and lithium.

According to Goldman’s report, aluminium averaged US$1.02 pp in 2023, down from US$1.23 pp in 2022. The broker estimates an average price of US$1.13 pp in 2024 and US$1.27 pp in 2025.

Lithium carbonate averaged US$32,694 pt in 2023, down from US$63,232 in 2022. The broker anticipates an average price of US$12,847pt in 2024 and US$11,000 pt in 2025.

The broker has a buy rating on Rio Tinto shares, explaining:

We are Buy rated on: (1) compelling relative valuation vs. peers, (2) attractive FCF and Div yield (expect 75% payout for final div), (3) strong production growth in 2024-2025 of 5-6% CuEq driven by the ramp-up of the Oyu Tolgoi UG copper mine & a recovery at Escondida and Bingham, (4) potential for FCF/t improvement in the Pilbara, and (5) high margin low emission aluminium.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is $3.51, down 1.27% on Thursday. Goldman has a 12-month price target of $2.95 on this pure-play ASX lithium share. Pilbara Minerals shares haven’t traded below $3 since August 2022.

The lithium market is currently oversupplied, and this continues to weigh on lithium commodity prices. The lithium carbonate price fell another 1% in January and is down about 80% over 12 months.

Demand for electric vehicles (EVs) globally is stalling, which is affecting demand for batteries and raw lithium. Goldman notes that while Chinese EV sales and battery output continue to rise, a phase-out of subsidies and supply chain normalisation have weighed on the pace of growth.

As such, the GS commodity team expect the lithium market to be in a 202kt surplus in 2024 (17% of global demand) and continue to expect prices to trade deeply into the cost curve to balance the market.

But EVs still have a big future in our decarbonising world. So, Pilbara Minerals is a stock to watch in 2024 because, at some point, it may become a fantastic buy-and-hold opportunity for the long term.

For now, Goldman has a sell rating on Pilbara Minerals stock. This is primarily due to valuation, as the broker explains:

We see near-term FCF continuing to decline on lithium prices and 1. increasing growth spend, where we see PLS spending ~A$0.85bn on P1400, taking total capex spend from FY24E to FY28E on current and P1400 expansions to ~A$3bn, ~A$0.9bn ahead of consensus which already prices further expansion.

Furthermore, we see PLS’ net cash declining to ~A$1bn (though still a relatively strong position vs. some peers and defensive into a declining lithium price), where with the stock trading at a premium to peers and relatively expensive on fundamentals.

The broker adds that an anticipated doubling in production over five years with further optionality is “more than priced in”.

The post BHP stock and more: 3 ASX commodity titans to watch in 2024 appeared first on The Motley Fool Australia.

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More reading

• Where will the bottom be for the scorched lithium price?
• Got $15,000? How I’d invest for a bulletproof ASX passive-income portfolio
• Uh oh! Does this spell more bad news for ASX 200 lithium shares?
• Why the dividends from BHP shares could surge in 2024
• Top 5 most profitable ASX large-cap shares of 2023

Motley Fool contributor Bronwyn Allen has positions in BHP Group. 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.

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Woodside Energy Group Ltd (ASX: WDS) shares are joining in the broader market sell-down today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock could be facing some additional pressure from a 1.4% overnight drop in the Brent crude oil price. Brent slid to US$81.72 per barrel, amid news of swelling crude production in the United States.

Woodside shares closed yesterday trading for $32.41. In afternoon trade on Thursday, shares are swapping hands for $32.09 apiece, down 1%.

The ASX 200 is also down 1% at this same time.

That’s the latest price action for you.

Now, here’s why Woodside shares are making news this week.

What’s putting Woodside shares in the news

In an Australian first, Woodside announced that it has joined the United Nations Environment Programme (UNEP) Oil & Gas Methane Partnership 2.0 (OGMP 2.0).

The program provides a measurement-based reporting framework to help improve the accuracy and transparency of methane emission reporting.

Oil and gas production comes with significant methane emissions, which has previously seen Woodside shares targeted by activists.

Commenting on the development, Woodside CEO Meg O’Neill said, “Woodside is pleased to extend our leadership in minimising methane emissions by being OGMP 2.0’s first Australian member. “

She added that, “As part of our methane strategy, Woodside is striving for near-zero methane emissions on operated assets by 2030.”

OGMP 2.0 program manager, Giulia Ferrini said, “We are thrilled to welcome Woodside to the Partnership as its first member company in Australia.”

According to Ferrini:

This is a valuable step towards expanding methane accountability and transparency across the industry and the region. As customers, investors and governments demand stronger methane performance, we hope Woodside’s commitment will inspire others to join OGMP 2.0 and adopt a high standard of emissions reporting and management.

Woodside said it has four key pillars to its methane reduction plan:

• Developing a high-integrity measured dataset
• Striving for near-zero methane emissions
• Transparent reporting
• Leadership through advocating and collaborating with others

The company noted its 2022 methane emissions were “around 0.1% of our production by volume, well below the Oil and Gas Climate Initiative (OGCI) methane intensity target of below 0.2%”.

Woodside shares are down 10% over the past 12 months and up 2% so far in 2024.

The post Australian first: Why Woodside shares are making news this week appeared first on The Motley Fool Australia.

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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 been quite a sobering day on the ASX boards so far this Thursday. After yesterday’s fresh new all-time highs, investors are taking a breather, with the S&P/ASX 200 Index (ASX: XJO) currently nursing a chunky loss of 1.2%. But let’s talk about the ASX news coming out from Santos Ltd (ASX: STO) shares.

To start things off, it’s worth noting that Santos shares are currently being punished even more than the broader market. The ASX 200 oil and gas producer is currently down by a hefty 1.46% at $7.74 a share.

To be fair, this isn’t too different from what some other ASX energy shares are doing. Woodside Energy Group Ltd (ASX: WDS) shares have lost 1.34% so far today. Karoon Energy Ltd (ASX: KAR) is down 0.92%, while Beach Energy Ltd (ASX: BPT) has lost 0.3%.

But Santos seems to be the punching bag this Thursday. Perhaps a new announcement out of the company is responsible.

What’s making ASX news today with this energy stock?

Enthusiastic Santos stakeholders may recall that last year, Santos reached an agreement with Kumul Petroleum Holdings. Kumul agreed to purchase the 2.6% stake in PNG LNG that Santos owns.

On 29 December, Santos told investors that Kumul had paid $250 million into an escrow account as a part payment for this deal. It also revealed that Kumul had secured the additional funds needed to complete this purchase by 31 January.

Well, today, the company gave investors an update. Here’s what was said:

Santos and Kumul have agreed an amendment to the Sale Agreement where Kumul has taken an effective interest in the Santos entity that holds the 2.6 per cent sale interest. Kumul has paid US$352 million to Santos (equivalent to a ~1.6 per cent interest) on 31 January 2024 to allow partial completion of the transaction.

The amendment provides additional time for Kumul to pay the remaining purchase price of US$241 million. Until final completion, Santos retains control of the entity holding the 2.6% and in order to assist with purchase of the remaining interest, future project distributions associated with the interest sold to Kumul will be applied to acquiring the remaining interest

As such it seems that this deal isn’t quite ‘home and hosed’ just yet.

Perhaps the instability, for want of a better phrase, that is revolving around this yet-to-be-completed deal is what is weighing on Santos shares today.

It’s certainly possible, although, as we discussed earlier, Santos really isn’t straying too far out of the broader energy ballpark when it comes to its share price losses.

Santos share price snapshot

Today’s share price losses don’t take too much away from what has been a rather lucrative 12 months for the company. Even after today’s falls, the Santos share price remains up 9.94% over the past 12 months.

At the present levels, the company is offering a trailing dividend yield of 3.23%.

The post Here’s why Santos shares are making ASX news on Thursday appeared first on The Motley Fool Australia.

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More reading

• Morgans names the ASX cyclical shares to buy for earnings season
• How US-Iran tensions will support oil prices: CBA analyst
• Could this be jump-starting ASX energy shares today?
• 5 things to watch on the ASX 200 on Monday
• Santos share price rises on $2.3 billion revenue from ‘challenging year’

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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From mid-2021 through to November 2022, the lithium price rise was nothing short of meteoric.

Investors who bought S&P/ASX 200 Index (ASX: XJO) lithium shares like Pilbara Minerals Ltd, (ASX: PLS) Core Lithium Ltd (ASX: CXO) and Liontown Resources Ltd (ASX: LTR) near the beginning of that cycle and sold near the end will have banked some eye-popping gains.

The Core Lithium share price, as one example, soared more than 560% over that 18-month period.

But, as you’re likely aware, the lithium price then headed the other direction.

And just as quickly.

The price for spodumene, a lithium rich mineral, has collapsed by more than 85% over the past 12 months. Spodumene 6% (meaning it contains at least 6% lithium) is now trading below US$1,000 per tonne, down from around US$7,600 per tonne in January 2023.

With the lithium price in freefall, ASX 200 lithium stocks have seen their previously soaring share prices hammered.

And the miners have been taking steps to conserve cash amid plunging revenues.

In January, Core Lithium announced it was temporarily halting mining operations at its Finniss lithium project.

Meanwhile, Liontown has chosen to delay the expansion of its Kathleen Valley lithium project.

And Pilbara Minerals, which delivered its first two dividends in 2023, is looking at suspending those payouts in 2024.

With that in mind, when can investors in ASX 200 lithium shares like Core Lithium, Pilbara and Liontown expect to see a bottom in the scorched lithium price?

What’s ahead for the lithium price?

Investors hoping for a rapid turnaround in spodumene prices are likely to be disappointed.

Bank of America senior commodities strategist Michael Widmer noted (quoted by The Australian Financial Review), “We are concerned that lithium has not yet found a bottom.”

Widmer slashed his forecast for spodumene prices in 2024 by 63% to US$650 per tonne. He reduced his forecast for 2025 to US$1,438 per tonne, down from his previous expectations of US$2,188.

That would see the lithium price continue to slide this year before rebounding above current levels in 2025.

Goldman Sachs recently released a more bearish forecast for 2025, though the broker is slightly more optimistic about its outlook for 2024.

Goldman expects spodumene prices of US$1,175 per tonne in 2024, which it then forecasts will fall to US$800 per tonne in 2025.

Why is Bank of America bearish on the near-term outlook for spodumene?

Commenting on why he expects the lithium price to fall further in 2024, Widmer said, “Operators have been reluctant to curtail production, the project pipeline is well filled, and we continue to expect very high surpluses. This should keep the pressure on prices for now.”

He added that, “Western producers keep pushing ahead on expectations that lithium demand will expand thanks to [government] policies.”

Those include the Inflation Reduction Act in the United States and potential tax incentive extensions for lithium producers in Australia.

On the demand side, a global slowdown in the growth rate of EV sales isn’t helping the lithium price turn around either.

According to Widmer (quoted by the AFR):

Further investigation reveals a dichotomy in the EV market: the premium market has moved towards electrification, while mass-market adoption lags. This divergence is mostly driven by pricing, but EV prices are unlikely to converge with [internal combustion engines] in the near term… EV production keeps expanding, albeit at a slower pace.

So, when can investors in ASX 200 lithium shares expect the lithium price to run higher again?

Keep an eye on those production scalebacks.

“Eventual announcements of lithium production cuts will be key to a price rebound,” Widmer said.

The post Where will the bottom be for the scorched lithium price? appeared first on The Motley Fool Australia.

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More reading

• Uh oh! Does this spell more bad news for ASX 200 lithium shares?
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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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Whenever an ASX All Ordinaries (ASX: XAO) share trades ex-dividend on the stock market, it’s a pretty big deal. For one, it means that a fresh new dividend payment is getting ready to depart to eligible investors’ bank accounts.

But it also means that we’re primed to see a bit of a share price drop for the company in question.

Why? Well, whenever a company declares a new dividend payment, it must also nominate an ex-dividend date to preceed it.

The ex-dividend date acts as a line in the sand in terms of who actually gets the dividend. If you own a company’s shares before the nominated ex-dividend date, you go on the books as being eligible for payment. However, if you buy those same shares on or after the ex-dividend date, the receiving rights to the dividend remain with the seller. You miss out, in other words.

This value leaves the dividend-paying companies’ books when it trades ex-dividend. As such, we normally see a corresponding drop in that company’s share price.

So today, let’s talk about three ASX All Ords shares that will experience this very phenomenon over the coming week

Three ASX All Ords shares poised to trade ex-dividend

ResMed Inc (ASX: RMD)

First up is healthcare stock Resmed. Resmed is a rather unusual share in that it pays out its dividends every quarter, rather than the normal six months. Just last week, the company revealed that its next dividend, due on 3 April, will be worth an unfranked 4.8 US cents per share. That’s the same payment investors enjoyed last quarter.

Since this payment is denominated in US dollars, we don’t yet know what the final amount will be in our local currency. But what we do know is that the ex-dividend payment for this upcoming dividend is set for next Wednesday, 7 February. So if you wish to bag this payment, you’ll need to own Resmed shares by the close of trade on Tuesday.

Euroz Hartleys Group Ltd (ASX: EZL)

Next, let’s discuss All Ords financial services share Euroz Hartleys Group. Earlier this week, Euroz Hartleys reported its half-year results for the six months ending 31 December. The company took the opportunity to announce that its upcoming interim dividend would be worth 1.75 cents per share, fully franked.

That’s a bit of a drop from Euroz’s final dividend from August, which was worth 3.5 cents per share. It’s also a decline from last year’s interim dividend of 2.5 cents per share.

Investors have until the end of trading today to secure this latest payment, given Euroz Hartleys is scheduled to trade ex-dividend tomorrow, 2 February. Payment day will then come around later this month on 16 February.

Nickel Industries Ltd (ASX: NIC)

Finally, let’s talk about All Ords nickel stock Nickel Industries. Nickel Industries also gave investors some results earlier this week, albeit for the past quarter. In these results, the company revealed a final dividend of 2.5 cents per share, unfranked. That’s a 25% rise over both the interim and final dividends from 2023. These both amounted to 2 cents per share.

Like Euroz Hartleys, Nickel Industries will go ex-dividend for this payment tomorrow, 2 February. So investors have until the end of today’s trading to secure it if they wish.

The dividend will then be doled out to eligible investors on 19 February.

A bonus ex-dividend date for your calendar

It’s probably worth mentioning a share that isn’t exactly on the All Ords, but is popular and trading ex-dividend tomorrow as well. Shareholders of the Australian Foundation Investment Company Ltd (ASX: AFI) are also looking forward to their upcoming interim dividend this month.

AFIC will be forking out a fully-franked 11.5 cents per share on 26 February. That’s a pleasing 4.55% rise over the 11 cents per share enjoyed in 2023. But once more, aspirants better be quick, as AFIC shares will cut off eligibility for this payout tomorrow.

The post 3 ASX All Ords shares with ex-dividend dates in the next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
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• Why Gold Road, Ioneer, Megaport, and Nickel Industries shares are roaring higher

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 ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 a rough session on Thursday. In afternoon trade, the benchmark index is down 1.3% to 7,580.2 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Block Inc (ASX: SQ2)

The Block share price is down 3% to $99.93. This follows a broad selloff in the tech sector overnight on Wall Street which impacted the payments company’s US listed shares. Investors were hitting the sell button after the US Federal Reserve suggested that rate cuts will still some way off.

Resolute Mining Ltd (ASX: RSG)

The Resolute Mining share price is down 6% to 40.25 cents. This follows the release of the gold miner’s fourth quarter update after the market close on Wednesday. Investors appear disappointed that its full-year production dropped year on year to 330,994 ounces from 353,069 ounces. Nevertheless, a stronger gold price meant that full year EBITDA came in 11.5% higher year on year at $165 million.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is down a further 7.5% to 3.7 cents. Investors have been selling this lithium miner’s shares following the release of its quarterly update this week. That update revealed that its unit operating cost increased to A$1,397 per tonne, which is significantly more than its realised selling price of A$946 per tonne. As this is clearly unsustainable, the market appears to believe a production suspension is inevitable. There may also be questions over the availability of its $200 million lending facility given the current environment.

Syrah Resources Ltd (ASX: SYR)

The Syrah share price is down 11% to 37.5 cents. This is despite UBS retaining its buy rating on the graphite producer’s shares with a lofty price target of $1.00. It was reasonably pleased with the company’s quarterly update. Especially given the tough environment it is operating in at present.

The post Why Block, Resolute Mining, Sayona Mining, and Syrah shares are sinking today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. 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 on course to end its winning streak on Thursday with a sizeable decline. In afternoon trade, the benchmark index is down 1.25% to 7,583.6 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Credit Corp Group Limited (ASX: CCP)

The Credit Corp share price is up 7% to $18.42. This may have been driven by a broker note out of Morgans this morning. While Credit Corp’s half year results missed expectations, the broker remains very positive on the future. As a result, it has retained its add rating and lifted its price target on the debt collector’s shares to $20.60.

Playside Studios Ltd (ASX: PLY)

The Playside Studios share price is up a further 4% to 75.5 cents. Investors have been buying this game developer’s shares this week after it delivered a record quarterly result. Playside posted record quarterly revenue of $20.7 million and positive unaudited EBITDA of $8 million. The latter was close to double what was recorded in the previous quarter.

QBE Insurance Group Ltd (ASX: QBE)

The QBE share price is up 1% to $16.00. This morning, Goldman Sachs reiterated its buy rating and $18.52 price target on the insurance giant’s shares. This was in response to the release of a strong update from one of its global peers.

Skycity Entertainment Group Ltd (ASX: SKC)

The Skycity share price is up 3.5% to $1.83. Investors have been buying this casino and resorts operator’s shares after it released an update on its AUSTRAC proceedings. That update reveals that the two parties have come to an agreement. This will see Skycity hit with a civil penalty and legal costs totalling an estimated A$73 million.

The post Why Credit Corp, Playside, QBE, and Skycity shares are pushing higher today appeared first on The Motley Fool Australia.

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• What could happen to Telstra shares if interest rates fall?
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• Brokers say these ASX 200 dividend shares are buys

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.

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The Wesfarmers Ltd (ASX: WES) share price has climbed impressively over the last six months, rising by 15%. The S&P/ASX 200 Index (ASX: XJO) has only gone up by 2% over that same time period.

A 15% rise is nowhere near as much of a gain as plenty of other businesses. For example, the JB Hi-Fi Limited (ASX: JBH) share price is up 22% and the Fortescue Ltd (ASX: FMG) share price has gone up 35%.  

Would it be crazy to invest now?

Wesfarmers is one of the best businesses on the ASX, in my eyes. It operates a number of leading businesses like Bunnings, Kmart and Officeworks.

I don’t think it would be a stretch to invest today. The forecast on Commsec puts the Wesfarmers share price at 24 times FY25’s estimated earnings. With the underlying quality of Wesfarmers, this doesn’t seem like an expensive valuation.

The company has done a wonderful job of growing over the long term. It has directed capital towards its strong businesses and moved away from areas it doesn’t think will deliver for shareholders over the long term.

Its move into healthcare is just the kind of thing I’d expect from Wesfarmers because of the long-term growth potential, an ageing population and the digitalisation of healthcare tailwinds. Healthcare is a huge industry, so it makes a lot of sense for Wesfarmers to create a new platform for growth here.

Population growth and the prospect of lowering interest rates are exciting for the potential of earnings growth and Wesfarmers share price growth over the next two or three years.

At the AGM, Wesfarmers indicated that the value offering of Kmart and Bunnings was resonating with customers. This bodes well if there’s an extended period of economic challenges for some households.

Don’t go all in

Investors seem to have become exuberant that inflation is reducing, but there haven’t actually been any interest rate cuts yet.

Sometimes the market can get ahead of itself and then adjust after that.

It’s not as though companies are suddenly being expected to make a lot more profit than they were before. Thus, this rally seems to be based on sentiment about interest rates. In fact, the US Federal Reserve boss has told investors not to expect cuts too early.

There’s no rush to invest. If the last four years have shown us anything, it’s that volatility usually isn’t that far away. We don’t need to FOMO invest in any particular ASX share, including Wesfarmers shares.

Over the long-term, I think Wesfarmers shares can keep rising, but there may be times when it falls below today’s price.

Even so, I’d be comfortable buying a parcel of shares today and buying more in the future at a price I like.

The post Would I be crazy to buy Wesfarmers shares at $58? appeared first on The Motley Fool Australia.

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• Why this broker just upgraded Wesfarmers shares to a buy rating

Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi. 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 Bapcor Ltd (ASX: BAP) share price is marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) auto parts company closed yesterday trading for $5.64. In earlier trade, shares were swapping hands for $5.95 apiece, up 5.5%.

The Bapcor share price has since retraced to $5.73, leaving the stock up 1.6% at time of writing.

That’s a good bit better than the 1% losses posted by the ASX 200 at this same time.

The benchmark index is following US markets lower after Fed chair Jerome Powell dashed investor hopes of a March interest rate cut from the central bank. (See the full story here.)

Here’s why the Bapcor share price looks to be shaking off those macro concerns today.

What did the ASX 200 auto parts company announce?

Investors are bidding up the Bapcor share price after the company announced the appointment of a new CEO and managing director.

Current CEO and managing director, Noel Meehan, will exit his position at the end of this week. Meehan, Bapcor’s CEO since December 2021, was said to be leaving for personal and family reasons.

Paul Dumbrell will take over the reins as CEO and managing director on 1 May.

Meehan will stay on during the transitional period to provide strategic support and facilitate an orderly leadership transition.

Bapcor non-executive director Mark Bernhard, who has more than 30 years of experience in the automotive industry in senior executive roles, will step in as interim CEO and managing director.

ASX 200 investors could be bidding up the Bapcor share price on news that sales at Total Tools almost doubled during the five years that Dumbrell served as the company’s CEO.

Commenting on his appointment to the top job, Dumbrell said:

After leaving Total Tools I had planned to take an extended break, but the opportunity to work alongside the Bapcor team is an exciting opportunity and I am very much looking forward to working with the leadership team and board to drive shareholder value.

I have a long history with Bapcor, and I look forward to seeing the full potential of the broader group realised into the future alongside the exceptional teams within the business.

Current chair, Margie Haseltine also said she would not seek re-election to the board at the 2024 AGM.

“We are focused on ensuring that Bapcor has the right executive team to drive profitable growth and the right board to give strategic oversight to the company,” she said.

Bapcor share price snapshot

After a big slide in October, the Bapcor share price remains down 11% over the past 12 months.

Shares in the ASX 200 auto parts company are up 8% since 24 January.

The post Why is the Bapcor share price racing ahead of the ASX 200 on Thursday? appeared first on The Motley Fool Australia.

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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 recommended Bapcor. 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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ASX growth shares could be the best way to invest to produce market-beating returns. Businesses that are compounding at a strong rate can lead to good wealth creation because of how they can grow to larger and larger financial numbers.

Australia is a great country to live in and do business in. But it’s the investments that give us exposure to international growth that can do particularly well over time because the US and other countries have much bigger populations and economies than Australia.

With that in mind, below are three ASX growth shares I really like, which is why I’m invested in two of them. If I had $7,000 to invest today, I’d happily split it between these three names.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a leading retailer of affordable jewellery with a network of stores around the world.

The business is opening stores across the world at a very fast pace, rapidly diversifying away from Australia. In FY23, the business grew its store network by 27%, or 172 stores, to 801 which included an extra 72 stores in the US to reach 190 stores.

Lovisa earns good margins at each of its stores, and it’s quite cheap for the business to open new stores. Despite the cost of opening all of those new stores and entering new countries, the business was able to grow FY23 net profit after tax (NPAT) by 20.1% (on a 52-week basis) to $68 million.

It has recently entered markets like Mexico, Canada, Hong Kong, China, Spain and Vietnam. Added to other markets like Germany, the UK and the US, Lovisa still has plenty of growth potential ahead. I think it can double its store count over the next five years.

According to the projection on Commsec, the Lovisa share price is valued at 20 times FY26’s estimated earnings.

Johns Lyng Group Ltd (ASX: JLG)

Johns Lyng is another one of my favourite S&P/ASX 200 Index (ASX: XJO) growth shares because it’s growing in a variety of different ways.

Its core offering is rebuilding and restoring buildings and contents after an insured event, including flooding, storms, fire and so on. The company’s main markets are Australia and the US.

The business is rapidly growing its earnings and capabilities in addressing catastrophes. In FY23, catastrophe revenue rose 125.3% to $371.3 million, helping total revenue grow 43.2% to $1.28 billion.

Johns Lyng is growing additional sources of earnings, which are defensive and recurring. It is acquiring body corp/strata service providers, as well as electrical, fire and compliance, testing and maintenance businesses (including Smoke Alarms Australia and Linkfire).

Its growing scale is delivering operating leverage, meaning profit is growing faster than revenue.

The US is a huge potential growth market, and it’s looking at expanding to other markets. It recently entered New Zealand and management has indicated there could be further geographic growth down the track.

According to Commsec, the ASX growth share is valued at 29 times FY24’s estimated earnings.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

The exchange-traded fund (ETF) is one of the most exciting ETFs in my mind.

It invests in (US) shares that, in Morningstar’s eyes, have strong competitive advantages that are expected to almost certainly endure for the next decade and more likely than not for two decades. In other words, these businesses need to have long-term economic moats that are hard for competitors to challenge.

The ETF only invests in these businesses when they’re at a good price, compared to what Morningstar thinks they’re worth.

That investment strategy has seen the MOAT ETF deliver net investment returns in the teens over the long term, though this isn’t guaranteed to continue.  

The post The ultimate ASX growth shares I’d buy with $7,000 right now appeared first on The Motley Fool Australia.

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More reading

• Buy and hold these ASX dividend stocks for a decade
• ASX passive income seekers: Invest $10,000 for $520 in monthly income
• Buying ASX retail shares? You’ll want to see these numbers
• 3 excellent ASX ETFs to buy and hold in February
• Why I think Lovisa stock is an amazing ASX 200 buy for both dividends and growth

Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and Lovisa. The Motley Fool Australia has recommended Johns Lyng Group, Lovisa, and VanEck Morningstar Wide Moat 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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