Category: Stock Market

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

Nvidia (NASDAQ: NVDA) share prices have recently reversed course after seemingly pushing higher for months without a breather. The stock now trades nearly 13% off its intraday high price of over $140 per share hit last month.

There is one Wall Street analyst who thinks shares of the artificial intelligence (AI) leader will soon rebound and even exceed its all-time high. Morgan Stanley analyst Joseph Moore put out a new note on Nvidia on Monday increasing his price target from $116 to $144 per share. Moore determined that share price based on what he sees as a jump in earnings per share (EPS) through next year. Moore thinks Nvidia stock is worth buying as his new price target would represent a gain of about 17.5% from its current price.

Nvidia’s “compelling narrative”

After data checks pointed to strong demand in China and Taiwan, as well as the U.S., Moore raised his EPS estimate for the semiconductor giant from $2.94 to $3.34 per share for next year. Moore believes Nvidia, “remains the most compelling narrative in the AI [semiconductor] space, and as we transition from H100 to H200 and then Blackwell, visibility and backlog will improve materially.”

That last point is the key to an investment in Nvidia right now. Even after its recent correction, Nvidia shares had run up ahead of revenue and earnings growth. In other words, further growth is already built into the stock price to some extent.

But even as Nvidia prepares to begin bulk shipments of its new, Blackwell AI platform, its H100 and H200 graphics processing units (GPUs) are still in high demand. That’s because many of Nvidia’s customers have been waiting in line to get these high-strength computing chips needed for training generative AI models.

Those sales will remain strong even as shipments of the new Blackwell chip accelerate. That’s why investors should still feel comfortable buying Nvidia shares. Even after the massive gains, there is a strong base of sales, and an even stronger pipeline of new AI products ahead.

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

The post Is Nvidia stock going to $144? appeared first on The Motley Fool Australia.

More reading

• Nvidia’s stock is up 160% in 2024, but is it a bubble waiting to pop?
• Can Nvidia stock cross $1,000 again after the stock split?
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• Where will Nvidia stock be in 10 years?
• Nvidia is no longer the most valuable company in the world. Here’s what investors need to know

Howard Smith has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Chalice Mining Ltd (ASX: CHN) shares are catching the eye on Wednesday.

In morning trade, the ASX mining stock is up 8% to $1.64.

Why is this ASX mining stock racing higher?

Investors have been scrambling to buy the company’s shares this morning after it made a big announcement.

According to the release, Chalice Mining and Mitsubishi Corporation have entered into a non-binding memorandum of understanding (MOU).

Mitsubishi is one of Japan’s largest conglomerates and a leading global natural resources investor. Management notes that it has a long and successful track record of partnering with mining companies to fund and develop major mining projects globally. As a result, it is considered a tier-one strategic partner.

What is the MOU?

This MOU will see the parties work together with the intention of forming a potential strategic partnership to develop the ASX mining stock’s 100%-owned Gonneville PGE-Nickel-Copper-Cobalt Project in Western Australia.

Management notes that the agreement establishes a general framework for collaboration on technical, financing, marketing, and offtake aspects of the project during the ongoing pre-feasibility study (PFS).

It also highlights that Mitsubishi brings a broad range of capabilities, experience and relationships across equity and debt financing, product marketing, procurement and large-scale project development.

The MOU is non-exclusive and does not restrict the ASX mining stock from entering into any other transaction involving the project.

A foundational, long-term relationship

Chalice Mining’s managing director and CEO, Alex Dorsch, was very pleased with the news. He said:

We are very pleased to have executed the MOU with Mitsubishi, which marks the beginning of a foundational, long-term relationship. Mitsubishi’s involvement in the Gonneville Project follows extensive due diligence and discussions over the past ~12 months and highlights the longer-term strategic nature and value of the Project as a potential large-scale, long-life and low-carbon source of critical minerals for Western markets.

From the outset of the strategic process, Mitsubishi was always considered one of the most impressive and best suited strategic partners for the Gonneville Project, based on its decades-long development, operational and trading track record. In the context of key ongoing PFS workstreams and optimisations, the MOU structure is favourable, as it provides a framework for collaboration for both parties during the PFS and allows for the progression and de-risking of the Project prior to having good faith discussions around a potential joint arrangement and investment following the completion of the PFS.

Despite today’s gain, this ASX mining stock is still down ~73% over the past 12 months.

The post Guess which ASX mining stock is jumping 8% on deal with Mitsubishi appeared first on The Motley Fool Australia.

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

Medibank Private Ltd (ASX: MPL) shares could be a candidate to produce solid returns in FY25 and perhaps beyond, according to a leading broker.

The ASX healthcare share has seen its fair share of volatility, as shown on the chart below, as it was smashed by a cyberattack in October 2022 and then recovered from the fallout.

One leading broker spies an opportunity with the leading Australian private health insurer.

The company could deliver returns through both a rising share price and a growing dividend, according to UBS.

Why UBS is excited about Medibank shares

The broker’s positive view on the ASX healthcare share is based on the low ongoing claims inflation, which supports margins remaining in the 8% to 9% range.

Medibank experienced claims inflation, meaning average claims per policy unit, of just 2% during the first half of FY24, compared to guidance of 2.6%. UBS noted FY24 guidance has been upgraded to 2.2% to 2.4%.

The broker described the outcome as “positive” and said it demonstrated that the claims base had “several different gears”. UBS noted that claims remained below pre-COVID levels in psych, rehab, respiratory and prosthesis, which was funding higher claims inflation in private surgical.

The broker also pointed out that the favourable claims outcome triggered another customer’s $215 million ‘giveback.

UBS said the resident claims ratio improved by 0.4 percentage points compared to the prior corresponding period, while the private health insurance net margin rose by 0.1 percentage points to 8.1%.

The broker forecasts that the private health insurance margin will remain “higher for longer” at above 8% between FY24 and FY26, which is a positive for Medibank shares.

Some disappointments

One negative for the ASX healthcare share was that its other costs were “disappointing”, with cost growth of 10.9%. There were several “unusual” items, including non-resident commissions increasing by more than 40%, resident commissions being fully expensed, business-as-usual cost inflation of around 5%, and IT security and payroll tax costs of $4 million.

FY24 guidance costs of between $610 million to $615 million implied 4% to 6% cost growth in the second half of FY24, and this will be aided by a “small step-up in productivity gains.

UBS also said policy numbers were “disappointing”, falling by 1,800 in the November and December period. The broker attributed this to a “more competitive environment recently”, requiring “greater retention activity”. UBS said the FY24 guidance of 1.2% to 1.5% policy growth appeared to be “optimistic”. The broker’s estimate is for 0.9% growth.

Price target and dividend

UBS has a price target of $4.20 on Medibank shares, which suggests a possible rise of 14%. The broker projects Medibank could pay an annual dividend per share of 18 cents, which translates into a fully franked dividend yield of 4.9%.

Together, the capital growth and dividend could produce a total return of around 19% over the next year or so.

The post Top broker says Medibank shares could return 19% in FY25 appeared first on The Motley Fool Australia.

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• Medibank shares: Here’s the dividend yield you’ll get today
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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.

Do you want some retail sector exposure for your investment portfolio?

If you do, then it could be worth looking at the ASX retail stocks in this article.

They have been named as best buys for the new financial year by analysts at Bell Potter. Let’s see what the broker is saying.

What is the broker saying about ASX retail stocks?

Firstly, Bell Potter explained what it is looking for in the sector right now. It said:

We continue to look for retailers with differentiating customer value propositions and balance sheet strength and support names who may grow via market share expansion and have exposure to the customer categories who could benefit in the current consumer backdrop.

One ASX retail stock that has been given the thumbs up is Premier Investments Limited (ASX: PMV). Bell Potter has a buy rating and $35.00 price target on the Smiggle and Peter Alexander owner’s shares.

It believes the market is undervaluing its shares, especially given its demerger plans. It explains:

PMV is currently trading on ~15x FY26e P/E (BPe) which we think is conservative given the value that we see emerging from the potential demerger of PMV’s two key brands, Smiggle and Peter Alexander which we believe are global roll-out worthy and highly profitable. We see further upside from the higher ownership PMV shareholders could receive in the Myer Group (MYR) given the potential to grow post MYR’s turnaround phase and synergies from merging with PMV’s apparel brands

What else?

Another ASX stock that has been tipped as a buy is youth fashion retailer Universal Store Holdings Ltd (ASX: UNI). The broker has a buy rating and $6.15 price target on its shares.

Bell Potter is positive on the company’s outlook due to margin expansion opportunities and its store rollout. It said:

Management execution remains a key strength for UNI and we see good growth trajectory for the name given the building of core brands while growing its store rollout. In our view, the higher margin sales from the majority private label sales should become a major driver of margin improvement and earnings growth, in an expanded store footprint. While we remain cautious on the overall consumer sentiment, given the return to positive comps while cycling elevated pcp through Jan-Feb (+1% for Universal Store and +10% for Perfect Stranger) and potential benefits from income tax cuts to the customer demographic, we think UNI is well placed given supportive 4Q comps.

A final ASX retail stock to consider according to Bell Potter is Propel Funeral Partners Ltd (ASX: PFP). It has a buy rating and $6.20 price target on its shares. It said:

While PFP remains to be one of the few listed deathcare players globally, we think the premium to the peer group PFP trades at is justified considering the current market position, M&A firepower/opportunity and successful track record.

The post Bell Potter names the best ASX retail stocks to buy in FY25 appeared first on The Motley Fool Australia.

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

Liontown Resources Ltd (ASX: LTR) shares were on fire on Tuesday.

The lithium developer’s shares ended the day 7% higher at 95.5 cents.

The catalyst for this was news that the company has secured a US$250 million convertible note (CN) investment and 10-year offtake extension from foundational partner, LG Energy Solution.

Broker reaction

Bell Potter was pleased with the news and highlights that the company is now funded to steady-state production. It said:

The CN increases LTR’s cash liquidity by $129m; it replaces the $550m debt facility announced in March 2024, of which $300m was allocated to repay a debt facility with offtake partner Ford. LTR will now retain the $300m Ford debt facility which has a 5-year tenor and BBSW+1.5% rate. LTR reiterated that Kathleen Valley remains on schedule for first production by the end of July 2024. With the CN, LTR will have available cash of $501m and remaining capex of around $120m to first production. LTR expects the $381m balance to fund Kathleen Valley to steady-state production, even under current depressed lithium pricing.

The broker was pleased with the agreement and feels it was the right thing for management to do. Its analysts add:

The LG CN funding is a pragmatic solution to remove the onerous terms associated with traditional bank debt and increase the company’s cash liquidity headroom. LTR’s 100% owned Kathleen Valley lithium project remains highly strategic with initial production imminent, a long mine life and tier-one location. LTR has offtake contracts with top tier EV and battery OEMs (Ford, LG Energy Solution and Tesla). Under our modelled assumptions, we expect that LTR is fully funded to free cash flow.

Should you buy Liontown shares?

If you have a high tolerance for risk, then Bell Potter thinks you should be considering an investment in Liontown’s shares. Especially if you are looking for exposure to the lithium industry.

In response to this update, the broker has reaffirmed its speculative buy rating and $1.85 price target on the lithium developer’s shares. Based on its current share price of 95.5 cents, this implies potential upside of almost 95% for investors over the next 12 months.

To put that into context, a $5,000 investment could turn into approximately $9,750 by this time next year if Bell Potter is on the money with its recommendation.

Though, the broker warns: “LTR is an asset development company; our Speculative risk rating recognises this higher level of risk.”

The post Should you buy Liontown shares after its update? appeared first on The Motley Fool Australia.

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• Is it time to buy FY24’s worst-performing ASX shares?
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• Here are the top 10 ASX 200 shares today
• Liontown share price roars 17% higher on funding update and ‘tremendous endorsement’
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are a lot of ASX 300 dividend shares to choose from on the Australian share market.

To narrow things down for income investors, I have picked out two that brokers have named as top buys recently.

Let’s see what they are saying about these shares:

Dexus Industria REIT (ASX: DXI)

Over at Morgans, its analysts think that Dexus Industria could be an ASX 300 dividend share to buy this month. It is a real estate investment trust with a focus on industrial warehouses.

The broker believes the industrial property company is well-placed due to solid demand, its development pipeline, and the positive rental growth outlook. It explains:

The portfolio is valued at $1.6bn across +90 properties with 89% of the portfolio weighted towards industrial assets (WACR 5.38%). The portfolio’s WALE is around 6 years and occupancy 97.5%. Across the portfolio 50% of leases are linked to CPI with the balance on fixed increases between 3-3.5%. While we expect cap rates to expand further in the near term, DXI’s industrial portfolio remains robust with the outlook positive for rental growth. The development pipeline also provides near and medium-term upside potential and post asset sales there is balance sheet capacity to execute.

In respect to income, the broker is forecasting dividends per share of 16.4 cents in FY 2024 and then 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $2.84, this will mean dividend yields of 5.8% and 5.85%, respectively.

Morgans has an add rating and $3.20 price target on its shares.

Rural Funds Group (ASX: RFF)

Analysts at Bell Potter think that Rural Funds could be an ASX 300 dividend share to buy. It is the owner of a portfolio of high-quality agricultural assets. This includes orchards, vineyards, water entitlements, cropping, and cattle farms.

The broker believes that its shares are too cheap at current levels and sees this as a buying opportunity for income investors. It explains:

RFF trades at a historical high discount to its market NAV per unit ($2.78 pu) at ~28%. While we are in general seeing large discounts to NAV in ASX listed farming and water assets to market NAV, the discount that RFF is trading appears excessive and we are seeing a valuable opportunity in RFF. While the timing of that value discount closing is difficult to call, investors are likely to be rewarded with a ~6% yield to hold the position until such a time as the asset class rerates. Furthermore, RFF aims to achieve income growth through productivity improvements, conversion of assets to higher and better use along with rental indexation which is built into all of its contracts with its tenants.

As for dividends, Bell Potter is forecasting dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.00, this will mean yields of 5.85% for investors.

The broker has a buy rating and $2.40 price target on its shares.

The post Brokers says these ASX 300 dividend shares are top buys appeared first on The Motley Fool Australia.

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

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

Reports of the demise of electric vehicle (EV) sales appear to have been exaggerated. At least that’s the conclusion that investors are drawing after Tesla (NASDAQ: TSLA) reported its second-quarter EV delivery numbers today.

After the EV leader reported stronger-than-anticipated vehicle deliveries, Tesla shares led the S&P 500 gainers for the second straight day. As of 10:55 a.m. ET, the stock was up by 8.6% after jumping by more than 6% yesterday. Tesla stock was a beneficiary yesterday ahead of its report after several Chinese EV makers reported strong sales data. But there was even more to like than most anticipated from Tesla’s update today.

Not just about EV sales

Tesla delivered nearly 444,000 EVs in the second quarter. Investors had been reducing expectations throughout the period resulting in a consensus estimate of 439,000 units, according to FactSet. The reported figure was almost 5% lower than the year-ago period, but there were some positive facets of the report that investors may be focused on.

In addition to beating estimates, the second quarter featured a drawdown in inventories as deliveries outpaced the 410,831 EVs it produced. A buildup of inventories due to lower perceived demand was a fear that helped drive Tesla’s share price down earlier this year. But the stock has now rebounded with a nearly 30% gain over just the last month.

The good news from today’s report didn’t end there, either. The company noted a record 9.4 GWh (gigawatt hours) of energy storage products deployed in the three-month period. That more than doubled the previous record of 4.1 GWh reported in the first quarter.

There’s been a surge in interest in energy storage products to smooth out power supply as renewable energy sources are installed for applications including growing data center construction.

That surge in deployments bodes well for yet another source of revenue for Tesla. Investors will look for even more updates from the company when it reports full second-quarter financials on July 23 and provides an update on its self-driving technology on Aug. 8.

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

The post Why Tesla stock continued to surge higher today appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended FactSet Research Systems and Tesla. Howard Smith has positions in Tesla. 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.

Normally, the phrases ‘40% return’ and ‘bank shares’ aren’t uttered in the same sentence. ASX bank shares like National Australia Bank Ltd (ASX: NAB) are known for many things.

Fat, fully franked, market-leading dividends would be the obvious choice. Stable, mature business models and multi-decade presences on the ASX could also be thrown around.

But 40% returns in 12-month periods? That’s certainly a new one.

Yet that’s exactly what NAB shares have delivered for their investors over the financial year just gone. Yep, NAB shares rose by a whopping 35.6% over the 2024 financial year.

Want proof? Well, NAB shares started FY24 at $26.37 each. But by the time trading wrapped up last Friday, those same shares closed at $36.23. That’s a capital gain of 37.39% alone.

If you want visual proof, just check out the graph below:

But then we have to factor in NAB’s hefty dividend payments as well. Over the financial year that’s just passed us by, NAB doled out two fully franked dividend payments. As is the bank’s typical habit.

Last July saw an interim dividend worth 83 cents per share paid out. Then we had December’s final dividend, worth 84 cents per share.

Together, this $1.67 in dividends per share would have resulted in investors enjoying an additional yield of 6.33% over FY24, going off the bank’s FY24 starting price. So all up, investors have bagged a massive 43.7% in total gains from NAB shares last financial year.

What about NAB shares in FY25?

So NAB has had a phenomenal FY24. But what about the now-current financial year? Can investors expect another 40%-plus windfall from their NAB shares?

Unfortunately, it doesn’t look good, at least according to some ASX experts.

Last month, my Fool colleague Tristan covered the views of ASX broker UBS. UBS did note that it expects NAB to grow profits over both FY24 and FY25, which bodes well for NAB’s dividend payments. However, that wasn’t enough for UBS to hold back in issuing a ‘sell’ rating on the NAB share price.

The broker simply sees NAB as “fully valued” at its current pricing, and gives the bank a 12-month share price target of $30. If realised, that would see investors take a 16% haircut from where the shares are today.

Just over a month ago, we also looked at the view of another broker in Goldman Sachs. Goldman voiced similar concerns, noting that NAB “trades well above its 15-year average” and that all ASX banks are “close to record expensive”.

Goldman gave NAB shares a neutral rating at the time, with a share price target of $34.04.

So it seems most ASX experts aren’t liking what they see with NAB shares at the current price. That’s certainly something for investors to keep in mind after such a bumper FY24.

The post Own NAB shares? You just got a 44% return in FY24 appeared first on The Motley Fool Australia.

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

Pilbara Minerals Ltd (ASX: PLS) shares have taken quite a beating over the past 12 months.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for $2.97 apiece. That sees the stock down more than 41% since this time last year, when shares were swapping hands for $5.06 each.

That’s a far cry from the performance we witnessed in 2021, when the lithium miner’s shares leapt 288% over the calendar year.

But things began heading downhill in late 2023. That’s when lithium prices fell off a cliff as surging supply growth began to outpace global demand growth for the battery-critical metal.

For longer-term investors, however, the big selldown in Pilbara Minerals shares could represent a buying opportunity. One with a potential upside of more than 66%.

That’s according to Richard Coppleson, director of institutional sales and trading at Bell Potter.

According to Coppleson (quoted by The Australian Financial Review), “I own this and like it a lot. I think it’s a super buy at these levels. When lithium does recover, this is back to $5; only question is when will that be?”

When will lithium prices recover?

Like most market analysts, Coppleson is confident lithium prices will recover. Until then, though, it’s unlikely that Pilbara Minerals shares will rocket back to $5.

On Tuesday, lithium carbonate was trading for US$12,800 a tonne.

As for the outlook for global lithium prices, Citi forecasts that fast-building lithium inventories are likely to further pressure prices.

“This high and rising low-shelf-life chemical inventories should see lithium prices fall another 15% to 20% to $US10,000 a tonne,” Citi global head of commodities research Max Layton said.

But Citi expects lithium prices could begin to pick back up in 2025. According to Layton:

A low-price environment over the next three to six months would force supply curtailments, driving physical markets to rebalance… Lithium consumption is expected to accelerate from 2025 onwards once the current negative EV sentiment fades.

Advantage Pilbara Minerals shares?

One advantage Pilbara Minerals shares could have over some of the miner’s rivals is the company’s comparatively low costs.

“Pilbara’s relatively low unit costs have so far seen the company withstand softer pricing, providing a competitive advantage over others in the sector,” CEO Dale Henderson said when Pilbara reported its half-year results in February.

And the company’s balance sheet remains strong, despite revenue dropping 27% year-on-year to $192 million in the March quarter. Management noted that fall reflected “a 28% decline in average realised price partly offset by a 3% increase in sales volume”.

Pilbara Minerals had a cash balance of $1.8 billion as at 31 March.

The post Top broker says Pilbara Minerals shares are ‘a super buy at these levels’ appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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.

With the end of a financial year and the beginning of a new one this week, it’s pertinent to look back on some of our share market’s best and worst stocks over the past 12 months and assess whether we should buy these ASX shares.

On the weekend, my Fool colleague James named the worst-performing shares for FY24. They included Fletcher Building Ltd (ASX: FBU), Healius Ltd (ASX: HLS), Star Entertainment Group Ltd (ASX: SGR) and IGO Ltd (ASX: IGO). However, the worst performer on the index over FY24 was lithium stock Liontown Resources Ltd (ASX: LTR).

These shares were dastardly performers over the 12 months to 30 June 2024. Liontown, in particular, lost its investors a painful 68%.

As it happens, Liontown shares rallied more than 10% yesterday before news of a funding deal halted the shares. Still, this move comes too late to save the company from taking out the crown of thorns as the worst ASX 200 stock of FY24.

But the more value-inclined investors out there might be sizing up these FY24 laggards today. After all, it was the legendary Waren Buffett who famously told us to “be greedy when others are fearful”. And investors were clearly mighty fearful of Fletcher Building, Healius, Star Entertainment, IGO and Liontown last financial year.

Well, the good news for these value investors is that most of these shares are currently being eyed off by some ASX experts for their value potential.

ASX experts rate some of the worst ASX shares of FY24 as a buy

As reported in the Australian Financial Review (AFR) this week, Richard Coppleson, director of institutional sale and trading at Bell Potter, reckons the lithium sector is undervalued. Coppleson’s pick in lithium is the poor FY24 performer Pilbara Minerals Ltd (ASX: PLS) rather than Liontown:

I own this and like it a lot… I think it’s a super buy at these levels – when lithium does recover, this is back to $5 – only question is when will that be?

Star Entertainment is another beaten-down stock that has an enthusiastic backer. Atlantic Pacific Capital is reportedly a big fan of Star shares at their recent pricing. Fund manager Nicolas Bryon recently stated:

If one were to read popular media, social media or the anonymous on chat forums, you would be convinced that this is potentially the worst decision in the world…

Often those who don’t understand distressed investing will dump positions. This is true of institutional and retail investors alike … ultimately these assets are premium entertainment precincts. If operated well, they can earn above their cost of capital.

Atlantic Pacific Capital joins other fund managers like Cooper Investors and L1 Capital in holding Star shares.

Healius also has some fans amongst the ASX professional investing class. Maple-Brown Abbott, Perpetual Ltd (ASX: PPT) and Argo Investments Ltd (ASX: ARG) all retain significant stakes in Helius within their portfolios.

But before we go, it’s worth keeping in mind another one of Warren Buffett’s best quotes:

Mr. Market [the stock market] is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence.

Just because a share has had a disastrous year doesn’t mean it will bounce back in value. Sure, some beaten-down shares will end up getting oversold and might represent buying opportunities. But others are sold off for a very good reason and might end up being value traps.

So make sure you follow Buffett’s advice and avoid getting ‘guidance’ from the share market. As he says, letting it guide our investing decisions is a path to disaster.

The post Is it time to buy FY24’s worst-performing ASX shares? appeared first on The Motley Fool Australia.

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