Category: Stock Market

The Australian tech sector is home to a number of ASX shares that have significant growth potential.

This could make them great options for investors that are willing to make patient buy and hold investments.

For example, three ASX tech stocks that brokers think have very bright futures and could be in the buy zone now are listed below.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

Life360 could be a fantastic ASX tech stock to buy.

It is the location technology company behind the eponymous Life360 app. This app is used by millions of families worldwide. A recent update revealed that its global monthly active users (MAU) increased by 4.9 million during the first quarter to 66.4 million.

This is underpinning significant revenue and earnings growth. And with management focusing on increasing both its average revenue per user metric and paid subscribers, as well as venturing into advertising, Life360’s growth outlook appears very positive.

Morgan Stanley is confident on its outlook and recently put an overweight rating and $17.50 price target on its shares.

Megaport Ltd (ASX: MP1)

The second ASX tech stock that could be a buy is Megaport.

It is the leading global provider of elastic interconnection services. Megaport’s software layer provides users with an easy way to create and manage network connections. Through its network, businesses can deploy private point-to-point connectivity between any of the locations on Megaport’s global network infrastructure.

Due to the structural shift to the cloud and higher spending on enterprise networking, the company has been growing at a rapid rate and appears well-placed to continue doing so in the coming years.

Citi is a big fan of the company and believes there will be a multi-year spend on cloud infrastructure coming and this will support structural growth for Megaport.

The broker put a buy rating and $16.05 price target on its shares last week.

Xero Ltd (ASX: XRO)

A third ASX tech stock that analysts rate as a buy is Xero.

It is a global small business platform with a total of 4.2 million subscribers. The company notes that its smart tools help small businesses and their advisors to manage core accounting functions like tax and bank reconciliation. In addition, they can complete other important small business tasks like payroll and payments.

Goldman Sachs is very bullish about the company due largely to its quality and significant growth opportunity.

Its analysts highlight that Xero is “very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM.”

Goldman currently has a buy rating and $164.00 price target on its shares.

The post 3 explosive ASX tech stocks to buy and hold forever appeared first on The Motley Fool Australia.

More reading

• Why Xero could be one the best shares to buy in the Asia-Pacific
• Top ASX AI stocks to buy in June 2024
• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• Why Boss Energy, Judo Capital, Life360, and Paladin Energy shares are pushing higher

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Life360 and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Life360, Megaport, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Although the Australian share market is trading within sight of its record high, that doesn’t mean there aren’t any bargain buys out there.

For example, the ASX 200 stock in this article has been labelled as undervalued and tipped to deliver big returns for investors over the next 12 months.

Which ASX 200 stock is cheap?

The stock in question is steel products manufacturer BlueScope Steel Limited (ASX: BSL).

According to a note out of Goldman Sachs, its analysts have reiterated their buy rating on the company’s shares with an improved price target of $30.10.

Based on the current BlueScope share price of $20.54, this implies potential upside of approximately 47% for investors over the next 12 months.

In addition, the broker is expecting the ASX 200 stock to provide dividend yields of 2.9% in FY 2024 and 3.4% in FY 2025. This boosts the total potential return to approximately 50%.

Why is the broker bullish?

The main reason that Goldman Sachs is bullish on BlueScope is its US painted steel business. It explains:

BSL began its push into the high growth US painted steel market in 2022 with the acquisition of Coil Coatings making BSL the third-largest painted steel producer in the US. Our analysis of the US painted steel market and BSL’s strategy indicates the US painted steel growth opportunity could deliver ~A$400mn (~20%) EBITDA upside.

The broker also highlights that this ASX 200 stock is trading at a significant discount to peers. It adds:

Comp analysis implies BSL undervalued: Despite ~50% of EBITDA being higher margin painted steel by FY28E, BSL trades at ~4x EBITDA vs. US steel peers at ~7-8x, with painted steel company AZZ on ~9x. […] Compelling valuation and FCF: trading at ~0.65x NAV (A$31.7/sh), ~4x NTM EBITDA (vs. 10-yr average of 4-7x), and on a FCF yield of ~6% in FY24E.

Goldman then concludes:

We reiterate our Buy rating on BSL. Our NAV increases by 5% (~A$700mn) to A$31.7/sh after incorporating US painted growth into our base case, and our 12m PT rises by 8% to A$30.1/sh, on the higher NAV and putting the US coated and painted business on 8x (unchanged for Aus, new for US). Although the US growth strategy could take around five years to deliver, BSL already looks undervalued vs. US steel peers, and we believe very little of the potential upside from the US growth strategy is being priced into the stock.

The post This ASX 200 stock’s ‘compelling valuation’ makes it a strong buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 2 ASX 200 shares this fund manager rates as really cheap 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 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.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a small decline. The benchmark index fell 0.3% to 7,724.3 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to edge lower on Monday following a mixed finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 17 points or 0.25% lower. In the United States, the Dow Jones was down 0.15%, the S&P 500 edged slightly lower, and the Nasdaq rose by 0.1%.

Oil prices soften

ASX 200 energy shares such as Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued start to the week after oil prices softened on Friday. According to Bloomberg, the WTI crude oil price was down 0.2% to US$78.45 a barrel and the Brent crude oil price was down 0.15% to US$82.62 a barrel. This couldn’t stop oil from snapping its three-week losing streak amid optimism over a tighter market.

Buy BlueScope shares

The BlueScope Steel Limited (ASX: BSL) share price could be undervalued according to analysts at Goldman Sachs. This morning, the broker has reiterated its buy rating with an improved price target of $30.10. This implies potential upside of approximately 47% for investors over the next 12 months. Goldman said: “Although the US growth strategy could take around five years to deliver, BSL already looks undervalued vs. US steel peers, and we believe very little of the potential upside from the US growth strategy is being priced into the stock.”

Gold price storms higher

It could be a good start to the week for ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price stormed higher on Friday. According to CNBC, the spot gold price was up 1.3% to US$2,348.4 an ounce. This meant that the precious metal recorded its first weekly gain in four thanks to interest rate cut hopes.

Capricorn Metals named as a buy

Bell Potter thinks investors should be buying Capricorn Metals Ltd (ASX: CMM) shares. This morning, the broker has reaffirmed its buy rating on the gold miner’s shares and lifted its price target slightly to $6.53. This suggests that its shares could rise 46% from current levels. The broker said: “CMM is a sector leading gold producer with a strong balance sheet, a management team with an excellent track record of delivery and clear organic growth options to lift group production to 270kozpa. We retain our Buy recommendation.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Here’s how the ASX 200 market sectors stacked up last week
• This fund returned 30% per annum for 3 years. Here are the ASX shares it’s buying now.
• Tax-busters: 5 fully-franked ASX dividend shares I’d buy for FY25
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)

Motley Fool contributor James Mickleboro has positions in Woodside Energy 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.

If you want to make some long term investments with your hard earned money but aren’t a fan of stock-picking, don’t worry. That’s because there is a solution.

The solution is exchange-traded funds (ETFs).

These funds allow investors to buy a large number of companies in one fell swoop. This can be an entire index, a whole country, a specific sector, or a group of shares with certain qualities or characteristics.

But which ASX ETFs could be great long term picks for investors today? Let’s take a look at three candidates:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

If we’re talking long term, then you want to invest in the best. And the BetaShares NASDAQ 100 ETF is home to 100 of the best companies that the world has to offer.

These are the 100 largest non-financial shares on the famous NASDAQ index. The ETF is heavily focused on technology, with many of the best-known tech giants held by the fund. This includes those that provide the search engines, streaming services, mobile phones, spreadsheets, electric vehicles, and online shopping platforms we use daily.

Among its largest holdings are Apple (NASDAQ: AAPL) and Nvidia (NASDAQ: NVDA).

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another cracking long term option for investors could be the VanEck Vectors Morningstar Wide Moat ETF.

That’s because it has been designed to invest in the type of companies that legendary investor Warren Buffett would buy. And given how he built his wealth through buy and hold investing, this bodes well for investors buying this ASX ETF.

The VanEck Vectors Morningstar Wide Moat ETF focuses on investing in high quality companies with sustainable competitive advantages (wide moats) and fair valuations. The ETF has beaten the market over the last decade, so the strategy clearly has a lot of merit.

Betashares Global Cash Flow Kings ETF (ASX: CFLO)

A third ASX ETF to look at is the Betashares Global Cash Flow Kings ETF.

It provides investors with access to global companies with strong free cash flow. Betashares notes that the fund can serve as a core exposure to global equities or alongside existing low-cost passive global ETFs to enhance a portfolio’s emphasis on cash-generating companies.

The fund manager recently named it as one to consider buying when interest rates start to fall.

Among its holdings at present are Google parent Alphabet (NASDAQ: GOOG), payments giant Visa (NYSE: V), and cyber security leader Accenture (NYSE: ACN).

The post Why these strong ASX ETFs could be top long term picks appeared first on The Motley Fool Australia.

More reading

• Top ASX AI stocks to buy in June 2024
• Records tumble! Hot ASX ETFs smash all-time highs again on Friday
• 16% per annum: What is the VanEck Wide Moat ETF’s secret sauce?
• Looking for ASX growth shares? I rate these 2 as buys
• 3 popular ASX ETFs smashing record highs today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Accenture Plc, Alphabet, Apple, BetaShares Nasdaq 100 ETF, Nvidia, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Apple, Nvidia, 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.

If you were to gauge the outlook of ASX uranium stocks by the past month’s performance, you might be tempted to throw in the towel.

After enjoying some of the strongest share price gains among any group of companies, Australia’s top uranium shares have all lost ground over the last four trading weeks.

The selling pressure has come amid a roughly 8% decline in uranium prices over the last month.

Four weeks ago, uranium was trading for US$93 a pound. Currently, the radioactive metal is fetching US$86 per pound, well down from the 16-year highs of US$106 per pound reached in early February this year.

Still, bear in mind that in 2023 uranium prices averaged just US$67 per pound in 2023. And back in 2021 the spot price for yellow cake averaged around only US$30 per pound.

Still, with the past month’s retrace, investors have been quick to hit the sell button.

Here’s how these five top ASX uranium stocks have performed since this time last month:

• Paladin Energy Ltd (ASX: PDN) shares are down 13.56%
• Bannerman Energy Ltd (ASX: BMN) shares are down 8.22%
• Deep Yellow Limited (ASX: DYL) shares are down 10.19%
• Boss Energy Ltd (ASX: BOE) shares are down 26.86%
• Alligator Energy Ltd (ASX: AGE) shares are down 8.33%

For some context, the All Ordinaries Index (ASX: XAO) is down 0.2% over this same period.

Despite that retrace, longer-term shareholders will still be sitting on some outsized gains.

Here’s how these ASX uranium stocks have performed over the past 12 months, a period that’s seen the All Ords return 8.5%.

• Paladin shares are up 99.30%
• Bannerman shares are up 142.17%
• Deep Yellow shares are up 86.54%
• Boss Energy shares are up 33.12%
• Alligator Energy shares are up 37.50%

That’s more like it!

Now here’s why I think these companies could continue to outperform.

Why ASX uranium stocks could outshine

The first reason I remain bullish on ASX uranium stocks is the rapidly changing global public opinion surrounding nuclear power.

Nuclear energy was all but off the table following the 2011 Fukushima disaster in Japan.

But with climate change at the top of many nations’ agendas, we’ve seen a big turnaround in sentiment for the reliable, carbon-free baseload power offered by both the newer design modular and traditional large scale nuclear reactors. Though disposing of the radioactive waste remains an ongoing concern.

The second reason ASX uranium shares could charge higher once more is the massive forecast demand growth that’s come along with this shift in public sentiment.

Currently, more than 60 nuclear power plants are under construction worldwide. Another 90 are in the planning stages, with hundreds more being considered.

China and India lead the charge in building new nuclear plants, but other nations are also doing so, including Japan, South Korea, Russia, and Brazil.

Indeed, it was only back in December that 22 nations at the COP28 climate conference – including Japan, the United States and France – pledged to triple their nuclear power capacity by 2050.

And the third reason ASX uranium stocks could continue to reward investors into 2025 and beyond is that there is very limited supply growth to meet that booming demand growth.

According to the World Nuclear Association, global demand is likely to outpace global supply through to 2040.

And over the medium term, a number of nations are turning their backs on Russia’s uranium exports amid its ongoing invasion of Ukraine.

The US has gone so far as to ban Russian uranium imports, a ban that drew the attention of Boss Energy managing director Duncan Craib this week.

Craib said, “US President Joe Biden’s recent signing of legislation to ban the importation of uranium products from Russia … was a game-changing event for the uranium market and in particular for uranium projects in North America and Australia.”

And with Australia sitting on the world’s largest proven uranium reserves, I reckon ASX uranium stocks are well-placed to capitalise on the ongoing supply and demand imbalances.

The post 3 reasons ASX uranium stocks can keep charging higher into 2025 appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Here are the top 10 ASX 200 shares today
• Why Boss Energy, Judo Capital, Life360, and Paladin Energy shares are pushing higher
• Why is ASX 200 uranium stock Boss Energy flying higher on Friday?
• 3 ASX All Ords shares raised to ‘strong buy’ status in May

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.

It has been another busy week for Australia’s top brokers. This has led to the release of a number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

BHP Group Ltd (ASX: BHP)

According to a note out of Citi, its analysts have retained their buy rating and $48.50 price target on this mining giant’s shares. The broker points out that its global commodities team has become more bullish on copper and lifted its forecast by 20% to US$12,000 per pound. This is to reflect increased demand due to the decarbonisation megatrend. In light of this, Citi has lifted its earnings estimates for the coming years. Another positive is that the broker is now forecasting an attractive ~6% dividend yield from the Big Australian’s shares in FY 2025. This gives the total potential 12-month return a nice boost. The BHP share price ended the week at $43.09.

Capricorn Metals Ltd (ASX: CMM)

A note out of Bell Potter reveals that its analysts have retained their buy rating on this gold miner’s shares with an improved price target of $6.53. The broker believes that recent share price weakness has created a very attractive opportunity for investors to buy Capricorn Metals’ shares on the cheap. Especially given the recent announcement of a 26% increase in ore reserves at the 100%-owned Mt Gibson Gold Project in Western Australia. Bell Potter also highlights that the company has sector leading cash generation and strong production record, which it believes means that it deserves to trade at a premium to sector average valuation metrics. The Capricorn Metals share price was fetching $4.46 at the end of the week.

QBE Insurance Group Ltd (ASX: QBE)

Analysts at Goldman Sachs have retained their buy rating and $20.90 price target on this insurance giant’s shares. The broker points out that QBE has recently held a number of investor meetings. Goldman highlights that management conveyed greater confidence on the delivery of its 95% combined operating ratio (COR) in North America by 2025. This is a big positive as the lower the COR, the more profitable QBE’s operations are. As a result, Goldman believes that there is now upside risk to the FY 2025 consensus group COR of 92.8%. In fact, it sees under 92.5% as possible, reflecting the improvement in North America, a North America non-core run off, and organic trends. The QBE share price ended Friday’s session at $18.31.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

More reading

• This fund returned 30% per annum for 3 years. Here are the ASX shares it’s buying now.
• Tax-busters: 5 fully-franked ASX dividend shares I’d buy for FY25
• These ASX shares could rise 25% to ~50%
• 2 outstanding ASX 200 shares to buy and hold for a decade
• Brokers name 3 ASX shares to buy now

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

ASX consumer discretionary shares led the ASX 200 market sectors last week with a minor 0.36% gain over the five trading days.

Meantime, the S&P/ASX 200 Index (ASX: XJO) lost 1.48% to finish the week at 7,724.3 points.

Only two of the 11 market sectors finished the week in the green.

Let’s recap.

Consumer discretionary shares led the ASX 200 sectors last week

ASX 200 consumer discretionary shares are arguably the most susceptible to weakness in today’s inflationary economy, amid high interest rates and the weakest economic growth since COVID.

As we learned earlier this month, gross domestic product (GDP) rose 0.1% in the March quarter and just 1.1% over 12 months.

Such economic conditions generally encourage people to restrict their discretionary spending, as evidenced by household spending data released by the Australian Bureau of Statistics last week.

The data showed Australians are having to allocate more of their money to essential items and cut back on discretionary items.

Robert Ewing, ABS head of business statistics, said:

We saw a 5.8 per cent rise in spending on non-discretionary goods and services, with households also spending more on fuel and food. In contrast, discretionary spending rose 0.6 per cent over the year as households continue to limit their spending on non-essentials.

One factor supporting discretionary spending is low unemployment. Data released by the ABS last week revealed the jobless rate fell by 0.1% in seasonally adjusted terms in May to 4%.

What else happened last week?

United States inflation data released last week suggested global inflation was resuming a downward path.

The US core consumer price index (CPI), which excludes volatile items like food, increased by 0.2% in May. That put the CPI at 3.4% year over year, the lowest inflation rate in three years.

If inflation falls, so will interest rates, and anything indicating this gets the markets excited these days.

The S&P 500 Index reset its all-time again, and ASX 200 shares lurched forward on Thursday on the news, which prompted speculation the same trend would eventuate here.

After its last board meeting in May, the Reserve Bank said it “remains vigilant to the risk of continued high inflation and is not ruling anything in or out” in relation to rate cuts or even a further hike in 2024.

There has been concern that inflation may prove stickier than expected during what economists refer to as the ‘last mile’ of reducing it from 3.6% now to the RBA’s target band of 2% to 3%.

Is there any chance of an interest rate cut in Australia when the Reserve Bank board meets on Tuesday? Find out here.

Which discretionary retail stocks outperformed last week?

Among the best performers last week was Tabcorp Holdings Ltd (ASX: TAH), up 7.91% over the five trading days to close at 66 cents on Friday. This was despite no news from the company.

JB Hi-Fi Ltd (ASX: JBH) shares also did well, rising 5.71% to finish at $63.28 on Friday.

The biggest of the ASX 200 consumer discretionary stocks, Wesfarmers Ltd (ASX: WES), lifted 1.23% to close at $67.90 on Friday.

The Super Retail Group Ltd (ASX: SUL share price rose by 1.06% over the week to finish at $13.38.

Harvey Norman Holdings Limited (ASX: HVN) shares gained 0.78% to close at $4.50 on Friday. 

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

S&P/ASX 200 market sector	Change last week
Consumer Discretionary (ASX: XDJ)	0.36%
Information Technology (ASX: XIJ)	0.14%
Healthcare (ASX: XHJ)	(0.17%)
Consumer Staples (ASX: XSJ)	(0.46%)
Financials (ASX: XFJ)	(1.12%)
Energy (ASX: XEJ)	(1.47%)
Communication (ASX: XTJ)	(1.52%)
A-REIT (ASX: XPJ)	(1.56%)
Industrials (ASX: XNJ)	(2.44%)
Utilities (ASX: XUJ)	(2.64%)
Materials (ASX: XMJ)	(4.28%)

The post Here’s how the ASX 200 market sectors stacked up last week appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares going gangbusters in June
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman. 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 Harvey Norman and 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.

As we near the halfway point of 2024, many investors may be wondering if now is a good time to buy ASX shares. But where to start?

Checking where the experts are positioned is a good place.

The Perennial Natural Resources Trust has delivered impressive returns of 30% per annum over the last three years. It believes ASX resources stocks could offer compelling value in the future.

With stocks such as BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) often the first Australian resource companies that come to mind, some might forget there is a whole universe of commodity stocks on the ASX.

Here’s a look at the ASX shares the fund is bullish on and whether they are suitable ASX shares to buy.

Undercovered commodity shares

Perennial’s resources fund, headed up by Sam Berridge, has returned 32.3% in the year to May 31, with notable gains from commodities like gold, lithium, uranium, rare earths, and bauxite.

According to the Australian Financial Review, the fund has shown a keen interest in Brazilian Rare Earths Ltd (ASX: BRE).

“We’ve had solid runs from gold, lithium, uranium, rare earths, and bauxite at different points over the last four years”, Berridge said.

He says one of these “big winners” included Brazilian Rare Earths. The company is Australian-based but has exploration sites for rare earths and critical minerals in Brazil and operates the Rocha da Rocha Critical Minerals project there.

This diversification away from traditional resources such as iron ore is critical to the fund’s strategy, which involves buying ASX shares in the commodity space.

The commodity sector is becoming more diverse, with new boutique metals periodically rising to prominence due to some energy-related change in demand.

As such, players like Brazilian Rare Earths with exposure to critical minerals fit this bill well. Regarding the company’s prospects, Berridge notes that it has “plenty more to give.”

Should you buy these ASX shares?

The fund is also bullish on Capricorn Metals Ltd (ASX: CMM), an ASX-listed gold miner. Berridge said the ASX share has been a major contributor to its total 2024 return.

But he said that investors could capitalise on the AI theme in commodities through DUG Technology Ltd (ASX: DUG). Regarding the thesis to buy the ASX share, he said:

I think the most interesting direct exposure is DUG Technology. DUG makes most of its money by processing vast quantities of seismic data for oil and gas companies, but the compute it uses for this has ubiquitous applications.

Its key advantage is the use of immersion cooling, in which the hard drives sit in gently circulating baths of oil. This is more energy-efficient and cheaper than air-conditioning whole rooms full of computers. Elsewhere, the energy demands for AI and data centres require immense amounts of power. It must be cheap 24/7 power so, in the short term, that means US gas.

Leading brokers are also bullish on Capricorn Metals. Analysts at Bell Potter recently maintained a buy rating on the ASX share with a price target of $6.50 per share. According to my colleague James, the broker said the company deserved to be traded at a premium.

Foolish takeaway

According to the Perennial Resources Fund, investors looking to buy ASX shares may find potential in Capricorn Metals and Brazilian Rare Earths.

The Brazilian Rare Earths share price is trading 70% higher year to date, while shares in Capricorn Metals are down 5.3% over the same period. Dug Technology shares are up 34.7% since January this year.

As always, remember to conduct your own due diligence before investing.

The post This fund returned 30% per annum for 3 years. Here are the ASX shares it’s buying now. appeared first on The Motley Fool Australia.

More reading

• These ASX shares could rise 25% to ~50%
• Why ASX, Brazilian Rare Earths, Liontown, and Sigma shares are sinking today
• Leading brokers name 3 ASX shares to buy today
• Is this the very best ASX 200 gold stock to buy now?
• Here are the top 10 ASX 200 shares today

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

We’re now well into the month of June. That means many things… cold weather, short days, and end-of-financial-year sales. Maybe even a late payout from one of your ASX dividend shares. But it also means it’s nearly tax time.

Yep, from 1 July, you can lodge your tax return for the 2024 financial year. Getting your taxes in line is a task that most of us probably don’t exactly look forward to.

Hopefully, most readers will have a big refund coming their way. In the spirit of this time of year, it’s a great opportunity to think about some ASX shares you can buy if you wish to beef up your franking credit balance.

As most dividend investors would know, franking credits are a major tax perk of owning ASX shares. They enable us to claim a tax deduction for the corporate taxes our companies have already paid on the dividends they dole out to us.

Because of this transfer effect, these ‘tax-busting’ franking credits can make a significant impact on both our tax returns and overall wealth.

So, with that in mind, there are five ASX dividend shares that I would happily buy over the coming 2025 financial year that all tend to pay healthy and fully franked dividends.

5 fully-franked ASX dividend shares I’d buy to bust my taxes

Telstra Group Ltd (ASX: TLS)

First up is ASX 200 telco Telstra. Telstra has a long and well-known history of paying large, fully-franked dividend payments to its shareholders. This has continued over the past few years, with Telstra raising its most recent dividends pretty consistently.

This is a strong company with a solid financial foundation, thanks to Telstra’s dominance of both the mobile and fixed-line internet market in Australia. And that makes for a good investment from a dividend perspective.

Today, investors can expect a hefty dividend yield of around 5% if they buy Telstra stock at recent pricing.

Woolworths Group Ltd (ASX: WOW)

I have historically favoured Coles Group Ltd (ASX: COL) shares over arch-rival Woolworths when it comes to dividend income. However, the tables have turned a little in 2024, thanks to a significant drop in the Woolworths share price over the past 12 months.

I like Woolies as a dividend investment for similar reasons to Telstra: a mature business model, and a defensive earnings base.

Because Woolworths sells us goods that we need — rather than want — to buy, the company has a boosted capacity to pay out passive income in all forms of economic weather.

At recent pricing, you could nab a fully-franked dividend yield of 3.22% from Woolworths shares.

Westpac Banking Corp (ASX: WBC)

It wouldn’t be a ‘best dividend shares’ list without at least one ASX bank stock. Our big four banks enjoy some unique benefits from an investing standpoint, including government support and a loyal customer base.

Normally, my pick of the banks right now would be National Australia Bank Ltd (ASX: NAB). However, if one was prioritising dividend income, Westpac might be a better option to consider today.

This bank is currently trading on a chunky dividend yield of 5.49%. Unlike ANZ Group Holdings Ltd (ASX: ANZ) stock, Westpac’s dividends still come with full franking credits attached too.

BHP Group Ltd (ASX: BHP)

Like the ASX banks and Telstra, BHP is a renowned source of dividends on the ASX. The ‘Big Australian’ has been paying out hefty, fully franked dividends for generations.

Unlike most resources stocks, BHP has a rather diversified earning base, with the company having significant operations in iron ore, copper, potash and nickel.

Although most resources stocks tend to pay cyclical dividends, this diversified earnings base gives BHP significant wiggle room compared to some of its rivals.

BHP stock was recently trading on a fully franked dividend yield of 5.45%.

Woodside Energy Group Ltd (ASX: WDS)

ASX 200 oil and energy stock Woodside is our final dividend share to discuss. Woodside is the largest oil stock on the ASX, and a global giant. It has some of the lowest oil and gas production cost bases on the Australian markets.

Since it only deals in energy commodities, Woodside doesn’t have that diversified earnings base that lends stability to its dividend.

Even so, I think it’s a great option for income-hungry investors, because when oil and gas prices are high, Woodside tends to shower its investors with dividend cash.

At last pricing, Woodside was trading with a fully franked dividend yield of 7.92%.

The post Tax-busters: 5 fully-franked ASX dividend shares I’d buy for FY25 appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• 2 outstanding ASX 200 shares to buy and hold for a decade
• Is there any chance of an interest rate cut in Australia next week?
• Brokers name 3 ASX shares to buy now

Motley Fool contributor Sebastian Bowen has positions in National Austalia Bank and Telstra Group. 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 Coles Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Commonwealth Bank of Australia (ASX: CBA) share price has risen by close to 30% in the past year, as shown on the chart below. After such a strong year, investors may be wondering whether the ASX bank share can go on another run.

The focus on inflation and interest rates has dominated discussions regarding banks in the last couple of years. The performance of CBA’s net interest margin (NIM) and loan arrears could be key moving forward into the 2025 financial year.

Keep in mind that CBA’s FY25 first half involves the last six months of the 2024 calendar year.

First, we’ll examine how the bank sees the outlook.

Challenges are building

When CBA released its FY24 third quarter update, the CEO Matt Comyn said:

We have continued to focus on supporting our customers and communities, investing for the future and providing strength and stability for the broader economy. We know that many Australians are feeling under pressure due to a higher cost of living, and we are here to support those customers that need our help.

We have continued to strengthen our balance sheet to ensure we remain well positioned to support our customers, communities, and economy. All Australians benefit from strong and stable banks.

The fundamentals of the Australian remain sound. Unemployment remains low, supported by business and government investment and elevated terms of trade. We recognise that all households are feeling the impact of higher inflation and higher rates, however immigration is providing a structural tailwind for the economy.

So, while the overall picture is still solid, there are pockets of weakness, though CBA is confident it can navigate any difficulties. which could mean good news for CBA shares.

Arrears do seem to be building at the bank – the ratio of home loans that were at least 90 days overdue was 0.43% at December 2022, 0.47% at June 2023, 0.52% at December 2023, and 0.61% at March 2024.

In the third quarter update, CBA said it expects to see “further increases in arrears in the months ahead given continued pressure on real household disposable incomes”.

In terms of the NIM, CBA reported an 11 basis point decline to 1.99% in the HY24 result because of continued competitive pressures and higher funding costs.

Analyst views on CBA shares

The broker UBS recently noted CBA may see a softer fourth quarter on the revenue front, with CBA showing “good cost disciplined and management”, though there has been a “visible deterioration” in asset quality metrics.

UBS notes CBA is leaning on its own distribution channels to defend and drive volume growth in mortgages, a strategy that has seen CBA grow at 0.7 times the rate of Australia’s loan system.

The broker believes defending its ‘back book’ profitability remains a “key imperative” for management.

UBS has made a number of forecasts for CBA shares in FY25.

The broker has forecast CBA can generate $27.2 billion of revenue, $13.6 billion of pre-tax profit and $9.8 billion of net profit after tax (NPAT).

In terms of the dividend, UBS thinks CBA shares will have a fully franked dividend yield of 3.5%.

UBS has a price target on CBA shares of $105, implying the bank could drop by well over 10% in the next 12 months.

The post What is the outlook for CBA shares in FY25? appeared first on The Motley Fool Australia.

More reading

• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit
• Is there any chance of an interest rate cut in Australia next week?
• Here’s how much I’d have if I’d bought 500 CBA shares 10 years ago
• Big bank bargain: Are this week’s tumbling ASX 200 bank shares a good buy?

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.