Category: Stock Market

After a heavy selloff in FY 2024, several ASX lithium shares are starting to show sprouts of green.

One major catalyst for the sector’s underperformance is the price of lithium, with the battery metal down heavily last financial year. It had plunged more than 70% to CNY90,500 per tonne at the time of writing.

Now, with heavily compressed stock prices in the sector, brokers have identified three ASX lithium shares with potentially compelling catalysts.

Let’s dive into why these lithium shares are gaining traction and what brokers suggest for their future.

Core Lithium Ltd (ASX: CXO)

Core Lithium shares have jumped more than 20% this past week and are now trading at 11 cents per share. The ASX lithium share caught a strong bid on Thursday after a company announcement.

The update said Core Lithium has initiated reverse circulation (RC) drilling at its Shoobridge Project in the Northern Territory. This is part of its FY25 exploration program.

While the site potentially contains lithium-containing pegmatites, it is also prospective for gold, uranium, and other base metals. Given the recent prices of some of these metals, this could potentially add more value.

Broker Goldman Sachs is more bullish on the ASX lithium share after its review of the sector. In a recent note, it stated:

While we still expect developers to underperform ramped-up producers into the declining lithium price environment, we upgrade CXO to Neutral on valuation, with ongoing production restart risk now more priced in at 1.1x NAV (peers 0.8-1.0x NAV).

It also says that approximately 40% of the company’s market capitalisation at the time of reporting was “now in cash on hand (with no debt), potentially partially mitigating exposure to falling lithium prices.”

IGO Ltd (ASX: IGO)

IGO closed on Friday at $6.07 apiece and is one ASX lithium share that has lifted 3% into the green this week. Aside from its nickel-copper-cobalt assets in Western Australia, IGO is also a major lithium player.

It has a large stake in the Greenbushes lithium mine, one of the world’s most largest hard-rock lithium mine.

IGO shares were heavily sold in FY24, with the stock plunging from highs of $16.12 per share in July last year. Shares are down 32% in the past 12 months.

Despite this, Goldman Sachs has a buy rating on the ASX lithium share with a $7.15 price target. This implies around 17% potential upside at the time of writing.

It views “a widening discount” that supports its “relative preference for IGO”, adding:

With Greenbushes expansion (and opportunity for value optimisation) and JV balance sheet risks overdone, with the AISC of Greenbushes well below peers. For recently initiated ALTM/LTM, we see current discounts (~0.75x NAV) as fair and in part representative of upcoming growth/ execution risk with >60% of CY30E raw material production yet to be built/ramped up.

IGO is rated a hold by consensus, according to CommSec.

Liontown Resources Ltd (ASX: LTR)

Liontown Resources are up by more than 9% this week. The company’s Kathleen Valley Lithium Project is nearing production, marking a critical shift from development to mining.

This is the ASX lithium share’s flagship asset, with first production expected soon.

Liontown recently secured a US$250 million convertible note agreement with LG Energy Solution to fund Kathleen Valley’s development. This funding boosts the company’s cash reserves to around A$501 million, giving it stable footing for the prospective operations at the site.

Analysts have mixed views, but Bell Potter maintains a speculative buy rating with a $1.85 price target on the ASX lithium share. The broker praised the funding arrangement with LG, and eagerly awaits production at Kathleen Valley.

Goldman Sachs, however, holds a neutral view. Despite this, it has a $1.15 price target on the stock, implying around 15% upside from the current market price.

It says the projected Liontown’s revenue could reach $1.46 billion by FY29, with a significant profit increase if production ramps up as planned.

ASX lithium shares takeaway

ASX lithium shares may have found a bottom after a turbulent FY24. Whether these stocks will flourish this year is yet to be seen. Nevertheless, the analysts appear to think the worst is over.

As always, it’s wise to conduct your own due diligence before investing.

The post Here 3 ASX lithium shares to watch for FY25 appeared first on The Motley Fool Australia.

More reading

• Are Liontown Resources shares a buy after surging 9% this week?
• Why did Goldman Sachs just upgrade Core Lithium shares?
• Is it time to dive back into ASX lithium shares?
• Buy this ASX lithium stock and sell this one
• Up 20% in a week, why is the Core Lithium share price racing higher again 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 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 inflation still running hot, many investors are understandably attracted to ASX shares offering high dividend yields.

After all, if you can earn 5%, 6%, 7% or even more on your money, this can go a long way in helping offset today’s surging cost of living.

But just because a stock is trading on a lofty dividend yield doesn’t necessarily make it a good investment.

A high yield can reflect low investor confidence and, thus, a falling share price. It can also be the result of a one-off special dividend payment that won’t be repeated any time soon.

So, we asked our Foolish writers to sort the treasure from the trash and tell us which high-yielding ASX dividend shares they think are worth buying right now.

Here is what they told us:

6 best high-yielding ASX shares for July 2024 (smallest to largest)

• Shaver Shop Group Ltd (ASX: SSG), $154.59 million
• Rural Funds Group (ASX: RFF), $811.43 million
• Nick Scali Limited (ASX: NCK), $1.21 billion
• IPH Ltd (ASX: IPH), $1.55 billion
• Vanguard Australian Shares High Yield ETF (ASX: VHY), $3.84 billion
• Bendigo and Adelaide Bank Ltd (ASX: BEN), $6.65 billion

(Market capitalisations as of market close 12 July 2024).

Why our Foolish writers love these ASX dividend stocks

Shaver Shop Group Ltd

What it does: Shaver Shop sells personal grooming products for men and women. It currently has 123 Shaver Shop stores across Australia and New Zealand and retails through its own websites, as well as eBay, Amazon, TradeMe, and MyDeal online marketplaces.

By Tristan Harrison: When it comes to investing for a high dividend yield, I look for ASX dividend shares that have fairly good track records of consistently paying dividends. I’m not interested in just one good year of big payments.

Shaver Shop has grown its annual dividend payout every year since it first started paying dividends in 2017, which is an impressive record considering it’s an ASX retail stock.

While that dividend record isn’t guaranteed to continue amid this high cost of living era, I’d suggest personal grooming products may have fairly consistent demand. After all, hair keeps growing in all economic conditions!

The latest two dividends declared by Shaver Shop amount to 10.2 cents, which translates into a fully franked dividend yield of 8.6%, or 12.2% grossed-up with the franking credits. Of course, it’s possible the next two declared dividends may not be quite as large. But, even a 10% dividend reduction would still translate into a double-digit grossed-up dividend yield. 

Furthermore, I believe Shaver Shop can increase its profit over the long term by growing its store network, increasing its online sales, improving efficiencies/margins, and expanding its product range. The business retails various products across oral care, hair care, massage, air treatment, and beauty categories. 

Motley Fool contributor Tristan Harrison does not own shares of Shaver Shop Group Ltd.

Rural Funds Group

What it does: Rural Funds Australia is a real estate investment trust (REIT) focused on agricultural assets across Australia.

By Kate Lee: In addition to dividend yields, two other important considerations for dividend investing are the sustainability of future dividends and the potential for invested capital appreciation. 

In this regard, Rural Funds Group stands out as a strong ASX dividend share worth considering buying today. 

Rural Funds Group provides exposure to the agricultural sector, an essential and growing component of the economy. The REIT’s business model focuses on long-term leasing arrangements with agricultural tenants, providing stable rental income. 

Over the last 12 months, Rural Funds paid a total distribution of 11.6 cents per unit, implying a 5.6% yield from its closing price of $2.09.

Trading at a price-to-book (P/B) ratio of just 0.7x, Rural Funds Group appears undervalued compared to its asset base, offering potential upside. The company estimates its net asset value (NAV) to be $3.07 per unit as of 31 December 2023, including the market value of its water entitlements. This means its adjusted P/B ratio, based on the company’s NAV estimate, is at just 0.66x.

Motley Fool contributor Kate Lee does not own shares of Rural Funds Group. 

Nick Scali Limited

What it does: Nick Scali is a high-end furniture retailer. As of February, the company had 108 store locations across Australia and New Zealand. The sofa-seller also operates 21 stores in the United Kingdom following its recent acquisition of Fabb Furniture.

By Mitchell Lawler: Retail is a tough industry. You only need to look to the financial struggles of Booktopia for an example of this. 

It’s incredibly hard to differentiate yourself in this often cutthroat industry. However, I believe Nick Scali is one company that has successfully separated itself from the pack. This is evidenced by the abnormally high return on capital it has generated — 27.4% in the past year. 

Moving into a market two-and-a-half times the size of Australia may come with challenges. However, I’m confident Nick Scali will leverage economies of scale to give local UK competitors a run for their money. 

Nick Scali currently yields 4.9% of passive income.  

Motley Fool contributor Mitchell Lawler does not own shares of Nick Scali Limited.

IPH Ltd

What it does: IPH is an intellectual property solutions company with operations across the world.

By James Mickleboro: In the current uncertain economic environment, I think income investors ought to focus on companies with defensive qualities. 

IPH has these qualities and more, thanks to the ever-growing patent market. In addition, the company is no stranger to making acquisitions to bolster its growth in a fragmented market. This ultimately led to IPH reporting a 21% increase in revenue and a 13% lift in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) during the first half of FY 2024.

Analysts at Goldman Sachs have highlighted these defensive earnings as a reason to buy. They recently stated their belief that IPH was “well-placed to deliver consistent and defensive earnings with modest overall organic growth.”

The broker expects this ASX share to pay fully franked dividends per share of 34 cents in FY 2024, 37 cents in FY 2025, and then 39 cents in FY 2026. Based on the recent IPH share price of $6.16, this represents yields of 5.5%, 6%, and 6.3%, respectively. Goldman Sachs has a buy rating and $8.70 price target on IPH’s shares.

Motley Fool contributor James Mickleboro does not own shares of IPH Ltd.

Vanguard Australian Shares High Yield ETF

What it does: This exchange-traded fund (ETF) holds a select portfolio of blue chip ASX dividend shares, selected on their current yields and future income potential. 

By Sebastian Bowen: With many ASX dividend shares surging in value in recent months, I think this ETF from provider Vanguard is a prudent choice for a high-income investment this July and beyond. 

VHY holds a portfolio of around 70 mature ASX businesses, automatically providing a bucketload of diversification benefits. These stocks range from many different corners of the market, too, and include everything from Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) to Woodside Energy Group Ltd (ASX: WDS) and Telstra Group Ltd (ASX: TLS). 

Given the kinds of companies this ETF holds, it goes without saying that there is a lot of dividend income potential here.

The Vanguard Australian Shares High Yield ETF also pays quarterly dividend distributions, which will be a welcome change for many investors who are used to the typical biannual ASX schedule. 

This ETF’s most recent four payments add up to an annual total of $4.24 per unit. That gives VHY units a hefty dividend yield of 5.88%. You could certainly do worse if you’re looking for an income heavy-hitter right now. 

Motley Fool contributor Sebastian Bowen owns shares of Telstra Group Ltd.

Bendigo and Adelaide Bank Ltd

What it does: Bendigo and Adelaide Bank operates in the personal, small business, and rural banking sectors. The company is one of Australia’s leading regional banks and commands a market cap of around $6.6 billion.

By Bernd Struben: I think there’s a lot to like about Bendigo and Adelaide Bank.

First, there’s its lengthy track record as a reliable passive income payer and the relatively high yield the S&P/ASX 200 Index (ASX: XJO) bank stock is currently trading at.

Over the past 12 months, it has paid out two fully franked dividends, totalling 62 cents a share. At the recent share price of $11.65, that equates to a trailing yield of 5.3%, with potential tax benefits from those franking credits.

And this high trailing dividend yield comes after the Bendigo and Adelaide Bank share price has soared 37% over the full year. That strong share price performance, and the ongoing uptrend, is the second reason I like this stock.

The third reason is its attractive valuation. Despite the 37% share price surge, the bank has a price-to-earnings (P/E) ratio of 13.8 times. That’s near the lowest P/E ratio you’ll find among any of the ASX 200 bank stocks.

Motley Fool contributor Bernd Struben does not own shares in Bendigo and Adelaide Bank Ltd.

The post Top high-yield ASX shares to buy in July 2024 appeared first on The Motley Fool Australia.

More reading

• Which Australian shares ASX ETFs have dished out the best returns over 3 years?
• Do ANZ shares offer the biggest dividend yield in the ASX bank sector?
• 6% dividend yield! I’m buying this ASX share and holding it for decades
• Buy these ASX dividend shares for 5% to 7% yields
• Would Warren Buffett buy this impressive ASX 300 stock?

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tamara Stein 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 Amazon and Goldman Sachs Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group and eBay and has recommended the following options: short July 2024 $52.50 calls on eBay. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank, Rural Funds Group, and Telstra Group. The Motley Fool Australia has recommended Amazon, IPH, Nick Scali, Shaver Shop Group, and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

More reading

• 3 reasons I’m still buying ASX stocks in July despite record prices
• US inflation easing: What does it mean for ASX shares?
• ASX 200 re-writes history. Which companies are leading the charge?
• Why did ASX retail shares rise 19% in FY24 amid a cost of living crisis?
• 5 things to watch on the ASX 200 on Friday

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.

Today is a historic day. The S&P/ASX 200 Index (ASX: XJO) has set a new record high of 7,969 points, pulling the wealth of Australians invested in ASX stocks higher along with it.

We have made it… except if you’re investing in shares for the long term like I am, you’ll know the journey doesn’t end here. There are still decades of compounding to be captured.

The global economy doesn’t take its foot off the gas because the stock market hit record levels. In fact, it’s just another day for most of the world, with countless people blissfully unaware of the value assigned to corporations by investors and speculators alike.

Including today’s rise, the ASX 200 Index is up 11.5% in the past year before dividends. That alone might make some investors apprehensive about buying ASX shares now.

Call me crazy, but it has basically zero influence on my decision to invest right now.

Is now the ‘right time’ to buy ASX stocks?

Is it the ‘right time’ to invest when the market is at an all-time high? The short answer is, “It can be”. But in truth, it’s probably the wrong question to be asking.

Once we begin thinking about the timing of investment, we enter the realm of stock trading, not investing. And I don’t know about you, but all those squiggles on charts make about as much sense as the pattern of tea leaves in the bottom of my cup.

Here are three reasons why buying ASX stocks even now can be reasonable for an investor.

Taking advantage of dollar-cost averaging

The simple act of making regular investments, come rain or shine, is a free kick for patient shareholders. It’s an action called dollar-cost averaging. I use this cost-smoothing tool every week to remove the emotion from a large portion of my portfolio.

Like clockwork, I buy more ASX shares every Wednesday. Sometimes, I buy before a fall; other times, it’s before a rally. In the long run, it should average out to provide a decent return without letting my ape-like brain get in the way of compounding.

Herd mentality creates opportunity

Secondly, just because the overall Australian share market is at record highs doesn’t mean there are no pockets of opportunity.

The S&P/ASX All Ordinaries Index (ASX: XAO) is up 11.7% for the past year. Yet, around 260 companies in the top 500 are down compared to a year ago. Further still, only 192 ASX stocks are up as much or more than the market. Even more important, a company’s shares can be up 20% and still be ‘cheap’.

A keen-eyed investor can still find good value. So much attention has been drawn to the AI hype that great companies are going unnoticed elsewhere.

Don’t tempt fate

Saving the best for last. The stock market loves to make a mockery of the self-described ‘geniuses’. You know, the people who have been warning of a crash every year for the last 10 years.

It turns out they were right in 2015 and 2020. The only problem is that if you had waited on the sidelines all these years, you would have missed out on a 45% increase (plus dividends), as shown below.

Basically, the past shows that if we stay in the market long enough, the crashes don’t matter, but trying to dodge the falls will.

I think it’s better not to try to be the ‘wise guy’ in the market. As the late and great Charlie Munger said, “If you want to become rich, stop trying to be ‘intelligent’ and aim for ‘not stupid’ instead.”

Something tells me that buying ASX stocks consistently, no matter what, is ‘not stupid’.

The post 3 reasons I’m still buying ASX stocks in July despite record prices appeared first on The Motley Fool Australia.

More reading

• US inflation easing: What does it mean for ASX shares?
• ASX 200 re-writes history. Which companies are leading the charge?
• Why did ASX retail shares rise 19% in FY24 amid a cost of living crisis?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Mitchell Lawler 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 seems everyone around the proverbial ASX water cooler has been talking about Commonwealth Bank of Australia (ASX: CBA) shares this week.

On the surface, that’s nothing too unusual. As the ASX’s second-largest (perhaps soon to be largest) share, as well as the spiritual leader of the ASX big four bank stocks, CBA is never far from the front of mind when discussing the Australian share market.

But this week, there are three reasons CBA shares might have been even more prominent than usual in the minds of ASX investors. Let’s get into them.

3 reasons everyone has been talking about CBA shares this week

An avalanche of new record highs for CBA shares

ASX investors have probably become used to seeing the CBA share price clock the odd new record high. After all, we’ve seen this ASX bank reset its high watermark quite a few times over the past 12 months.

But this week, we saw no fewer than three fresh records for Commonwealth Bank shares. Tuesday had the bank soar up to $128.97 a share. That record didn’t last too long though.

By yesterday, CBA had topped that, reaching up to $130.30 a share. But that high was to last for less than 24 hours. Today, investors have sent the bank higher yet again, with CBA topping out at its new record high of $131.70.

This cascade of new records is enough to get ASX chins a-wagging by itself.

The CBA dividend yield enters mediocre territory

Of course, these fresh new highs for CBA shares haven’t come without a cost. That cost would be this bank’s dividend yield.

As most ASX investors would know, the ASX banks are well-known for their chunky, fully franked dividends. CBA used to be in that club, with investors enjoying a typical yield of between 4-5% in days of yore.

But not anymore. The galloping CBA share price has had the perverse effect of lowering the bank’s dividend yield to something unrecognisable for an ASX bank.

Today, CBA is trading on a yield of just 3.46%.

Not only is that well below National Australia Bank Ltd (ASX: NAB)’s 4.55%, but it is getting close to half of the 5.98% that ANZ Group Holdings Ltd (ASX: ANZ) currently has on the table.

This un-banklike dividend yield would also be provoking some discussions amongst income investors this week.

ASX 200 hits new record high

It’s not just CBA shares hitting new records this week. We’ve also enjoyed a far rarer event today – a new all-time record high for the S&P/ASX 200 Index (ASX: XJO) itself. Yep, this Friday has seen the ASX 200 clock a new record of its own – 7,969.1 points.

What does this have to do with CBA shares? Well, as we went through earlier today, ASX 200 investors largely have CommBank to thank for this new high.

CBA shares are up a healthy 15.8% over 2024 alone. Since this bank is the second-largest stock in the ASX 200 by market capitalisation, its 9.22% weighting in the index means its share price performance has a disproportionately large impact on the broader index.

Put simply, if CBA wasn’t hitting new high after new high this week, we probably wouldn’t see the ASX 200 at a new record itself.

So even if investors don’t directly own CBA shares, they probably still have a reason to thank the bank today.

The post 3 reasons everyone’s talking about CBA shares this week appeared first on The Motley Fool Australia.

More reading

• ASX 200 re-writes history. Which companies are leading the charge?
• Do ANZ shares offer the biggest dividend yield in the ASX bank sector?
• CBA and 7 other ASX 200 shares smashing new highs on Thursday
• $3,000 in savings? Here’s how I’d use that to start investing today
• CBA shares hit new record amid higher revised predictions for home price growth

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.

The S&P/ASX 200 Index (ASX: XJO) is up 2.5% and in new all-time high territory as we near the end of the second trading week of FY 2025. But some ASX shares have already done much better.

Now, two weeks is only a small snapshot for these ASX 200 shares and the broader market as far as what’s yet to come for the full financial year. But try telling that to the investors who bought these companies near market close on 28 June and are already banking gains of more than 20%.

Which stocks are we talking about?

Read on!

ASX 200 shares starting the 2025 financial year with a bang

The third best ASX 200 share to have bought at the end of FY 2024 is Whitehaven Coal Ltd (ASX: WHC).

Despite slipping over the past three trading days, shares in the Aussie coal stock remain up 13.0% since market close on 28 June, currently changing hands for $8.65 apiece.

There’s been no price-sensitive news from the miner since its 19 April quarterly update.

But Whitehaven shares got a big boost along with other coal stocks following news of an underground fire at Anglo American‘s (LSE: AAL) Grosvenor coal mine in Queensland on 29 June. Anglo American has suspended production at the mine for an indeterminate time.

Whitehaven shares trade on a fully franked trailing dividend yield of 5.7%.

Moving on to the second-best performing ASX 200 share in FY 2025, we have gold share Red 5 Ltd (ASX: RED).

Shares in the ASX gold stock have surged 16.7% since market close on 28 June.

The gold miner enjoyed a big boost on Monday when it reported it had entered into a restructured hedge facility and security package, repaid all outstanding loans, and restructured the hedging from its legacy Silver Lake Resources Limited (ASX: SLR) common terms deed.

Red 5 also reported full-year gold sales of 455,259 ounces.

Which brings us to the best ASX 200 share to have held for the first two weeks of FY 2025, Coronado Global Resources Inc (ASX: CRN).

That’s right, another big Australian coal stock, which also enjoyed a big boost from Anglo American’s mine closure.

The Coronado share price ended FY 2024 at $1.185 and currently stands at $1.427. That sees the stock up 20.4% in only two weeks.

And it could have a lot further to run.

According to Bell Potter:

Throughout 2024, CRN should realise improved production volumes and subsequent cost benefits following the self-funded investment across its Australian and US operations. We expect CRN to generate improved free cash flow and shareholder returns going forward.

Our buy recommendation is underpinned by a supply constrained met coal environment, supporting long term prices. We see the potential for CRN to participate in industry consolidation.

The broker has a ‘buy’ rating and a $1.85 price target for the ASX 200 share. That represents a further potential upside of almost 30% from current levels.

The post Do you own the 3 best performing ASX 200 shares of FY 2025? appeared first on The Motley Fool Australia.

More reading

• 1 ASX 200 coal stock to buy and 1 to hold
• Here are the top 10 ASX 200 shares today
• Why Catalyst Metals, Imugene, Red 5, and Telstra shares are pushing higher today
• Shares vs. property: Which stocks and suburbs delivered the best growth in FY24?
• Here are the top 10 ASX 200 shares today

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.

Liontown Resources Ltd (ASX: LTR) shares have faced a tough past year. From the 12 months to June 11, they lost 66% of their value.

Since entering the new financial year, the story is a little different. The stock is up 14% since July 1 and has surged 10% this week so far.

They currently fetch $1.02 apiece, more than 6% higher than yesterday’s close. The chart below shows the last twelve months of Liontown’s share price action.

Do the experts say Liontown is a buy? Here’s a look.

Recent developments for Liontown shares

Liontown has made substantial progress towards transitioning from a lithium developer to a miner. As a reminder, the company’s crown jewel is its Kathleen Valley Lithium Project.

Production is set to commence at the site, which could be a tailwind if successful, in my view.

In July, the company also secured a US$250 million convertible note agreement with LG Energy Solution to fund the development of its Kathleen Valley project.

After this transaction, it will have cash of around A$501 million, with $120 million set to be immediately invested into Kathleen Valley.

The remaining A$381 million and “additional liquidity provides balance sheet strength” for the site, it says.

What do analysts say?

Bell Potter is bullish on Liontown shares and praises the funding arrangement with LG Energy Solution. The broker reckons it removes some of the negative terms associated with undertaking traditional bank debt.

Goldman Sachs, on the other hand, recently provided a cautious earnings forecast for Liontown, considering its bearish outlook on lithium prices.

The firm estimates a gradual increase in revenue and profitability for Liontown from FY25 to FY29.

According to my colleague James’ analysis, the broker expects revenue of $143 million in FY25, leading to a loss of $162 million.

By FY 2029, Goldman forecasts revenue to reach $1,326 million, with a profit of $330 million.

These estimates reflect a significant growth trajectory as estimated production ramps up and operational efficiencies improve.

Despite this, Goldman Sachs holds a neutral rating on Liontown shares with a price target of $1.15, noting:

For LTR, though we expect more modest cost escalation based on our benchmarking we remain Neutral on relative valuation.

Although it acknowledges the potential valuation uplift from de-risking and improved lithium pricing, it still advises caution until production and cost management are clearer.

Bell Potter, however, is more optimistic, maintaining a speculative buy rating and a $1.85 price target. It says that with initial production at Kathleen Valley on the way, Liontown shares are well positioned, according to my colleague James.

Meanwhile, according to CommSec, the consensus of analyst ratings says Liontown is a hold.

Foolish takeaway

Liontown Resources is at a critical juncture. With production set to start soon, the company could see significant growth if it manages costs effectively and ramps up production smoothly.

While Goldman Sachs advises caution, Bell Potter’s bullish outlook suggests substantial upside potential. Based on this, there are risks in owning this stock before it successfully starts production, in my view.

In any case, it’s essential to conduct your own due diligence and seek financial advice when necessary.

The post Are Liontown Resources shares a buy after surging 9% this week? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Here’s the earnings forecast to 2029 for Liontown shares
• ASX lithium shares: Screaming bargains or falling knives?
• Why the Liontown share price could jump 25%+

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

It is a very happy Friday for most ASX shares so far today. The S&P/ASX 200 Index (ASX: XJO) quickly clocked a series of new record highs in early trading today, and has continued to push higher into the afternoon.

At the time of writing, the ASX 200 is up a healthy 0.93% at just over 7,960 points after hitting a new record high of 7,969.1 points this morning.

But let’s talk about some economic news out from the United States overnight that might have some consequences for ASX investors going forward.

The United States, like Australia, has been struggling with the economic impacts of inflation over the past few years. Like in Australia, the US has been steadily ratcheting up interest rates in an attempt to control inflation.

Last night, we got the latest news on how that struggle is going.

American CPI falls over June

According to reporting from CNBC, the American consumer price index (CPI) fell 0.1% between May and June. That drop puts the annual rate of inflation in the US economy at 3%, which is reportedly the lowest figure in more than three years. It’s the first time since May 2020 that monthly CPI declined.

Core CPI, which excludes volatile items like petrol and food costs, increased 0.1% month-on-month though, putting its annual rate at a higher 3.3%. Even so, this rise was the smallest increase in core inflation since April 2021.

This inflation report was welcomed by economic commentators. Here’s some of what Morgan Stanley’s Chris Larkin told CNBC:

The June inflation report means the [US Federal Reserve] is one step closer to a September rate cut… A lot can happen between now and September 18, but unless most of the numbers pivot back into ‘hot’ territory, the Fed’s reasoning for not cutting rates may no longer be justified.

As most ASX investors know, interest rates are usually raised to put downward pressure on inflation. Since inflation seems to be cooling in the States, the next interest rate move might be a cut, and perhaps sooner rather than later.

But what would this mean for ASX shares?

Well, this report is arguably great news for ASX investors as well. Interest rates may be different from country to country. But they are all interconnected too. It’s no coincidence that the US has raised interest rates over the past few years almost in tandem with our own Reserve Bank of Australia (RBA).

If American inflation is cooling, it bodes well for Australian inflation as well. Taking inflationary heat out of the global economy is what the RBA would want to see from the United States. And it just got a big dose of that.

If rates do start dropping over in the US, it would probably mean that an interest rate cut in Australia is more likely. That’s not a guarantee, of course. But this June inflation report out of the US is probably just what Michelle Bullock and the other bigwigs at the RBA were hoping to see.

Lower inflation will eventually lead to lower interest rates, both here and in the United States. And lower rates are great news for the share market. Remember, high interest rates tend to suck money out of ASX shares as investors flock to safer investments like cash and bonds. Lower rates would have the opposite effect.

As such, this inflation report is exciting for ASX investors, which might be at least partly why the Australian stock market is reaching new record highs today.

Let’s see what the RBA’s next move might be.

The post US inflation easing: What does it mean for ASX shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

One in five investors intends to spend their tax-cut savings buying shares, according to a survey of more than 2,000 Australian investors conducted by online trading platform, Stake.

Let’s find out what other investors intend to do with the extra money in their pay this month.

1 in 5 investors will put tax-cut savings into shares

Stage three tax cuts began this month. Every worker will receive a bit more in their pay following amendments to the original stage three tax cut plan.

The tax cuts will see a worker earning $55,000 per year saving $1,054 per annum in tax. A worker earning $140,000 per year will save $3,729 per annum in tax. You can check out the new tax rates here.

Stake’s survey showed most investors, or 31%, intend to use their tax-cut savings to help them with the cost of living.

Following 13 interest rate rises between May 2022 and November 2023, and indicators this month that inflation may prove stickier than expected, households are under significant pressure.

A further 31% of investors intend to save the extra cash for a rainy day or emergencies.

Here at The Fool, we suggest investors always have an emergency fund to cover unexpected expenses. This avoids having to sell assets like ASX shares at inopportune times to cover urgent expenses.

Another 24% of investors intend to pay off debts. The Fool distinguishes between ‘good’ and ‘bad debts’. Bad debts are short-term debts not associated with investment, like interest on credit cards.

Other ideas for the extra cash

As mentioned earlier, one in five investors, or 21%, intend to buy shares. The survey also revealed the five most popular ASX shares purchased by investors, which are listed below.

The survey results reflect Australians’ ongoing love of travel.

About 19% of respondents intend to use their extra cash to fund holidays and travel. This was the only discretionary expense featured in the top six responses.

Finally, 19% intend to use their additional income to save for retirement.

Some might use their tax cuts to make concessional contributions to superannuation, which would give them further tax savings.

This is because contributions are taxed at 15%, which is well below most people’s marginal income tax rates. You can learn about how to save tax through superannuation here.

Top 5 ASX shares among survey respondents

The survey found the five favourite ASX shares among investors comprised four exchange-traded funds (ETFs) and an ASX lithium share.

Here they are.

1/ Vanguard Australian Shares Index ETF (ASX: VAS) 

The Vanguard Australian Shares Index ETF is an index-based ETF that tracks the performance of the S&P/ASX 300 Index (ASX: XKO).

2/ iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF is an index-based ETF that tracks the 500 largest companies comprising the US S&P 500 Index (SP: .INX).

3/ Vanguard Msci Index International Shares ETF (ASX: VGS)

The Vanguard Msci Index International Shares ETF tracks the return of the MSCI World ex-Australia (with net dividends reinvested). This means exposure to about 1,500 companies from 23 developed countries.

4/ Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF tracks the performance of the tech-heavy NASDAQ-100 Index (NASDAQ: NDX).

5/ Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals has lost 41% of its value over the past 12 months due to plunging commodity values.

The post Buying shares and 5 other ways investors intend to spend tax cuts: report appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX All Ordinaries Index (ASX: XAO) financial share GQG Partners Inc (ASX: GQG) has shown a remarkable performance this year.

Over the past 12 months, the United States-based asset manager’s share price has surged by 86%, outpacing the All Ords index’s modest 6% rise during the same period.

Since its initial public offering (IPO) in October 2021, GQG Partners shares traded below the IPO price of $2 for the first two years, reaching a low of $1.32 in November 2023. From there, the share price more than doubled to its current price of $2.85 as the company’s assets under management (AUM) continued to grow.

What drove the strong share price growth?

GQG Partners is an active asset management company specialising in equity investments across four categories: international, global, emerging markets, and US shares. The company is led by experienced stock picker Rajiv Jain, who serves as both chief investment officer and executive chairman.

The significant increase in share price can be attributed to rapid growth in AUM. In its latest update for June 2024, GQG Partners reported a surge in total AUM to US$155.6 billion. Net inflows nearly doubled to US$11.1 billion in the first six months of 2024, compared to US$6.2 billion for the same period the previous year.

In his interview with the Australian Financial Review in February 2024, GQG Partners CEO Tim Carver highlighted its superior investment returns and its relatively low fee structure compared to its peers as key success factors.

In addition, the company boasts a high insider ownership. Company insiders, including management and employees, own more than 75% of the company. Jain is the largest shareholder, with a 70% holding.

At the annual general meeting (AGM) in May 2024, Jain said:

An important part of this is being co-investors. Not only are we majority shareholders in the business, but our team has invested meaningfully in our strategies alongside our clients.

As the largest shareholder in GQG, I remain aligned with you in my expectations that the executive team will remain completely focused on delivering value to our clients, and thereby creating long-term shareholder value.

What do experts say about GQG Partners?

Goldman Sachs rates GQG Partners a buy with a target price of $3, indicating a 5% upside from here. The broker’s analysts believe GQG shares’ valuations are still attractive compared to those of its peers, considering the company’s strong growth.

Fund manager Blackwattle sees GQG’s valuations as undemanding, as my colleague Tristan highlighted. In its portfolio update, the investment team at Blackwattle said that GQG Partners still screened cheaply compared to its peers.

The fund manager pointed out that the 10-year average price-to-earnings (P/E) ratio of listed asset management companies is 16x. At the current share price, GQG Partners shares are valued at 13x on S&P Capital IQ’s FY25 earnings estimates.

The GQG Partners share price is down 0.87% at the time of writing trading at $2.85.

The post Up 86% in a year, could this ASX All Ords financial share keep on rising? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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.